Decentralized finance (DeFi) projects are blockchain-based ecosystems with distributed ledgers interacting for common goals. Digital assets undergo trading on the platforms to facilitate value exchange between users on different networks. Value exchange across the platforms depends on unique protocols that determine the compatibility of the assets. Despite the progress over the years, the DeFi projects are under continuous hacking attacks that define the present risk of such entities. The theft of up to $625 million worth of crypto assets from the Ronin Network underlines the consequences of the existing risks. Some elements make the projects susceptible to attacks. Smart Contract Bugs Smart contracts facilitate trading activities where the execution of trade terms occurs to the satisfaction of terms by both parties. The contracts facilitate the transfer of value in digital assets across user wallets to prevent fraud against creators. However, hackers exploit bugs in the exchange protocols to manipulate and jeopardize the transactions. Damaged exchange protocols give the hacker freedom to change the value of the digital assets. The hacker then spends a few tokens buying the creator’s assets at a low value causing losses to targeted users. Security Limits in Cross-Chain Bridges Cross-chain bridges exist in the form of protocols that allow the transfer of crypto coins from one platform to the next. For example, a bridge will fac...
