DeFi Platform Hacks Result in More Than $1 Billion in Losses
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- By Patrick Ryan
- Apr 06, 2022
A recent report from Immunefi states that hacks targeting decentralized finance (DeFi) platforms have resulted in losses that total more than a billion dollars. The hacks are partially the result of recently implemented DeFi dApps.
The compromised dApps lacked the digital safeguards necessary to thwart digital attacks. The total amount of money locked within DeFi apps equates to slightly more than 10% of the total cryptocurrency market cap. It is particularly interesting to note that the amount of money stolen from DeFi apps through the initial financial quarter of 2022 exceeds the amount stolen from the apps in previous years.
What was the Value Lost Through DeFi Hacks After Q1 in 2021?
As a point of comparison, the total money lost in DeFi hacks through the initial quarter of 2021 was a mere $154 million. This figure is about 10% of the $1.22 billion of assets stolen from the DeFi crypto market after the initial quarter of 2022. Run the numbers, and you will find there is about a 700% increase in losses stemming from DeFi hacks in one year alone.
Which Recent DeFi Hack Has Been Most Significant?
The Ronin hack is the most important of the recent DeFi hacks. The hack of Ronin that occurred about one week ago equates to nearly 50% of the industry’s aggregate $1.22 billion in losses. The Ronin Network hack resulted in an eye-popping $625 million loss. This devastating hack centered on a hack exploit in which a cyber miscreant illegally accessed private keys to give the green light to the transfer of cryptocurrency to unauthorized parties.
What are Other Recent DeFi Hacks of Note?
A litany of DeFi hacks has been executed in recent months. Though the Ronin hack described above is certainly the most important, the Wormhole attack is also noteworthy. The hack of Wormhole resulted in the theft of $320 million.
Another $80 million of cryptocurrency was stolen from Qubit Finance in a protocol exploit of a smart contract in which xETH was minted and used as a form of collateral. These hacks prove that merely one protocol weakness sets the stage for a successful hack and the theft of millions or even hundreds of millions of dollars worth of cryptocurrency.
Will DeFi Hacks Worsen Through the Rest of the Year?
Indeed, industry experts anticipate DeFi industry hacks will worsen through 2022 and into the years ahead. Mitchell Amador, the CEO and founder of the aforementioned Immunefi has gone out of his way to note that DeFi industry hacks will worsen as time progresses.
Amador was recently quoted as saying that the DeFi hacks are likely to increase in frequency and magnitude. Amador pointed out that criminal enterprises are bolstering their hacking skills to breach DeFi businesses surprisingly easily. Add in the fact that more DeFi companies are popping up, and there is even more reason for hackers to target the industry’s players.