The total amount of funds already stolen in attacks on the decentralized finance sector (DeFi, the acronym in English) already total US$ 680 million this year alone, according to the chart below, prepared by The Block.
Data collected by The Block Research shows that $1.4 billion was initially stolen from DeFi protocols through exploitative attacks and bugs, but $760 million was returned.
Over 2021, 64 of the biggest DeFi attacks occurred on four major platforms blockchain. Most of the attacks happened on Ethereum – which was attacked 34 times – followed by Binance Smart Chain, with 25 attacks. In addition, three took place at Polygon and two at Avalanche.
Regarding hacks, 34 of them used instant loans (“flash loans”). In this category, loan funds are removed from the network, used for some specific function, and then returned – all in a single transaction block.
This means the lender knows that their money will be returned (or it was never borrowed in the first place).
As a result, instant loans of very high value but low cost can be made, which allows hackers to borrow large amounts of funds in order to maximize the damage from this type of attack.
For example, the DeFi xToken protocol suffered an attack in May of this year. The hacker used a flash loan to borrow 61,800 ethers ($270 million) in order to destabilize the system and steal $24.5 million. The sheer volume of instant lending made the attack more profitable.
Three of the five biggest attacks were on the Poly Network, which it lost $611 million in total, before the amount is fully refunded.
Other big losses include the protocolo Compound, in which an error in September led to the release of $114 million in COMP tokens – half of which were returned.
Last month, Cream Finance was hacked for the third time this year and lost over $130 million, after using an instant loan.
As a way of contextualization, the data presented does not include “carpet pulls” (in which project developers raise money and disappear with the value acquired) and other types of crypto fraud – only focus on attacks on DeFi protocols.
Source From: Moneytimes
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