Centralized Domains Jeopardize DeFi Trust After Aerodrome DNS Breach

Aerodrome Finance, a decentralized exchange (DEX) on Coinbase's Base network, is battling a front-end attack that has forced users to abandon its centralized domains due to DNS hijacking risks. The attack, which redirected traffic to phishing sites, has prompted urgent warnings for users to switch to decentralized ENS (Ethereum Name Service) mirrors to access the protocol safely according to reports. The incident, which occurred late Friday, marks the latest in a series of security challenges for the platform, which holds $400 million in total value locked.

The attack exploited vulnerabilities in Aerodrome's centralized domain management, allowing hackers to reroute users to lookalike websites designed to steal wallet transaction signatures. While the underlying smart contracts-responsible for managing user funds and protocol logic-remain secure, Aerodrome's team has advised users to revoke recent token approvals and avoid signing transactions from unverified domains. The compromised domains include aerodrome.finance and aerodrome.box, with the platform urging reliance on decentralized alternatives like aero.drome.eth.limo.

This incident follows a similar DNS hijack in late 2023 that resulted in approximately $300,000 in user losses. The recent attack comes just days after Aerodrome announced a merger with Velodrome, another top DEX on Optimism, to consolidate liquidity under a unified "Aero" ecosystem. Both platforms are investigating the breach, though no confirmed losses have been reported as of press time.

Meanwhile, Aerodrome's native token, AERO, has seen mixed market performance. Despite a 155 million-token buyback program-accounting for 17% of its circulating supply- the token retreated 3% to around $0.80 at press time. The buyback, which includes contributions from the Flight School incentive program and token locks, has reduced supply pressure but faces headwinds from a "Death Cross" pattern in its 50-day and 200-day exponential moving averages, signaling short-term bearishness.

The attack underscores broader challenges in DeFi security, particularly for protocols reliant on centralized infrastructure. While decentralized smart contracts remain a key innovation in blockchain, front-end vulnerabilities-such as DNS hijacks-highlight the risks of hybrid models that blend on-chain and off-chain components. Aerodrome's response, which emphasizes decentralized access points, aligns with growing industry calls for reducing reliance on centralized services.

Aerodrome's team is working with domain provider My.box to resolve the breach according to reports, but the incident has reignited debates about the adequacy of current security measures in DeFi. As the platform investigates, users are reminded that decentralized alternatives, such as ENS domains, offer a more resilient pathway to accessing protocols without exposing themselves to phishing risks.