As capital infusion grows in the crypto market, so does the size of its scams. According to an ImmuneFi report, hackers made away with over $1.23 billion in Q1 2022. That's 700 percent higher than what was recorded in Q1 of 2021.

The emphasis on decentralisation has made the crypto markets the preferred playground for hackers. There is no central authority to constantly oversee the security of the system. Moreover, new protocols are entering the markets at a rate of knots. Their underlying code is not always up to the mark, and bug fixes are rolled out only after vulnerabilities are discovered, which is often too late.

Therefore, wouldn’t it be nice if a blockchain came along that could self-detect malicious presence and nip it in the bud? Behold, the Lossless Protocol.

What is the Lossless Protocol?

Lossless is decentralised finance (DeFi) protocol with a high-utility scam detection solution. It uses the LSS token as its native cryptocurrency, which can be staked on the network, used for lending/borrowing, or for making payments and receiving rewards. It is also used as a governance token wherein LSS owners can participate in the voting process when key changes are proposed.

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Should you ever be at the receiving end of a cyber-attack, your transactions will be one of the first things to get hijacked. The Lossless Protocol is designed to identify such network breaches and immediately halt such transactions. Upon verification of the attack, the transaction is reversed, and the funds are returned to the respective user’s wallet.

The Lossless Core Protocol enables the network to take such immediate action and is thus a crucial component of the blockchain. It is also available for integration with other blockchains if one wishes to make them lossless.

How does the Lossless Protocol ward off hacks?

The lossless solution was conceptualised by a group of white-hat hackers. These hackers point out vulnerabilities in a network to its developers, they are the good kind of hackers. They created ‘bots’ (or programs) that would constantly carry out surveillance and detect transaction anomalies in real-time when released into the network.

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When these bots freeze transactions, the ‘Lossless committee,’ a body of third-party auditors affiliated with the network, thoroughly scrutinises the available data and validates the hack.

The Lossless network incentivises its users to innovate and build efficient detection systems constantly. The user who points it out first gets rewarded by the blockchain. To participate in hack-spotting, bot owners must ‘stake’ 2,500 LSS tokens on the network. The staking ensures that the hack reports are all genuine and legitimate.

Is it worth investing in?

Cyber-security is the need of the hour as crypto hacks are on the rise. Since Lossless is the only technology with a hack mitigation system, its popularity will likely rise in the crypto markets. Lossless is quickly garnering the attention of white-hat hackers, for whom it could generate a passive revenue stream.

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In October 2021, Lossless helped Cream Finance (a DeFi protocol) recover 5,152.6 ETH (worth $16.7 million at the time) when the latter’s network security was compromised. Lossless has proven its capabilities, and the Ethereum mainnet, on which the protocol has been launched, will serve as the perfect testing ground as developers come up with newer solutions.

According to CoinMarketCap data, the LSS token is currently trading at $0.64, up by 90.9 percent in the last month alone. There will be a maximum of 100 million LSS tokens in existence, of which 45.8 million are already circulating. Its current market capitalisation stands at $28.6 million, up by 86.3 percent over the last month.

In contrast, Bitcoin has dropped by 6.6 percent in the last month to $38,958.63. Its market capitalisation has also taken a 6.4 percent hit from $792 billion to $741 billion. Nonetheless, cryptocurrencies are volatile in nature, and we recommend that you arm yourself with all the information you can get your hands on before investing in one.

(Edited by : Jomy Jos Pullokaran)