2021 has definitely been the year of mainstream crypto adoption as institutions finally realized that it is not a fad and going to become the alternate financial market. However, with the surge in interest and adoption, the number of security breaches and hacks also reached new highs. According to the latest report from Slowmist, crypto hackers managed to get their hands on a whopping $9.8 billion dollars stolen in various breaches and ransomware attacks.
The Slowmist yearly report also highlighted that the majority of the crypto hacks came from one particualr industry i.e decentralized finance (defi). Nearly 73% of all stolen money from the crypto hacks came from various defi protocols amounting to nearly $7 billion.
The yearly report noted a total of 231 incidents of hacks and security breaches in the crypto ecosystem, and out of these total 231 incidents, 171 were reported from various defi protocols. While the Defi ecosystem has grown to become one of the most prominent use cases of the crypto ecosystem, it is also one of the most exploited ones. There hasn’t been a single week over the past year when there wasn’t a security breach of any kind.
Can the crypto ecosystem improve security against hacks?
The Defi sector has definitely been the biggest security concern due to the anonymity factor, however, it is also important to note that, some of the biggest heists in crypto was ultimately returned due to the decentralized nature of the blockchain where it became near impossible for the hacker to launder money out of the systems. The prime example of this is the biggest Defi hack in the form of PolyNetwork where the hackers managed to get their hands on assets worth more than $600 million.
The protocol alerted all exchanges and stablecoin issuers about the hacking address which resulted in the blocking of any transactions from that account and later all the stablecoins were also frozen. As a result, the hacker was left with no other option but to return the money and get a white hack bounty instead.