Once we see reports about hacks one by one, we don’t grasp the size of the problem crypto is facing. Some hacks result in losses of tens of thousands, and others go as far as hundreds of millions. And we can only be witnesses to increasing loss of funds. Here are some numbers of stolen funds to compare:
What does this tell us? For one thing, hackers have found DeFi to be superbly profitable. With increasing numbers of launched projects in parallel, so does the malicious behavior. Unfortunately, security measures do not follow the same example — there are scarce options. Projects mostly rely on audits if they seek to complete any but statistics tell us that it’s not a reliable security solution.
From numbers provided by the REKT Database we can see that Q1 of 2022 was not an exception to the trend. On the contrary, we saw hacks like the one with Ronin or Wormhole which resulted in losses never seen before — a joint steal of over $900 million. This tells us that though the industry is experiencing immense growth, hackers are following the same path: learning about blockchain, discovering smart contract vulnerabilities, refurbishing their code. The further we go, the more sophisticated the hacks become.
Here’s what Q1 of this year looks like in numbers:
The core deduction is that security is in an early stage of crypto. To illustrate, if you go to CoinMarketCap’s Cybersecurity category, you will see only 15 projects listed there. Crypto project numbers are growing, hacks too but security is yet to follow. And though crypto space players are aware of the problem, quite often project founders think of protecting their funds and communities only once the danger is breathing in their necks or they have to write a post-mortem.
DeFi does not yet have the luxury to pick security solution providers since there are so few of them. We hope that this will change in the near future. Until then best practices are:
- proper smart contract development
- multiple audits from different service providers
- honoring security rules (for example, multisig — having 9 separate wallets stay separate and not fall into a single person’s/entity’s hands)
You can always reach out to our team if you’re interested in security and would like to know more of the options out there including our Core Protocol and other tools we have developed. Stay safe.
About Lossless
Lossless is the world’s first DeFi hack mitigation tool for token creators. Apart from Lossless’ known cyber security solutions and renowned professionals, the community also plays a role. With a tangible reward system, community members are also encouraged to explore new ways to detect hacks and fraudulent transactions.
Lossless protocol halts counterfeit transactions through various methods of fraud identification and automatically reverses any stolen tokens back to the original owner. Its solutions to the impending problems of cyber theft within the blockchain space are thorough and applicable within many protocols.
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