DeFi exploded in the summer of 2020 as a result of a confluence in decentralized Automated Market Makers and other yield-offering projects. The industry has since grown significantly while also experiencing some critical hurdles in terms of security and decentralization.
Cyber exploits on decentralized finance (DeFi) systems increased 22.5x year on year (YoY) as of October 2021, accounting for nearly three-quarters of all major hacks that year. The increase in interest in DeFi products from cybercriminals is proportional to the sector’s growth. This was evident with the major hack of the Poly Network where the hacker stole nearly $610 million worth of crypto assets, making it one of the largest hacks ever. However, the majority of the funds were then recovered from the hacker.
This unusual conclusion to the Poly Network saga exposes new risks in this burgeoning area of DeFi, particularly DEXs, where millions of dollars are at stake on the smart contracts.
These hacks made 2021 the year of many learnings in DeFi. And while 2022 started off well, there was another major hack that siphoned nearly $320 million in crypto assets.
Roundup of the $320 Million Wormhole Hack
It is clearly evident that DeFi hacks are getting worse. The hack of Wormhole, one of the most popular bridges connecting the Ethereum and Solana blockchains, was a testament to that. Despite having functioned reliably, Wormhole was exploited by hackers last week, resulting in a loss of more than $320 million worth of assets. This number made it the second-largest DeFi hack ever, just behind Poly Network’s $600 million hack.
The official website for Wormhole is currently unavailable. Moreover, CertiK has reported that the attacker’s profits so far are at least $251 million in ETH, nearly $47 million in SOL, and more than $4 million in USDC. Analysis showed that the attacker used a vulnerability on the Solana side of the Wormhole bridge to create 120,000 “wrapped” Ethereum tokens for themselves.
All of this points to one conclusion: DeFi is an easy target for hackers because of its infancy. As a result, people are now looking for more trustless or decentralized DEXs that are built on DeFi’s core principles and offer maximum security.
Rise of More Decentralized and Secure Solutions
As hacks become more common in the DeFi ecosystem, people are looking for more decentralized and secure solutions. The existing DEXs and protocols have all had some security flaws or centralized factors, resulting in major hacks. But things are changing in some parts of DeFi as new DEXs and protocols adopt a hybrid model that makes operations, most notably, staking and governance more decentralized.
Furthermore, many new DEXs are now emphasizing the adoption of more decentralized structures and talents who share the ideology of building decentralized models. Even the existing protocols are restructuring their models to become more trustless and secure in order to combat hackers. dYdX is a great example that has planned to completely decentralize its protocol by the end of 2022. Their adoption of a hybrid model has proven to be a game-changer for the protocol resulting in skyrocketing prices.
Even FibSwap is a new protocol that has entered the DeFi market with a more decentralized and secure model to combat cyber mishaps. Also, it is the world’s first DEX that is available on mobile phones and its security has proven to be top-notch, ensuring the safety of traders’ funds.
Search for the Most Trustless DEXs Continue
With unstoppable hacks in the DeFi realm, it has become increasingly difficult for people to invest funds in protocols that claim to be secure and decentralized. However, with platforms such as dydx and FibSwap entering the market with their practically secure and decentralized infrastructure, trust is being built again. In addition, with the launch of the world’s first mobile DEX, FibSwap hopes to attract new users who are unfamiliar with DeFi. Yet, the search for more trustless DEXs continues but it will inevitably come to an end as new platforms address the pain points.
TheBitcoinNews.com – Bitcoin News source since June 2011 –
Virtual currency is not legal tender, is not backed by the government, and accounts and value balances are not subject to consumer protections. TheBitcoinNews.com holds several Cryptocurrencies, and this information does NOT constitute investment advice or an offer to invest.
Everything on this website can be seen as Advertisment and most comes from Press Releases, TheBitcoinNews.com is is not responsible for any of the content of or from external sites and feeds. Sponsored posts are always flagged as this, guest posts, guest articles and PRs are most time but NOT always flagged as this. Expert opinions and Price predictions are not supported by us and comes up from 3th part websites.
Advertise with us : Advertise
Our Social Networks: Facebook Instagram Pinterest Reddit Telegram Twitter Youtube
