According to s report published today by blockchain security firm Hacken, decentralized finance protocols (DeFi) saw a sharp decline in profits in 2024, while centralized finance platforms (CeFi) more than doubled their losses due to breaches security.
DeFi platforms show better security tools
In his annual “Web3 Security Report”, Hacken outlined the general trends in the cryptocurrency industry in terms of scams and security infrastructure. The report notes that the total loss due to security failures in 2024 was $2.91 billion.
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DeFi protocols accounted for $474 million in losses this year, a 40% decline from $787 million in 2023. This sharp drop reflects the growing adoption of advanced security techniques, such as zero-knowledge encryption and multi-party computation, across the DeFi ecosystem.
One major factor contributing to the decline in DeFi gains was the sharp decline in cross-chain bridge hacks. Losses from these attacks have fallen steadily – from $1.89 billion in 2022 to $338 million in 2023, and finally to $114 million in 2024.
In contrast, CeFi platforms, including cryptocurrency exchanges, reported $694 million in losses in 2024, more than double the $339 million recorded in 2023. CeFi accounts for nearly a third of all crypto-related incidents, demonstrating the continued vulnerability of centralized systems.
Another major target in 2024 was gaming and metaverse projects, responsible for nearly 20% of all crypto-related hacks, with a loss of $389 million. The biggest gaming / metric breach of the year was the PlayDapp exploit in Q1 2024, which resulted in a $290 million loss.
Phishing scams remained a major concern, causing losses of more than $600 million this year. These scams highlight the increasingly advanced social engineering tactics in the Web3 space.
In November, the department faced a $129 million poisoning attack. For context, address poisoning phishing involves attackers sending small transactions from an address that closely resembles one the victim has interacted with, tricking them into erroneously sending money to a false address in future transactions.
Memecoins And Rugpulls Continue To Rip Off Users
While memecoins all the rage for most of 2024 – especially on the Solana blockchain (SOL) because of a low transaction costs – a significant proportion involved investors through pre-sale scams and celebrity-sponsored carpet draws.
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One notable example is the Hawk Tuah memecoin, launched by viral influencer Hailey Welch, popularly known as “Hawk Tuah Girl”. The value of the coin has fallen 95% shortly after launch, generating massive backlash from the wider Web3 community.
The rise in memecoin-related scams also underscores the need for greater investor education, especially when dealing with such speculative assets. At press time, Bitcoin (BTC) is trading at $98,921, up 5.8% in the past 24 hours.
Featured image from Unsplash, chart from Tradingview.com
