The phrase “Web3” refers to a wide range of technological developments that have significantly changed how the internet and our online lives operate. There are various lenses available for viewing web3. One defined considered a grouping of rapidly expanding industries underpinned by blockchain technology, such as the Internet of Things, the Metaverse, cryptocurrencies, NFTs, and game-related wireless networks.
Another is a fundamental change in how the internet is set up, with businesses and initiatives moving away from centralized structures and toward more decentralized ones.
The term “web3 security” can refer to the different attack vectors that web3 projects and users must contend with as well as their various lines of defense. It also refers to a crucial objective for web3 in general, as the security of the web3 ecosystem is necessary for the success of all web3 projects.
Anonymity and Identity
The anonymity that web3 provides to its users is one of its main tenants. One of the promises of web3 is that it will preserve identity and data rights by enabling complete user anonymity, especially in light of the titans of web2 frequently making headlines for misusing and exploiting user data. This is most noticeable in cryptocurrencies, where user wallets and transactions are completely accessible on the blockchain but are not associated with the identities of their owners.
As a result, privacy and anonymity are essential to web3 security. However, this anonymity also poses some serious issues for web3 security, since it permits hackers to carry out assaults while aware that it would be very challenging to link their genuine identity to the attacking wallet.
Similar to anonymity, transparency is a key component of web3 security. Web3 projects frequently promote transparency through the open source initiatives and the transparent ledgers mentioned above.
In theory, this openness fosters web3 security since it makes it more difficult for projects and institutions to engage in risky or dishonest behavior behind closed doors. A project can also be tested for bugs, vulnerabilities, and harmful code at any time, from anywhere because the underlying code and ledger activity is accessible to everyone.
Yet again, this enhancement to web3 security also introduces fresh attack avenues. The majority of individuals simply don’t have the time, knowledge, or motivation to thoroughly examine a project’s source code in search of bugs and vulnerabilities. And those that do so are frequently individuals who want to take advantage of it for personal gain. The web3 ecosystem is expanding quickly, and as new technologies like bridges, flash loans, and decentralized exchanges are introduced with the possibility of flaws, this is made worse.
Although decentralization is the cornerstone of the web3 ecosystem, both technologically and as a general idea, many projects continue to use some aspects of centralization. This might be due to technological limits, organizational needs, or even just plain convenience. But in doing so, they provide hackers with a direct line of attack that they can use against them.
The privileged access management risk, when hackers target project team members with privileged access to a network, is possibly the clearest illustration of a centralization risk. They use this to steal high-value assets by taking advantage of areas of centralization in a project’s structure and technology. This was demonstrated in the recent Ronin Network Hack, where a hacker was able to obtain a network’s secret keys and syphon off almost $620 Million through a sophisticated spear phishing assault.
Centralization risk can be seen as an increasing problem for the web3 ecosystem in various ways. Hackers target projects that put off correcting such vulnerabilities as more and more initiatives go toward decentralized methods. In these situations, greater decentralization is the solution to the centralization risk. This could entail giving more nodes access to privileged keys or handing over control of a project’s network from the team to the community.
Here, Web3 security technologies like blockchain analytics and smart contract audits are crucial. By identifying single points of failure and offering solutions, smart contract audits aid in reducing the risk of centralization. Similar to this, smart contract on-chain insights are provided to project teams via blockchain analytics tools.
Web3 security objectives are intrinsically tied to those of a successful web3 ecosystem. Without protective measures, we can’t conceive a healthy web3 ecosystem, and we can’t envisage web3 security without a dynamic and expanding spectrum of projects to guard. In this sense, web3 security is both a prerequisite for the web3 ecosystem and an ongoing issue that must be managed throughout time rather than verified once and then ignored.