How to Stay Safe
How to Stay Safe and on Top of Security in the Crypto Sphere
"Stay SAFU'' is a phrase used in the cryptocurrency community to mean "stay safe." The term "SAFU" first originated from a humorous, intentional misspelling of the word "safe." It then became popularized after a 2018 video meme that addressed concerns about the safety of funds on Binance, one of the world's largest cryptocurrency exchanges.
The term "SAFU" was later embraced by Binance's CEO, Changpeng Zhao (often referred to as CZ), and has since been adopted by the wider crypto community as a slang term to encourage safety and security in dealing with cryptocurrency.
Increase of Phishing Attacks
How Does a Phishing Attack Occur?
Phishing attacks are quite straightforward. Typically, the victim unknowingly clicks on a deceptive link that will often promise tempting offers, such as a free NFT or airdrop. These malicious links can be found in various places: they might be sent directly via email, posted on social media with several users tagged, or scattered elsewhere across the internet.
Many of these phishing sites are expertly designed to mimic legitimate ones, making it easy for newcomers to the crypto space to be fooled. The unsuspecting user might believe they've stumbled upon a generous opportunity to receive free money, and once they click on the link, they will then usually be prompted to execute a transaction, believing that the NFT, airdrop, or free gift will follow. In reality, though, once they sign the transaction, their assets - especially those with unlimited spending allowances - will quickly be drained.
Other Common Threats
Understanding Other Common Threats in the Crypto Space
In addition to phishing attacks, the world of cryptocurrencies has witnessed a variety of other security threats that every enthusiast should be aware of. Let's break them down in simple terms:
- Rug Pulls: Think of this as a trick where developers or project leaders run away with people's money. They might create a lot of hype around a project, then, once they've gathered enough investment, they disappear, leaving everyone who wasn’t in the know empty-handed
- Protocol Exploits: This is when hackers find a weakness or loophole in the programming of a blockchain or a smart contract and use it to their advantage
- Pump and Dump Schemes: Here, large groups or influential people artificially increase (or "pump") the price of a cryptocurrency. Once it's high enough, they then sell (or "dump") their shares en masse for a profit, causing the price to crash and leaving other investors at a loss
- Sybil Attacks: In simple terms, this is when one user pretends to be many different users, usually to spread false information or trick a network
- 51% Attacks: This sounds technical, but it's actually when one person or group controls more than half of a cryptocurrency's mining power. With that much control, they can then mess with transactions and double-spend coins
- Flash Loan Attacks: This is a more advanced concept, but think of it as borrowing a huge amount of crypto, then using it to manipulate market prices, before returning the borrowed amount within seconds. All the profit the user makes in between is their gain, but it often comes at the expense of other traders
Protect Your Assets
It Is Important to Protect Your Assets
Hackers often come up with new ways to steal your digital assets, so it is important to remain vigilant and stay alert to new threats. However, if you follow and utilize the following steps, I believe you will be able to avoid most potential pitfalls.
Web 2.0 Interactions
Limit Your Web 2.0 Interactions
Traditional internet platforms, often referred to as "Web 2.0," are prime targets for phishing attacks and data breaches. Minimizing your presence on these platforms can safeguard your crypto assets. When using such platforms, ensure your exposure is limited to trusted sites and communities. Attackers often compromise email or social media accounts to trick your contacts into accessing scam websites.
Phishing sites frequently imitate genuine platforms, copying their design and URL to deceive users. To ensure you're always accessing the authentic website and sidestepping potential scam traps, adopt the following practices:
- Direct Access: Use bookmarks for your most-visited crypto websites. This guarantees you'll land on the correct page every time, eliminating the risks associated with mistyped URLs or deceptive search results
- Avoid Search Engines: While it might seem easy to ‘google’ a protocol's website, this approach comes with inherent dangers. Scammers exploit search engine ads to lure users to their fake sites. To avoid being misled, always bookmark the legitimate site once you've confirmed its authenticity
Be careful about what websites you visit and what links you click on. By integrating these habits, you'll significantly reduce the chances of falling prey to phishing attacks.
Ignore DMs from Admins, Unknown Females, and Technical Support. They Will Never DM You First
It's a common tactic for scammers to impersonate certain profiles to gain your trust. Remember, legitimate entities, especially in the crypto space, will never initiate a direct message. Always be sceptical and verify the legitimacy of any potential contact before sharing any information. Better yet, never share sensitive information with anyone.
Passwords and Two-Factor Authentication
Use a Strong Password and Enable Two-Factor Authentication for All Your Crypto Accounts
A strong, unique password combined with two-factor authentication (we recommend Yubico) adds an extra layer of security, making it harder for unauthorized users to gain access to your accounts.
With Yubico, there's an additional physical security layer, meaning that any hacker would require your actual YubiKey to make significant changes to your account.
Only Store Your Private Keys in a Secure Location Offline, and Do Not Share Them With Anyone
Private keys grant full access to your crypto funds. Keeping them offline (cold storage) ensures they are shielded from online hackers. Also, sharing your private keys is akin to giving away the keys to your vault; remember, no trustworthy organization or individual would ever ask for them.
DYOR Before You Venture Into a New Protocol
"Do Your Own Research" (DYOR) isn't just a catchy crypto phrase; it's a fundamental strategy for risk management in the ever-evolving digital asset landscape. When considering becoming part of a new protocol, a thorough investigation is essential to grasp the inherent risks and gauge the project's authenticity. Adopt these practices to ensure you're making informed decisions:
- Engage with Multiple Sources: Venturing into a new protocol without adequate understanding can be dangerous. Dive into its documentation, FAQs and whitepaper to understand its complex nuances and potential risks. Your experience with the protocol begins long before the investment - it starts with your research
- Use Reliable Platforms: Many platforms can be your compass when navigating the vast crypto realm. We, of course, recommend Charlie DeFi website along with our Discord server, where you can ask questions, interact, and verify the facts you come up with in your research
- Beware of Red Flags: If you struggle to locate comprehensive documentation or other educational materials for a given project, treat it as a warning sign. A lack of transparency could indicate a project's unreliability
Exchanges and Wallets
Use Reputable Exchanges and Wallets
Stick to well-known and widely-accepted platforms that have a track record of security and trustworthiness.
Regularly Monitor Your Portfolio
Regularly review your assets and transactions to identify any unauthorized or suspicious activity. One common form of attack that scammers use is to send you assets that will drain your wallet if you sell them. This is done by sending you a token that has a malicious smart contract attached to it. When you sell the token, the smart contract will execute and empty your wallet. By monitoring your portfolio regularly, you can make sure that you never buy such assets, and if they appear in your wallet, you leave them untouched.
Latest Security Threats
Stay Up-to-Date On the Latest Security Threats In the Crypto Space
By staying informed, you can proactively defend against emerging threats. There are a number of ways to stay up-to-date on the latest security threats, including reading security blogs and news articles, following security experts on social media, joining security mailing lists and attending security conferences.
A multi-signature wallet is a cryptocurrency wallet that requires multiple private keys to authorize a transaction. This mechanism enhances the security of the stored assets, akin to a bank vault that necessitates multiple keys to be accessed.
Utilizing a multi-signature wallet is especially vital for long-term crypto holdings. The requirement of multiple keys ensures that even if one key becomes compromised, the assets remain secure.
For those considering the adoption of a multi-signature wallet, it is advisable to initiate with a platform such as Safe Wallet. A recommended starting configuration is the 2-of-3 multisig setup, where any two out of the three private keys may be required for transaction authorization.
To bolster the security framework of a multi-signature wallet, consider integrating hardware wallets, such as Ledger or Trezor. These devices add an additional layer of security, further safeguarding your assets from potential breaches.
For Risky Investments, Use a Burner Wallet
In the DeFi world, it's important to segregate assets based on their risk profiles.
- Use a separate wallet for high-risk investments or routine transactions, ensuring it operates independently from your primary vault that contains any long-term assets
- Activities like claiming airdrops or minting NFTs should exclusively occur in this high-risk wallet.
This approach ensures that even if an error occurs, your main savings will remain untouched, providing a balance of flexibility and security for crypto users
Transaction Preview Tools
Transaction Preview Tools - Pocket Universe, Stelo, Fire
Tools such as Pocket Universe, Stelo, and Fire allow users to check the details of a transaction before completing it. Their primary function is to help users detect and avert malicious transactions. These tools provide an intuitive interface and detailed transaction insights.
Have you ever come across a transaction that doesn't look right, like an unexpected transfer of a large sum or assets? Transaction preview tools serve as your first line of defense, often coming as browser extensions and offering real-time pop-ups that outline the specifics of proposed transactions.
Use Rabby Wallet Instead of MetaMask
Opting for Rabby wallet presents several advantages, especially when compared to the more widely-used alternative, MetaMask. One of Rabby's standout features is its built-in transaction preview, which not only offers an extra layer of security but also eliminates the need for additional extensions dedicated to transaction previews.
Update Token Allowances
Regularly Monitor and Update Token Allowances
For crypto users, particularly within the Ethereum network and DeFi, it's imperative that you consistently review and adjust token allowances. This prevents the risk of unauthorized or unwanted asset movements, ensuring the security of your digital assets.
- Risk with "Unlimited" Approvals: Many DeFi applications prompt users to grant "unlimited" asset spending permissions. This streamlines the user experience as repeated approvals aren't necessary. However, the downside is significant: if a wallet is ever compromised, unlimited approvals can provide a gateway for attackers to siphon off all accessible funds
Best practice dictates that you periodically audit asset allowances. Wherever possible, revoke or reduce any unlimited approvals to limit exposure. A platform like Revoke.cash is invaluable in this context, as it simplifies the process of monitoring and adjusting asset allowances, ensuring that users can maintain control over their assets with ease.
Use Verification Tools
Use Smart Contract Verification Tools
Smart contract verification tools are designed to analyze and verify the integrity of smart contracts by identifying potential vulnerabilities in the smart contract code.
Establish an Escape Route
Despite having access to various tools and best practices, it's wise to prepare for unforeseen challenges. Tools with features such as a "panic button" can help you act quickly when you detect a potential security breach.
- Webacy: This Web 3.0 security solution offers the dual feature of a backup wallet and panic button. This means that should there be an immediate threat, or if an individual feels their assets are at risk, Webacy’s panic option facilitates a quick transfer of assets to a predetermined backup wallet
- Spotter: Tailored to those with a deep understanding of the blockchain, Spotter provides real-time monitoring and defensive measures, boasting ultra-fast detection capabilities that ensure on-chain threats are identified and countered in fractions of seconds
Sound the Alarm
Report suspicious activity promptly to help the community stay safe.
Your vigilance can make a difference. If you encounter a potential cryptocurrency phishing scheme, it's crucial to sound the alarm. This could involve posting a brief public service announcement in community chats, sharing a warning on social media, or logging a report on dedicated platforms such as CryptoScamDB. Taking a brief moment to notify others not only protects them but strengthens the security of the entire crypto community.
DeFi, and the whole crypto ecosystem, requires more than just technical know-how; it demands an ever-evolving mindfulness. After reviewing the security tools and strategies in this report, one thing should be clear: taking steps to protect your digital assets is extremely important.
It's good to know there are tools like the ones we've discussed out there, but it's on us to use them, and do it at the right time. Always be on the lookout for new risks and make sure you update your safety habits. If you find something that seems off or dangerous, share it. A quick heads-up could save someone a lot of trouble.
Remember, our digital assets are valuable, and their safety depends on both good tools and our own responsible actions. Let's stay SAFU together.