According to Cointelegraph, Dominic Williams, founder and chief scientist at the Dfinity Foundation, emphasized the need for decentralized applications to operate entirely onchain to prevent vulnerabilities like those exposed in the recent Bybit hack. Williams highlighted that while many blockchain projects incorporate onchain tokenomics, they often depend on centralized web services such as Amazon Web Services for infrastructure, which exposes them to potential security breaches. He stated that the primary advantage of blockchain technology is its ability to ensure that the software logic runs accurately against the correct onchain data, a guarantee not provided by traditional IT systems.
Williams expressed concern that the industry has deviated from its original path by labeling projects as onchain despite their reliance on centralized services due to associated tokens. He advocated for code updates to be managed through decentralized autonomous organizations (DAOs) with community oversight, rather than being controlled by individual developers. The Internet Computer Protocol, maintained by the Dfinity Foundation, supports hosting entire applications onchain via smart contracts to maintain data integrity during updates.
The financial repercussions of centralized security breaches were also addressed by Williams, who pointed to the $1.4 billion Bybit hack as a significant factor impacting the crypto markets. He noted that the state-sponsored Lazarus Hacker group is proficient in laundering funds, which are then diverted from the crypto markets into other economic sectors, contributing to market instability. This incident, according to Williams, is a key reason for the current decline in cryptocurrency prices.
Following the Bybit hack, the total cryptocurrency market capitalization dropped significantly, falling from approximately $3.62 trillion in January 2025 to $2.8 trillion. This decline is attributed to the hack, which is the largest in crypto history, coupled with macroeconomic uncertainties and diminishing investor confidence in the emerging asset class. Bohdan Opryshko, Everstake’s chief operating officer, also noted that the hack has led institutional stakers to shift away from centralized platforms due to heightened cybersecurity concerns.
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