Is the Trezor model T safe to use for Defi? In the case that a smart contract is buggy or exploited, is their a risk of losing funds stored on the device? I’m aware that Trezor is a cold wallet, but does the device protect against the increase in Defi and smart contract hacks? Is there any inherent danger to connecting to a DEX or any other Dapp? Thanks.
If smart contracts allow you to sign a consent agreement for unlimited transfers, it seems that no hardware or software wallet can prevent the loss of coins.
Interaction with smart contracts is inherently unsafe.
With a traditional network like Bitcoin, there are two possible targets of hacking: (a) your wallet and (b) the network itself. As long as your cold wallet is literally in cold storage, it is unhackable; once you connect it to a PC, it is “only” extremely difficult to hack.
The network itself tends to be designed in a way that makes for a bad target for hacking: it is distributed, conservatively designed, the blockchain is verifiable, etc.
In this scenario, using a cold wallet like Trezor offers a very strong protection.
Once smart contracts enter the picture, there is a third target for hacking: the code of the smart contract, provided by end-users of the network. The smart contract itself can be malicious, or there is an exploitable issue in its code, or the contract allows interaction in a way that can be exploited by phishing (such as signing a bianco permission to send your NFTs away). The current technology level doesn’t have any form of “antivirus” for smart contracts that would fight these risks.
Trezor only allows you to verify the identifier of the smart contract, and can show you (machine-readable) data of the contract call. This way you can choose to interact with trusted sources only.
However, even a trusted source can be subverted or exploited.