In 2022, the world of Web3 and decentralized finance (DeFi) witnessed a surge in major exploits and attacks, resulting in over $2 billion lost. The Beosin Global Web3 Security Report 2022 revealed that DeFi projects were the most vulnerable, experiencing 113 attacks out of 167 major security incidents, accounting for approximately 67.6% of all recorded attacks. Following DeFi projects, exchanges, nonfungible token (NFT) projects, cross-chain bridges, and wallets were also targeted in that order.
The report highlighted that DeFi projects ranked second in terms of monetary losses, with a total of $950 million lost, following the $1.89 billion lost in cross-chain bridge exploits in the last year. Overall, 2022 saw a total of $3.6 billion lost to security exploits across all project types, marking a significant increase of 47.4% from the previous year’s total of $2.4 billion in losses. Despite the alarming figures, DeFi projects must remain vigilant as experts predict more exploits in the upcoming year.
Experts attribute the susceptibility of DeFi projects to a combination of factors including the proliferation of new projects, lack of security testing prior to launch, and the high value these projects hold, making them attractive targets for hackers. Blockchain security firms are advising users to secure their private keys as funds lost due to private key compromises in 2023 will likely be attributed to poor key management. The recent year has already witnessed exploit incidents, with hackers stealing $3.5 million worth of digital assets from GMX whale on Jan 3.
It is crucial for DeFi projects to prioritize security measures to mitigate the risk of further exploits in the future. Despite ending 2022 with a decrease in the value of exploited funds from DeFi projects, with only $62 million lost in December, the threat of attacks remains prevalent. Therefore, enhancing security protocols, conducting thorough testing, and implementing robust security measures are imperative for DeFi projects to safeguard against potential attacks and protect users’ funds from malicious activities. As the crypto space continues to evolve, staying abreast of emerging cybersecurity threats is essential for DeFi projects to ensure the safety and integrity of their platforms.
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