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According to A a report Published today by blockchain security firm Hacken, decentralized finance (DeFi) protocols saw a sharp decline in exploits in 2024, while centralized finance (CeFi) platforms doubled their losses due to security breaches.
DeFi platforms demonstrate better security mechanisms
In the annual “Web3 Security Report,” Hacken outlined general trends in the cryptocurrency industry regarding scams and security infrastructure. The report indicates that the total losses resulting from security failures in 2024 amounted to $2.91 billion.
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DeFi protocols accounted for $474 million in losses this year, down 40% from $787 million in 2023. This sharp decline reflects the growing adoption of advanced security technologies, such as zero-knowledge cryptography and multiparty computing, across the DeFi ecosystem.
One of the major factors contributing to the reduction in DeFi exploits has been the sharp decline in cross-chain bridge hacks. Losses from these attacks have continually decreased – from $1.89 billion in 2022 to $338 million in 2023, and finally to $114 million in 2024.
In contrast, CeFi platforms, including cryptocurrency exchanges, reported losses of $694 million in 2024, more than double the $339 million recorded in 2023. CeFi accounts for nearly a third of all cryptocurrency-related incidents, highlighting persistent vulnerabilities in centralized systems.
Gaming and metaverse projects were another major target in 2024, accounting for nearly 20% of all cryptocurrency-related hacks, with losses worth $389 million. The biggest gaming hack/hack of the year was the PlayDapp exploit in Q1 2024, which resulted in a loss of $290 million.
Phishing scams also remained a major concern, causing more than $600 million in losses this year. These scams highlight increasingly sophisticated social engineering tactics in the Web3 space.
In November, the sector faced a $129 million poisoning attack. For context, address poisoning phishing involves attackers sending small transactions from an address that closely resembles the address the victim interacted with, tricking them into mistakenly sending funds to the fraudulent address in future transactions.
Memecoins and Rugpulls continue to target users
While the meme coins were All the anger For the majority of 2024 – especially on the Solana (SOL) chain because Transaction costs are low – A large percentage of them exploit investors through pre-sale scams and celebrity-backed rug pulls.
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One notable example is the Hawk Tuah memecoin, launched by viral influencer Hailey Welsh, known as the “Hawk Tuah Girl.” Currency value decreased 95% shortly after launch, sparking severe backlash from the wider Web3 community.
The rise in memecoin-related scams also underscores the need for greater investor education, especially when dealing with such speculative assets. At press time, Bitcoin (BTC) is trading at $98,921, up 5.8% over the past 24 hours.
Featured image from Unsplash, chart from Tradingview.com