Interview: Hacks, scams and launching on Polygon – De.Fi
It’s no secret that DeFi has struggled since the heyday of 2020. Like a lot of things in crypto, liquidity has fled and prices have collapsed. DeFi has been hit especially hard as the attractive yields that were once available have disappeared – at the same time that rates in traditional finance have rocketed.
We chatted with Artem Bondarenko, Software Architect at De.Fi, to get his thoughts on what it’s like working in the sector today against this backdrop. Additionally, we talked about hacks and scams in DeFi, a problem which has plagued the bludgeoning sector, and an area in which Bondarekno’s company is working.
Interview with Artem Bondarenko of De.Fi
Invezz (IZ): When DeFi was taking off, yields in the space were extremely high while interest rates in traditional finance were near zero. This has now completely flipped – do you think TVL in DeFi will remain low as long as rates outside of crypto are stout?
Artem Bondarenko (AB): The “DeFi summer” was primarily driven by speculation without solid underlying fundamentals. The initial surge was a short-term effect lacking sustainable foundations.
Considering the current landscape, it is unlikely that the TVL in DeFi will experience substantial growth in the near future, unless there is another bullish market period or significant non-speculative use cases emerge for DeFi.
These developments could potentially reignite interest and attract a larger pool of participants to the DeFi space.
Scams and hacks within DeFi
The DeFi sector is notorious for hacks, with millions upon millions syphoned across the blockchain as users fall victim to various types of scams and exploits. De.Fi is aiming to reduce these losses, and has recently launched an AntiVirus tool on the Polygon network, the popular Layer-2 for Ethereum.
IZ: Can you explain in simple terms how the AntiVirus tool could protect against crypto exploits and scams?
AB: An antivirus for crypto is responsible for protecting your digital assets (such as cryptocurrency tokens and NFTs) from potential threats such as smart contract exploits and malicious attacks. De.Fi’s Antivirus is a multi-layer security solution that consists of two tools: a Scanner and a Shield.
De.Fi Shield functions as a traditional antivirus, similar to renowned software like Kaspersky, that automatically scans all downloaded files on your PC. Our Shield scans all smart contract approvals stored in the user’s wallet, promptly notifying them if they have interacted with high-risk contracts.
It allows users to revoke access to potentially malicious dApps they have interacted with, either proactively or reactively, such as after an application has been hacked or experienced a security breach.
On the other hand, De.Fi Scanner serves as a due diligence tool, enabling users to assess the security level of any NFT, token, or staking vault before engaging with them. By utilising the Scanner, individuals can conduct instant security analyses, helping them make informed decisions and avoid high-risk assets.
The De.Fi Antivirus suite, comprising the Scanner and the Shield, provides robust protection and proactive measures to enhance the security of digital assets within the crypto ecosystem.
IZ: How big a problem are hacks and scams in the DeFi space?
I will let the numbers speak for themselves: over $452 million was lost in the first quarter of 2023. And only 28% of the missing funds that went missing during this period were successfully recovered.
Notably, $125 million of these losses occurred specifically on Polygon, underscoring the importance of implementing innovative security measures to safeguard users on the network.
Competition is fierce
The DeFi sector may only be a couple of years old, but doesn’t mean the space is rife for the taking. Many projects have popped up in the last couple of years, meaning it is suddenly a crowded space.
IZ: De.Fi is marketed as a “Web3 super app”. There are many competitors in this area striving to achieve the same thing – does this make it a difficult space to operate in?
AB: The field of cryptocurrency attracts a multitude of exceptionally talented and highly motivated individuals from diverse backgrounds, contributing to a dynamic and thriving industry where new ideas flourish. Consequently, this influx of talent also leads to heightened competition within the field.
In the context of Web3, Super Apps can serve various purposes. For instance, similar to how Uber caters to multiple transportation needs and WeChat combines messaging, social media, and banking functionalities, De.Fi functions as a Super App serving as a gateway to Web3.
It offers a user-friendly and comprehensive dashboard, enabling retail investors to conveniently track the performance of their digital asset positions across 40 networks, DEXes, and CEXs.
Additionally, our platform includes essential security features. Our goal is to enhance the DeFi user experience with better accessibility and security at the core.
While we face competition from various other companies working on similar products, we are confident that our platform currently boasts the most extensive range of blockchains and protocols available to our users.
IZ: You said in a press release that “De.Fi’s suite of digital asset management tools are already trusted by researchers at companies like Coingecko, as well as academic institutions such as the University of London and the National University of Singapore”. Can you please elaborate on how these companies and organisations use your protocol?
AB: All of these institutions are actively using the valuable data provided by our REKT Database for a variety of purposes, including research papers and investigations. The REKT Database stands as the largest repository of hacks and scams within the cryptocurrency space.
Each case within the database undergoes a thorough on-chain investigation and is meticulously explained by the Security Department. Currently, the Database encompasses over 3,000 documented instances of crypto-related hacks and scams, with records dating back to 2011.
This extensive collection of cases serves as a vital resource for the industry, facilitating comprehensive analysis and further enhancing the understanding of security incidents within the crypto landscape.
IZ: TVL on Polygon two years ago was close to $10 billion. Today as you launch on the network, it is below $1 billion. Does this pattern concern you, and is there a reason you are deciding to launch on Polygon now?
We recognise the immense potential of Polygon as a blockchain network and view the current downtrend as a natural occurrence within the broader bear market.
Two years ago, we were still in the early stages of our development of De.Fi Antivirus and now we’ve started getting a lot of traction this year.
We firmly believe that it is never too late to prioritise user security, and Polygon offers a robust infrastructure for us to implement our innovative security suite.
Get started in crypto easily by following crypto signals & charts by pro-trader Lisa N Edwards. Sign-up today for easy-to-follow trades for tonnes of altcoins at GSIC.