Decentralized finance (DeFi) is an emerging model for organizing and enabling cryptocurrency-based transactions, exchanges and financial services. DeFi’s core premise is no centralized authority to dictate or control operations. This is a different approach than the traditional models of finance for fiat currency or centralized finance (CeFi) within the cryptocurrency markets. With centralized models, there is a core foundational authority that can influence and control the flow of transactions. The central authority is often also responsible for the custody of assets.

With DeFi, there is no central authority. Instead, authority is distributed in a decentralized approach intended to provide more power and control to individuals. In the DeFi model, all transactions for buying, selling, loans, and payments with cryptocurrency can occur without a central authority in a peer-to-peer (P2P) approach.

Custody of assets is a fundamental component of any financial model. In the DeFi approach, individual traders have control over the private cryptographic encryption keys, enabling cryptocurrency asset custody. Financial transactions within the DeFi model are enabled with smart contracts often supported on Ethereum-based blockchains.

  1. Code Quality: Check if the code is clean, well-structured, and follows best practices. Look for any signs of rushed or sloppy coding.
  2. Functionality: Ensure that all functions and modules work as intended. Check if the code logic matches the project’s documentation and intended functionality.
  3. Security: Look for potential security issues, such as reentrancy attacks, integer overflow and underflow, and front-running attacks. Check if the project has implemented measures to prevent these attacks.
  4. Smart Contracts: Review the smart contracts used in the project. Check for security and proper testing, and look for potential vulnerabilities.
  5. Dependencies: Check the project’s dependencies. Ensure that they are up to any known vulnerabilities.
  6. Data Storage: Review how the project stores data. Check if it uses encryption for sensitive data and follows best data storage practices.
  7. Error Handling: Check how the project handles errors. Ensure that it does not reveal any sensitive information when an error occurs.
  8. Gas Optimization: In Ethereum-based projects, check for gas optimisation in the smart contracts. Inefficient contracts can lead to higher costs for users.
  9. Upgradability: Check if the smart contracts are upgradeable. If they are, ensure the upgrade process is secure and cannot be exploited.
  10. Access Controls: Review the project’s access controls. Ensure that only authorised individuals can perform certain actions.
  11. Tokenomics: If the project has its own token, review its tokenomics. Check if the token distribution is fair and if the token has any potential security issues.
  12. Interactions with External Systems: Review how the project interacts with external systems. Check if these interactions are secure and if they could potentially be exploited.

E COM SECURITY SOLUTIONS’ – BLOCKCHAIN SECURITY

The E Com Security Solutions Cyber Range solution creates immersive simulations to guide your team through realistic breach scenarios, helping ensure you can respond and recover from enterprise-level cyber security incidents, manage vulnerabilities, and build a stronger security culture in your organization. E Com Security Solutions blockchain testing solution will help enterprises to securely create, implement, and use blockchain technology and the connected infrastructure. The solution includes a manual review of chain code, security controls, and processes. These processes include access controls and finding a probable adversarial path to compromise and move laterally within a blockchain network.