beincrypto.com
The DeFi market lost over $1.22 billion to hackers in the first three months of 2022 alone, according to bug bounty platform Immunefi.
The figure is nearly eight times more than the $154 million lost in the first quarter of 2021.
DeFi has grown considerably since the start of 2021, and hackers continue to exploit the space. New projects, with weaker security audits, are prime targets for bad actors.
Immunefi confirmed that most of the hacks were a result of poor security. They also expect attacks to increase in the future.
“We should expect these types of [sophisticated] attacks to continue to increase, as more and more criminal organizations build DeFi-hacking skills in-house. Furthermore, as DeFi gets bigger and bigger, these kinds of attacks become more and more lucrative,” said Mitchell Amador, CEO and founder of Immunefi.
According to data aggregator, Defi Llama, the total value locked across different smart contracts increased from $80 billion this time last year to $227.84 billion. And the rise in blockchain usage, thanks to growing non-fungible token (NFT) and DeFi apps, has led to increased transaction fees on Ethereum, the biggest blockchain for the segment.
The Ronin Network suffered the most, losing approximately $625 million in a hack at the end of March. While Ethereum and Solana bridge Wormhole was the next biggest victim, losing over $320 million in Feb.
Hackers will persist without greater security
The sheer number of hacks in the DeFi space and the explosive growth means that projects need to concentrate more on securing their smart contracts. This has been a recommendation since the early days of the space, but not all projects have been allocating resources towards it.
Some solutions include third-party audits of smart contracts and crypto insurance programs. The latter makes it easier to compensate victims of hacks, while an audit goes a long way in ensuring security.