Sumer Money — A balanced approach to Security
Introduction
Over the years, the majority of protocols in the DeFI ecosystem relied on code-centric methods (e.g. static code auditing, smart contract scanning tool, or dynamic fuzzing) as a primary defense against the security threats. However, we still encounter several cases where vulnerable contracts have been audited by multiple reputable code auditing companies.
It is now a foregone conclusion that the code-centric approach cannot solely solve the security issues and protect users’ assets.
Growing Role of Real Time Exploit Monitoring and Prevention
With Real-time exploits monitoring and prevention, it is now possible to infer patterns from exploits and the pre-exploit behavior of the attacker by collecting, analyzing, and processing historic security incidents and their metadata to detect and/or prevent future incidents.
While the amount of data required for these techniques to work (frequently based on techniques like machine learning) is considerable, multiple teams have shown evident results on the detection of real attacks on DeFi.
While Real Time Exploit Monitoring — the ability to continuously and accurately predict and alert on hacks before they happen is crucial, the response time required is not always favorable. Thus, DeFI protocols also need actionable measures to stop the threat.
Flash Loans and Exploits
Flash loans are a unique feature in DeFi that allow users to borrow large amounts of cryptocurrency without collateral, as long as the loan is repaid within a single transaction block. While this innovation offered opportunities for arbitrage and liquidity optimization, it has also been exploited by malicious actors to manipulate markets or drain liquidity pools.
Over 90% of exploits in Defi are related to flash loan attacks.
Sumer — a balanced approach to security!
Sumer recognizes that no single defense layer can offer complete protection against security threats to user funds. Sumer combines a multi-layered security strategy that includes automated interventions, continuous smart contract audits, and active threat modeling.
Layer 1 — Static Audits
Sumer has undergone 3 audits thus far and has partnered with Ancilia Inc to support Sumer for continuous audits on any changes to the code base. Users can find the previous audits here.
Layer 2 — Withdrawal Guard
In Sumer, withdrawal guard is a Timelock contract (a smart contract) that delays the execution of withdrawals of funds — deposit withdrawal or borrowed funds — from the Protocol.
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The timelock mechanism breaks potential flash loan attacks on Sumer, preventing adverse actors from launching an attack without first securing a significant amount of capital — a challenging feat without interacting with KYC protocols.
The withdrawal guard currently applies to borrow, mint and redemptions. There is no timelock for liquidations as it is common practice to use flashloans for liquidations. Even with liquidations, a borrowed position cannot be liquidated within 60 seconds to prevent further attack vectors.
Layer 3 — Real Time Monitoring and Prevention with Ancilia Inc
Sumer has partnered with Ancilia to utilize their security platform to proactively identify security incidents, zero-day vulnerabilities, and market risks accurately, preventing them from affecting Sumer and user assets across the multichain environment.
Ancilia, with its high fidelity alert (low false positives) will have the ability to lock the funds in the Timelock contract as part of active threat prevention mechanism to ensure security of funds in case of an attack.
Ancilia currently supports Ethereum, Arbitrum and Base Network deployments.
User Experience vs Withdrawal Guard — A delicate balance
To a Sumer user, the withdrawal guard in place to protect user funds can feel restrictive. However, we believe security of user funds to be our foremost responsibility and priority. As we drive Sumer adoption further, we will actively review and manage the Timelock configurations in consultation with Ancilia to ensure a more balanced user experience.
Understanding Withdrawal Guard
Through the Withdrawal guard mechanism, Sumer — in partnership with Ancilia, employs below security measures on all withdrawals through a configurable leaky bucket/ Timelock contract.
The configurations determining the withdrawal process from the Timelock contract are;
- Timelock Minimum — This is the minimum amount (in USD) that a user can withdraw directly to the account with no Timelock involvement.
- Minimum Delay — This is the minimum time the funds are locked in the Timelock Contract. Any funds entering the Timelock contract are locked for the minimum delay.
- Maximum Capacity — This is the maximum amount that can be withdrawn from the Timelock contract with the minimum delay
- Maximum Delay — This is the maximum amount of time a user has to wait if the withdrawal amount exceeds the maximum capacity.
- Refill Speed — Any withdrawal from Sumer which is less than the maximum capacity consumes the capacity. The refill speed reinstates the Timelock maximum capacity gradually.
These parameters are consistently monitored and adjusted based on the status of the protocol to ensure a secure but also pleasant user experience.
