Recently, the Web3 world has been stirred up again. The news that over $100 million evaporated in two days as UXLINK and SFUND suffered successive hacker attacks poured cold water on the heated market. Many newcomers to this field may feel confused and worried: Why is Web3, hailed as the next-generation internet, so fragile? What risks are hidden behind it?

Today, we won't delve into complex technology. Instead, we'll start with these real-life incidents to uncover the core risks beneath the glossy surface of Web3 projects and provide a 'Safety Guide' that even ordinary people can understand.

Event Recap: Why Do Billion-Dollar Ecosystems Suffer Repeated Blows?

Simply put, in the recent attacks, hackers exploited vulnerabilities in the projects' smart contracts to gain special permissions they shouldn't have had. Imagine the smart access control system in your residential community being hacked. The hacker could not only enter and exit at will but also infinitely duplicate all residents' key cards and sell them on the market.

This attack was similar. The hackers obtained the project's 'minting rights,' creating a massive amount of tokens out of thin air and selling them off. This caused an instant imbalance in the market's token supply, leading to a price crash of over 80% and delivering a devastating blow to the entire project ecosystem. What's thought-provoking is that one of the project's contracts had even passed an audit and had been running stably for three years. This shows that even with endorsements from professional institutions, risks are not entirely eliminated.

Beneath the Iceberg: A Look at the Three Core Risk Exposures of Web3 Projects

These alarming incidents are just the tip of the iceberg. According to statistics, losses from various attacks in the Web3 space have already reached billions of dollars in 2024 alone. To navigate this world safely, you must understand the three core risks lurking beneath the surface:

1. Technical Vulnerabilities: Code is Law, But Law Has Loopholes

One of the core charms of Web3 is the 'smart contract.' You can think of it as an automated vending machine deployed on the blockchain, operating 24/7. Its rules are public and transparent. Once set (e.g., insert $1, dispense a can of coke), it will be strictly executed without any human intervention.

The problem is, if the engineer who wrote the program for this 'vending machine' accidentally leaves a bug—for example, a logical flaw that makes the machine dispense a coke even when it receives only 10 cents—an attacker can exploit this vulnerability to empty the entire machine's stock using dimes. This is a smart contract vulnerability attack, one of the most common types of attacks in the Web3 world.

2. Economic Model Flaws: 'Rule-Based Kills' in Clever Designs

If technical vulnerabilities are a 'hardware' problem, then economic model flaws are a 'software' and 'rules' problem. Some projects may have flawless code, but their internal economic cycles and incentive mechanisms contain 'arbitrage opportunities' that can be exploited.

This is like a poorly designed basketball game where the rules allow a player to run the full court with the ball to score. Although it doesn't violate any 'code' (the game rules), this kind of play completely destroys the fairness and enjoyment of the game. In the Web3 world, attackers exploit similar economic model flaws through complex operations like 'flash loans' to complete a combination attack of 'borrowing - manipulating price - profiting - repaying' in an instant, draining the project's liquidity pools.

3. Team and Centralization Risks: Human-Made Disasters in a Decentralized World

You might think, isn't Web3 supposed to be 'decentralized'? Why are there still 'human' risks? This is a common misconception. In the early stages of many Web3 projects, control (such as the 'admin private keys' that can upgrade contracts or withdraw funds) is still held by a few core developers.

It's like a group of people building a supposedly open public treasury, but the final keys to the vault are held by only a few founders. If these few individuals have malicious intent (a 'Rug Pull'), or if their keys are stolen due to poor security (as in the SFUND incident), the consequences can be catastrophic. There are even hackers who disguise themselves as developers, lurking for long periods to steal core secrets.

A Beginner's Guide to Avoiding Pitfalls: A Three-Step Method for Assessing Web3 Project Security

After understanding the risks, we need to learn how to proactively protect ourselves. As an ordinary participant, while you can't audit the code yourself, you can significantly increase your safety factor by following these three steps:

1. Step 1: Check the 'Health Report' – Is the Code Open-Source and Audited? A responsible project will usually make its core code public and invite third-party professional security firms to conduct a 'code audit'. This is like a restaurant displaying its health permit and kitchen surveillance. Although an audit report cannot guarantee 100% security, you should be extra cautious with a project that has no audit at all, or one whose audit report points out numerous high-risk vulnerabilities that remain unfixed.

2. Step 2: Read the 'Rulebook' – Does the Project's Whitepaper Make Sense? Spend some time reading the project's whitepaper, especially the section on its economic model. You don't need to understand every technical detail, but try to get a feel for whether its logic is self-consistent and if it's clear 'where the money comes from and where it goes'. If a project promises ridiculously high returns without a clear explanation of their source, it's likely a poorly designed 'Ponzi scheme'.

3. Step 3: Observe the 'Community Vibe' – Is the Team Actively Communicating? Follow the project's official social media and community channels. A healthy team maintains active communication with its community, regularly announces project progress, and can respond to community questions honestly and quickly, especially when problems arise. Conversely, if a team is secretive and deletes posts or bans users for negative comments, it's a red flag.

The Security Arms Race: How Offense and Defense are Reshaping Web3 Investment Logic

Frequent security incidents are forcing the Web3 industry to mature faster. In the past, people focused more on how grand a project's narrative was or how high its expected returns were. In the future, 'security' will no longer be an option but the cornerstone upon which all applications are built.

The continuous battle between attackers and defenders, like natural selection, will weed out projects with weak security foundations. Those protocols that can withstand attacks and protect user assets will ultimately win trust. For participants, this also means a shift in evaluation logic: from searching for the 'next 100x opportunity' to discovering 'robust value that can endure through cycles'.

Conclusion: Be a Smart Web3 Participant Amidst Opportunities and Risks

Web3 is undoubtedly a new continent full of opportunities, but it also follows the fundamental rule of 'high returns come with high risks'. The incident of over $100 million evaporating in two days as UXLINK and SFUND suffered successive hacker attacks serves as another wake-up call for us.

It reminds us that before embracing innovation, we must first learn to identify and respect risks. By understanding the three core risk exposures—technology, economic models, and teams—and applying basic assessment methods, you can better protect yourself and be a smarter Web3 participant. Remember, in this rapidly changing field, the most important thing is to keep learning and to choose well-recognized and security-focused platforms to start your journey of exploration.

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