CipherTrace: DeFi Protocols Lost $ 474 Million Due To Scams And Hacks In 2021

Hackers are not losing interest in DeFi protocols – more than 75% of hacks in the cryptocurrency industry in 2021 were associated with decentralized finance projects.

The number of attacks on cryptocurrency companies is declining, but the number of hacks associated with DeFi projects continues to grow. DeFi hacks and scams cost the protocols and their users $ 474 million in the first seven months of this year, according to a report by analyst firm CipherTrace.

The decentralized finance industry is undergoing a period of steady growth. According to DeFi Pulse, the value of assets locked in DeFi protocols exceeds $ 80 billion.

However, according to a CipherTrace report, DeFi projects remain a prime target for attackers. External hacker attacks led to the loss of cryptoassets by the protocols for $ 361 million, and the fraud of project developers cost users $ 113 million.

According to CipherTrace, 75% of all cryptocurrency hacks in 2021 happened in DeFi projects. Moreover, “DeFi-related fraud accounted for 54% of all criminal activities in the industry. At the same time, last year this figure was only 3% of the total volume for the year ”.

CipherTrace researchers note that most attacks on DeFi protocols are carried out using “quick credits”.

“The crux of the problem lies not in platforms that issue quick loans, but in unaudited smart contracts, where vulnerabilities are exploited by attackers,” the report says.

Analysts have detailed 30 known attacks since the beginning of the year, including the PancakeBunny hack in May. Given the current pace of development for DeFi, it is likely that this list will grow throughout 2021.

So, on August 10, the largest hack in the DeFi ecosystem occurred – a hacker was able to withdraw tokens worth $ 611 million from the Poly Network project.

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