The decentralized finance (DeFi) ecosystem has grown to become a $200 billion industry, but security remains a huge issue for the protocols.
DeFi Protocols Have Lost Over $1 Billion to Hackers
A new report has revealed that there have been 70 attacks on decentralized finance (DeFi) platforms since the start of the year. The attacks have been focused on four of the leading DeFi blockchains, including Ethereum and the Binance Smart Chain.
According to the latest data obtained from The Block, DeFi protocols have lost $1.4 billion to hackers since the start of 2021. However, $760 million of the stolen funds were returned by the hackers.
The most famous one was the Polychain hack, with the attacker wheeling away with more than $600 million from the DeFi platform. However, the attacker returned all the funds, claiming that he wanted to point out the vulnerability in the Polychain network.
With $760 million returned to the protocols, the total amount lost by DeFi protocols this year dropped to $680 million. The Ethereum network suffered most of the exploits, with DeFi protocols on the blockchain suffering 34 hacks.
The Binance Smart Chain comes in second place, with DeFi protocols on the blockchain suffering 25 attacks since the start of the year. Polygon and Avalanche networks recorded three and two attacks, respectively.
Flash Loan Attacks Take the Lead
Flash loan attacks have been very popular in the DeFi space since the start of the year. According to the report, 34 of the hacks were flash loan attacks. In this type of attack, the hacker takes out loans from a network, uses the funds for some function and repays the loan all in the same transaction block.
Ethereum remains the leading DeFi blockchain, accounting for more than 50% of all transaction volumes in the ecosystem. However, it is facing stiff competition from the likes of Binance Smart Chain, Solana, Cardano, Avalanche, Terra and Polygon as they offer faster and cheaper transactions.