One of the major problems that the DeFi market, and the crypto market by extension, has faced is its association with bad actors. For a long time, cryptocurrencies had to deal with a terrible reputation of aiding money launderers and illegal activities.
However, over the decade that the market has been around, it has evolved and so has the conversation surrounding it. People are no longer condemning cryptocurrencies, but are still hesitant to step inside the DeFi space, since they are worried about possible hackers.
Hacks throughout the DeFi space have escalated in recent years, as nearly every major hacking group has tried their hand on the market, getting away with million in company assets. And due to the increased frequency of these attacks, many companies have decided to pack up and leave, and many investors are too scared to enter the market.
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The Major Leak in the System: Bridges
The DeFi space is made of an intricate array of unique systems that help transport currency from one exchange to another. Since they work in a decentralized manner, these bridges end up being significantly faster than most other traditional financial institutions.
Therefore, suffice it to say, these bridges happen to be an integral part of the DeFi system, since they are responsible for transporting essential data and currency at fast speeds. However, due to an exploit that exists in the system, most hackers can steal money through the bridge.
Following the BNB hack that happened this month, Binance was able to track down how the attack took place. And after a detailed search, the company was able to find out that an exploit in the bridge is what allowed the company hackers to get away with stealing close to $100 billion.
More than $700 Million Worth of Hacks in October Alone
The frequency of the attacks throughout the DeFi space has only gotten worse in recent months, with October being the worst so far. Through a number of high profile hacks happening over three weeks, the market lost well over $700 billion before the month even ended.
Since there were little to no incidents throughout the summer, many were under the impression that hackers would eventually stop. However, following the summer drought, hackers and exploiters were quick to fill in the market.
No End in Sight
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One of the reasons why hackers continue to target these different DeFi platforms is because they are very low hanging fruit. And as the entire market continues to struggle because of these hacks, many are looking up to companies like Binance to come up with a solution that could potentially save the rest of the market.