Research Summary
The report discusses the security challenges faced by Web3 and how Forta, a decentralized network, is addressing these issues. It highlights the significant losses due to smart contract exploits and on-chain scams in 2023. The report also explains Forta’s detection methodology and the role of its utility token, FORT, in maintaining network security and economics.
Key Takeaways
Web3’s Security Challenges
- Prevalence of Security Threats: The report identifies two main security threats in Web3: smart contract exploits and scams targeting end users. In 2023, these threats resulted in losses of approximately $1.5 billion and $1 billion, respectively.
- Root Causes of Vulnerabilities: The vulnerabilities in Web3 stem from the inherent fallibility of smart contracts and the lack of security focus among many teams. Additionally, scams thrive due to user inexperience and insufficient warnings from wallets and exchanges.
Forta’s Solution to Web3’s Security Problems
- Comprehensive Monitoring System: Forta operates as a vast monitoring system, scanning on-chain activities for signs of exploits, scams, or other suspicious activities. It aims to detect attacks in real-time and alert the community promptly.
- Detection Methodology: Forta uses a combination of heuristics and machine learning to identify on-chain patterns typically associated with threats. Upon detecting suspicious on-chain activity, it issues real-time alerts and labels the entities involved.
The Role of FORT Token in Forta’s Network
- Importance of FORT Token: The FORT token is crucial for both network security and economics in the decentralized Forta network. Node operators must stake FORT tokens to ensure honest operation, and delegators can stake tokens on node pools to bolster security and earn rewards.
- Token Holders and Governance: Token holders play a significant role in network governance, using their FORT tokens to vote on proposals. This decentralized governance model ensures that the network remains secure and operates in the best interest of its users.
Actionable Insights
- Understanding Web3 Security: Stakeholders in the Web3 ecosystem should understand the prevalent security threats and their root causes to develop effective countermeasures.
- Adopting Comprehensive Security Measures: Teams developing on Web3 should prioritize security alongside growth, going beyond audits and bug bounty programs to ensure user safety.
- Exploring Forta’s Approach: Entities involved in Web3, such as DeFi protocols, wallets, and exchanges, could consider Forta’s comprehensive monitoring system and real-time alert mechanism to enhance their security measures.
- Recognizing the Role of Tokens: Understanding the role of utility tokens like FORT in decentralized networks can provide insights into network security and economics, and inform decision-making in token staking and governance.
