Wallets and networks in DeFi: Efficient Management

The DeFi ecosystem has grown exponentially in recent years, but so has the number of attacks. According to a report by Chainalysis, DeFi hacks accounted for 82% of all stolen funds in cryptocurrencies in 2022, with losses reaching 3.1 billion dollars. Many of these security breaches occurred due to errors in wallet and network management at DeFi and the lack of verification of secure RPCs, which facilitated attacks such as phishing, vulnerabilities in smart contracts and unauthorized access.

This data emphasizes the importance of taking precautions and efficiently managing wallets and networks in DeFi to avoid losses.

Managing multiple wallets and networks has become a major challenge for DeFi users, especially as the ecosystem continues to grow and diversify. The need to manage different types of wallets, securely add new networks and optimize the use of RPCs can be overwhelming.

In this article, we provide you with a practical guide with recommendations and tools that will help you manage your assets efficiently and securely.

1. Dashboards for Asset Management: Control Everything in One Place

Dashboards such as Debank, Zapper or Zerion are essential tools for any DeFi user. These dashboards allow you to view and manage all your assets from multiple wallets in one place, making it easy to monitor balances, transactions and performance of your investments.

• Security against Scams and Hacks: By centralizing the management of your assets in one place, dashboards allow you to keep a more precise control of your funds, detecting unusual or potentially fraudulent movements quickly. This reduces the risk of being a victim of scams or hacks, as you can monitor all your wallets from a single interface and receive alerts about sudden changes in balances. In addition, by connecting only verified wallets with multi-network support, you reduce the risk of interaction with malicious contracts.
• Debank: Offers a detailed view of your assets, including NFTs, and support for multiple blockchains. In addition, it provides detailed analytics that can help identify suspicious contracts or unusual activity in your account.
• Zapper: In addition to managing assets, it allows you to interact with different DeFi protocols from the same interface, which facilitates a more secure monitoring of farming and staking activities, minimizing the risks of interacting with vulnerable contracts.
• Zerion: Offers a friendly user experience and support for various types of wallets, which makes managing your assets more intuitive. It also allows secure integration with DApps, avoiding insecure connections.

These dashboards not only simplify asset management, but also act as an additional layer of protection against potential fraud or hacks by providing real-time visibility into all your wallets and activities. The ability to quickly check the status of your funds and transactions from a single platform can be key to preventing losses and detecting unusual behavior before it becomes a problem.

2. Wallet Diversification: Find the one that best suits your needs.

The choice of a wallet is fundamental to the user experience in DeFi. In addition to ease of use, security is a critical aspect, as many vulnerabilities in DeFi stem from poor wallet management or the use of insecure wallets. Below, we explore some of the most popular options and their security levels:

• Metamask: It is the most widely used wallet in DeFi, compatible with multiple networks and easy to set up. However, its popularity also makes it an attractive target for hackers. If not configured correctly, it is susceptible to phishing attacks and malware. Despite this, when used with the right security configurations, such as protection via hardware wallets (like Ledger or Trezor), it remains a solid option.
• Rabby Wallet: This wallet stands out for its focus on security, integrating directly with DApps and providing a unique feature of analyzing transactions before they are confirmed. This allows users to check for potential security risks, such as interaction with malicious smart contracts. In addition, at Alldefi we use Rabby Wallet through the Fireblocks extension, which adds an additional layer of enterprise-level security, minimizing operational risks and improving asset protection.
• Fireblocks: It is one of the most secure solutions for the custody of digital assets at the enterprise level. Companies like Alldefi use Fireblocks because of its advanced security technology, which includes key storage in hardware security modules (HSMs) and multi-signature transaction approval. This level of enterprise security drastically reduces the chances of hacking and unauthorized access.
• Trust Wallet: Ideal for mobile users, it is compatible with a wide variety of blockchains and offers support for direct purchase of cryptoassets from the app. While it has not been the target of as many hacks as other more popular wallets, it is still essential to use additional security measures, such as using secure recovery phrases and enabling two-factor authentication(2FA) where possible.

Security in the use of wallets: It is important to note that, although some wallets have a stronger reputation in terms of security, the proper use of each wallet is what really makes the difference. Using hardware wallets, constantly verifying transactions and connecting to trusted networks can significantly reduce the risk of hacks, scams and losses.

3. Secure Networking: Avoid Risks with Chainlist and Safe Practices

Adding new networks to your wallet is a common task in DeFi, but doing it securely is crucial to avoid phishing risks and errors that could compromise your assets. Correctly choosing the networks you connect to can prevent critical vulnerabilities that hackers often exploit. In fact, multiple hacks on DeFi have occurred because of the addition of insecure networks or interactions with insecure smart contracts.

• Chainlist: This tool makes it easy to add networks to wallets like Metamask quickly and securely. With a single click, you can add verified networks, ensuring that the information you are using comes from official sources. By eliminating the manual process, you minimize the risk of users entering incorrect data or connecting to malicious networks that could put your funds at risk.
• Security Advantages: Chainlist acts as a security filter, ensuring that RPCs and other critical settings come from trusted sources. This significantly reduces the likelihood of falling for phishing attacks or being redirected to fake networks, where hackers could attempt to steal funds or private information.
• Best Practices when Adding Networks: Although tools such as Chainlist simplify the process, it is important to always verify the legitimacy of the network you are connecting to, using official sources or verified communities. Avoiding connections to unknown or unverified networks is one of the best practices to reduce risks.

Security Impact: Many users have been hacked by manually adding networks with incorrect information, allowing attackers to intercept transactions or redirect funds to malicious wallets. Using secure tools like Chainlist can mitigate these risks and ensure that your wallet only connects to trusted networks.

4. What are RPCs and How to Configure them to Improve Security?

RPCs (Remote Procedure Calls) are protocols that allow your wallet to communicate with the blockchain. They act as a bridge to perform operations such as sending transactions, querying balances and executing smart contracts. Without a proper RPC, your wallet would not be able to interact effectively with the blockchain, which can expose your assets to vulnerabilities.

• Importance of Secure RPCs: If an RPC is compromised or malicious, hackers can intercept sensitive information or, in some cases, perform malicious transactions without your authorization. Configuring the RPC correctly and verifying that it does not request unusual permissions, such as access to your private keys, is essential to protect your assets.
• RPC Security Verification: When changing RPCs, it is always important to verify that they come from trusted sources, such as official blockchain network websites or secure platforms like Chainlist. Avoiding the use of data from unverified sources is key to keeping your assets safe.

How to Change the Default RPC in Metamask:

1. Access the Network Settings:
   • Open Metamask and click on your profile icon at the top right.
   • Select "Settings" and then "Networks".
2. Select the Network you want to Modify:
   • In the list of networks, choose the network whose RPC you want to change (e.g. Ethereum Mainnet).
3. Edit the RPC:
   • Click on the network and you will see a field called "RPC URL". Enter the new RPC URL you want to use.
   • Make sure that the RPC URL comes from a reliable and secure source, such as official web sites or recognized providers.
4. Save Changes:
   • After entering the new RPC URL, save the changes and close the configuration.
5. Verify the Connection:
   • Once changed, verify that your wallet is connecting correctly to the network and that transactions are processing smoothly.

Benefits of Changing the RPC: Changing the RPC in Metamask can not only improve connectivity and reduce wait times, but can also increase security in the management of your wallets and DeFi networks if you choose a quality and recognized RPC provider. This ensures a better user experience and reduces the possibility of attacks related to the network infrastructure.

Alldefi: Simplify the Management of your Assets, wallets and networks on DeFi

At Alldefi, we understand that managing multiple wallets and networks in DeFi and optimizing the use of RPCs can be a complex challenge, especially for those new to DeFi. Our goal is to be the nexus that connects all these solutions in one intuitive and accessible platform, so you can focus on what really matters: maximizing your DeFi opportunities in a secure and efficient way.

Why choose Alldefi?

• Centralized Management: Alldefi offers a unified experience, eliminating the need to jump between different wallets and dashboards. Everything you need is in one place.
• User-friendly interface: Designed to be intuitive, our platform allows you to access your assets and perform transactions without technical complications.
• Simplified Experience: We focus on reducing complexity, helping you manage your assets simply and without the technical complications that often accompany the use of multiple tools in DeFi.
• Informational Resources: Although we do not offer personalized support, at Alldefi you can find educational resources and guides to help you better understand the ecosystem and make informed decisions.

With Alldefi, you don't have to worry about the complexity of managing multiple tools and configurations. We simplify your DeFi experience, giving you full control over your assets and helping you overcome the challenges faced by beginners and advanced users alike. Join Alldefi and discover a simpler and more efficient way to interact with the decentralized financial future.