News linked to both this project and an event.
Andre Cronje stated most current decentralized finance (DeFi) protocols no longer qualify as "DeFi in the strict sense" and are closer to commercial systems operated by teams. This has sparked industry division over whether "circuit breakers" should be introduced to mitigate attack risks.In an interview, Andre Cronje pointed out that early DeFi centered on immutable smart contracts, but today many protocols rely on upgradeable contracts, multi-signature permissions, off-chain infrastructure, and manual operational processes. In essence, they have transitioned from "immutable public goods" to "operable, for-profit businesses." He noted that against the backdrop of recent security incidents, including DeFi attacks involving approximately $280 million and $293 million, industry risks have expanded from simple smart contract vulnerabilities to "Web2-style risks" such as infrastructure issues, permission controls, and social engineering attacks.Regarding risk management, Cronje's firm Flying Tulip recently introduced circuit breakers that delay or queue withdrawals during abnormal fund outflows, providing an emergency response window of about six hours to prevent systemic bank runs and further losses.However, this mechanism has also sparked controversy. Michael Egorov believes that circuit breakers may introduce new centralized attack surfaces. If controlled by signers or administrators, they could instead become new security vulnerabilities or sources of freezing risk. He emphasized that DeFi design should minimize human intervention rather than increase manual control points. Industry analysts pointed out that this debate essentially reflects how DeFi is shifting from the ideal model of "code is law" toward a practical architecture of "hybrid governance plus operational control," while the security boundaries are being redefined. (Cointelegraph)
According to Cointelegraph, Flying Tulip—a decentralized finance platform founded by Andre Cronje—has implemented a withdrawal circuit breaker mechanism. This mechanism delays or queues withdrawals during abnormal capital outflows, thereby limiting potential losses and buying time for the team to investigate. The mechanism operates differently across products: for the Perpetual PUT product, withdrawals may be reverted, requiring users to retry later; for ftUSD, withdrawals are queued and can be claimed after a delay. Flying Tulip states that this mechanism follows a “fail-open” design—meaning transactions continue to execute even if the safety mechanism fails.
Odaily News: Sonic Labs co-founder and Flying Tulip founder Andre Cronje posted on platform X, stating that his team is continuing to investigate the L0/rsETH incident. Preliminary reports indicate that approximately $200 million worth of rsETH was stolen, possibly due to a private key leak or configuration error. The related assets were subsequently deposited into Aave as collateral to borrow ETH (due to insufficient rsETH liquidity).Andre Cronje pointed out that the affected positions are technically still overcollateralized. However, if bad debt occurs, Aave's token mechanism and Safety Module will serve as the first line of defense to absorb the risk. Nevertheless, Aave has no mechanism to subsidize user losses, as doing so could trigger a bank run. Currently, Aave holds approximately $7 billion in ETH with an outstanding borrowing amount of around $100 million, so the overall impact of this incident is limited. Furthermore, prioritizing user liquidity, Flying Tulip has withdrawn all its ETH from Aave to its fund management wrapper contract. This action was taken because Aave's available liquidity had fallen below its set minimum threshold.