Michael Egorov, founder of Curve Finance, has raised serious concerns about security failures across decentralized finance, questioning the industry’s credibility as repeated exploits continue to occur. He pointed out that during these incidents, different platforms often deflect responsibility onto one another while insisting their systems are functioning, even as users are left unable to access their funds.
Egorov urged the creation of shared security standards across the DeFi space, especially as many recent hacks have stemmed from centralized points of failure. One of the most recent cases, the KelpDAO exploit, stands among the largest breaches in recent months and has further weakened market confidence.
Call for a DeFi Security Overhaul
In a recent statement, Egorov emphasized that many of these attacks could have been avoided and are steadily eroding trust in the sector. He referenced a recent incident involving Aave, where users were unable to withdraw funds after the exploitation of rsETH. This occurred despite assurances from multiple parties, including the protocol and its infrastructure providers, that their systems were operating as expected.
According to Egorov, this pattern of shifting blame reveals a deeper structural flaw within DeFi. The heavy reliance on interconnected systems means that when one component fails, users can be left exposed. He stressed that risks linked to centralized dependencies should be reduced wherever possible, and when they cannot be eliminated, trust should be spread across multiple entities rather than concentrated in one place.
He suggested that the industry should collaborate to establish clear safety standards, including guidelines on how to build secure systems and how to verify their safety. He encouraged developers, auditors, and risk assessment groups to contribute their best practices and ensure they are widely understood and applied.
Egorov also proposed that major ecosystem organizations such as the Ethereum Foundation and the Solana Foundation could help coordinate these efforts by bringing together key stakeholders to define shared security principles. He added that while DeFi aims for decentralization, it can still learn from traditional finance in managing unavoidable centralized risks.
Mounting Pressure on DeFi
The KelpDAO exploit has added to the growing strain on the DeFi sector. Following the incident, total value locked dropped sharply across several networks within a single day, with notable declines on Cosmos Hub.
Investigations by ZachXBT and Arkham Intelligence indicate that the stolen funds are already in motion. Data shows two significant Ethereum transactions took place during European trading hours on Tuesday, with portions of the stolen assets being moved across different blockchains.
Some of the funds were transferred to Bitcoin through Thorchain, while a smaller portion was routed via Umbra, a privacy focused protocol. These laundering patterns are similar to previous operations associated with the Lazarus Group, which has used comparable methods in the past.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
