This article evaluates and analyzes the foundational security risks of DeFi projects listed on DefiLlama's rankings.
Background
The rapid growth of DeFi (Decentralized Finance) projects has spearheaded a revolution in financial innovation. By leveraging blockchain technology, DeFi enables decentralized financial services—such as lending, trading, and asset management—allowing users to interact directly without traditional intermediaries.
However, the substantial capital and user base of DeFi projects also make them prime targets for hackers. A common misconception among project teams is equating DeFi security solely with smart contract safety, overlooking critical components like domain and server security.
Emerging Threats: Social Engineering Attacks
Notable among recent threats is Angel Drainer, a phishing group exploiting social engineering to hijack domains via DNS compromise. By injecting malicious JavaScript into project frontends, they deceive users into signing fraudulent transactions, ultimately draining assets. Victims in 2024 included Balancer, Galxe, and Frax Finance.
This analysis focuses on DeFi projects ranked by DefiLlama, a leading platform for DeFi metrics, to assess their foundational security risks.
Methodology
Projects were categorized by DefiLlama rankings (Top 50, 100, 200, 500, and 3000). Key evaluation metrics included:
- DNSSEC configuration
- Domain registrar security
- CDN and traffic protection
- Source IP exposure
1. DNSSEC Security
DNSSEC (Domain Name System Security Extensions) enhances DNS integrity and authenticity through cryptographic signatures, mitigating risks like:
- DNS hijacking
- Cache poisoning
- Data tampering
Testing Tools:
- Custom scripts
- Third-party services (e.g., domsignal.com)
Sample Output:
Domain: example.defi
DNSSEC Status: Enabled
RRSIG Valid: Yes
DNSKEY Configured: Correct 2. Domain Registrar Risks
Insecure registrars may lead to:
- Unauthorized transfers
- Lack of 2FA
- Poor privacy controls
Data Source:
- WHOIS lookups (e.g., GoDaddy WHOIS)
Sample:
Domain: sample.defi
Registrar: InsecureProvider LLC
Name Server: ns1.riskyhosting.com 3. CDN & Traffic Protection
Unsecured CDNs risk:
- DDoS vulnerabilities
- Malicious content distribution
- Inadequate encryption
Key Findings:
- 0% adoption of Akamai (top-tier CDN) among DeFi projects.
- Dominance of Cloudflare (62%) and Cloudfront (23%).
4. Source IP Exposure
Exposed IPs enable direct server attacks, bypassing CDN protections.
Example Incident:
On December 7, 2024, @XAI_GAMES suffered a DDoS attack via exposed IPs, leading to a phishing scam that stole 400+ ETH.
Testing Method:
- CDN bypass attempts to identify origin IPs.
Statistical Results
DNSSEC Adoption
| Rank Tier | Enabled (%) | Disabled (%) |
|-----------|------------|-------------|
| Top 50 | 12% | 88% |
| Top 100 | 8% | 92% |
Registrar Risks
- 62% used registrars without 2FA.
- 34% had publicly visible admin emails.
CDN Usage
| Provider | Adoption Rate |
|--------------|--------------|
| Cloudflare | 62% |
| Cloudfront | 23% |
| Fastly | 9% |
IP Exposure
- 41% of projects had leakable origin IPs.
Conclusion
DeFi projects exhibit critical gaps in foundational security:
- Low DNSSEC adoption.
- Risky domain management.
- Suboptimal CDN choices.
- Frequent IP exposure.
Recommendations:
- Enable DNSSEC and use registrars with 2FA.
- Adopt enterprise-grade CDNs like Akamai.
- Conduct regular IP leak tests.
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FAQs
Q1: Why is DNSSEC critical for DeFi projects?
A1: DNSSEC prevents DNS spoofing, ensuring users reach legitimate sites—critical for preventing asset theft.
Q2: How can projects mitigate IP exposure?
A2: Use firewalls, hide origin IPs behind proxies, and employ DDoS-protected CDNs.
Q3: Which registrars are recommended for DeFi?
A3: Providers offering 2FA and domain locking (e.g., Namecheap, Google Domains).
References:
Disclaimer: This content is informational only and not financial/security advice.