Report on the largest DeFi hacking incidents of 2021


Compound Finance is just one of the youngest victims of DeFi hacking incidents in 2021. On September 30, its flawed token distribution bug in Proposal 062 exposed a bug in which $ 70 million to $ 85 million in excess COMP tokens was mistakenly made distributed to users.

However, a few days later, an additional $ 65 million was placed in a vulnerable vault, putting at least $ 150 million in COMP tokens at risk. But while Compound was able to fix the entire situation, it shows how vulnerable the decentralized financial sector (DeFi) can be at times due to its emergence.

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Last year, the Total Value (TVL) in DeFi was only 5% of its current value – $ 255 billion. The change marks an explosive growth of 1686%. Even with the compound debacle, and most recently with the decentralized trading platform BXH, which withdrew $ 139 million in an attack due to a leaked admin key, TVL actually rose 14.27% last month.

One reason investors have turned to DeFi protocols is in search of higher returns. The 2020 lows lacked a clear framework to hike, and that led investors to look for other ways to park their money. Locking crypto assets to DeFi protocols and providing liquidity for such services has become an attractive option as it offers more attractive returns. What followed was a high-yield farming boom in 2020 that continues through this year.

Counting the incidents

DeFi’s rising popularity is a double-edged sword for the young sector and the entire cryptocurrency space as a whole. According to Chinese cybersecurity firm Slow Mist, 534 blockchain hacking incidents have occurred since 2012, 169 of them in 2021 alone. Hacks have become more sophisticated and target different areas in the room.

Still, the biggest hack ever to take place took place in 2021 and was carried out by an unknown hacker on the Poly Network cross-chain protocol. The result was the equivalent of $ 610 million in stolen tokens, outperforming MtGox and Coincheck’s losses. The attack raked in approximately $ 273 million from the Ethereum network, $ 85 million in USD Coin (USDC) from the Polygon network, and $ 253 million from Binance Smart Chain. It also removed significant amounts of renBTC, packaged bitcoin (wBTC), and packaged ethers (wETH).