Crypto Security Firm Ironblocks Builds ‘Firewall’ for DeFi Protocols

As an analyst with a background in blockchain technology and cybersecurity, I see great potential in Ironblocks’ new Firewall tool for DeFi developers. The persistent threat of hacks and heists in the decentralized finance space is a major concern, and this free service offers a proactive approach to security.

In the realm of crypto, a multitude of security companies have established themselves, focusing on safeguarding networks following hacking incidents and heists of cryptocurrency protocols. Among these firms, one has recently introduced an innovative solution: a “firewall” designed to prevent such thefts from occurring in the first place.

As a security analyst at Ironblocks, I’m excited to share that our latest offering, Firewall, is now available for free for developers looking to bolster the security of their smart contracts. In an exclusive interview with CoinDesk, our CEO Or Dadosh revealed this news. Firewall functions as a user-friendly security solution, enabling developers to effortlessly implement various “policies” that monitor transactions on their decentralized finance (DeFi) platforms for any signs of suspicious activity.

An open-source toolkit could provide some relief against the continuous danger of hacks in Decentralized Finance (DeFi). According to Dadosh, there are approximately ten distinct hacking incidents targeting crypto lending, trading, staking, or other financial platforms each week. The consequences of these breaches are significant; PeckShield reported a total loss of around $60 million in April alone.

Firewalls are integrated into the processing procedures of smart contract transactions, according to Dadosh. Developers can choose from a few policies to monitor the transaction flow for suspicious behaviors or signs of an ongoing cyberattack.

As an analyst, I would explain it this way: “I can interrupt a particular transaction that could potentially harm the application without halting the entire application’s functionality. This is analogous to how web2 firewalls operate.”

When the service initially goes live, there will be three major clients utilizing it: Linea, the zkEVM chain; AltLayer; and the layer-2 network, Kinto. Dadosh mentioned that additional users are anticipated in the future.

Ironblocks, a startup based in Israel that recently secured $7 million in venture funding, offers a free service not intended to generate revenue directly for the company. Instead, this service functions as a lead generator for Ironblocks’ other crypto cybersecurity solutions, such as the forthcoming “Venn Security Network.” The specifics of Venn Security Network remain undisclosed by Ironblocks’ representative, Dadosh.

In environments where codeless adjustments are difficult due to code immutability, the Firewall toolkit might represent a significant advancement for security. Dadosh explained that this solution allows developers to implement or revoke additional security policies post-deployment.

As a researcher studying the development process in the blockchain community, I have observed that how changes are implemented is largely at the discretion of the developers. They may consider delegating decision-making authority to their projects’ governance communities represented by token holders, implementing a multi-signature (multisig) wallet controlled by multiple parties, or handing over control to a Decentralized Autonomous Organization (DAO). These options aim to introduce more decentralization and community involvement in the decision-making process.

The point is to stop the hacks before they happen.

“In the majority of hacking incidents, the damage is irreversible, as stated by Dadosh. Our goal is to avoid such outcomes.”