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Arbitrum has been gaining traction as a Layer 2 scaling solution for Ethereum, offering quicker and more affordable transactions while broadening the decentralized applications ecosystem. At Apostro, we recognize the intricacies of tackling these challenges and are committed to providing solutions for buildooors and DeFi users.
Arbitrum has been gaining traction as a Layer 2 scaling solution for Ethereum, offering quicker and more affordable transactions while broadening the decentralized applications ecosystem. However, with increased adoption comes a rise in potential security risks. Regrettably, the security toolkit for Arbitrum still needs to catch up with Ethereum's.
As more DeFi protocols begin to support Arbitrum and rely on one another through cross-integrations and liquidity provisions, it's essential to have a thorough risk management approach and expand the security stack for both users and protocols.
At Apostro, we recognize the intricacies of tackling these challenges and are committed to providing solutions for buildooors and DeFi users.
Apostro is a risk management and security platform crafted to monitor, mitigate, and ward off potential economic and technical dangers that protocols might encounter. Both development teams and DeFi users can turn to Apostro to assess a protocol's health status and receive notifications about technical, economic, and market hazards.
Protocols can employ Apostro as a risk management tool to shield against oracle manipulation. It monitors both oracle and market data persistently, alerting users to market inefficiencies that rogue actors could exploit. Additionally, it supplies pump-and-dump costs for specific assets that may impact oracle prices, essentially warning the community about possible oracle manipulation attacks.
It can do much more - but we want to cover the case for oracle and liquidity manipulation that can be prevented with timely alerts.
Apostro recently added support for Arbitrum, and it instantly proved worthy. Our platform found gaps in Uniswap v3 liquidity for one of the assets listed on Silo - RDPX. The liquidity was concentrated around current market prices, leaving lower and higher ends dry. That opens up a possibility for price manipulation - if all liquidity is used, the short-term oracle price (TWAP within a 30-minute period) of a token can soar or freefall easily, which will affect the oracle and can be used to exploit the platforms where the asset is used.
The Silo team were notified about the possibility with recommendations, specifically about adding full-range liquidity will reduce the probability of oracle manipulation almost to zero. They decided to act on it and added around $20k to the Uniswap v3 pool on Arbitrum.
Here are the current impact costs for the RPDX token before and after adding full-range liquidity to the Uniswap pool. As you can see, after adding liquidity the manipulation costs became too high for any malicious actor to act on it.
To wrap up, our support for Arbitrum shows that we're all about making the DeFi space safer and easier to navigate for everyone. By giving developers and users the tools and insights they need, we hope to help them avoid potential pitfalls and keep their investments secure. With more Layer 2 solutions gaining traction, we'll keep adapting and finding ways to offer top-notch resources. We're excited to see more DeFi protocols on Arbitrum taking advantage of our platform to protect themselves against market manipulation attacks and keep the ecosystem thriving.
P.S. Additional thanks for all the support and feedback from Silo.Finance team & community - you guys rock!
P.P.S. If you want to work with us and have your protocol's dashboard up and running, or have suggestions/proposals for further Apostro development - ping us on Twitter or write directly to hello@apostro.xyz 👀