Fasten Your Seatbelts: DeFi Investors Brace for a Year of Exploits and Attacks

Investors in decentralized finance should prepare for another major year of exploits and attacks as new projects are created and hackers become more advanced. For a report titled "An Overview of DeFi Security In 2022," the executives of three blockchain security and auditing companies - HashEx, Beosin and Apostro - were asked to explain why there was such a remarkable rise in DeFi hacks last year, and whether this trend is likely to continue into 2023.

Tommy Deng, the managing director of Beosin, a blockchain security firm, noted that while DeFi protocols are gradually getting more secure, he also noted that there isn' a guaranteed way to be totally safe. He went on to say that as long as there is interest in digital currencies, the amount of people targeting it for malicious behavior will not decrease. Another point that Deng mentioned is that numerous DeFi projects are going public without having undergone extensive security testing.

Projects are actively looking into cross-chain bridges as an area of focus, particularly as they have recently witnessed a sizable amount of losses via six incidents, amounting to a total of $1.4 billion. Deng echoes the statement made by CertiK, a blockchain security company, noting that there won't be a significant reduction in activities such as exploitations, flash loans, and exit scams in the upcoming year. CertiK observed that hackers are likely to continue attempting to penetrate bridge networks in 2023, based on the plentiful rewards of their efforts in 2022. Dmitry Mishunin, the CEO of crypto auditing company HashEx, believes that malicious hackers have become more sophisticated and have grown in expertise, thereby being able to identify bugs more easily. Moreover, he said that due to significant growth in the crypto industry, it is difficult to keep ahead of criminals.

Mishuin commented that the high value of many DeFi projects makes them an appealing target for malicious actors and predicted that the number of hacks would only increase over time. He even went so far as to suggest that such attacks could branch out to other areas of the crypto world, with crypto exchanges and banks possibly seen as even better targets due to the additional security they could offer for digital asset storage.

Tim Ismiliaev of Apostro, a security and auditing firm that specializes in smart contracts, anticipates that the DeFi space will experience substantial evolution in the next five years. He believes that protocols for the sector's security will grow to encompass impressive, advanced best practices. Post-Incident Blockchain Security Reports Failing to Reach Target Audience:

Developers, Mishunin and Deng both recognized that the field reports issued by blockchain safety businesses rarely reach their intended readership-- blockchain coders. Mishunin commented that developers tend to primarily focus on coding, leaving them without the time to absorb reports. Deng went on to say that these reports often cover one-off issues and advice which would not help other developers who might face something different. He did concede though that reports dealing with general DeFi susceptibilities are effective in augmenting defense.