Funds Lost to DeFi Hacks More Than Doubled to $1.3B in 2021: Certik


The amount of cash misplaced in hacks of decentralized financed (DeFi) initiatives greater than doubled to $1.3 billion in 2021, with centralization the most typical vulnerability, Certik mentioned in its inaugural “State of DeFi Security” analysis report.

  • While the worth misplaced climbed 160%, the quantity was a smaller proportion of the whole than in 2020 due to progress of the DeFi market, the safety agency mentioned in the report released on Wednesday. The misplaced funds represented 17% of the whole market cap, in accordance to the report.
  • The whole worth locked (TVL) in DeFi protocols at end-2021 was $243.88 billion, up from $18.29 billion the 12 months earlier than, in accordance to DefiLlama knowledge. That means the misplaced funds shrank to 0.5% of TVL final 12 months from 2.78% in 2020.
  • Centralization was the most typical vulnerability “by far,” the safety agency mentioned. Certik discovered 286 discrete centralization dangers by the 1,737 initiatives it audited, together with privileged possession. For instance, some initiatives have been drained when hackers obtained personal keys that gave them full management of sensible contracts. This doubtless would have been averted utilizing multi-signature wallets or DAOs as a substitute of 1 or a set of personal keys.
  • The second most-common vulnerability was lacking occasion emissions, adopted by use of an unlocked compiler model, code missing correct enter validation, and reliance on third events. An occasion emission is info produced by a wise contract when it’s executed.
  • The report additionally discovered that Ethereum surpassed the Bitcoin community on charge income. It now generates greater than 64 occasions Bitcoin’s income and 4 occasions the variety of each day transactions. But Ethereum additionally suffered from its success as excessive transaction charges despatched customers to different platforms.
  • Certik famous the rise of Ethereum alternate options, corresponding to Binance Smart Chain. Binance’s layer 1 protocol noticed TVL rise 31,000% to $21 billion, Certik mentioned.
  • The safety agency raised $80 million in a Series B2 fundraising in December 2021, bringing its valuation to $1 billion.

Read extra: Cross-Chain DeFi Site Poly Network Hacked; Hundreds of Millions Potentially Lost