May 26, 2022

we’re few More than three months have passed until 2022, and every month it seems that the scale of crypto exploits continues to grow as the industry continues to grow.

Just last week, the playing and earning ronin network Axi Infinity announced that it has roughly $625 million in use, making it the largest decentralized finance (DeFi) hack ever.

While it was the largest hack in history, 2022 also saw several major multi-million dollar exploits. As people and capital pour into crypto, the losses are mounting, said gaming-updates Adrian Hetman, DeFi expert at Immunefi’s Web3 bug-finding and security platform.

Hack History of the Year

Wormhole, one of the largest cryptocurrency platforms that provides a bridge to Solana and other blockchains, was hacked on February 2 for approximately $320 million, or 120,000 Ether. A week before the wormhole hack, the DeFi protocol Qubit Finance was attacked by hackers who were using 206,809 Binance Coins of the Qubit Qubridge protocol, which was valued at around $80 million at the time.

Anthony Georgiades, co-founder of blockchain provider NFT and Web3 Pestel and general partner at Innovating Capital, told gaming-updates: “Wormhole and Ronin hacks in general represent major vulnerabilities or weaknesses in the crypto ecosystem.”

In the first quarter of 2022, the web3 ecosystem suffered a “loss” of around $1.23 billion, according to a report by Immunefi. Hetman said that this number accounts for any loss of money due to break-ins and fraud cases.

The data shows that this is 695% more than the total loss of $154.6 million for the quarter last year.

As of April 4, the total value locked (TVL) across multiple DeFi protocols is around $230 billion. TVL is up 170% from $84.91 billion a year ago, according to Defilama data.

“So given that number, and the fact that a single vulnerability in the code could mean hundreds of millions of dollars in instant hacker access, it makes sense that Blackhat is interested in a piece of that pie,” Hetman said.

Apart from the rise in popularity, DeFi is still relatively new and developers are still learning how to write secure code, Hetman said.

“Many users are still not well-informed about how to securely interact with different projects, or even which projects to interact with,” Hetman said. In addition, many developers still “copy and paste code from other projects”, so a vulnerability in the code of one project can often spread to many other projects.

a matter of trust

Although hacks and exploits cause financial and property damage, Georgiades said they also cause inconvenience to the entire ecosystem. Hacks and exploits can lead to a loss of trust and confidence on the part of users, consumers and institutions, which in turn could stunt user growth and deter new market entrants, Georgia said.

Leave a Reply

Your email address will not be published.