7+ Practices for Web3 Security Risk Mitigation

When assessing the potential of Web3, businesses must take a proactive approach to security. Here are 7+ practices for Web3 security risk mitigation.

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Web3 is a rapidly growing but contentious technology movement. Web3 supporters broadly oppose centralized Big Tech control and rally around a vision of decentralization, specifically an Internet that uses blockchain-based architectures to distribute power and gives end users more control, participation, and economic benefit. 

When assessing the potential of Web3, technology developers and businesses must take a proactive approach to security. From traditional social engineering issues, internal exploits, and flawed implementations to an emerging class of native Web3 exploits in decentralized apps, exchanges, and wallets, blockchains and cryptocurrencies have been the subject of increasing security concerns.

Blockchain-related attacks are frequently more damaging than traditional applications. These events are frequently irreversible and rely on smart contracts, which, when used, cascade across the network rather than a single node.

By following these best practices for Web3 security risk mitigation, security leaders can help mitigate risk.

1. Implement Safety-by-Design Principles


Traditional security design principles are just as important in Web3 systems as they are in other systems. Safety standards should be incorporated into building designs, products, and infrastructure. Developers, for example, should work to reduce attack surface areas, secure defaults, and zero-trust frameworks, as well as ensure separate and minimal privileges. The principles that guide their design should take precedence over technology.

2. Accept different blockchain designs in order to apply security more strategically


Although security-by-design principles should be prioritized, businesses should also consider the type of blockchain they intend to use.

Ethereum and Solana are public blockchain networks that anyone can join. Depending on the app, users can also enjoy varying degrees of anonymity. In contrast, a private or authorized blockchain network requires users to confirm not only their identity, but also membership and access privileges.

Because different blockchains, whether public or private, have different complexities, understanding one does not imply understanding them all. Other criteria, such as speed, efficiency, and resiliency, are informed by a variety of hybrid infrastructures, such as sidechains, multi-chains, cross-chains, federations, oracles, and other distributed ledger components.

3. Understand market dynamics and Web3 trust.

Web3’s Wild West consists of many legal, cultural, and economic dynamics that designers must consider. Certain configurations or integrations, for example, may conflict with existing compliance regimes such as Know Your Customer or GDPR.

Aside from identity, different jurisdictions have different cryptographic technology regulations. Furthermore, many Web3 entities are autonomous, decentralized projects or organizations.

Consider the security implications of social engineering as well: What are some ways that Discord communities may misunderstand or exaggerate the benefits of digital assets? How will bad actors be incentivized by the encrypted financialization of crypto platforms?

4. Collaborate on security and intelligence resources with the industry.

Collaboration with peers in the industry benefits cyber risk management programs by increasing understanding and mitigation of emerging threats. Some Web3 channels resemble traditional resources, such as newly launched open source platforms like GitHub or OODA Loop. 

Database of Cryptocurrency Incidents Following the discovery of a high number of cybersecurity incidents among Web3 projects, OODA Loop developed the database to assist security researchers and engineers in identifying common categories of cyberattacks and root causes. 

Builders must also publish a developer security guide on their platforms. Because Web3 development is relatively open, other places to look include Reddit, Discord, and Twitter.

5. Integrate Web3 initiatives into security governance.


Before and during the development process, organizations must model, analyze, and mitigate risks. Blockchain developers and security professionals should ask the following questions ahead of time:

  • What are the most vulnerable code areas?
  • What impact might incident response protocols have?
  • How will security flaws be reported?
  • How will users be encouraged to take risks?
  • How will user permissions be managed, and what kind of interoperability should be considered between wallets, chains, and so on?
  • Is the organization prepared for community governance through participation?
  • In the event of a breach, how would major changes or forking of the chain be handled?

Such questions are best addressed in advance rather than during an incident. Responses should be consistent with the cybersecurity governance program of the organization.

6. Use attack prevention strategies.

The risk of information quality or data manipulation should be linked to on-chain versus off-chain decisions, as well as what information is required to validate transactions or mint ownership.

Address common threats like phishing in the technology’s architecture as well as the UX workflow. Security teams, for example, should prompt users to install malicious link detection software in their browsers, mandate multifactor authentication, and send regular reminders to avoid open Wi-Fi networks or perform system updates.

Furthermore, you can avoid blockchain-specific risks such as 51 percent or Sybil attacks by avoiding proof-of-work consensus algorithms, monitoring mining pools, and analyzing other nodes for suspicious behavior.

Given the new user responsibilities that come with blockchain keys and wallets, security must be built into user onboarding, communication, and experience design.

7. Independently examine and audit contracts and codes

Developers must thoroughly test their projects both before and after releasing new code and commits, despite the rapid pace of Web3 development. When insiders get around common exploits, insider attack vectors, user privacy protections, and other bugs, it can result in significant breaches and losses.

Organizations should also perform regular audits, particularly since startup developers might not have the same security controls as established businesses.

The good news is that DeepReason, a company that has created technology for audit-grade controls at every stage of development, is one of a new class of native Web3 security features that is emerging.

This new class of technologies should be embraced by security leaders. However, distributed ledgers, crypto assets, wallets, and a broader financialization of digital interactions present a number of different security implications. Many conventional security practices will still be applicable. Although Web3 may appear to be unimportant to businesses, the underlying technologies hold the potential to significantly disrupt both businesses and their customers.

Final Words,

To help mitigate traditional and novel cyber threats, tech builders and businesses evaluating decentralized technologies should keep these seven Web3 security best practices in mind.

Besides, when running your Web3 startup, if you encounter any difficulties, please contact Satom Venture Studio, where they encourage and incubate blockchain startups focusing on Web3 and NFT apps.

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