Home News Funds lost to DeFi hacks reached $1.3B in 2021: CertiK

Funds lost to DeFi hacks reached $1.3B in 2021: CertiK

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In 2021, the number of funds stolen by hackers from decentralized finance (DeFi) applications more than doubled, reaching $1.3 billion. Problems related to the centralization of projects have become the most common vector of attacks, according to the report of the security-focused ranking platform CertiK.

Thus, according to CertiK, in 2020, the losses of DeFi protocols amounted to $500 million. Furthermore, startup analysts stressed that the growth in absolute numbers is associated with an increase in the total market capitalization of digital assets:

“2021’s losses represented 0.05% of crypto’s total market capitalization, a drop of 17% from 2020.”

Centralization is antithetical to the ethos of DeFi and poses major security risks

During the year, CertiK conducted an audit of 1,737 projects. During the work, experts found 286 “red flags” indicating discrete risks of centralization.

“Centralization is antithetical to the ethos of DeFi and poses major security risks. Single points of failure can be exploited by dedicated hackers and malicious insiders alike,” the document says.

Moreover, the second most popular attack vector is insufficient “event emissions”. The latter term refers to the functions of smart contracts that notify about changes in “sensitive variables” or “important processes”.

Crypto scammers hit a record of $14 billion in 2021

In 2021, the number of cyberattacks doubled, according to Check Point Research. Geographically, the main victims of cybercriminals were located in Africa and the Asia-Pacific region.

Check Point Research noted that a vulnerability in the popular Java library Log4j, revealed at the end of December 2021; played an important role in the activation of hacker activity. Hackers used the latter to install hidden miners and other malware.

Recall that earlier, the analytical company Chainalysis reported that crypto scammers hit a record of $14 billion in 2021. The attackers’ income from scam projects increased by 82% and amounted to $7.8 billion in cryptocurrencies in 2021. Analysts noted that in many ways, the development of the DeFi segment and hype around it facilitated the growth of fraud in the crypto industry in 2021.

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