The Decentralized Finance (DeFi) sector has seen explosive growth this year. The Total Value Locked (TVL) across all decentralized financial protocols (DeFi) reached a new all-time high of 84 billion US dollars at the end of August, according to data aggregator DeFi Pulse.

As of ConsenSys Q2 2021 DeFi reportBillions of institutional capital flow into DeFi. As the space soars to new heights, it is attracting significant attention from cyber criminals. The attacks on DeFi have become so regular that a protocol has developed a “DeFi REKT database”.

The CipherTrace database asserts that more than 2,500 projects were “REKT” and in the year 2021 a total of almost 474 million US dollars were lost to Ghostface killers.

While the overall fraud rate for cryptocurrencies has decreased, DeFi-related scams and hacking have increased significantly in recent years. In 2021 alone, DeFi hacks accounted for over 60% of the total hacking and theft volume of crypto attacks, according to CipherTrace, an increase of 40% compared to 2020.

DeFi Exploit Outlook 2021

Recently, the Defi-Cross-Chain-Protocol, Poly Network, fell victim to the largest crypto-heist in history. The hackers stole about $ 610 million worth of cryptocurrencies from Poly Network, which operated across the Binance Smart Chain (BSC), Ethereum (ETH) and Polygon. Thousands of people were affected by the hack, PolyNetwork said in a letter published on Twitter. However, the hacker later returned the stolen amount.

DeFi Protocol, Cream Finance, encountered another major flash credit attack on Aug. 30 when the loan history lost $ 18 million to fraudsters. According to initial reports from Wu Blockchain, two attackers were behind the exploit, who carried out the robbery in just 17 transactions.

More money, more problems

The DeFi industry is clearly emerging and industry players are optimistic about its continued growth. However, the DeFi sector has become a major target for hackers. Many DeFi space projects start without an audit, and those that are audited often have undetected attack vectors.

Also, DeFi exchanges don’t have AML or KYC, so it’s easy to carry out an attack and launder the money through a DeFi wallet while the culprits go undetected.

Disclaimer of liability

The content presented may contain the author’s personal opinion and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or the publication assumes no responsibility for your personal financial loss.

About the author

LEAVE A REPLY

Please enter your comment!
Please enter your name here