The Battle Against DDoS Attacks in Decentralized Finance

The Decentralized Finance (DeFi) sector envisioned lofty goals of universal enfranchisement of users and accessibility. While the goals continue to remain in focus, there are emerging cyber threats that pose serious problems to the integrity of the DeFi systems. Distributed Denial of Service (DDoS) assault is a serious cyber infiltration that can cause problems even for the most powerful, distributed protocols out there.

In this age, DDoS attacks have long moved past being minor nuisances and have the potential to steal millions of dollars, ruin carefully managed reputations, and dent the efforts to move to a decentralized, trustless alternative.

The DDoS attack is not only limited to the Defi industry alone. For instance, the largest DDoS attack on record is the 2024 Cloudflare attack. It lasted for just 80 seconds reaching about 5.6 terabits per second (Tbps). Other notable examples are the 2016 Mirai Dyn attack, the 2018 GitHub attack, and the 2020 AWS attack, etc.

However, this article will shed light on the threat posed by DDoS attacks and their devastating potential on the DeFi economy. Expert industry insight into problem identification and solution-oriented approach will be provided by a top cybersecurity specialist.

DeFi: A Prime Target for Cybercriminals

The DeFi economy boasts a major incentive to the finance sector. It is a trustless, permissionless, and innovative space with the potential for bigger profits compared to the conventional finance scene. However, DeFi protocols handle a lot of money, mostly in crypto, so they appeal to hackers of all backgrounds. These online hackers study smart contracts in detail and use sophisticated automated systems to take advantage of vulnerabilities.

A successful hacking attempt often results in users being unable to track and access their funds, rendering the platform useless. As a result, investors jump ship from the platform, encompassing it completely in financial ruin.

Due to the negative effects of such attacks, companies often try to cover up the scale of the intrusion and keep numbers secret. However, the open-source nature of DeFI protocols means that they cannot keep everything under wraps and the secrecy often causes problems to compound further.

Notably, the market capitalization and liquidity of hacked platforms often experience a major decline after losing potential millions in DDoS attacks. The psychological impact of a major hack on users cannot be understated as well – It undermines user confidence and could eventually cause a domino effect, resulting in the platform declaring bankruptcy.

Maksym Ishchenko, Founder and CEO of Azerux, is a well-known cybersecurity professional specializing in these DDoS attacks and mitigation efforts to counter them.

According to Maksym:

DeFi's decentralized structure poses a special security risk. Because there isn't a single point of control as in centralized systems, security is very complicated yet undeniably crucial. A successful assault might have disastrous financial consequences, resulting in large losses and irreversible harm to one's image.

Ischenko’s comments echo earlier concerns that the attacks themselves are becoming more and more complex and no longer limited to volume-based assaults which involve overloading a platform’s server with a large number of pointless requests, choking it entirely. Attackers now employ an organized approach using high-level tools that have a complete grasp of blockchain technology and its underlying infrastructure. Hence, efforts to limit DDoS attacks are becoming more and more difficult with time in the DeFi ecosystem.

Advanced DDoS Attacks and the Threats to DeFi

The exponential rise in attacks on the decentralized fintech platforms is largely attributed to DeFi’s explosive growth over the years. It has been a major target for hackers due to abundance of funds and relatively nascent technology that has weak links present in between.

"Many projects rush to market with insufficient security testing," Maksym states. According to him, the Solana network is one of the prime examples of decentralized networks coming under DDoS attacks. Malicious automated transactions overloaded the network during the Grape Protocol's IDO on Raydium, resulting in a devastating 17-hour outage that impacted the whole Solana ecosystem. Solana has choked consistently over the few years of its existence but other experts believe that DDoS is not the only one to be blamed for the network’s frequent shortcomings.

Another notable incident occurred on January 18, 2024, when the listing of Manta Network's token coincided with a DDoS assault of more than 135 million bogus RPC queries.

“While the demand for Manta tokens remained high, the attack showed how susceptible even recently announced, well-known projects are to sophisticated DDoS operations. The network's bandwidth was overloaded by the sheer number of bogus RPC queries, which essentially stopped valid transactions." Ischenko notes that it is crucial to have robust DDoS mitigation techniques, especially at a time when new projects are being deployed on a blockchain. DeFi protocols need to take a hint here.

How to Build Robust DDoS Protection for Your DeFi Platform

A stellar DDoS defense system is necessary for a DeFi protocol in the long run. It is no longer a technical jargon that needs to be dealt with later on but a basic security mechanism that needs to be implemented from the ground up.

The Azerux CEO believes that robust protection for your DeFi platform goes beyond DDoS risk mitigation. He proposes a multi-layered approach, championed by Azerux, consisting of:

• Network-level mitigation: Malware-focused traffic is a major cause of concern and needs to be filtered before it can reach the target servers. A well-planned filtering process, including strategic scrubbing centers, helps to prevent the system from becoming overwhelmed by the initial barrage of malware.

  
  

• Application-level protection: Web application-focused security measures, such as Web Application Firewall (WAF) technology, are essential for protecting platforms in addition to securing servers. WAFs enable actual users to continue using the platform during an attack while providing administrators with real-time traffic analysis to differentiate between attackers and legitimate users.

  
  

• Real-time monitoring and automated response: Advanced monitoring setups can detect irregularities associated with DDoS attacks in real-time. Automated response systems are crucial for scaling defenses to match the attack's intensity, ensuring the network remains operational under pressure.

• Adaptive defense mechanisms and proactive threat intelligence: Smart defenses that learn from previous DDoS attacks and continuously refine strategies can make networks more resilient over time. Engaging in proactive threat intelligence ensures that mitigation strategies evolve to counter emerging attack vectors effectively.

Why DDoS Protection is Critical for DeFi

The DeFI ecosystem is an emerging, dynamic field that has the potential to hit trillions of dollars worth of liquidity in the near future. It already holds tens of billions of dollars in place despite the dangers associated with it and it is expected to only grow with time. Cyber incursions like DDoS attacks are a serious issue and may cause entire platforms to collapse in a matter of days if not hours. The path to a successful DeFi future is to help create a secure, proactive environment with central attention to cybersecurity.