Since the fall of ICOs in 2018, the decentralized finance market has become an explosive trend in the crypto space. Digital assets locked away in different protocols to date have crossed the mark of $53 billion.
This dramatic rise in value coupled with the fact that most DeFi protocols run autonomously has made the market a vulnerable target for hackers and other malicious actors. In 2020, at least 17 major DeFi exploits and hacks took place, and the collective amount lost exceeds $150 million. While the blame for these hacks is often pinned on business logic errors and coding mistakes, the problems arising from management override controls are equally responsible. If it tells us anything, in particular, is that blockchain technology is breakable and that hackers can exploit it using several methods. HAPI is an effort to bring a new security standard for all kinds of blockchain industry players to fix any cybersecurity flaws on the fly.
Overview of HAPI
Launched as a first on-chain cybersecurity protocol by Hacken Foundation, HAPI is a set of cross-chain smart contracts, which DeFi projects can embed into their protocols to increase their security level. It creates trustless oracles to feed real-time price data to decentralized protocols, accumulated from trustworthy resources. Additionally, the platform combines decentralized autonomous systems with oracles to deliver SaaS in the DeFi environment that keeps malicious actors away from a protocol.
How Does HAPI Work?
HAPI protocol uses oracles to identify if a smart contract has been audited or not. It happens every time a user selects a token to trade on the decentralized exchange. The platform also uses a DAO, which helps to select a reliable data provider to fetch relevant information from a trusted resource; in most cases, it is a centralized exchange. This data provider is selected through a voting process in HAPI. The smart contract auditor uploads data of the audit into the data provider’s database, which will then transfer this information to the HAPI’s smart contract.
When a user selects a token to trade on the decentralized exchange, a request is sent out to HAPI smart contract to check the audit status. If unaudited, the DEX can inform users of any potential risks and can even impose limits on their buy/sell orders. In some cases, the exchange can also restrict the purchase of the token.
To understand how HAPI Protocol prevents hacking, let’s say a hacker breaks into an exchange’s hot wallet and tries to transfer funds out of the exchange.
The exchange immediately sends the coin details and address to HAPI. The protocol will then filter the address and details. Since it’s a malicious address, HAPI will instantly block these transactions and freeze funds. After proper inspection of the transactions and address in question, the platform releases the funds.
Benefits of HAPI
HAPI seeks to act as a bridge between DeFi projects and the white hats by providing a trustworthy blockchain security information platform that intends to improve the overall security awareness of DeFi space.
DEXs, lending protocols, yield farming protocols, and other DeFi projects run autonomously. They require a security standard that can feed correct data to their protocols. HAPI expects to become the security standard for all DeFi classes.
Data churned out by HAPI will be available on-chain for everyone to view and evaluate, thereby making the audit process completely transparent.
HAPI Token: The Lifeline of HAPI Ecosystem
$HAPI is an ERC-20 token that is at the center of the HAPI platform as they are essential for submitting any data to the platform’s DAO. Token holders can use $HAPI to participate in the governance protocol, as well as, to elect data providers. $HAPI will also serve as the payment method to oracles used for reviewing the security of any token available on a decentralized exchange. Moreover, users can also stake $HAPI to get incentives for validating transactions.
With the current rapid rate of projects entering the decentralized finance market and the growing amount of digital assets being locked in multiple DeFi protocols, HAPI will prove to be a security standard for safeguarding users from audited or unaudited smart contracts. The project aims to improve the security of both centralized and decentralized applications by using the analyzed data.
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