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

The magnitude of wealth mislaid successful hacks of decentralized financed (DeFi) projects much than doubled to $1.3 cardinal successful 2021, with centralization the astir communal vulnerability, Certik said successful its inaugural "State of DeFi Security" probe report.

• While the worth mislaid climbed 160%, the magnitude was a smaller proportionality of the full than successful 2020 owed to maturation of the DeFi market, the information steadfast said successful the study released connected Wednesday. The mislaid funds represented 17% of the full marketplace cap, according to the report.

• The full worth locked (TVL) successful DeFi protocols astatine end-2021 was $243.88 billion, up from $18.29 cardinal the twelvemonth before, according to DefiLlama data. That means the mislaid funds shrank to 0.5% of TVL past twelvemonth from 2.78% successful 2020.

• Centralization was the astir communal vulnerability "by far," the information steadfast said. Certik recovered 286 discrete centralization risks done the 1,737 projects it audited, including privileged ownership. For example, some projects were drained erstwhile hackers obtained backstage keys that gave them implicit power of astute contracts. This apt would person been avoided utilizing multi-signature wallets oregon DAOs alternatively of 1 oregon a acceptable of backstage keys.

• The 2nd most-common vulnerability was missing lawsuit emissions, followed by usage of an unlocked compiler version, codification lacking due input validation, and reliance connected 3rd parties. An lawsuit emanation is accusation produced by a astute declaration erstwhile it is executed.

• The study besides recovered that Ethereum surpassed the Bitcoin web connected interest revenue. It present generates much than 64 times Bitcoin's gross and 4 times the fig of regular transactions. But Ethereum besides suffered from its occurrence arsenic precocious transaction fees sent users to different platforms.

• Certik noted the emergence of Ethereum alternatives, specified arsenic Binance Smart Chain. Binance's furniture 1 protocol saw TVL emergence 31,000% to $21 billion, Certik said.

• The information steadfast raised $80 cardinal successful a Series B2 fundraising successful December 2021, bringing its valuation to $1 billion.