Defi lenders and crypto bridges lead exploits in 2023
A report from IntoTheBlock showed that defi hacks are on course to post the lowest losses seen in two years despite over $1.7 billion stolen in November alone.
Data from the blockchain analytics provider indicated that defi lending protocols and cryptocurrency bridges were the top targets for hackers looking to siphon user funds.
While lenders suffered 34 attacks and lost $1.3 billion to theft, exploiters pilfered nearly double that amount over 10 incidents, according to Lucas Outumuro, head of research at IntoTheBlock. The researcher further classified defi exploits into two risk vectors, namely economic and technical.
There is a greater number of technical exploits, but the funds lost due to economic factors are much larger. In terms of the underlying causes, most of the economic exploits have been due to poor mechanism design. Most of the technical attacks have been due to smart contract bugs and inadequate private key management.
Lucas Outumuro, head of research, IntoTheBlock
Crypto platforms and defi protocols have reported numerous hacks throughout 2023, with bad actors stealing hundreds of millions in digital assets from a single project in some cases.
Hackers stole over $290 million from five platforms during November following attacks on Poloniex, HTX, Heco Bridge, KyberSwap, and Kronos Research.
Despite the constant threat of web3 exploits, TRM Labs reported a 50% drop in crypto hack volumes. This marked a noteworthy decrease in hacks, considering bad actors looted over $4 billion the previous year.
However, experts urged additional attention toward on-chain security and tools designed to mitigate attacks.
Sipan Vardanyan, co-founder and CEO of cyber security firm Hexens, said security would be a key area of focus in 2024 and beyond. Vardanyan told crypto.news that companies must prioritize on-chain safety if the industry hopes to grow in leaps and bounds.
We’re convinced that the two biggest obstacles to the mass adoption of web3 are inadequate regulatory oversight and critical cybersecurity shortcomings, which are deeply interconnected. Securing decentralized technologies needs to be an absolute priority if investors are to operate in the space without the fear of financial devastation looming overhead.
Sipan Vardanyan, co-founder and CEO, Hexens
