Messari has revealed that it lost more than $284M to cybercriminals from decentralized finance manipulations and hacks right from the dawn of 2019.
Messari, a platform dedicated to cryptocurrency data released this news to the public, and it stated that it has been lost forever. It conveyed the information in a tweet where it provided facts on the hacks.
Also, it disclosed that the decentralized finance insurance marketplace only made provision for a small part of this loss, stressing the importance of the insurance market growth.
The Dangers of Decentralized Finance
The frauds add up to 0.3% of the existing TVL (total value locked). The TVL of decentralized finance is present at about $117.6B, although this amount could be even greater.
Several hacks and exploitations have been experienced in the sector right from the time decentralized finance began enjoying credence. Several of these can be traced to the characteristic errors of Smart Contract programming. The cyber attacks on Compound, Cream Finance, and Alpha are some of the most obvious depictions of these oversights. Just lately, EasyFi lost a whopping $6M to hackers.
In terms of amount, BizX experienced several cyber-attacks from hackers leading to the loss of about $8M. One other popular occurrence was a certain cybercriminal pilfered $25M from dForce, leveraging on the identical method that utilized to hack DAO in 2016.
But the recent exploitation of Uranium, where about $50 M was stolen, is arguably the most obvious of these exploitations. The cyberattack took place when developers were busy upgrading the platform to a better version. The cybercriminal responsible for this hack is having a hard time withdrawing his loot; a large part of it is in the form of BUSD and BNB.
The occurrences above breed skepticism in the industry, but it is not sufficient to destroy the drive. The ever surging in exploitations caused protocols to stress the importance of examination. But, the use of decentralized insurance has materialized as extra security covering for investors.
It Is Time To Focus On Decentralized Insurance
Messari believes that it is time for insurance protocols to focus on decentralized insurance. Examples of decentralized insurance projects are Etherisc and Nexus Mutual. The latter suffered a hack that caused it to lose $8M.
These insurance protocols received financial support to make up for what their investors will lose in case some unfavorable incident takes place. While it is true that it has been enjoying some appreciable momentum since the dawn of 2020, the truth is that it is yet to grow from an omnipresent standpoint. Arguably, this position will change with time.
Maybe it is because projects are now being built to prevent the occurrence of hacks. Because crypto is still in its early years, there will be ways of curtailing these events with time.
It would provide investors with some level of serenity, especially those that are leveraging on decentralized finance. Decentralized finance’s TVL has recently been waxing strong, despite experiencing an extraordinary 2020.
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