DeFi Hacks and Scams of 2022
The year 2022 has been a turning point for DeFi, as it gave us an insight into the risks and scams that can occur due to a lack of security. So far this calendar year, there have been some extreme examples which show how quickly things can go wrong in our increasingly cashless society. This is how the DeFi sector has been affected this year:
- DeFi platforms lost over 2 Billion USD. According to Peckshield, it is as much as $2.32 Billion.
- Approximately 14.5 Billion in cryptocurrencies were stolen between January 2011 and July 10, 2022. The amount lost this year from DeFi alone accounts for more than 1/10th of the total stolen cryptocurrencies.
- About 50% of the funds stolen have been via Tornado Cash
- DEXes have experienced 20 times more hacks than CEXes in 2022.
- The biggest DeFi hack incident so far took place in March 2022, involving Ronin Network, which lost over $650 Million.
- In four months, hackers managed to attack Axie Infinity’s Ronin Bridge, Wormhole Network, and Beanstalk Farms.
The last couple of years have been eye-opening and drawn our attention toward negligence in DeFi and Web3. Growing hacks could ultimately impact mass adoption to a point where innovation will cease progress entirely.
Here are the top DeFi hacks and scams of 2022:
Ronin Network: Loss — $620 million
Wormhole Bridge: Loss — $320 million
Nomad Bridge: Loss — $190 million
Beanstalk Farms: Loss — $182 million
Wintermute: Loss — $160 million
Elrond: Loss — $113 million
Horizon Bridge: Loss — $100 million
Qubit Finance: Loss — $80 million
Cashio: Loss — $48 million
Scream: Loss — $38 million
These instances of crimes against cryptocurrency holders are a concern. However, it is essential to acknowledge the potential for DeFi, which could revolutionize the global financial market.
The growing crime drew attention to the need for regulation to prevent certain activities and users that appear to have dishonest intentions. Laws in DeFi would bring the necessary compliance to ensure all participants are safe and criminals can be identified.
DeFi Safety with Regulation
Users can take measures to protect themselves, such as avoiding links from random emails, staying vigilant, enabling security measures, cross-checking URLs, and DYOR. However, this issue needs to be resolved on a macro level, as these crimes convey how businesses can get entrapped.
DeFi regulation is a set of rules to preserve the decentralization and truthfulness of a blockchain. Using KYC and KYB in Web3 and implementing regulatory expertise are some of the things DeFi Protocols are doing to secure the space. We can also consider some security measures that might help DeFi.
DeFi Regulatory Protocols for Security
With DeFi Regulatory Protocols, we can expect DeFi to flourish. How? DeFi Regulatory Protocols use decentralized compliance for users and businesses that safeguard them from risks and malicious activities on the blockchain. Astra is the decentralized compliance layer that brings user protection to the entire Web3 economy.
Astra comprises a Decentralized Legal Network (DLN) of legal experts that provide unique on-chain audit services and a security package with the best features of traditional finance tailored for a decentralized world, such as KYC, KYB, Reporting and AML processes.
Astra is on a mission to provide regulatory compliance tools for crypto applications, ensuring that all Web3 protocols can meet legal requirements. To strengthen its mission and team, Astra recruited the former Chief of Staff from Trump’s Presidency, Mick Mulvaney, as a part of its advisory board. Mick Mulvaney’s experience in the current developments of crypto, blockchain and fintech is second to none and helps Astra bring improved security to Web3. Astra is a game changer for DeFi and will make it easier than ever to take advantage of this revolutionary new financial infrastructure.
Astra Protocol is a leading enabler of decentralized compliance and innovations in the financial security sector to improve security in DeFi. With such efforts, we can expect DeFi mass adoption and safer accessibility in the future.
Astra: KYC for Web3
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