Over $1.8 Billion Lost to Web3 Security Incidents in 2023
A recent report from CertiK reveals that the crypto industry lost a staggering $1,840,879,064 to security incidents in 2023. These incidents included code vulnerability, exit scams, phishing, and private key compromises. With billions locked in DeFi protocols, any vulnerabilities in smart contracts can be exploited by bad actors to steal funds.
Decline in Amount Lost to Security Incidents
The report also highlights some positive news—the amount lost to security incidents decreased by 51% compared to the previous year. In 2022, the total amount stolen was over $3.7 billion. Private key compromises caused the most significant damage, with crypto firms losing $880.9 million due to this type of exploit.
Tips to Mitigate the Risk of Exit Scams
Exit scams, also known as rug pulls, were the most frequent type of security incident in 2023. To mitigate the risk of falling victim to these scams, CertiK suggests conducting thorough research on project teams and their track records, analyzing tokenomics for sustainability and fairness, looking for projects with code audits from reputable firms, staying updated with community feedback and developments, and being cautious of projects promising unusually high returns.
The Need for Caution in a Bull Market
“It’s crucial to remain vigilant and informed, as the excitement of a bull market can often overshadow the need for caution.”
Predictions for 2024
While 2024 has just begun, the industry has already lost nearly $90 million to crypto exploits. However, CertiK remains hopeful that losses will decline this year. They point out the implementation of proactive security measures by projects and the growth of bug bounty platforms as positive developments. If asset prices rise and losses remain low, it would indicate that the Web3 industry is learning from its security lessons.
White Hat Victory: Recovery of Stolen Funds
A significant success story in 2023 was the recovery of nearly $200 million stolen from Euler Finance. The project lost the funds in a flash loan attack, but white hat hackers managed to retrieve the stolen funds.
Hot Take: Protecting Your Crypto Investments
As the crypto industry continues to grow, protecting your investments becomes increasingly important. Conduct thorough research on projects, analyze their track records and tokenomics, and stay informed about community feedback and developments. Remember to exercise caution and remain vigilant, especially during bull markets. By taking these precautions, you can mitigate the risk of falling victim to security incidents and scams.
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