Over $10 Billion Has Been Lost To DeFi Exploits In 2021

Over $10 Billion Has Been Lost To DeFi Exploits In 2021

Decentralized finance (DeFi) platforms have been the target of criminal attacks this year. Investors in the blockchain-based form of finance have lost billions of dollars to criminals that target the platforms.
The total amount of money deposited at DeFi services has spiked from just $500 million in 2019 to $247 billion this year.
According to a report from London-based firm Elliptic, the overall losses caused by DeFi exploits have totaled $12 billion in the past year. Out of that amount, fraud and theft accounted for $10.5 billion, seven times the amount last year.
DeFi, which has drawn in billions of dollars in investor funds, has also been a frequent target by hackers. They exploit poorly protected protocols, mostly using flash loans.
One of the popular attacks this year was the Poly Network hack. Hackers exploited a vulnerability in the multi-chain interoperability protocol. And they took off with roughly $600 million worth of various cryptocurrencies. They however returned most of the stolen funds.
Elliptic is a firm that tracks movements of funds on the digital ledgers that underpin cryptocurrencies. It recently reported that DeFi exploits amounted to $12 billion this year.
DeFi is often called the “Wild West” of cryptocurrencies because it is still the most unregulated area of crypto. DeFi platforms allow users to lend, borrow and save – usually in cryptocurrencies – without any involvement from middlemen like banks.
“The DeFi ecosystem is an incredibly exciting and fast-moving space, with financial services innovation happening at light speed,” said Tom Robinson, chief scientist at Elliptic. “This is attracting large amounts of capital to projects that are not always robust or well-tested. Criminal actors have seen the opportunity to exploit this.”