Flying Tulip adds a mining circuit breaker after DeFi mining
Flying Tulip, a decentralized finance (DeFi) platform founded by DeFi developer André Cronje, added a circuit breaker that delays termination or queues during irregular outflows as the April DeFi loss escalated amid several major exploits.
According to Flying Tulip's documentation, the strategy is designed to delay the outflow of funds from the protocol, allowing the team to investigate suspicious activity and limit how much an attacker can leak in the worst-case scenario.
Flying Tulip said it works differently on circuit breaker products. The first version of the circuit breaker used in the fixed PUT product, withdrawal can be returned and users must try again later. In the second version, with Flying Tulip's stable asset and settlement currency, ftUSD, withdrawals are queued and requested after a delay.
The Flying Tulip circuit breaker is built with an “open loop” design, meaning that if the security mechanism itself is compromised, transactions are still allowed. The platform said users can track the feature through a special status page.
The design adds a new layer of protection to the DeFi platform, as the latest industry uses exposed risks beyond smart contract code.
Definition of circuit breaker. Source: Flying Tulip
Recent exploits have brought into focus widespread security failures
With recent exploits highlighting not only smart contract errors, but also vulnerabilities tied to signatories, infrastructure, and collateral design, more attention is being paid to outflow controls.
Amir Hajian, a digital assets researcher at trading firm Keyrock, said the biggest failures in April were linked to operational and infrastructure weaknesses, including broken multisigs, configuration errors and key leaks.
The new system deployed by Flying Tulip is designed to reduce abnormal flows and give the protocol time to respond to failures outside of the smart contract.
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Hajian highlighted April's DeFi losses of more than $600 million in the first 18 days of the month, with two instances accounting for 95% of the losses.
On April 2, the Solana-based decentralized exchange Drift Protocol suffered an exploit, costing it an estimated $280 million. On April 19, liquid recovery platform Kelp was exploited for about $293 million, causing the lending protocol Aave to halt the rsETH markets on V3 and V4.
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