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DeFi Protocols Reduce Losses to Hacks by 58% in Q2 2023

Certik reported DeFi protocols’ losses to hacks and cybersecurity breaches have shown a significant decrease by 58% in the second quarter of 2023. This exciting development points out that the defi industry’s security and technical defenses are continually improving their effectiveness. Compared to Q1, the decrease represents a slight dip from the $330 million figure, thus bolstering investor confidence and demonstrating robust industry resilience.

certik

A closer look at the security breaches of Q2 2023

During Q2, 212 security incidents recorded an average loss of $1.5 million. April and June were particularly lucrative for the illicit play, recording more than 70 incidents in over $100 million in losses. Comparatively, May experienced the least number of exploits, counting only 63, with losses capped at $74.6 million.

Not exit scams remain a serious threat

Alarmingly, exit scams, also known as rug pulls, were the most common security incidents within the quarter. It saw a significant rise in bad actors exploiting 98 projects to steal a hefty sum of $70.35 million, double the figure from Q1 ($31 million). Notorious instances include Morgan DF Fintoch, which enlisted losses of over $30 million, along with Ordinals Finance and Chibi Finance, each absconding with approximately $1 million.

The rise of bad actors in BNB Chain

Coinciding with its increasing popularity, crypto projects on the BNB Chain have emerged as a prime target for exploits. The CertiK report noted a whopping 119 incidents involving the network, leading to $70.7 million in losses. By comparison, Ethereum (ETH) experienced 55 breaches, causing a loss of $66 million.

Exploits through Flash loans and oracle manipulation

Flash loans/oracle manipulation accounted for 54 incidents with $23.7 million stolen, whereas other forms of security breaches resulted in an alarming loss of $219.5 million. The larger chunk of this loss would be ascribed to the most significant single exploit in the quarter, the $100 million hack of Atomic Wallet.

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