Web3 Security Company Ironblocks Takes Aim at Spate of DeFi Hacks

Ironblocks is the latest Israeli startup to build a protocol monitoring product.

AccessTimeIconMar 15, 2023 at 4:49 p.m. UTC
Updated May 9, 2023 at 4:10 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Decentralized finance (DeFi) protocols keep losing the security fight – and hundreds of millions of dollars in crypto – to hackers and thieves. Israeli startup Ironblocks is looking to change that.

On Wednesday, Ironblocks began rolling out a security product that CEO Or Dadosh says could help smart contract-based financial programs get ahead of the damage. It’s a threat detection platform, and it plugs into DeFi protocols in order to monitor and flag any asset transfer that looks fishy – or worse.

  • Aptos Is Not a Security: Anchorage General Counsel
    00:45
    Aptos Is Not a Security: Anchorage General Counsel
  • Sam Bankman-Fried Suggests Bounty Cap for White Hat Hackers
    05:05
    Sam Bankman-Fried Suggests Bounty Cap for White Hat Hackers
  • Pantera Capital Exec on How Venture Capital Is Investing in the Digital Economy
    06:30
    Pantera Capital Exec on How Venture Capital Is Investing in the Digital Economy
  • Telegram Users Can Now Send Crypto to Each Other via Wallet Bot: Report
    07:20
    Telegram Users Can Now Send Crypto to Each Other via Wallet Bot: Report
  • “We are looking for economic anomalies in the transaction itself,” Dadosh told CoinDesk in an interview at ETHDenver.

    The launch comes as DeFi protocols continue to take a shellacking from savvy hackers who steal millions of dollars by pulling their economic levels in unanticipated ways. Just this week, an unknown exploiter drained borrowing and lending protocol Euler Finance of $200 million by spoofing the way it handles collateral and debt, Dadosh said.

    In the case of Euler, the hacker withdrew the funds in a flurry of multi-million-dollar transactions. But those withdrawals were possible because of the unusual transactions that they initially executed to trick the protocol in the first place. It's at this stage that Ironblocks thinks it can flag and foil other instances of smart contract thievery.

    Ironblocks is hardly the only security team building monitoring software for DeFi protocols; it’s not even the only Israeli company. Hypernative is also trying to make a name for itself. Both companies announced seven-figure funding rounds less than a month apart.

    The funding frenzy and competitive landscape speaks to the growth of the on-chain security landscape. While once only inhabited by tracing companies that retroactively follow the money, it's now buzzing with smart contract auditors, economic risk analysis firms, white hats and monitoring platforms that seek to mitigate the damage.

    More is obviously needed. Wednesday morning, crypto crowdfunding platform Poolz became the latest hack victim when it lost over $2 million.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Danny Nelson

    Danny is CoinDesk's Managing Editor for Data & Tokens. He owns BTC, ETH and SOL.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.