The conventional financial realm possesses a noteworthy edge over the blockchain sector, an aspect that often remains under-discussed. This advantage lies in its superior resilience to cyber-attacks. Over time, IT experts and the legal system have effectively tackled hacks, scams, and fraudulent activities. Although such incidents are not absent, their occurrence is significantly less frequent compared to those within the blockchain industry. For Decentralized Finance (DeFi) to reach its full potential, it must secure the trust of its users. This trust can only be established by significantly reducing the number of security incidents. The 2023 security report released by CERTIK offers an in-depth analysis of the incidents that transpired and the corresponding losses, thereby providing valuable insights into the state of security within the industry.
CERTIK deals with security incidents that occurred on 24 platforms (including some L2s such as Arbitrum or Polygon). Cardano is also on this list.
You can look at the security report from CERTIK yourself.
Let’s look at the essential numbers.
A total of 1,840,879,064 USD was lost across 751 security incidents in 2023.
This represents a decline of 51% from 2022’s total of 3.7B USD. However, this may be the result of a bear market. In the upcoming bull market, we can expect increased activity by fraudsters and hackers.
If a bull market attracts new users, it naturally also attracts attackers.
The report states that it is possible to observe a moderate positive correlation between the number of hacks and TVL. If TVL increases, so does the number of incidents. It is important to note that the total financial loss in USD increases as the market value of native coins increases.
Private key compromises were the most costly attack vector, with ~881M USD lost in just 47 incidents. This represents almost half of all financial losses, although private key compromises accounted for just 6.3% of all security incidents.
BNB Chain experienced the highest number of security incidents, with a total of 387 hacks…
