Has the revolution gone too far, and are we indeed just building trustless castles on sand? While everyone obsesses over smart contract vulnerabilities, the real danger might be lurking where the chain ends: off-chain. We’re not discussing the APIs, the storage solutions, whatever the heck it’s hosted on—which centralized servers support the dream, decentralized as it may be. OneKey’s recent acknowledgment of BitsLab’s Web3SecuringPlan as a “trustworthy” plan are encouraging signs. It points to a key opportunity that we can’t afford to take for granted and must act on without delay.
Off-Chain: Where The Real Hacks Happen?
Think of a laser grid protecting a bank vault door, while the air vent system is completely unsecured. That's Web3 right now. We’re putting all of our resources into securing the blockchain itself, while ignoring everything around it. BitsLab’s Web3SecuringPlan, especially with its emphasis on proactive penetration testing, is an important, if overdue, acknowledgement of this reality.
For example, the Bybit $1.46B loss, which was unfortunately mentioned in OneKey’s announcement, needs to be a wake-up call. It wasn’t a smart contract exploit that did them in, it was an off-chain vulnerability that caused the cavalcade of catastrophic losses. How many other similar time bombs are out there, waiting to fail explosively? Are we so enamored by the promise of decentralization that we’ve forgotten core concepts of security? This isn’t only the story of lost crypto — it’s the story of broken trust, and the possible death of the entire Web3 dream.
Regulation: Friend or Foe to Security?
The response to every Web3 issue should NOT be more regulation. The knee-jerk reaction to any Web3 problem is the urge to regulate. But is that the right solution? The problem is that off-chain security often has to contend with infrastructure that is very similar to what we would want to use in traditional web services. How should regulators be thinking about these— are these crypto or are these businesses like any other?
The problem is this: overbearing regulation could stifle innovation and drive development underground. A hands-off approach combined with no user protections creates the perfect climate for scams, hacks and outright fraud. We need to take a more balanced approach – one that fosters innovation and experimentation, but ensures that projects are held to minimum security standards. Call it building codes for the internet. Often perceived as burdensome, cumbersome, or restrictive, these safeguards are meant to ensure that no one gets hurt.
Maybe an auditing and disclosure based framework is the solution. Establish routine security audits by independent firms for all projects, requiring public disclosure of any vulnerabilities. This would push projects to consider security from the outset as well as arm users with the information necessary to make informed choices. And what about insurance? Might decentralized insurance protocols provide valuable protection for users who have funds drained in off-chain exploits? This is the type of conversation that we should all be having.
The Human Cost: Beyond the Headlines
It's easy to get lost in the technical jargon and the dollar figures, but let's not forget the real victims here: the users. The people who are being crushed – who are losing all of their savings, their livelihoods, their faith in the promise of Web3.
Imagine that single mother, putting her entire life savings into what looks like a very competitive DeFi project. Second, hope and pray that it doesn’t disappear overnight from an off-chain exploit. Now picture the emotional distress, the sleepless nights, the feeling of utter betrayal that these families will experience. This isn’t just an abstract discussion — these are actual people with real, lived experiences.
For those of us in the Web3 community, we have a moral obligation to safeguard these users. As a society, we can’t throw up our hands and say, “Caveat emptor.” We need to create a culture of security, where every project puts user safety first, third and last. That starts with acknowledging the elephant in the room: off-chain security is the Achilles' heel of Web3, and we need to address it before it's too late.
OneKey’s new partnership with BitsLab is a big move in that direction! It's just one step. It’s going to take the whole of the Web3 ecosystem to rally around this effort. Developers, investors, regulators, and users have critical parts to play in creating a more secure and trustworthy future. Otherwise, the dream of a decentralized web will remain just that: a dream. And a very expensive one at that.
