A Survey of DeFi Security: Challenges and Opportunities

DeFi, or Decentralized Finance, is based on a distributed ledger called blockchain technology. Using blockchain, DeFi may customize the execution of predetermined operations between parties. The DeFi system use blockchain technology to execute user transactions, such as lending and exchanging. The total value locked in DeFi decreased from \$200 billion in April 2022 to \$80 billion in July 2022, indicating that security in this area remained problematic. In this paper, we address the deficiency in DeFi security studies. To our best knowledge, our paper is the first to make a systematic analysis of DeFi security. First, we summarize the DeFi-related vulnerabilities in each blockchain layer. Additionally, application-level vulnerabilities are also analyzed. Then we classify and analyze real-world DeFi attacks based on the principles that correlate to the vulnerabilities. In addition, we collect optimization strategies from the data, network, consensus, smart contract, and application layers. And then, we describe the weaknesses and technical approaches they address. On the basis of this comprehensive analysis, we summarize several challenges and possible future directions in DeFi to offer ideas for further research

Security Analysis of DeFi: Vulnerabilities, Attacks and Advances

Decentralized finance (DeFi) in Ethereum is a financial ecosystem built on the blockchain that has locked over 200 billion USD until April 2022. All transaction information is transparent and open when transacting through the DeFi protocol, which has led to a series of attacks. Several studies have attempted to optimize it from both economic and technical perspectives. However, few works analyze the vulnerabilities and optimizations of the entire DeFi system. In this paper, we first systematically analyze vulnerabilities related to DeFi in Ethereum at several levels, then we investigate real-world attacks. Finally, we summarize the achievements of DeFi optimization and provide some future directions