DeFi Security Best Practices for 2024

Introduction

Based on our experience auditing hundreds of DeFi protocols, we've compiled the essential security practices that every protocol should implement. These practices can prevent the majority of exploits we see in the wild.

1. Robust Access Control

Implement defense-in-depth access control with timelocks for sensitive operations.

AccessControl.sol

// Use OpenZeppelin's AccessControl with timelocks
contract SecureProtocol is AccessControl, TimelockController {
    bytes32 public constant ADMIN_ROLE = keccak256("ADMIN_ROLE");
    bytes32 public constant OPERATOR_ROLE = keccak256("OPERATOR_ROLE");
    
    // Sensitive functions require timelock
    function setFeeRate(uint256 newRate) external onlyRole(ADMIN_ROLE) {
        require(newRate <= MAX_FEE, "Fee too high");
        _scheduleOperation(
            abi.encodeCall(this._setFeeRate, (newRate)),
            TIMELOCK_DELAY
        );
    }
}

2. Oracle Security

Use TWAP (Time-Weighted Average Price) instead of spot prices
Implement multiple oracle sources with deviation checks
Add circuit breakers for extreme price movements
Consider Chainlink or other battle-tested oracle solutions

Over 60% of DeFi exploits in 2023 involved oracle manipulation. Never rely on single-block prices.

3. Reentrancy Protection

ReentrancyGuard.sol

// Always use checks-effects-interactions pattern
function withdraw(uint256 amount) external nonReentrant {
    // Checks
    require(balances[msg.sender] >= amount, "Insufficient balance");
    
    // Effects (state changes BEFORE external calls)
    balances[msg.sender] -= amount;
    
    // Interactions (external calls LAST)
    (bool success, ) = msg.sender.call{value: amount}("");
    require(success, "Transfer failed");
}

Access Control

Defense-in-depth with timelocks

Oracle Security

TWAP and multiple sources

Reentrancy

Checks-effects-interactions pattern

Audit Everything

Professional audits before mainnet