DeFi Projects were Main Attack Target in 2022, Expect More Hacks This Year

Reports show DeFi projects faced 113 hacking attacks in 2022, with a total of $950 million in losses

DeFi hack attacks

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Beosin Global Web3 Security Report 2022 revealed that DeFi projects were attacked 113 times in 2022, out of 167 total major security incidents recorded over the last year. DeFi hacks accounted for approximately 67.6% of all recognised attacks.

Overall, the Web3 industry witnessed the growth of major exploits last year – an increase of 47.4% from 2021. One concerning factor is that the volume of stolen funds significantly increased to reach $3.6 billion. Thus, the top 10 Web3 exploits alone saw over $2 billion in lost customers’ funds. Besides, 10 security incidents lost over $100 million in a single attack, while losses of 21 more security incidents ranged from $10 million to $100 million.

Ethereum, BNB Chain, and Solana were the top 3 public blockchains, having major security incidents in 2022.

The less popular attack targets were crypto exchanges, non-fungible token (NFT) projects, cross-chain bridges and, finally, digital asset wallets. At the same time, cross-chain bridges remained leaders in terms of the hacked funds – $1.89 billion vs $950 million in DeFi-related losses.

What to expect in 2023?

Furthermore, experts warn of the increasing number of hack incidents waiting for DeFi in 2023. The growth of attacks will be spurred by the lack of security testing prior to going live and the increasing value these projects attract. Besides, many DeFi projects today explore the use of cross-chain bridges which are the main attraction for hackers.

As numerous new projects enter the DeFi market, hackers have become more sophisticated. Crypto criminals improve their skills and learn how to find inherent bugs since they got historically high returns from their Web3 -related activities last year. Meanwhile, vulnerability exploits ranked highest in both frequency and money loss throughout 2022.

Of the 167 major attacks monitored in 2022, about $1,4 million of stolen funds were deposited into the Tornado Cash mixer, which is 38.7% of the funds lost in all attacks. Only 8% of the stolen funds were recovered, representing around $289 million.

Global crypto crimes stats

At the same time, global crypto crimes amounted to $13.76 billion in losses for the year 2022:

  • $7.33 billion – money laundering;
  • $3.6 billion – attacks/exploits;
  • $1 billion – pyramid schemes;
  • $830 million – scams.

However, global TVL (Total Value Locked) shrank in 2022, affected by Three Arrows Capital, Terra Luna and FTX black swan events. That led to a TVL decline of approximately 80% from its peak at the beginning of the year.

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