The company Immunefi, which specializes in cybersecurity of cryptocurrency platforms, informedthat investors in digital assets have lost more than $1.22 billion to hackers since the beginning of 2022, almost 8 times more than the same period last year when $154 million was stolen.
In 99% of cases, the digital asset thefts were related to exploiting vulnerabilities – this scenario worked with the Wormhole and Ronin platforms. And you should get used to this condition, experts say. It is likely that the number of such incidents will only increase in the future. Hackers will continue to target the decentralized finance (DeFi) sector as the market grows in size and attacks become more lucrative.
Funding in DeFi has tripled over the past year. According to aggregator Defi Lama, the total amount of assets locked in smart contracts has increased from $80 billion to $227.84 billion. With the insane growth in popularity of non-fungible tokens (NFTs), fees on the Ethereum network have risen, so alternatively first-level blockchains like Solana are trying to take their place Avalanche, Polygon, Algorand, Polkadot, and Cardano all offer low fees for NFT and DeFi projects. The problem is that the number of security researchers and auditors is disastrously not keeping pace with innovation: many talented programmers, both conscientious and not so, are coming into the DeFi segment.
The weakest point proved to be bridge services that offer the transfer of funds between blockchains. The service is growing in popularity as crypto investors seek to diversify their investments, meaning spreading them across networks. The lion’s share of losses in the crypto sector were incidents involving hacking of the wormhole and Ronin bridges, in which the amount of damages amounted to $325 and $626 million, respectively. It is noteworthy that both platforms decided to compensate victims for the stolen funds: Ronin said they would return all funds, and Wormhole investors have already received a refund. In this regard, experts predict that there will be fewer and fewer such services, and the most trusted of them will be those who have sufficient funds to pay compensation.
But the number of scams in the DeFi sector is now declining. Last year, scammers stole $7.7 billion from crypto investors — an average of $1.925 billion each quarter, and the two biggest incidents this year saw losses amount to “only” $11 million from 2020, and then there were no guidelines for identifying fraudulent schemes – the market peaked in November 2021, after which the number of newcomers to the DeFi market began to decline. In addition to newcomers, fraudsters are also leaving the market.