DeFi Security Breaches: Lessons from Recent Exploits

Major Hacks and Their Impact

In this year, we have seen over 200 hacking incidents which resulted in losses of approximately $1.4 billion. However, the hardwork of the dedicated security researchers team allowed the system to recover around $105 million of the stolen funds. This recovery shows about 7.43% of the total losses which provides a ray of hope amidst the turmoil.

Top DeFi Hacks

Among all the breaches these five hacks stood out with losses exceeding $50 million: DMM Bitcoin suffered the biggest loss of the year in May with an estimated $308 million in stolen assets. The attack most likely used a private key compromise which allowed the attacker to transfer a huge amount of BTC from the decentralized exchange accounts.

In 2024 February PlayDapp lost around $290 million due to having vulnerabilities in its smart contract. The attacker exploited the access control flaw to mint unauthorized PLA tokens which allowed him to drain huge funds from the platform.

WazirX faced an advanced hack with an estimate of $235 million. Attackers used malware to manipulate the transaction data which tricked four signers on the exchange multi-sig waller into approving the malicious transactions.

Gala Games was targeted for $216 million through a compromised deployer account. The attacker accessed the account’s private key and then exploited the access control in a smart contract to steal funds.

Muchables has experienced a $62.5 million loss when a rogue developer exploited the upgradeable proxy in the smart contract. This allowed them to assign themselves a large balance before draining ETH from the contract.

Lessons Learned from the Attacks

Most attacks in 2024 targeted CEXs, and those were roughly half of the large hacks in DeFi. It is proof that such sites require robust security like multi-sig wallets and cold storage. Other DeFi projects are still exposed to other attack vectors such as private key compromises, vulnerabilities of smart contracts, and access control. Full security measures with very extensive audit on the smart contracts should be done to prevent this from happening again in the future.

Security Researchers and Tools

The year also acknowledged the efforts of different security researchers who participated in the audit contexts and contributed to DeFi security. Tools such as Chimera, Libmev and Simbolik also became essential resources for analyzing and preventing attacks. Other platforms, including Immunefi and REKT Database, also provide useful data and support to the current security initiatives.

Looking Ahead

During 2024, DeFi continued to scale highly but unfortunately exposed itself to a number of significant security issues. The amount that was stolen by hackers surged above $1.4 billion while the recovery of the amounts that were stolen was below $105 million. This shows us how critical it is to push for security research and improve security practices. As the ecosystem continues to grow the safety and strength of the entire system is something that everyone has to work for.