Study finds most DEX unsafe for users

Only two of the 25 considered decentralized exchanges (DEX), Uniswap and Synthetix, received the highest safety score. The scores of 14 of them were unsatisfactory. The rating is presented on Cer.Live — a platform by Hacken, a cybersecurity company.

We are pleased to present Decentralized Exchange Ranking Methodology.

In the second half of October, #CER will publish the rating of DEXs on the https://t.co/evmQIH6XQJ, hence the analysts present an overview ranking methodology.

Read More: https://t.co/ILL1Fkpf8T#Hacken #DEX pic.twitter.com/88LHDt08E2

— Hacken (@hackenclub) October 19, 2020

The rating methodology is based on a set of issues peculiar to DEXs. These include listing of fake tokens, price slippage, delays in transaction confirmations, and the lack of data on quoted trading pairs.

The final score in the rating was also influenced by the presence of audits, bug bounties, and end-to-end security.

The next step after analyzing all criteria was assigning a score on a scale from 1 to 10.

Hacken defined that a score above 8 is categorized as “high,” 6 to 8 as “good,” and anything below as “unsafe.”

DEX security rating. Source: CER.Live.

Such a low share of “safe DEX” was attributed by the rating’s authors to the specifics of auditing trading platforms. Many did not repeat this procedure after code changes. Some DEX had their rating lowered due to the long time since the last audit, while others abandoned the practice altogether.

«Six of the 25 decentralized exchanges did not present an audit. They cannot be in the “safe” category by definition», the researchers noted.

Experts likewise criticized the decision of some DEX to hire individual specialists rather than reputable firms for audits.

In their study of DEX security, Hacken concluded that users are more frequently exposed to fraud risk than to hacks:

«Even though there have been no significant hacks on decentralized exchanges compared with centralized platforms, DEX users are more frequently subjected to fraud attempts», the experts stressed.

Hacken recommended that DEX adopt best industry practices to create a safer trading environment for users.

In July, the analytics service CoinGecko integrated into the so-called “Trust Score” metrics for assessing the security of cryptocurrency exchanges, based on Cer.Live data.

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