Fortifying Web3 with AI-powered threat detection and mitigation
In Brief
Proactive vigilance and preventive mechanisms have become a necessity. To this end, Forta’s community innovations and tools represent Web3’s strongest weapons in an ever-evolving threat landscape.
Web3 aims to onboard the next million (and then billion) users. But that’s not possible with $200K+ being lost every hour, as it happened in 2023.
While 2023 was much better than 2022, with 51% less hack loss, there’s still a pressing need to bolster Web3 security.
Proactive vigilance and preventive mechanisms have become a necessity. To this end, Forta’s community innovations and tools represent Web3’s strongest weapons in an ever-evolving threat landscape.
The nature of Web3 attacks
Courtesy Web3’s eternal September, developers and project owners often take security for granted even today. Simply because their protocols or platforms are blockchain-based. It must, however, be very clear by now that blockchains aren’t necessarily secure.
On the contrary, robust security frameworks are a must to tap blockchain’s full potential. Because attack vectors in this space are often more complicated and diverse than in legacy environments. Mainly from a prevention and mitigation PoV.
The complexities of Web3 attacks demand a dedicated discussion. But their diversity is more apparent and gives an idea of the scope of Forta’s security solutions.
Per Certik’s report, private key theft was the most common attack type in 2023. Traditional methods like phishing scams are heavily in use here, but users ignoring privacy best practices are also to blame.
Besides stolen keys, sophisticated Reentrancy Attacks drained $800 million, DAO governance attacks took $250 million, and price oracle manipulations exploited $50 million.
Prevention is better than cure
The stakes are high for Web3 attackers. They invest huge sums and constantly invent new tactics to beat security systems. And so far, they’ve often moved faster than projects and platforms.
It’s very difficult to trace and catch Web3 attackers after the exploit happens, given pseudonymity, etc. Preventing exploits or stopping attackers at the time of execution is thus the best route for Web3 security.
Forta’s real-time threat detection tools provide an efficient means to this end. In April 2023, for instance, its Attack Detector identified and raised alerts to potentially stop the $197-million Euler Finance hack.
More recently, the community-managed bot detected attacks on Telcoin Token ($1.3 million), Fantom Foundation ($7.5 million), Curve Finance ($62 million), etc., before exploitation. Overall, in 2023, Forta generated preventive intelligence for exploits worth $304.2+ million.
The Attack Detector uses advanced ML models to achieve such feats, efficiently tracking malicious acts at every stage of the Web3 attack lifecycle: funding, preparation, exploitation, and money laundering.
From detection to response
Detecting possible attacks in real-time, before execution and raising high-confidence alerts is one part of the story. Acting on these alerts is another. So far, most projects lagged on this front.
Web3 projects typically need about 24 hours to pause the protocol, which is often the only option to stop imminent threats. Attackers, on the contrary, could buy 10 beach villas in exotic islands by that time. It’s a massive gap.
In the Euler Finance case, for example, Forta raised three critical alerts before the exploitation. First, when the hackers funded their attack using Tornado Cash. Second, when they created the suspicious contract. Third, when they deployed the contract from a TC-funded EOA.
But despite identifying Euler as the victim and raising multiple pre-attack alerts, 2023’s biggest DeFi hack couldn’t be stopped.
To prevent such issues in the future, the Attack Detector now integrates with OpenZeppelin’s automatic Incident Response (IR) framework. This enables dynamic mitigation response across scenarios.
For example, automatically invoking the pause function based on Forta’s alerts. Or, flagging transactions that Tornado Cash funding or suspicious Flashloans using alerts from respective detector bots.
While the teams’ inability to control protocols once deployed is a feature, not a bug, the ability to pre-define attack scenarios and automate response mechanisms is groundbreaking.
It’s an effective way to delay attack transactions, at the least, giving the community or team members the time to take further action. And the ones above are only a few examples.
The community’s collective intelligence
Forta’s community-led model lets users build custom detector-mitigator bots that best serve their needs and potential threats. And it offers various incentives in this regard: bounties, subscriptions, community rewards, and other revenue streams.
Promoting an all-inclusive space for individual security analysts, developers, and end-users to participate helps harness the community’s collective intelligence. It’s a great way to boost the industry’s agility when it comes to adapting to and mitigating new threats.
Moreover, with the combined effort and firepower of diverse stakeholders, Web3 becomes more robust, secure, and resilient. It thus gains the ability to attract and meaningfully serve the next one billion users, delivering and protecting value simultaneously.
Transforming cybersecurity’s future in a decentralized, community-driven manner is the goal. For it’ll help Web3 scale new heights and create a win-win situation for all, except malicious actors.
Disclaimer
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About The Author
Gregory, a digital nomad hailing from Poland, is not only a financial analyst but also a valuable contributor to various online magazines. With a wealth of experience in the financial industry, his insights and expertise have earned him recognition in numerous publications. Utilising his spare time effectively, Gregory is currently dedicated to writing a book about cryptocurrency and blockchain.
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Gregory, a digital nomad hailing from Poland, is not only a financial analyst but also a valuable contributor to various online magazines. With a wealth of experience in the financial industry, his insights and expertise have earned him recognition in numerous publications. Utilising his spare time effectively, Gregory is currently dedicated to writing a book about cryptocurrency and blockchain.
