Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you significant developments over the last week.
The DeFi ecosystem started 2023 on a bullish note, similar to the broader cryptocurrency market. However, the bullish start to the year didn’t diminish the damage caused by vulnerabilities and attacks in 2022.
A new research report has highlighted that DeFi was the most vulnerable crypto ecosystem, at the receiving end of 113 exploits out of the total 167. On top of that, blockchain security experts have warned the trend could continue in 2023.
MetaMask became the first prominent victim in 2023, as a new wallet scam emerged. The wallet address scam, called address poisoning, tries to take advantage of users’ carelessness. In other DeFi exploit news, an address connected to the $190 million Nomad bridge exploit has moved $1.57 million in Ether (ETH) to the sanctioned crypto mixer Tornado Cash.
Arbitrum and Optimism, the two Ethereum-based layer-2 networks, processed more than 1.1 million transactions combined on Jan. 10, flipping Ethereum in transaction volume.
The top 100 DeFi tokens entered the second week on a bullish note, with most of the tokens recording multi-week highs.
DeFi-type projects received the highest number of attacks in 2022: Report
It’s no secret that in 2022, Web3 and DeFi experienced a slew of significant exploits and attacks. From the Ronin Bridge attack to the Nomad Bridge attack, the top 10 exploits alone saw over $2 billion lost.
A new report from the Blockchain Security Alliance, written by Beosin, BuilderDAO, LegalDAO and Footprint Analytics titled, “Global Web3 Security Report 2022 & Crypto Regulatory Compliance Research”, revealed that of 167 major security incidents over the last year, those rooted in DeFi were the most vulnerable. DeFi projects were attacked 113 times, which accounted for approx. 67.6% of recorded attacks.
Why DeFi should expect more hacks this year: Blockchain security execs
DeFi investors should buckle themselves up for another big year of exploits and attacks as new projects enter the market and hackers become more sophisticated.
Shared exclusively with Cointelegraph, executives from blockchain security and auditing firms HashEx, Beosin and Apostro were interviewed for a new report on DeFi security by Drofa, titled “An Overview of DeFi Security In 2022.”