Interview with Akshay Nassa, Chimp Exchange CEO
Transparency is typically seen as an absolute good in the crypto market, but it also presents security challenges. The total visibility of balances creates a situation where hackers can target specific addresses and threaten end users, suggests Akshay Nassa, CEO of Chimp Exchange. In this interview, Akshay shares his insights on balancing openness and security and argues that encrypted DEXs can tackle hacks without compromising transparency.
Akshay Nassa
With over eight years of experience and a background in computer applications, Akshay Nassa is a recognized player in blockchain and decentralized finance who contributes significantly to the growth of secure and user-friendly products. As the Founder and CEO of Chimp Exchange, Akshay has driven the creation of the first encrypted DEX on EVM, enabling cross-chain and confidential trading. His user-centric approach has simplified the DeFi experience, making it accessible for all users.
Q: Cryptocurrency hackers stole $1.38 billion in the first half of 2024 – twice as much as in H1 2023. Key attack vectors remained the same: private key and seed phrase theft, smart contract attacks, and flash loan exploits. Why did the crypto industry fail to prevent this?
A: The crypto market is evolving so fast that sometimes security measures can’t keep up. Moreover, there’s nothing 100% “hack-proof.” A booming blockchain industry will always be the hotbed for hackers and scammers.
It’s also important that your crypto funds are visible to everyone. Having your balances publicly observable is like walking down the street shaking a wad of cash. The visibility of balances poses a threat, as hackers can track and target your funds. Some attacks occur because intruders know whom to target and try to steal from specific addresses.
Q: Transparency is a key feature of crypto. Should we also consider that a security challenge we need to tackle at this point?
A: Absolutely – transparency is a double-edged sword. On the one hand, it builds trust and accountability, which is fantastic. On the other, it exposes vulnerabilities. Let me bring another metaphor: building a glass house creates trust as everyone can see what’s inside, but it also means potential attackers can spot weaknesses. We need innovative solutions like zero-knowledge proofs and secure enclaves to keep things transparent without giving away too much.
Q: Which measures can we take to reduce targeted attacks on exposed balances?
A: First off, it’s some basic security measures that are commonplace in crypto. For users, it’s crucial to secure private keys and seed phrases with hardware wallets and multi-signature solutions. For projects building on Web3, regular audits and thorough testing of smart contracts help catch vulnerabilities early. Educating users about phishing and other social engineering tactics is also key.
Moving further, there are some specific measures that can secure Web3 trading. Many DEX traders feel safer when their transactions are encrypted, and the swaps are confidential. This way, attackers have significantly lower chances of tracing their funds and targeting the address. At Chimp Exchange, we prevent asset tracking, counteract identity disclosure, and make sure customers’ trades cannot be traced.
Trade tracking gives way to malicious price manipulation techniques. For example, when attackers identify a high concentration of stop-loss orders at certain price levels, they can dump the price in that direction and activate unintended selloffs, causing the traders to lose their funds. Preventing this kind of tracking helps build a safer trading environment.
Q: How do we strike a better balance between transparency (essential for trust) and user privacy, considering the risk?
A: Finding that sweet spot is challenging but doable. As I said earlier, privacy-preserving technologies like Secure Enclaves & zk-SNARKs can help. These techniques allow for verification without spilling all the details. This way, we maintain transparency for trust and compliance while keeping user data private.
Q: Are privacy-focused features, like confidential transactions, gaining traction as a response to rising hacks? What are the potential challenges and benefits for DEX adoption?
A: Definitely, there’s a growing interest in privacy-focused features as hacks become more common. Concepts like dark pools and confidential transactions, where transaction details and user intents can be hidden, are being explored. The benefits include enhanced privacy, better security, and likely increased adoption as users feel safer. The challenges here are ensuring seamless integration of those concepts, fostering user education, and dealing with regulatory hiccups.
Q: What is the regulatory status of confidential transactions? Is there anything users need to know before engaging with a privacy-focused DEX?
A: The regulatory environment for confidential transactions is still taking shape. People need to be aware that privacy-focused applications – like Chimp Exchange, to name one – provide confidentiality within the boundaries of regulatory compliance. In Chimp’s case, privacy is provided through encryption, and it’s only to safeguard your assets from fraudulent activities. It helps users avoid getting doxxed, tracked, and exploited. We’re always committed to following regulations and advocating for technologies that protect our users’ privacy.
