HOW MERLIN LAB USES UPGRADED SECURITY MEASURES TO PREVENT FLASH LOAN ATTACKS ON DEFI PLATFORMS
Fraud is an indispensable factor, as far as financial systems are concerned. Fraudulent transactions in this case include hacking accounts and falsifying account information in a bid to swindle the unsuspecting public.
This has been going on for many years until cryptocurrencies came into the picture following the launch of Bitcoin (BTC) in 2009.
One would hope that cryptocurrencies would be the game-changer.
As much as cryptocurrencies as a whole have created a veritable financial system, more needs to be done. For example, flash loans are one of the vulnerabilities that are tenable on cryptocurrencies and Decentralized Finance (DeFi) platforms.
WHAT ARE FLASH LOANS?
Flash Loans are unique loan systems launched on the Decentralized Finance (DeFi) system. The idea is to use this loan system to simplify the lending and borrowing of crypto assets.
However, Flash Loans are susceptible to multiple financial downsides that include Flash Loan Attacks, whereby Decentralized Finance (DeFi) protocols are opened up to vulnerabilities.
The highpoint of the use of Flash Loan Attacks is the low-risk characteristic and the affordability of Flash Loans, which make the loans very attractive for cybercriminals.
INTRODUCING THE ADVANCED FLASH LOANS SYSTEM
Flash Loans may be susceptible to accelerated attacks in the Decentralized Finance (DeFi) space, but they are still one of the best ways to lend and borrow crypto assets across DeFi protocols.
For that reason, I am pleased to let you know that something can be done to prevent the multiple exposures of Flash Loans to attacks.
Merlin LABS is the platform that introduces one of the best Flash Loans systems. This Labs is the technical development aspect of the broader Merlin ecosystem.
The Merlin Labs is interested in improving the fortunes of Flash Loans because these loans are easy to process and don’t often require collaterals.
Here are some of the strategic ways that the Merlin Labs will use to strengthen the Flash Loans system:
1- NO EXTERNAL SMART CONTRACTS
Most of the transactions involving Flash Loans are facilitated via smart contracts. These smart contracts are always the pathway for attacks on Flash Loans.
On the contrary, Merlin Labs has created a revolutionary approach to preventing reducing attacks on smart contracts used for Flash Loans.
The primary measure to this end is to stop all external smart contract interactions within the broader Merlin ecosystem. With the deployment of this strategy, it has now become easier for Merlin Labs to prevent Flash Loans attacks within the Merlin ecosystem and protocol.
2- FAIR PRICING
Merlin Labs also sourced the Fair Asset Price tool from Chainlink. The Fair Asset Price is one of the best Decentralized Price Oracles. There is also the implementation of the Fair LP Price calculation by Alpha Homora.
The combination of these 2 pricing mechanisms will go a long way to bolster the fair LP token prices for the different crypto assets within the Merlin protocol.
Merlin Labs is continually implementing new strategies that will help in making the Decentralized Finance (DeFi) space one of the best and healthiest spaces in the cryptocurrency economy.
Merlin important links:
Telegram Announcement: https://t.me/merlinannouncements
Telegram Community: https://t.me/merlinlab
Telegram Bounty Rewards Group: https://t.me/merlinbounty
Telegram Username: @Heroalt