The cryptocurrency industry faced significant difficulties in 2022, with various companies experiencing financial difficulties and even bankruptcy.
In addition, over $3 billion was reportedly stolen from crypto projects this year, according to Forbes. These setbacks have caused turmoil in the industry and raised concerns about its stability.
The report indicates that more than 125 hacks occurred, with the top five (all involving decentralized finance (DeFi) protocols) accounting for $1.48 billion of the total amount stolen.
These top five biggest crypto heists range from cross-chain hacks, code exploits, and flash loan attacks. DeFi hacks represent about 49% of the total amount stolen by hackers this year, leading to reduced investment in the sector.
According to blockchain analytics firm Elliptic, DeFi protocols lost 75% of their total value locked in 2022.
Data from DeFi Llama also shows that DeFi protocols’ total value locked dropped from $166.58 billion at the beginning of the year to $39 billion in December.
The Forbes report states that cross-chain bridges, which enable the swapping of tokens between blockchains, were the primary target for hackers this year, with nearly $2 billion being stolen, accounting for 70% of all crypto theft in 2022.
Most thefts in the DeFi space are due to flawed codes and smart contract errors, as the DeFi ecosystem is open source and vulnerable to exploitation by hackers