HyperJump Elaborates on Their Robust Ecosystem, How to Avoid Flash Loan Exploits

HyperJump has explained what steps they are taking to reduce potential attack vectors on their platform.

By
Robert D. Knight
on
June 13, 2021
Category:
BSC News

HyperJumps Stance on Flash Loans

HyperJump, the DeFi protocol on Binance Smart Chain (BSC) and Fantom which incorporates a dual token ecosystem with NFTs and gaming under one roof, has announced a series of measures it has taken to help protect itself and its community from the spectre of flash loan exploits. An in-depth medium post by has detailed the risks and everything the team has done to mitigate flash loans.

Flash loans have become the scourge of BSC in recent months with a number of protocols including Belt Finance, JulSwap and PancakeBunny falling victim to these attacks. The ongoing proliferation of these exploits even encouraged PancakeSwap to detail some strategies on how DeFi platforms could minimize their risk profiles.

Source

Flash Loan Exploits

As bsc.news previously reported, flash loans are a perfectly legitimate financial tool which was first proposed by Marble Capital in 2018. A flash loan is a situation in which a loan is taken and repaid within a single blockchain transaction, effectively giving it a time duration of zero. Due to the negligible time in which a flash loan is seen to be ‘active’ a large amount of capital can be borrowed for very little cost. A flash loan allows anyone to successfully profit from arbitrage opportunities - exploiting the cost differences of the same asset across platforms.


HyperJump

According to HyperJump, 90% of flash loan exploits use one of two methods. Oracle exploits and reentrancy exploits.

The protocol explains their prevention method for the first type of exploit thusly, “Hyperswap utilizes code in our own contracts to update the reserves on every mint/burn/swap call. The AMM is its own price oracle, which updates the reserve before leaving the function, averaging the prices, and making a Price Oracle Exploit unprofitable.”
For the reentrancy exploit HyperJump explains the prevention strategy as, “Using a modifier blockRentrancy: the idea is to lock the contract while any function of the contract is being executed, so only a single function in the contract can be executed at a time.”

In both cases a modification to the code has been made to make the platform more secure, but HyperJump concedes, “We can’t claim to be 100% unexploitable, no one can, and this is certainly not an exhaustive list of ways that an exploit can occur.”

Conclusion

During a period in which flash loan exploits have been a growing problem for protocols on Binance Smart Chain, the attention to which HyperJump are dedicating to securing their protocol from these attacks is welcome. For safety conscious DeFi users, HyperJump has made an appealing proposition.


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Robert D. Knight

Robert D. Knight is an experienced journalist and copywriter who has been working in crypto for 4+ years. His bags are heavy and he also hodls some cryptocurrency.

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