DeFi Hacks Top $6 Billion

Key Points:

• According to statistics from crypto data analyst Kofi, a contributor to DefiLlama, the decentralized finance (DeFi) ecosystem experienced a spike in thefts in 2022, with the total value of stolen cash surpassing $6 billion.
• Crypto analyst Nelson Ijih stated that the number would be significantly greater if previous “crypto hacks” were taken into account.
• DeFi attackers used a variety of methods to take advantage of Web3 project flaws. However, broken bridges, compromised keys, and flash loan attacks can be used to classify many of the most significant and expensive hacks of the year.

According to statistics from crypto data analyst Kofi, a contributor to DefiLlama, the decentralized finance (DeFi) ecosystem experienced a spike in thefts in 2022, with the total value of stolen cash surpassing $6 billion.

Numerous high-profile hacks and security breaches occurred throughout the year, with the Ronin hack standing out as the worst DeFi incident of the year. The $6 billion sum, in Kofi’s estimation, equals the original theft’s market worth for the funds.

Crypto analyst Nelson Ijih stated that the number would be significantly greater if previous “crypto hacks” were taken into account.

DeFi attackers used a variety of methods to take advantage of Web3 project flaws. However, broken bridges, compromised keys, and flash loan attacks can be used to classify many of the most significant and expensive hacks of the year.

Attackers discovered that the links connecting the blockchain ecosystem were often broken. Among the most expensive cross-chain bridge hacks of 2022 were Qubit Finance, the Ronin Network, BSC Beacon, Wormhole, Nomad Bridge, Harmony Horizon, and BSC Beacon.

Another entry point for DeFi breaches was compromised private keys, which produce the digital signatures for blockchain transactions. Ankr, Helio, and the Wintermute contract were among the protocols that experienced losses as a result of stolen private keys. DeFi hacks often used flash loans, which enable large borrowing without collateral.

In 2022, the protocols for the Beanstalk and Mango Markets were among those abused by flash loans. An analytics company based in New York, Chainalysis, recently revealed that in 2022, an astounding $20.1 billion in illicit bitcoin transactions were transacted, a 40% increase from the year before. A significant amount of those cash were stolen by North Korea.

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