@windr Considering the frequency of the different exploits in DeFi, your research is very instrumental to its security. Just last week, Nomad, a cross chain bridge, lost about $200 million to such exploits. If proactive steps like your research are not taken, more exploitation could be imminent in the DeFi ecosystem. However, I have some questions for you:
If we assume that some token holders collude to exploit this system of incentives, how big do you estimate the effect of their actions? Would it be as impactful as in the case of Nomad?
Again, are there other factors that could be considered for the exploit before it becomes impactful and remarkable on the DeFi application?
Also, I came across a research summary by @jasonanastas which provides a nice background to understanding this present research summary. In fact, I consider it a follow-up and recommend it to anyone reading this to go through it for some background understanding. Consider this comparison of the two research summaries:
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Although this present summary is a step ahead, both research summaries are focused on decentralized governance.
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The summary by @jasonanastas suggests that users in a decentralized blockchain system should participate in shaping the governance in such systems. Users should get involved to balance both privacy and security.
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Applying the suggestion from Jasonanastas’ summary, users were made to participate in DeFi governance in this present paper. But this participation comes with a new security challenge, thus complicating the process further.
In the end, we can say that for a successful decentralized blockchain governance, user participation is important. But getting users to participate in this decentralized governance could enable them to game the system in their favor.
In this paper, the researchers applied the option theory to prevent users from gaming the system.
References
Kessler, S. & Betz, B.(2022) Crypto Bridge Nomad Drained of Nearly $200M in Exploit. CoinDesk[online]. Available at: Crypto Bridge Nomad Drained of Nearly $200M in Exploit [Accessed 2nd August 2022].