Economic Exploit Analysis is a brand-new service that utilizes studies conducted at the University of Toronto and is compatible with any blockchain that supports the EVM standard.
Quantstamp, a blockchain security company, has released a new automated solution to identify potential entry points for flash loan attacks in smart contracts. Economic Exploit Analysis is the name given to the new service that originated at the University of Toronto.
Protocols, whether or not they have been implemented, will have access to Economic Exploit Analysis. By identifying potential entry points for flash loan attacks in a client’s code, will improve Quantstamp’s audits. The service is not comprehensive; it may be used on any blockchain that supports the Ethereum Virtual Machine (EVM), but it may miss certain threats.
A flash loan is a short-term, unsecured loan in the decentralized finance (DeFi) system that must be borrowed and repaid all in one go. Flash loans may be used for things like debt refinancing, arbitraging price disparities across cryptocurrency exchanges, and more. A flash loan attack is the use of undetected manipulations of DeFi protocols.
For example, “flash loan attacks can drain the entire TVL (total value locked) of a DeFi protocol,” and because of DeFi’s composability, “these attack vectors often evade conventional audits due to the complexity of the attack.”
The need for improved safety in DeFi markets is on the rise. The March assault on Euler Finance attracted attention to the issue of flash loan biggest attacks in particular. In 2022, hackers and exploits stole nearly $2 billion worth of cryptocurrency.
The new Base layer-2 introduced by Coinbase helps fix security flaws as well. To “provide prompt notification of anomalies in the protocol and network, such as account balance irregularities, contract events, or disparities between L1 and L2 states,” the company has stated in a blog post that it is launching a monitoring tool called Pessimism.
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