Can a decentralized exchange be hacked?

Asked 2 years ago

Good morning peeps, I'm investigating the safety of a DEX exchange. What is the risk level of a decentralized exchange being hacked? Can you check the protocol?

Hugh Bender

Monday, April 25, 2022

Though a Decentralized Exchange (DEX) cannot be hacked, it is not completely immune to security threats. For instance, PancakeSwap suffered a DNS hijack in 2021. The attackers rerouted PancakeSwap traffic to a malicious server to gain users’ login details. In this case, the PancakeSwap protocol had not been hacked since the attackers were only limited to the front end of the PancakeSwap website.

Remember, DEX users enjoy the privilege of controlling direct custody of their wallets’ private keys and assets. Therefore, as long as individual users did not disclose their keys during the hijack, their assets remained safe. From this example, it is almost impossible for hackers to steal huge amounts of user funds, as often seen in CEXs.

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