The recent BZx incidents have left the cryptocurrency community somewhat puzzled. Many fear this may be a death blow to DeFi, although things won’t evolve in that direction anytime soon.
New technologies, services, and products often come with their own set of growing pains.
What Comes Next for the DeFi Industry?
Those growing pains can be extremely cumbersome when money is involved.
For the DeFi industry, the recent incidents affecting BXz have cast a dark shadow that won’t disappear overnight.
During these incidents, the concept of flash loans was also scrutinized thoroughly.
While they provide a lot of value and potential, the inherent risks can no longer be ignored either.
In fact, the culprits managed to obtain nearly $1 million in Ether from the platform.
Additionally, they also manipulated a market without much opposition.
To top it all off, this method can be used to generate a fair bit of profit.
All of these incidents also highlight the security issues when dealing with smart contracts.
Independent audits of all contracts ever created – and to be created – need to take place.
Otherwise, there can be no “trustless” ecosystem, especially for decentralized finance.
Although this technology is widely accessible, it is evident that not everyone can create foolproof smart contracts.
Even so, those individuals can still engage in providing financial services and products.