Ethereum

What Are The Most Secure DeFi Protocols On Ethereum?

By Cryptofab | Cointune | 26 Feb 2023


With the recent events regarding Oasis app, the frontend of MakerDAO, which upgraded their smart contract to steal the funds from Wormhole hackers by using Oasis multisig wallet, it can be useful to understand how multisig wallets are used for some other protocols on Ethereum (ETH) blockchain:

  • MakerDAO Oasis uses a multisig wallet to secure the funds held in its system. Specifically, the platform uses a 2-of-3 multisig wallet, meaning that any two out of the three designated keyholders must sign off on a transaction before it can be executed.
  • Uniswap is a decentralized exchange protocol that allows users to trade ERC-20 tokens without the need for an intermediary. While Uniswap does use multisig for some functions, such as admin access to the protocol contract, it does not use multisig for control of user funds.
  • Compound is a lending and borrowing platform that allows users to earn interest on their crypto assets. Similar to Uniswap, Compound uses multisig for some administrative functions, but not for control of user funds.
  • Aave is another lending and borrowing platform that allows users to earn interest on their crypto assets. While Aave does use multisig for some functions, such as admin access to the protocol contract, it uses a non-multisig system for control of user funds.

Therefore, Uniswap, Compound and Aave do not use multisig for control of user funds like MakerDAO Oasis does. However, it does not mean that it is 100% sure, since all DeFi protocol have vulnerabilities. The safety can be assessed by checking several key points, like some independent websites do by applying the same methodology to all the protocols they analyse. One of them is defisafety.com. On this site, MakerDAO score is 81% whereas it is 94% for Aave. However, as usual, it is crucial to do your own research before investing in any DeFi protocol.

Disclaimer: this article does not contain any financial advice. The information is provided for general informational and educational purposes only.

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Cryptofab
Cryptofab

Studying Bitcoin, Alts & Arts.


Cointune
Cointune

Crypto, DeFi and passive income.

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