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Security incidents in Q2 2025 showed a decrease in overall losses compared to previous periods. Key breaches highlighted ongoing risks in both decentralized and centralized platforms. Improvements in response and recovery are helping reduce damage, but vulnerabilities and sophisticated attackers continue to pose challenges. Maintaining strong security practices remains essential.

Web security has become more important than ever as the internet continues to power everything from banking to decentralized applications. While early online threats were fairly simple, today’s attacks are far more advanced, targeting everything from supply chains to blockchain systems. Staying secure now requires a proactive approach testing systems, monitoring for threats, and building security into development from the start. As technology evolves, so will the risks, making ongoing security work essential. At Borg, we help businesses navigate this changing landscape by providing expertise in Web3 security and helping teams build safer digital platforms.

A proper penetration test isn’t just about running tools to find bugs. It’s about investing in expert offensive security tailored to how real attackers think and operate. Especially in Web3, where threats can lead to major financial losses, you’re paying for experienced professionals who go beyond automated scanners to uncover unknown vulnerabilities, build custom attack paths, and provide clear, actionable guidance on fixing issues. It’s not just about listing problems. It’s about showing you exactly how attackers could exploit your project and helping you secure it before they get the chance.

Account Takeover (ATO) attacks are on the rise in Web3, targeting wallets, smart contracts, and community platforms through phishing, stolen credentials, and compromised infrastructure. With high financial stakes and no easy recovery mechanisms, these attacks pose a serious threat to both users and projects. To defend against them, Web3 teams must prioritize security hygiene, implement role-based access controls, monitor their systems, and conduct regular penetration testing to identify vulnerabilities before attackers do.

DeFi security goes beyond smart contracts—the often-overlooked Web2 stack poses serious risks. Vulnerabilities in frontends, APIs, cloud setups, and authentication can lead to data leaks, phishing, and unauthorized access. From XSS attacks to misconfigured storage and spoofed interfaces, attackers are increasingly targeting traditional web layers. The blog stresses the importance of securing the full stack and conducting regular penetration testing to protect DeFi protocols effectively.

In Web3 security, focusing solely on smart contracts is not enough—APIs, web applications, and backend infrastructure are often the most vulnerable points of attack. A comprehensive penetration test should include evaluating API endpoints, testing web application vulnerabilities, reviewing node configurations, and auditing smart contracts. Recent findings from a Web3 identity platform reveal that weaknesses in these areas can lead to significant security risks, highlighting the importance of a full-stack approach to security. By addressing both on-chain and off-chain components, Web3 projects can prevent hacks, safeguard assets, and build user trust.

EIP-712 improves Ethereum message signing by introducing a structured, human-readable format that enhances security and usability compared to EIP-191, which relies on raw message hashes. By encoding messages with a defined schema, EIP-712 allows wallets to display clear signing requests, reducing phishing risks and preventing blind approvals. Key security benefits include domain separation to prevent replay attacks, input validation to ensure correct data, and expiration timestamps to limit signature reuse. Proper implementation, including strong domain separators and user-friendly wallet interfaces, ensures that EIP-712 remains a secure and transparent standard for Ethereum transactions.

Web3 security remains a major challenge, with vulnerabilities that expose users and platforms to significant risks. Key threats include smart contract flaws, reentrancy attacks, private key exposure, and flash loan exploits, which hackers use to manipulate transactions and drain funds. Other issues, such as phishing scams, rug pulls, and oracle manipulation, highlight the dangers of poor security practices and centralized control in supposedly decentralized systems. Additionally, cross-chain bridges and inadequate security audits introduce further risks. Addressing these flaws through robust security measures, decentralized validation, and thorough audits is crucial to ensuring a safer Web3 ecosystem.

In the evolving Web3 landscape, Web2 vulnerabilities continue to pose serious risks to decentralized platforms, as demonstrated by the BadgerDAO hack. This incident underscores the importance of addressing traditional security flaws within Web3 environments. The blog outlines key strategies for mitigating these risks, such as implementing strong access controls, educating users, utilizing specialized security providers, and developing robust incident response plans. These measures are crucial for Web3 businesses to protect their platforms and ensure long-term security.