Compound Finance is just one of the latest victims of the DeFi hack in 2021. On September 30, Proposal 062 Token Misallocation Bug revealed a bug that caused $ 70- $ 85 million in excess COMP tokens to be incorrectly distributed to users.
A few days later, however, another $ 65 million was placed in the vulnerable vault, putting at least $ 150 million worth of COMP tokens at risk. But while Compound was able to resolve the whole situation, it shows how vulnerable the decentralized financial sector (DeFi) is due to the mandate.
Last year, Defi’s total fixed value (TVL) was only 5% of the current value of 255 billion dollars. The change represents a significant increase of 1686%. Even with the complex failure, and the last decentralized trading platform BXH lost $ 139 million in an attack on admin key leakage, TVL has actually increased in the last month, to 14.27%.
One of the reasons investors are flocking to DeFi protocols is to look for higher returns. The ultra-low interest rates for 2020 did not have a clear basis for an increase, forcing investors to look for other ways to raise money. Linking cryptocurrencies to DeFi protocols and providing liquidity to such services has become an attractive option since it provides the most attractive return. This was followed by a farming boom in 2020 that lasted until this year.
The growing popularity of DeFi is a double-edged sword for the young sector and for the entire cryptocurrency area as a whole. According to the Chinese cybersecurity company Slow Mist, there have been 534 blockchain hacking incidents since 2012, 169 of them in 2021 alone. Hacks have grown during evolution and target different areas of the cosmos.
However, the largest hack ever took place in 2021 and was carried out by an unknown hacker on the Polynetwork protocol via a chain. As a result, the stolen tokens are worth $ 610 million, which exceeds the losses of MtGox and Coincheck. The attack earned about $ 273 million from the Ethereum network, $ 85 million from the Polygon network and $ 253 million from Binance Smart Chain. It also removed a significant amount of RnBTC, packaged bitcoin (wBTC) and folded ether (wETH).
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The Poly Network event is one of many DeFi hacks in 2021. Poly Network was lucky to get all the money back. On the other hand, Karim Finans is not so lucky. The decentralized lending protocol is far in the future, and attacks on it twice this year have wiped out almost $ 150 million, which it is still struggling to make up. In total, the total amount lost due to the blockchain hack this year was almost $ 7 billion, up $ 2.5 billion from last year.
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Poly Network, Compound and Cream Finance managed to get into the top three in terms of the number of affected funds (a total of 906 million dollars). As with Cream Finance, there are other well-known protocols that have been utilized more than once in a single year, such as THORChain and Value DeFi.
In addition, Merlin Labs, a BSC-based revenue growth company, was attacked three times – first twice in the same week, and then again, despite a paltry $ 1.5 million, as opposed to the money raised by the rest of the victims. the week after. month. It is also surprising that it was tested by Haken 11 days before the attack.