DeFi hacks on Ethereum 2.0 ‘easier to scale’ than on Eth1: report

In brief
The transition from Ethereum 1.0 to Ethereum 2.0 could open up new attack vectors.
Researchers found that, for adequate security, the new proof-of-stake network should aim for 13.8% of ETH to be staked.
To incentivize people to stake, the researchers recommend increasing the base rewards factor and, thus, the amount stakers can earn.

DeFi has proven to be something of a double-edged sword for crypto. On the one hand, it’s generating excitement and income. On the other, it poses security threats.
 Derivative attacks and other hacks made possible by the DeFi “money piñata” could cause cracks in the forthcoming Ethereum 2.0 network.

So say ConsenSys’ Tanner Hoban and Thomas Borgers, who, with funding from MolochDao, used their free time to analyze the incentive structure and security for Ethereum’s long-awaited proof-of-stake network.



 (Disclosure: ConsenSys funds an editorially independent Decrypt.)In their just-released paper, “Ethereum 2.0 Economic Review: An Analysis of Ethereum’s Proof of Stake Incentive Model,” the co-authors argue that with “options volume increasing and unique financial instruments like ‘flash loans’ being used in malicious exploits derivatives could become the favored avenue of attack for adversaries.”

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