The collapse of centralized crypto firms became the biggest news stories in 2022, with Celsius and FTX dominating mainstream coverage. CeFi also experienced its share of hacks, such as exchanges Crypto.com, Deribit and the more than $400 million from FTX during its chaotic implosion last month. DeFi has taken a hammering, too. CeFi’s failures can mainly be chalked up to mismanagement, opacity, and fraud. Many of the following DeFi hacks and exploits are down to smart contract vulnerabilities, from which there is generally no recourse. The concept of play-to-earn was one of 2022’s most hyped crypto narratives. Sky Mavis’s Axie Infinity, a play-to-earn NFT game where users could battle, breed, and trade axolotls, grew rapidly. It boasted around 3 million users earlier this year, many of which were attempting to earn above minimum wage by grinding in the game — until token inflation diminished their earning potential. In order to keep transaction costs down and ease network congestion, Axie Infinity moved from Ethereum to its own Ethereum sidechain, Ronin Bridge. Players could move their original tokens onto the bridge and receive an equal amount of ‘wrapped’ tokens to play with. However, the project’s centralized nature as well as the decision to build a cross-blockchan bridge led them vulnerable to attack. The hack was announced in March: 173,600 ether ($578 million) and $25.5 million in USDC was taken. Sky Mavis admitted that it took them a month to notice the funds were gone.
Full story : Top DeFi hacks and exploits of 2022.
While these are the largest cryptocurrency hacks that have happened in 2022, 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.
