The impact of comprehensive, rigorous security measures in DeFi protocols is truly monumental. Let us elucidate this with the narratives of two hypothetical DeFi protocols: one fortified by Uno WatchDog (Protocol B), and the other by traditional smart contract audits (Protocol A).
The Chronicle of Protocol A and Protocol B
Imagine two DeFi protocols; both sprouting from the immense dedication and talent of their teams, and fueled by solid community support and capital investment — Protocol A and Protocol B.
Protocol A’s Path :
- Protocol A opts for a tier-1 audit firm’s smart contract audit.
- Despite the comprehensive initial audits, new vulnerabilities could creep in with future smart contract updates. If exploited, the situation can be severe and detrimental
- In the aftermath of a breach, Protocol A may resort to a black-hat bug bounty program At its best, this could help recover around 90% of Protocol A’s stolen funds. The worst-case scenario could result in a total loss of the stolen funds
- Past experiences of giants like Euler Finance, Curve, and Balancer falling prey to such attacks indicate that it’s not “if” but “when” such an event will occur .