October hasn’t been kind to crypto, with $730 million lost to 18 hacks this month alone, driving the 2022 total loss to $3 billion. With decentralized finance, or DeFi, as the prime target, it’s becoming a serious enough problem that calling 2021 The Year of the Hack may have been premature on the part of blockchain data firm Chainalysis, which specializes in tracking cryptocurrencies. “What is unique that’s happening lately in the crypto space is the rate at which hacking is growing,” said Kim Grauer, head of research for Chainalysis, told PYMNTS’ Karen Webster. “It was the fastest growing subtype of crime out there of any type of crime we track — and we track many — and we had predicted that that was going to subside in the short term to medium term because it simply had to, to build trust in the industry.” But, she added, “that’s not what we’ve been seeing.” Instead, 2022 is just $220 million away from surpassing 2021’s record $3.2 billion in stolen funds. And, Grauer added, DeFi itself is in jeopardy. “The reputational risk is huge,” she said. “I can’t emphasize that enough. Having a hack happen every day makes it so that every trader, everyone involved in DeFi has an awareness that they could be the victim of a hack. And that’s not healthy for sustainable long-term growth. That’s not healthy for the industry. That is, in fact, a major reason why people are likely not getting into DeFi, not testing the waters.”
Full story : Hacktober’s $718M Losses Are an Existential Threat to DeFi.
Worried about DeFi security? You have a very good reason! OODA has been compiling a comprehensive Web3 incident database based on our research to categorize what compromises are taking place as well as document the root causes that plague Cryptos, DeFi, NFTs, and Web3 in general. Tracking root causes provides comprehensive insights into how innovators can create robust cyber risk management approaches and reduce the potential for consequential attacks. You can access the OODA comprehensive Crypto Incident tracker here.
