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Wednesday, September 28, 2022

Web3 projects lost over $2 billion to hacks this year

In the first six months of 2022, Web3 projects lost over $2 billion to hacks and exploits, more than all of 2021 combined.

That’s according to research from blockchain auditing and security firm CertiK, which released its quarterly Web3 security report covering the second quarter of this year on Thursday. The report paints a sobering picture of a cryptocurrency space still plagued by hacks, scams, and phishing schemes while also dealing with relatively new threats like flash loan attacks.

CertiK places particular emphasis on this last category of threat, which was created by the invention of flash loans: a decentralized financing mechanism that allows borrowers to access extremely large amounts of cryptocurrency for very short periods of time. . If used maliciously, flash loans can be used to manipulate the value of a certain token on exchanges or buy all of a project’s governance tokens and vote to withdraw all funds, as it happens. is produced for Beanstalk in April.

In total, CertiK’s report claims a total of $308 million was lost through 27 flash loan attacks in Q2 2022 – a huge increase from just $14 million lost in flash loans in Q1 .

Phishing attacks also increased in frequency between the first and second quarters of this year, with CertiK registering 290 in the last quarter compared to 106 in the first three months of the year. Discord was the vehicle for the vast majority of phishing attempts, a sign of its continued popularity as the social network of choice for the cryptocurrency and NFT scene, despite ongoing security issues.

In slightly more positive news, so-called “carpet pulls” – where a project’s founders halt development and run off with the funds – are becoming less common, although tens of millions of dollars have still been lost in this way. CertiK found that a total of $37.46 million was lost to rug draws in the second quarter of this year, down 16.5% from the previous quarter, although the report attributes a large part of that dip in the current crypto winter, which could drive less experienced investors away. likely to be fooled by fraudulent schemes.

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