Crypto companies had to struggle greatly in the last year and many among them experienced financial problems and bankruptcy. Apart from that trials, more than $3B worth was robbed from the crypto companies in 2022, as per Forbes.
The respective hindrances have paved the way for chaos in the market and raised apprehensions about the stability of the crypto world.
2022 Witnessed Top Five Crypto Hacks in DeFi Sector, Says Forbes
As per a report, the projects in the crypto space went through nearly 125 exploits and the prominent among them were targeted at the DeFi (decentralized finance) protocols. The cumulative amount stolen in those exploitations equaled $1.48 billion.
Forbes indicated in its report that the respective 5 extreme crypto exploits included cross-chain hacks, flash-loan attacks, code exploits, and so on.
The most prominent 5 hacks take into account Wintermute’s exploit of up to $160 million and the flash loan attack of Beanstalk Farms in which $182 million got drained. The others include Nomad Bridge’s hack of $190 million, Wormhole’s attack of $325 million, and Ronin Network’s exploit of $625 million.
The report mentioned that nearly a 49% ratio of the cumulative amount exploited by the exploiters in 2022 was related to the DeFi sector.
Hackers Target DeFi Despite Its Uniqueness
As a result of this, the investors’ interest in this space got minimized and investment value decreased. According to the data provided by Elliptic (a blockchain analytics company), a 75% decrease took place in the DeFi-based protocols’ total value locked (TVL) during 2022. Nonetheless, that additionally accounts for the slumping asset prices.
DeFi Llama’s data signifies that DeFi protocols’ TVL plummeted from $166.58B (witnessed at the beginning of 2022) to just $39 billion (as of December 2022).
The report from Forbes pointed out that the cross-chain bridges (responsible for enabling the tokens’ swaps between blockchains) turned out to be the highest target for exploiters in 2022. Hackers exploited almost $2B from blockchain-based bridges.
This accounts for nearly seventy percent of the entirety of crypto-related theft that took place in the previous year. The reports additionally disclose that decentralized finance has become a prioritized field for exploiters irrespective of its uniqueness.
Chainalysis, a blockchain analytics firm, reported that the majority of the hacks in the DeFi world are taking place because of vulnerable codes.
In this respect, the hackers exploit the loopholes in the smart contracts to steal funds from the protocols. In the report, it was elaborated that due to the open-source nature of the DeFi ecosystem, anyone (whether they are normal users or exploiters) can look for possible errors or vulnerabilities. In this way, those intending to perform a hack prepare their plan before getting in.