After the $650 million Ronin hack earlier this week, the total money lost to DeFi hacks this year alone crossed the billion-dollar mark.
In the first quarter of this year, the total DeFi hacks have led to a loss of $1.2 billion.
The emergence of new, poorly built DeFi Dapps is also cited as a cause of these hacks.
Total money locked in DeFi protocols represents 10.6% of the entire crypto market cap.
Throughout 2021 and 2022, the use of Decentralized Finance grew. But along with it grew the abuse of these dapps at the hands of hackers and exploiters who have stolen more money this year than any year before.
DeFi Hacks Cost Big Bucks
As per the data from Immunefi, in the first three months of 2022, the DeFi crypto market has seen a loss of $1.22 billion worth of assets.
This figure is unimaginable since, this time last year, all the DeFi hacks combined only cost the market $154 million. That difference marks a 692% increase in the loss of money.
Now, this doesn’t mean that the hacks have also increased by this magnitude since the Ronin hack that occurred last week alone is responsible for almost 50% of the $1.22 billion losses.
As reported by FXEmpire, the hack on Axie Infinity’s Ronin Network resulted in the loss of $625.5 million as the exploiter managed to hack private keys to approve fraudulent transactions.
But according to Mitchell Amador, the Chief Executive Officer and Founder at Immunefi, this is just the beginning as going forward; things are going to get worse. In a statement to Yahoo Finance, Amador said,
“We should expect these types of [sophisticated] attacks to continue to increase, as more and more criminal organizations build DeFi-hacking skills in-house. Furthermore, as DeFi gets bigger and bigger, these kinds of attacks become more and more lucrative.”
The Hacks From the Last Three Months
Apart from the Ronin hack, the second most significant hack recorded this quarter was the Wormhole hack, in which exploiters managed to get away with a $320 million theft after 120k cryptocurrencies were stolen from the platform.
Furthermore, another major exploit was the Qubit Finance protocol exploit, in which $80 million were taken by exploiting the smart contract that minted xETH, using which as collateral the hacker managed to take the $80 million.
This is proof that no matter how secure or how thorough the development of a protocol is, hackers will consistently eye for a single error that can enable them to exploit the protocol.
Holding a Mass Media Degree has enabled me to better understand the nitty-gritty of being a journalist and writing about cryptocurrencies’ news and price movements, effects of market developments, and the butterfly effect of individual assets nurtured me into a better investor as well.