SEC - Page 86

During a roundtable at Korea Blockchain Week (KBW) 2024, Solana Foundation’s executive director, Dan Albert, addressed concerns about the Solana network’s decentralization following a recent incident where a critical vulnerability was patched quietly by validators.

On August 9, a Solana validator named Laine highlighted a severe vulnerability that could have potentially halted the network. To prevent any exploits, the validators coordinated a patch in secret, fearing that public disclosure could allow an attacker to reverse-engineer the vulnerability and compromise the network. This behind-the-scenes coordination led some to question the network’s decentralization.

In response to these concerns, Albert explained at the KBW 2024 that the deployment of the patch was a necessary response to a security threat that could have “potentially caused a liveness issue on Solana mainnet.”

However, Albert strongly countered the notion that this action implied centralization. He stated:

“Regarding your question of decentralization, I think it’s important not to confuse centralization with the ability to coordinate. There are 1,500 block-producing nodes all over the world that are operated by almost as many individuals.”

Albert acknowledged that some companies operate multiple nodes, but emphasized that the coordination of the patch was a matter of communicating with active community members and node operators within the ecosystem. “We’ve spoken with them on occasions for other things,” he added.

He also highlighted that the validators independently choose the software they run, noting that the patch was open-source and that the Foundation never mandates running closed-source software.

“The ability to communicate with them, or some of them, voluntarily, is not to be confused with centralization,” Albert reiterated.

This incident isn’t the first time the Solana network has faced accusations of centralization. In 2022, a community member criticized the network as overly centralized, likening it to “another version of the traditional system.” Despite these claims, Solana-based DeFi firm Unstoppable Finance defended the network, asserting that Solana’s validator count is comparatively high and promotes greater decentralization than many realize.

During a roundtable at Korea Blockchain Week (KBW) 2024, Solana Foundation’s executive director, Dan Albert, addressed concerns about the Solana network’s decentralization following a recent incident where a critical vulnerability was patched quietly by validators.

On August 9, a Solana validator named Laine highlighted a severe vulnerability that could have potentially halted the network. To prevent any exploits, the validators coordinated a patch in secret, fearing that public disclosure could allow an attacker to reverse-engineer the vulnerability and compromise the network. This behind-the-scenes coordination led some to question the network’s decentralization.

In response to these concerns, Albert explained at the KBW 2024 that the deployment of the patch was a necessary response to a security threat that could have “potentially caused a liveness issue on Solana mainnet.”

However, Albert strongly countered the notion that this action implied centralization. He stated:

“Regarding your question of decentralization, I think it’s important not to confuse centralization with the ability to coordinate. There are 1,500 block-producing nodes all over the world that are operated by almost as many individuals.”

Albert acknowledged that some companies operate multiple nodes, but emphasized that the coordination of the patch was a matter of communicating with active community members and node operators within the ecosystem. “We’ve spoken with them on occasions for other things,” he added.

He also highlighted that the validators independently choose the software they run, noting that the patch was open-source and that the Foundation never mandates running closed-source software.

“The ability to communicate with them, or some of them, voluntarily, is not to be confused with centralization,” Albert reiterated.

This incident isn’t the first time the Solana network has faced accusations of centralization. In 2022, a community member criticized the network as overly centralized, likening it to “another version of the traditional system.” Despite these claims, Solana-based DeFi firm Unstoppable Finance defended the network, asserting that Solana’s validator count is comparatively high and promotes greater decentralization than many realize.

Cryptocurrency hackers stole $313.86 million in digital assets across more than 10 cyberattacks in August, casting shadows over the security and broader acceptance of cryptocurrencies.

Blockchain security firm PeckShield reported that phishing attacks were the primary method used, accounting for 93.5% of all stolen funds, amounting to $293.4 million in losses. The two largest phishing attacks of the month led to the theft of $238 million in Bitcoin and $55.4 million in Dai.

Additional significant incidents included an exploit on the Ronin Network, which, despite recovering $12 million from the hacker, suffered unauthorized transactions totaling $5.1 million. The decentralized finance protocol Nexera also reported a loss of $1.83 million due to a smart contract exploit.

An Immunefi report released on Aug. 29 highlights the ongoing risk in the crypto sector, noting that $1.21 billion in digital assets has been lost to hacks and rug pulls year-to-date as of August 2024.

In one of the year’s biggest cyber incidents, India’s WazirX crypto exchange lost $234.9 million from one of its multisig wallets in July. The exchange is actively working on a recovery plan that includes pursuing legal proceedings in Singapore.

In response to these security challenges, a team of ethical hackers has formed an elite unit called Security Alliance or SEAL, led by white hat hacker and Paradigm researcher Samczsun. Since its launch in August 2023, SEAL has tackled over 900 hack-related issues.

An Aug. 22 report by Immunefi reveals nearly 80% of cryptocurrencies never regain their pre-hack value, which often results in more significant long-term damage to projects than the immediate financial loss of the hack itself.