Analysts have seen an increase in the popularity of centralized cryptocurrency platforms as the security of DeFi platforms continues to decline.
Chainalysis, together with Bitfinex, has published a new report stating that despite the growth in decentralized finance (DeFi), cryptocurrency investors prefer centralized exchanges (CEX) to DeFi tools. They are more comfortable holding their assets on the CEX because decentralized exchanges are still more vulnerable to hacking threats.
As analysts say, over the past few years, the risks associated with hacking CEX have significantly decreased, but DeFi platforms, on the contrary, have become more vulnerable. Since 2018, the total amount of assets stolen from centralized crypto platforms over the year has decreased by 58%, to $80 million in 2022. In DeFi, this amount reached $2.2 billion, 96% of which was accounted for by hacks.
According to Chainalysis research director Kim Grauer, centralized exchanges are no longer the main targets of hackers, as they were in the early days of the industry. The reason is that such platforms have managed to significantly improve security:
“Despite all the market turmoil this year, many fundamentals of cryptocurrencies have been surprisingly stable. We see how hodlers accumulating cryptocurrencies for long-term holding use mostly centralized platforms.”
Previously, Chainalysis reported that 2022 has become the leader in the volume of cryptocurrency hacks. During the 12 days of October, hackers stole more assets than in the previous months of this year.
Source: Bits
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