DeFi Exploits Fall 40% in 2024 While CeFi Losses Exceed $694 Million
According to a report from blockchain security firm Hacken, decentralized finance (DeFi) protocols experienced a notable decrease in exploits in 2024, while centralized finance (CeFi) platforms saw their losses due to security breaches more than double.
DeFi Platforms Show Better Security Mechanisms
The annual “Web3 Security Report” by Hacken details trends in the cryptocurrency industry regarding scams and security measures. Total losses from security failures in 2024 reached $2.91 billion.
DeFi protocols reported losses of $474 million this year, down 40% from $787 million in 2023. This decline is attributed to the adoption of advanced security techniques, including zero-knowledge cryptography and multi-party computation.
A significant factor in the reduction of DeFi exploits was the drop in cross-chain bridge hacks, with losses decreasing from $1.89 billion in 2022 to $338 million in 2023, and further to $114 million in 2024.
In contrast, CeFi platforms, which include cryptocurrency exchanges, incurred $694 million in losses in 2024, more than double the $339 million from 2023. CeFi incidents accounted for nearly one-third of all crypto-related security breaches, indicating ongoing vulnerabilities in centralized systems.
Gaming and metaverse projects were also major targets in 2024, contributing to nearly 20% of all crypto-related hacks, with losses totaling $389 million. The largest breach in this sector was the PlayDapp exploit in Q1 2024, resulting in a loss of $290 million.
Phishing scams remained a critical issue, leading to over $600 million in losses this year, showcasing increasingly sophisticated social engineering tactics in the Web3 environment.
In November, the sector encountered a $129 million address poisoning attack, where attackers send small transactions from addresses resembling those of victims to mislead them into sending funds to fraudulent addresses.
Memecoins And Rugpulls Continue To Prey On Users
Memecoins gained popularity throughout 2024, particularly on the Solana blockchain due to its low transaction costs. However, many memecoins exploited investors through presale scams and celebrity-endorsed rug pulls.
An example is the Hawk Tuah memecoin, launched by influencer Hailey Welch, known as “Hawk Tuah Girl.” The coin's value dropped 95% shortly after launch, causing backlash within the Web3 community.
The increase in memecoin-related scams emphasizes the need for improved investor education when engaging with speculative assets. At press time, Bitcoin (BTC) trades at $98,921, reflecting a 5.8% increase in the last 24 hours.
