October was a banner month for crypto, but this is not good news

A sad month of October – of decentralized finance (DeFi) it is a continuous innovation ecosystem. Unfortunately, the smart contracts it is based on are volatile security. So good that every week New hacking deals make headlines. October was not to pass, with several hundred million dollars stolen.

DeFi Hack: $657 Million Gone

The realm of decentralized finance often makes headlines in the crypto media for business hacking.

Surprisingly, October did not miss the call. Indeed, according to data compiled by the company PeckShield, 44 different hacks were recorded in October. These were carried out in 53 different protocols.

In total, these are no less than 760 million dollars that were stolen, making October the bloodiest month for DeFi. October is closely followed by March, with $709 million stolen from DeFi protocols.

Amount of DeFi hacks month by month.

This surprising figure is mainly due to massive attack recorded by BNB Smart Chain. Indeed, a hacker managed to find a flaw in the Binance Token-Hub, a bridge connecting the BNB Beacon chain and the BNB Smart Chain. In total, the attacker managed to steal more than $500 million in BNB tokens.

To this amount are also added $100 million stolen from Mango Markets protocol, located in Solana. Fortunately, part of the funds were returned by the attacker after negotiations.

We can also cite hacks that have targeted protocols TransitFinance, TeamFinance or TempleDAO.

Top 10 Biggest DeFi Hacks of October 2022.
Top 10 Biggest DeFi Hacks of October 2022.

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Year 2022 much worse than 2021

The decentralized finance (DeFi) ecosystem emerged at the end of 2019. Soon, in 2020, the first smart contract attacks were recorded. Although the phenomenon was still controlled, $250 million was stolen in 2020.

A situation that quickly escalated in 2021. Indeed, the number of attacks exploded, taking the amount stolen to new heights. So, these are more than $1.55 billion that was stolen in 2021.

Not surprisingly, 2022 follows the trend that was emerging in the previous two years. Thus, two months from the end of the year, it has already broken all records.

Since January, approx 200 attacks allowed hackers to steal the astronomical sum of $2.98 billion. It is almost certain that the figure of 3 billion dollars will be passed before the end of the year. A sad record for DeFi and its defenders.

Lack of security and lack of auditing

The saddest thing in this case is the fact that most of these hacks could have been avoided. Indeed, many DeFi protocols are emerging and opening their doors to the public even before they have verified their contracts.

In this way, it is essential for DeFi protocols that their smart contracts are audited by competent teams. Unfortunately, the price and lack of availability of these specialized companies make these audits expensive and tedious.

As a result, we see protocols emerging that are successfully collecting several million dollars from TVL, without verifying their contracts.

Fortunately, bug bounty campaigns that aim to reward users who have discovered a bug are on the rise. Moreover, in some cases the exploited protocols manage to negotiate with their attacker. This was the last case of Transit Finance which was able to recover 70% of the stolen funds.

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