The growing popularity of decentralized financing since 2019 has turned the emerging market segment into a target for hackers and opportunistic speculators.
According to a report from cryptocurrency research firm Messari, DeFi logs have lost around $ 284.9 million in hacks and other exploit attacks since 2019. That number corresponds to roughly 0.65% of the total adjusted lock value of the Ethereum-based DeFi market, according to DappRadar.
In February, Messari calculated that more than $ 284 million to DeFi has been lost to hacks since 2019
At this point in time, the decentralized insurance industry only covers a fraction of the TVL in DeFi. The need is ripe for harvest. pic.twitter.com/WkZVI0TuWb
to???? Messari (@MessariCrypto) April 28, 2021
Almost half of the DeFi hacks covered in Messari’s report were flash credit attacks, which provides further evidence that it is the most popular vector of exploits in the DeFi landscape. Indeed, Many of DeFi’s key “hacks” have been flash credit attacks that sometimes exploit temporary shortcomings in oracle pricing sources.
While crypto hacks declined overall in 2020, DeFi accounted for more than half of the attacks recorded during the year. So far, Alpha Homora and Cream Finance made headlines in 2021 after both protocols fell victim to rogue actors, the former suffering the biggest attack in DeFi history, losing $ 37.5 million.
The Alpha Homora incident also challenged the quality of smart contract auditing as leading smart contract auditing teams such as Quantstamp and PeckShield reviewed the project codes.
DeFi hacks aren’t just limited to the Ethereum chain as the Binance Smart Chain environment also records similar incidents. With the growing activity at BSC, DeFi protocols on the network have also fallen victim to rogue actors using known attack vectors.
As previously reported by Cointelegraph, Uranium Finance, a BSC-based automated market-making platform, lost $ 50 million to a hacker. The attacker took advantage of flaws in the project’s smart contract and was able to reroute funds during a planned token migration event.
Other BSC-based DeFi projects have also made headlines for the wrong reasons. The TurtleDex team stole the 9,000 Binance Coin (BNB) tokens that were collected during the pre-sale event mid-March.