Diversification of Investments: Do not allocate all funds into a single token or project. Diversifying investments can reduce overall risk, ensuring that even if some investments fail, significant losses will not occur.
OKX Web3 Wallet Security Team: Rug pull incidents in online projects are common, and users should be vigilant. For example:
1. Research Project Background: Before purchasing any tokens, thoroughly research the project. Understand the project’s vision, team members, whitepaper, roadmap, and other relevant information. Look into community discussions about the project to understand others’ perspectives.
2. Watch for Warning Signs: Some warning signs may indicate that a token is a scam or unreliable. For instance, an anonymous team, exaggerated promises, lack of transparency, etc. If you identify any warning signs, stay alert and avoid purchasing such tokens easily.
3. Use Token Scanning Tools: Utilize token scanning features provided by OKX Web3 Wallet and other platforms. These tools analyze tokens comprehensively from contract codes, on-chain activities, community feedback, etc., to detect potential scam behaviors.
4. Review Contracts: On Ethereum or other smart contract platforms, you can inspect token contract codes. Reviewing contracts can help determine the token’s credibility. Be cautious if the contract code contains suspicious logic or is not open-source.
5. Stay Alert: Do not easily trust recommendations from strangers or promotional content circulated in communities. If you hear overly optimistic promises about a project, be skeptical and maintain rationality.
How Users can Prevent MEV Attacks and Avoid Fund Losses
GoPlus Security Team: To prevent fund losses from MEV (Miner Extractable Value) attacks, users can implement the following detailed measures.
1. Use Dedicated Tools
– MEV Protection: Enable MEV protection features in wallets using specially designed transaction tools or plugins. These tools can identify and avoid potential MEV attacks, safeguarding transactions from miners and other attackers.
– Transaction Protection Services: Some platforms offer transaction protection services that can split or obfuscate user transactions to reduce the risk of MEV attacks. These services help users execute large transactions more securely.
2. Diversify Transaction Times
– Avoid Peak Hours: Refrain from conducting significant transactions during peak trading hours when MEV attacks are more active. Peak hours usually coincide with periods of high market volatility or significant news releases. Opt for trading during low-volume periods to effectively reduce the likelihood of attacks.
– Scheduled Transactions: Use scheduled transaction features to spread large transactions across multiple time points, reducing the risk of exposure to MEV attacks.
3. Utilize Privacy Technologies
– Privacy Nodes: Users can send transactions to privacy nodes (such as Flashbots) to ensure their execution. Flashbots can directly transmit transactions to miners, bypassing public transaction pools to avoid MEV attacks. However, this method may slightly slow down transaction confirmation speeds as transactions need to wait for block confirmation to verify their status.
– Transaction Obfuscation: Employ transaction obfuscation techniques to split transactions into multiple small transactions and mix them before sending. This increases transaction privacy, reducing the risk of attacks.
4. Diversify Strategies
– Diversify Transactions: Avoid concentrating all transactions at the same time or on the same platform to reduce risks and minimize the likelihood of being targeted. By diversifying transactions, attackers find it challenging to predict and intercept all transactions, lowering overall risks.
– Use Multiple Trading Platforms: Utilize multiple trading platforms and tools to avoid conducting all transactions on a single platform, reducing the likelihood of concentrated attacks.
5. Choose Liquidity-Rich Trading Pools
– High Liquidity Pools: Opt for trading token pools with high liquidity and ample LP (Liquidity Provider) availability to avoid slippage losses and MEV attacks due to insufficient liquidity. High liquidity pools can absorb significant trading volumes, reducing the risk of manipulated trades.
– Review Trading Depth: Before conducting trades, check the depth of trading pools and the liquidity status of trading pairs to ensure smooth transactions without significant price fluctuations.
6. Set Reasonable Slippage Tolerance
– Slippage Protection: Set reasonable slippage tolerance levels on trading platforms to prevent deviations from expected prices. Excessively high slippage settings increase the risk of MEV attacks, while too low settings may lead to transaction failures. Adjust slippage tolerance levels according to market conditions to achieve optimal protection.
7. Monitor Continuously and Adjust Strategies
– Transaction Monitoring: Continuously monitor your trading activities to promptly identify and address potential MEV attacks. Use analytics tools and monitoring services to track transaction execution and market responses.
– Adjust Strategies: Based on transaction monitoring results and market changes, promptly adjust trading strategies and protection measures to ensure transactions remain secure.
OKX Web3 Wallet Security Team: We have distilled several key points, including:
1. Focus on Trading Depth and Set Slippage: Pay attention to trading depth, split large transactions into smaller ones, execute them multiple times, and set slippage protection to reduce the likelihood of attacks.
2. Use Privacy-Protected Nodes: Select RBG nodes with privacy protection features to prevent transactions from being public, such as Flashbot privacy RPC nodes.
3. Choose Trusted Wallets and Applications: Use reputable wallets and applications that offer MEV protection (such as OKX Wallet’s native DAPP) to avoid unknown or unverified services.
In the event of a user’s wallet assets being stolen, how can they remedy the situation?
GoPlus Security Team: Many users, upon discovering the sudden disappearance of wallet assets, often lack adequate experience or methods to handle the situation, leading to potential losses that could have been recovered or salvaged. To assist users in taking the correct actions promptly after their assets are stolen, here are several key remedial measures:
First Step: Transfer Remaining Tokens from the Wallet
– Create a New Wallet: Immediately create a new wallet address, ensuring that the new wallet address and private key are secure and not compromised.
– Transfer Assets: Swiftly transfer any remaining tokens in the wallet to the newly created wallet to prevent further asset theft.
– Revoke Authorizations: Use authorization management tools to revoke any unnecessary smart contract authorizations in the old wallet, further protecting remaining assets.
– Use Recovery Tools: When necessary, utilize recovery tools and services to swiftly recover losses. These services can help prioritize asset transfers to avoid detection by hackers’ monitoring programs during automatic transfers.
Second Step: Identify the Root Cause of the Theft
1. Check Devices and Accounts
– Device Security Check: Inspect the device used to access the wallet to ensure there is no malicious software, viruses, or spyware. Conduct a comprehensive scan using trusted antivirus software.
– Account Security Check: Review accounts associated with the wallet, such as trading platforms, emails, etc., to ensure they have not been compromised by hackers.
2. Determine the Theft Reason
– Stolen Private Key: If the private key is stolen, hackers can gain full control of the wallet and transfer all assets. If an EVM wallet’s private key is leaked, hackers can transfer assets from multiple EVM-compatible chains. Check for signs of private key or mnemonic word leakage, such as entering them on phishing websites.
– Deceived Authorization: Check if malicious smart contracts were authorized unknowingly. Use Etherscan or other blockchain explorers to view authorization history and identify unusual authorizations.
– Malicious Signatures: Confirm if any malicious transactions or information were signed. Pay particular attention to operations signed through DApps or other services, identifying any unknown or suspicious signatures.
3. Review Transaction Records
– Analyze Transaction History: Use blockchain explorers (such as Etherscan, BscScan) to review the wallet’s transaction history, identifying suspicious transactions and unclear fund movements.
– Collect Evidence: Record detailed information about suspicious transactions, including transaction IDs, timestamps, counterparty addresses, etc., to provide evidence for subsequent reporting and investigation.
Third Step: Report the Incident
1. Report to Authorities
– Contact Local Law Enforcement: Promptly reach out to local law enforcement agencies to report the wallet asset theft incident. Provide detailed transaction records and evidence to help authorities understand the case.
– File a Police Report: Fill out necessary forms and documents as per law enforcement requirements to ensure the case is formally filed. Provide as many clues and evidence as possible to aid the investigation.
2. Maintain Communication
– Regular Follow-up: Stay in touch with law enforcement regularly to understand the progress of the case and provide any new leads or information.
– Assist in the Investigation: Cooperate actively with law enforcement’s investigation, providing any required information and support.
Fourth Step: Seek Professional Security Assistance and Request Frozen Funds from Relevant Exchanges
1. Contact Professional Security Agencies
– Professional Assistance: Reach out to blockchain security companies or professional security agencies for assistance. These professionals can offer technical support to track and analyze the flow of stolen funds.
– Fund Tracking: Utilize professional blockchain analysis tools to trace the flow of stolen funds, identify the exchanges where funds were sent, and the final recipient addresses.
2. Request Fund Freezing from Exchanges
– Contact Exchanges: Reach out to exchanges related to the flow of stolen funds, providing detailed transaction records and evidence to request their cooperation in freezing the stolen funds.
– Provide Evidence: Submit police case proof, transaction records, and analysis reports to exchanges, proving that the funds are stolen assets and requesting their cooperation in freezing the funds.
– Follow-up Continuously: Maintain communication with exchanges, regularly following up on the progress of freezing funds to ensure the swift recovery of stolen assets.
OKX Web3 Wallet Security Team: When a blockchain user’s wallet assets are stolen, remedial measures may be limited due to the decentralized and immutable nature of blockchain, making transactions irrevocable once confirmed. Here are some possible remedial measures:
1. Take Immediate Action
– Analyze the Theft Reason
– If authorized to a hacker’s address, promptly revoke authorization on the platform.
– If the private key is leaked, conduct a comprehensive security check, identify the reason for the private key leakage, reinstall the system, and change the wallet.
– Asset Salvage
– If there are remaining assets in the wallet or assets in DeFi projects, salvage the assets to minimize losses.
– Track Fund Flow
– Collaborate with white hat hackers or community members to monitor fund movements. If funds are traced to an exchange, request the freezing of the account.
2. Report to Relevant Authorities
– Notify Wallet Customer Service
– Report to Law Enforcement and provide all relevant information. This information can help users freeze exchange accounts when fund movements are detected.
3. Seek Help from the Blockchain Community
– Post announcements on blockchain social media platforms like Twitter. Communities may assist in tracking and preventing fund theft.
– Offer rewards to incentivize white hat hackers or community members to help recover assets.
4. Prevention
– Engage in educational training to learn more about protecting oneself from future attacks.
– Use cold wallets to store a majority of assets offline.
– Securely back up keys.
In conclusion, while the characteristics of blockchain technology make recovering stolen assets challenging, taking swift action and implementing various remedial measures can help minimize losses and mitigate future risks.
Finally, thank you for reading the OKX Web3 Wallet “Security Digest” column in the 6th issue. We will summarize the content of the “Security Digest” series in the final issue, featuring real cases, risk identification, and practical security operations. Stay tuned!
Disclaimer:
This article is for reference only and does not intend to provide (i) investment advice or recommendations; (ii) solicitations to buy, sell, or hold digital assets; or (iii) financial, accounting, legal, or tax advice. Holding digital assets (including stablecoins and NFTs) involves high risks and may experience significant volatility, potentially resulting in worthlessness. Consider carefully whether trading or holding digital assets suits your financial situation. It is your responsibility to understand and comply with relevant local laws and regulations.
