Web3 Security: 8 Essential Ways to Stay Safe in Web3

Web3, the decentralized future of the internet, is an exciting opportunity for innovation, financial independence, and community building. But with these opportunities come unique risks. 

From phishing attacks to compromised smart contracts, the threats in the Web3 landscape are diverse and always evolving. This is why it’s so important that anyone participating in the Web3 ecosystem, from crypto traders to Web3 brands, take steps to stay secure.

Luckily, there are simple best practices that you can follow to protect your assets, reputation, and Web3 communities. Below, we’re sharing 8 essential tips that will safeguard your assets (or your brand) in the decentralized world of Web3.

8 Strategies to Leverage to Stay Safe in Web3

Let’s dive into 8 security tips that you can quickly adopt to stay safe in the Web3 space.

1. Only Use Reputable Wallets

Your wallet is your gateway to the Web3 world, and so choosing a reputable wallet is essential for keeping your assets safe.

Stick to using well-known wallet providers that have strong security records, such as Rabby Wallet, Coinbase, Metamask, Braavos, and Argent. 

You’ll want to make sure the wallet you choose is well-maintained, and up-to-date with the latest popular signature schemes and transaction preview / simulation tools. It’s also recommended that the wallet you choose is distributed through official sources: wallet website, Chrome/Firefox store, Apple/Google Play. 

Lastly, it’s important to always keep your software up-to-date. Doing this ensures that you always have the latest security patches to stay safe against any new vulnerabilities that have been identified by your wallet.

2. Verify Smart Contracts

Smart contracts are the building blocks of decentralized applications. A smart contract is a collection of code and data (sometimes referred to as functions and state) that is deployed using cryptographically signed transactions on the blockchain network. 

Smart contracts work by following simple statements that are written into code on a blockchain. These actions can trigger transactions, like the releasing of funds to specific parties. These transactions are executed by nodes within the blockchain network. The blockchain is then updated when the transaction is completed. 

One way to understand this (if you don’t have a technical background) is to think of a smart contract as a digital contract which is stored on a blockchain, and automatically executed when predetermined terms are met. 

Because these transactions can’t be reversed, smart contracts need to be carefully verified. Before interacting with a smart contract, check to see if it has been audited by a reputable security firm.

If possible, review the code of the smart contract yourself, or get someone with coding knowledge to review it for you. You can often find the source code for audited contracts on block explorers like Etherscan and Blockscout. This will help ensure that you know exactly what you’re agreeing to in the contract.

And finally, start small, and start by interacting with well-known contracts like Uniswap and OpenSea. If you’re new to the Web3 space, test using smart contracts with a smaller transaction first. This way you can make sure everything is working as expected before you commit to larger transactions. 

These simple steps will help to minimize the risks, and maximize the benefits of using smart contracts for your Web3 transactions. A smart

3. Beware of Phishing Attacks

Phishing is one of the most common online threats that is used to steal sensitive information. These attacks are especially concerning in the Web3 space since transactions are irreversible in blockchain systems. 

To avoid falling victim to a phishing attack, always verify that you are on the official website of any brand or service you are using. Double-check URLs for slight variations or spelling differences that may expose a phishing site. You can also run the URL through a checker like ChainPatrol’s Search Page, which identifies known phishing threats, or VirusTotal.

Always avoid clicking on any unsolicited links in emails, on social media, or in social media messages (this includes Discord and Telegram). You should only ever click a link if you are absolutely certain of the authenticity of the sender. 

If you are a Web3 brand and your community is being affected by phishing attacks, you can work with a partner like ChainPatrol to monitor, identify, and takedown phishing threats in real-time.

Book a ChainPatrol demo here to learn how we can help.

ChainPatrol's Threat Dashboard is automated to save time and effort for security, support, and community team members. 

4. Secure Your Private Keys

Keeping your private key safe is critical when handling cryptocurrency, because your key provides access to your funds. Your private key, as well as your seed phrase, should never be shared with anyone.

There are a couple things you can do to keep your private key secure. First, avoid storing your private keys online or in easily accessible locations. You can use hardware wallets or paper wallets to host your private keys offline.

Be sure to write down your seed phrase (the recovery phrase that’s generated when you set up your wallet) on paper, and store it in a safe place. Avoid storing this phrase digitally to reduce the risk of various hacks. For example, there is the threat of malware disguised as an app that searches through photos, text, and screenshots on your device for saved seed phrases. 

For peace of mind, consider storing the backup in multiple secure locations, like a safe or a safety deposit box.

It’s important to avoid using your private key to access your crypto wallet on public Wi-Fi, or on unsecured networks. Always ensure you’re using a private, secure connection.

5. Use Strong, Unique Passwords

Passwords are a fundamental security measure, but they only work if they are strong and unique. To store your passwords, consider using a password manager. These third-party services will generate and store complex passwords for each of your accounts.

For any service that requires access to your Web3 assets or accounts (like exchanges or wallets), enable two-factor authentication (2FA). This adds an extra layer of security because it requires you to provide a second form of confirmation that you are the rightful account owner. 

For 2FA, use an authentication app like Google Authenticator, or use YubiKey – instead of your phone number. Phone numbers are easily hacked with a sim swap attack. 

We also recommend using passkeys wherever possible, because these provide a similar level of security as hardware authenticators.

And lastly, be sure to regularly update your passwords and avoid reusing them across different platforms. It’s recommended to update passwords every few months, and to use a password generator to create them. Doing this will help to minimize the risk of a single breach that could compromise multiple accounts.

6. Carefully Manage DApp Permissions 

Interacting with a decentralized application (DApp) through a non-custodial wallet (like Coinbase Wallet) requires you to grant permission to access aspects of your wallet, and approve the use of your tokens to complete buy and trade transactions.

Before connecting your wallet to any decentralized application (DApp), carefully review the permissions it requests. Only grant the permissions that are necessary for the DApp’s functionality.

It’s also important to regularly review what DApps you are connected to and revoke permissions for applications you no longer use or trust. Doing this will help minimize the risk of unauthorized access to your assets and data. For example, Revoke is a great resource for reviewing token approvals.

7. Practice Safe Trading

When trading cryptocurrencies or other digital assets, always use reputable exchanges that have strong security protocols. Some reputable centralized exchanges include Coinbase, Binance, Kraken, VirgoCX, and Bitfinex.

Be sure to enable the security features that your exchange offers to protect your assets. For example, some exchanges offer withdrawal whitelists and trade confirmations.

Finally, before trading, start with small transactions. This will help to familiarize you with the trading process, and reduce potential losses from mistakes or unforeseen issues by the trading platforms or transactions you are making.

8. Stay Informed About Scams

Awareness is your first line of defense in Web3. Keeping yourself up-to-date and informed about common scams and fraud tactics in the ecosystem will help you be proactive in preventing yourself from falling victim to an online threat. 

By knowing the most common strategies used by malicious actors, you can better guide your security efforts to protect your assets – and if you’re a brand, you’ll be better equipped to protect your community.

Follow and subscribe to trusted sources and communities that provide updates on emerging threats and stay informed of the threats or attacks that are actively happening online. Some trusted sources include SEAL, ScamSniffer, The Defiant and CoinDesk.  Being in the know will help you to develop effective security countermeasures that keep you (or your organization) one step ahead of scammers.

Web3 Security Practices to Keep Top of Mind

Web3 is opening up a world of exciting opportunities – but it also introduces new risks. Whether you're trading crypto, engaging with decentralized finance (DeFi), or exploring blockchain-based apps, staying safe should be your top priority.

The key to staying secure in the Web3 ecosystem is to always be vigilant and aware of common scams, and to take proactive measures – Like choosing a reputable wallet, and using strong, unique passwords. 

By following these essential tips for staying safe on Web3, you can reduce your risk while enjoying the benefits of decentralized technology. 

Are you ready to protect your brand and community? Book a ChainPatrol demo to learn how we can help.