Sneak-peek: what’s inside this issue 👀 

👉️ Cover Story: Traps, Traps Everywhere - How to Stay One Step Ahead 🧠

👉️ Alpha from Masterclass: Nuggets from our recent “GTM & Business Fundamentals” masterclass that featured Tote, Director of Partnerships at MagicSquareio.

📌 Masterclasses on governance and grants for Web3 projects, among other topics are coming up. Stay tuned to our channels to stay updated - there will be limited slots open to the community as well!

👉️ What we’ve been upto… Our founder Nilotpal was part of a panel discussion featuring stalwarts from the business world

👉️ Symbiote Spotlight: Recent highlights, success stories and alpha from the Symbiote Ecosystem

Cover Story: Traps, Traps Everywhere - Common DeFi Exploits & How to Stay One Step Ahead 🧠

Introduction: The wild world of DeFi exploits

In the fast-paced and exhilarating landscape of decentralized finance (DeFi), where fortunes are made and lost in the blink of an eye, the need for robust security measures has never been more critical. ⚡️ 

In this post, we'll take a journey through some of the major types of DeFi exploits, shine a light on the utter lack of proactive security, and talk about DeHack, and what unique AI-driven security features it brings to the table.

Here are the most common traps that hackers set 👇️ 

1. The Smart Contract Bug Waltz 💃: A Tiny Typo Tango

In the world of DeFi, a tiny typo or missing check can lead to a dance where funds waltz away into malicious hands.

• Beyond typographical errors: While typos can be comical, vulnerabilities often arise from complex logic flaws, missing access controls, and unchecked inputs. These intricate missteps can allow attackers to manipulate transactions, drain funds, or even seize control of entire protocols.

• Patching the dance floor: Developers must prioritize smart contract auditing by reputable firms. Security testing, automated tools, and community-driven code reviews can also help identify and mitigate vulnerabilities before they become waltzes of loss.

• Constant vigilance: The dynamic nature of DeFi necessitates ongoing monitoring and updates. Patching exploits promptly and maintaining awareness of new vulnerabilities is crucial to keeping funds safe.

An example of this graceful yet perilous dance is etched in the painful memory of the Poly Network hack.

⏰ The Poly Network Heist: A $611M Wake-Up Call

In February 2022, Poly Network, a cross-chain decentralized finance platform, fell victim to a staggering $611 million exploit.

📌 What happened: The hacker targeted vulnerabilities in unverified contracts across Binance Smart Chain, Polygon, and Ethereum. Despite funds being returned, this incident highlighted the pressing need for proactive security measures in the DeFi space. Imagine someone leaving a back door unlocked in a row of connected houses – one compromised lock grants access to all.

2. Sneaky Reentrancy Attacks: The “Double Dipping” Trick 🔄🎭

Reentrancy attacks, a crafty maneuver where hackers call a function twice before it finishes, have haunted DeFi protocols.

• Double the disappearing act: The core of a reentrancy attack lies in exploiting the gap between a function call and its completion. Hackers call the function, perform another action outside the contract (often withdrawing funds), and then re-enter the original function before it updates its internal state. This "double-dipping" trick allows them to withdraw funds twice, vanishing with ill-gotten gains.

• Preventing the sleight of hand: Developers can combat reentrancy attacks by employing locking mechanisms that prevent re-entry during critical operations. Additionally, using reentrancy-safe libraries and smart contract frameworks can significantly reduce the risk of such exploits.

• Education and awareness: Users must be mindful of the potential for reentrancy attacks and choose protocols with established security practices. Understanding how these attacks work empowers users to make informed decisions and protect their assets.

🤺 The Ethereum DAO Attack in 2016 - 3.6M ETH drained

The 2016 Ethereum DAO attack exemplified the destructive potential of re-entrancy attacks.

📌What happened: Exploiting a vulnerability in the DAO smart contract, the attacker employed a re-entrancy technique, calling a function multiple times before it completed.

This crafty maneuver allowed the attacker to drain over 3.6 million ETH by tricking the smart contract into releasing funds before updating the user's balance. The incident highlighted the urgent necessity for robust security in decentralized finance.

3. Social Engineering & Phishing Scams: Candy-Coated Keys and Fake DeFi Projects 🪲🚨🎭

Beyond coded chaos, social engineering and phishing scams lure users into giving away their keys like candy.

• Beyond code, the human factor: Social engineering exploits the trusting nature of users, luring them into divulging sensitive information like private keys or seed phrases. Phishing scams often mimic legitimate DeFi platforms, websites, or emails, tricking users into providing access to their wallets.

• Unmasking the candy-coated traps: Users must exercise caution when interacting with DeFi platforms. Verifying website URLs, avoiding suspicious links, and double-checking project identities are crucial steps in discerning real DeFi services from elaborate scams.

• Building a fortress of awareness: Raising awareness about social engineering tactics and promoting best practices for secure online interactions is vital in shielding users from falling victim to phishing scams. Educational initiatives and community support can empower users to navigate the DeFi landscape safely.

🧊 Badger DAO's 2021 "Ice-Phishing" attack - $121M lost

📌What happened: The attackers created fake websites and emails mimicking Badger DAO, tricking users into divulging their private keys through a seemingly legitimate "ice airdrop." Imagine a beautifully wrapped box containing a ticking bomb instead of a promised treasure. 🤷 

This attack showcases the real-world impact of these deceptive schemes. It was a stark reminder that DeFi's complexity can be weaponized against unsuspecting users.

4. Oracle Manipulation : Pulling Strings on Price Feeds 🌐🎭

Hackers manipulate oracles, deceiving protocols and causing flash loans to drain liquidity faster than you can say "Beanstalk Farms."

• The puppet master's game: Oracles provide external data feeds (e.g., asset prices) to DeFi protocols. Hackers can manipulate these feeds, feeding false information that triggers unintended actions within the protocol. This can lead to flash loan attacks, where attackers borrow large sums of capital based on manipulated prices and swiftly drain liquidity before the true information surfaces.

• Securing the strings: Decentralized oracles that aggregate data from multiple sources and rely on consensus mechanisms are more resistant to manipulation compared to centralized oracles. Additionally, cryptographic verification of data feeds can further enhance security.

• Transparency and accountability: Protocols should prioritize transparency in oracle selection and data sourcing. Openly disclosing the methodology behind price feeds and employing community review processes can strengthen trust and mitigate the risk of manipulation.

🥭 The $117M Mango Market Fiasco : When Price Feeds Become Puppeteers

One notable example is the October 2022 attack on Mango Markets, a DEX on Solana, which saw $117 million in crypto assets drained from the protocol.

📌What happened: Mango Markets danced to a hacker's tune. The hackers inflated the price of their own token, MNGO, like a pumped-up balloon, fooling the oracle – DeFi's data puppeteer. Seeing this inflated value, Mango blindly lent the hacker a treasure trove of assets. The hacker then cut the strings, deflated the balloon, and vanished with the loot.

This “puppet show” exposed the real risks of oracle manipulation in DeFi, urging platforms to tighten security before the next act plays out in this Wild West of finance.

The Common Thread: Lack of Proactive Security 🕵️‍♂️⚠️

A recurring theme in these exploits is the lack of proactive security in DeFi protocols. Traditional audits, while beneficial, often act as post-mortem measures.

It's time to build fortresses, embracing secure code, formal verification, and community-driven threat modeling to prevent breaches before they occur.

DeHack: Catch Them Before They Get To You! 🌟🌐

Enter DeHack – a revolutionary force in the DeFi security space. It's time to rewrite the DeFi anthem, making exploits relics of the past.

Proactive vs. Post-mortem Security: A Paradigm Shift 🕰️🔒

Traditional audits patch holes after the damage is done. DeHack's AI, on the other hand, monitors 24/7, preventing attacks before they even happen. It's not just about security; it's about foresight, a paradigm shift towards proactive protection.

The 4-Stage Security Shield & 20 Pre-emptive Checks: DeHack's Arsenal 🛡️🌐

DeHack doesn't just talk the talk; it walks the walk with its comprehensive 4-stage security shield:

• Continuous Monitoring

• Real-Time Threat Intelligence

• Automated Prevention

• Post-Incident Analysis

With over 20 pre-emptive checks conducted by its engine, DeHack is a force to be reckoned with in the fight against DeFi threats.

Conclusion: Fortifying the Future of DeFi

As we navigate the DeFi Wild West, the exploits and vulnerabilities may seem daunting. However, with proactive security measures championed by the likes of DeHack, we can fortify the future of decentralized finance.

It's time to bid farewell to exploits and welcome an era where security is not just a shield but a beacon of confidence for every DeFi enthusiast. 🚀🛡️

Alpha from Masterclass on GTM & Business Strategy🌟 

In a recent masterclass, Tote Fernández-Bravo, a seasoned Web3 expert, shared invaluable insights on Go-To-Market (GTM) strategies and essential business fundamentals for Web3 startups.

Tote is the Director of Partnerships @MagicSquareio and is an entrepreneur, advisor mentor and former Investment Manager at DAO Maker and M&A Banker.

The discussion provided a detailed roadmap for entrepreneurs, blending theoretical frameworks with practical examples for navigating the dynamic world of decentralized technologies.

Here are some highlights from the session, a more detailed breakdown is coming shortly.

🌟 Alpha drop from the session 👇️ 

🌐 Web3 Landscape Understanding: Strive for decentralization without compromising user-friendliness. Ethereum and Polygon's success showcases this delicate balance.

🎨 UI/UX and Customer Experience: Prioritize a user-friendly interface and exceptional customer experience. Platforms like Uniswap and Binance set the standard.

🕵️‍♂️ Competitive Analysis: Conduct intensive market research to identify competitors. Learn from Web2 experiences to enhance and differentiate your solution effectively.

👥 Customer Persona Development: Define your company segment (B2B/B2C), start locally, and scale globally. Engage users, create a narrative, and build a brand users love.

🚀 User Acquisition Strategies: Gamify your app, utilize airdrops with multipliers, and consider innovative methods like direct email outreach to token holders for effective user acquisition.

💰 Budgeting and Financial Foundations: Be lean initially, focusing on pro development, business development, and cost-effective marketing. Ensure 12-18 months of runway for financial stability.

🛠️ Tools for Running Your Business: Utilize project management tools like Notion, communication tools like Slack and Discord, and analytics tools like Google Analytics. Structured data is crucial with CRM tools like Hotspot, while financial tools include Quickbooks and Syrux. Infrastructure tools involve AWS, Google Cloud, Alibaba Cloud, and GitHub.

🤝 Collaboration and Synergies: Explore collaborations with established protocols and leverage partnerships. Networking through platforms like LinkedIn and Telegram is key to success.

Community Slots - Grab hold of this opportunity! ✨ 

We have sessions on governance and grants for Web3 startups coming up shortly. This is going to be alpha packed as usual - and yes some slots will be open to the community!

We strongly recommend applying - some serious alpha and insights are about to be shared.

Keep an eye on our Twitter for further updates. And also subscribe to this newsletter.

What we’ve been upto…💬

A recent panel discussion on “How digital transformation is reshaping business landscapes” was held in Dubai featuring prominent figures from the business world, alumni of the prestigious FMS business school in India.

Our founder Nilotpal was part of this discussion and talked about how Web3 usecases like RWA and blockchain-based payments are completely redefining the business landscape in many new and exciting ways.

Symbiote Spotlight⭐️

Let’s take a look at some of the recent highlights, success stories and alpha from the Symbiote Ecosystem 👇

1) Hypersign went live with their Prajna Testnet v2

Hypersign’s Testnet Prajna is a huge leap in the area of decentralized identity, with advances in privacy, precision and interoperability.

2) ZOTH confirm that a token launch is coming!

ZOTH have confirmed a launch of their native token $ZOTH in Spring 2024. The community asked for it - and ZOTH delivered. Exciting times ahead for this game-changing RWA project!

3) NodeOps proposes DAO funding for Oraichain developer onboarding

The focus of the proposal is on practical improvements to make developers' entry into Oraichain more intuitive and efficient.

4) Chainrisk discuss incentive compatiblity in DeFi

Sudipan from Chainrisk breaks down the concept of incentive compatibility from a DeFi lens in this insightful thread.

5) Scallop discuss their regulated chain utilizing ZKP

In this thread, Scallop talks about ZKP tech and how their chain utilizes it to help maintain confidentiality of users’ fiat balances on their bank accounts.

6) DeHack analyzed vulnerabilities that led to the $3.3M Socket Exploit 🪲 

Socket faced a staggering $3.3M loss resulting from a devastating hack.

DeHack have done a deep dive into the vulnerabilities that caused this, and talk about how it can be mitigated.

That’s all for this week, folks! Stay tuned for new editions of SymBytes every Tuesday. In the meanwhile, stay connected with us here-

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About Symbiote

The Web3 ecosystem is plagued by funding gaps and a dearth of tailored support. Symbiote aims to be the antidote 💉 

Here are the key differentiators in Symbiote’s program.

• 12-week tailored program designed for individual project needs.

• Sprint-based model for high-paced, measured results.

• Focus on instilling confidence in startups to navigate the dynamic crypto market.

• Real-time project insights via cutting-edge analytical tools.

• Knowledge center providing detailed connections, past performance, and future plans.

• Access to an extensive ecosystem with 50+ Mentors, 450+ Partners, 150+ Investors and a fast growing 110k+ Global Community

 🚀 As crypto markets are heating up, the time could not be better for a promising project to join a program like this. 

The conditions are ripe - and with an industry leading support system, your chances of succeeding are catapulted to the 🌙.

Stay tuned as we’ll be announcing our first cohort of some super promising, path breaking projects shortly! 

👉️ Apply here for the next cohort!