Decentralized finance (DeFi) protocol hacks in 2022 are up almost eightfold compared to 2021.
Hackers likes DeFi
According to DeFi platform Immunefi, the DeFi industry has been a favorite target for hackers. In the first quarter of this year alone, more than $1.22 billion was identified as stolen from DeFi platforms.
This corresponds to a 7.9x increase when compared to the roughly $154.6 million stolen in the same period in 2021.
More than 77% of the $1.22 billion worth stems from the $625 million Ronin Network hack, bridge of Axie Infinity. Furthermore, another million dollar hack was the $326 million Wormhole blockchain bridge hack in February this year.
The numbers might look bad, but Immunefi said it’s not as bad as it sounds. As highlighted by Immunefi’s CEO, Mitchell Amador, the result is positive because it is increasing the security of the sector.
“Although things look bad, they are actually getting better and better on the security side,” he said.
The second quarter of this year saw less severe attacks against protocols.
Crimes in DeFi
Among the top hacks, Amador highlighted the theft of $100 million from Harmony’s Horizon cross-chain bridge. He also cited the theft of $180 million from the algorithmic stablecoin protocol Beanstalk.
“There were a lot of mistakes. Consensus vulnerabilities that we’ve seen in tier 1 blockchains. But all were successfully patched,” Amador said.
Despite the progress, however, the threat is not abating.
“Those hacks are fundamentally an unsolvable problem,” said the CEO.
Also according to him, it was already known that “things would go in this direction because where there is money there are hackers”: “Compared with global trends, even a few billion dollars are a drop in the bucket”, he said.
Recent estimates of global losses from payment fraud alone add up to about $32.4 billion. Meanwhile, the global market for fraud detection and prevention is worth $25 billion this year.
Cybercrime as a whole will cost the world an estimated $6.9 trillion in 2022, according to consultancy Cybersecurity
So even if DeFi exploits $3.5 billion by the end of the year, that would represent 0.05% of global cybercrime volume.
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