Unchained Unconfirmed: $12 Billion Has Been Lost in DeFi Value to Crime. Here’s How - Ep.299
Dec 17, 2021
Jess Symington, research lead at Elliptic and expert in DeFi security, dives into the alarming rise of hacking in the decentralized finance sector. She reveals that over $12 billion has been lost to crime, primarily due to user and developer errors. The conversation highlights various exploit types, the challenges law enforcement faces in tracking hackers, and the potential for blockchain transparency to assist regulators. Jess shares practical advice on how both users and protocols can enhance security against these threats.
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DeFi Crime Explosion
- DeFi hacks caused over $12B in losses since 2016, with $10.5B occurring in 2021 alone.
- Losses include direct theft and subsequent drops in protocol value (like governance tokens).
Protocol Flaws
- Protocol or smart contract flaws are the most common cause of DeFi hacks, not user error.
- These vulnerabilities include code errors and economic setup flaws, like those exploited in the MonoX hack.
Squid Coin Rug Pull
- Rug pulls, though often alleged, represent a small portion of DeFi hacks due to verification difficulties.
- The Squid Game-themed Squid coin is a clear example of a rug pull.
