cryptojournalist
Decentralized finance (DeFi) saw a 40% drop in financial losses from hacks in 2024, thanks to stronger security measures. Meanwhile, centralized finance (CeFi) suffered a challenging year, with breaches more than doubling and losses reaching $694 million, according to blockchain security firm Hacken’s “Web3 Security Report.”
DeFi: Security Improvements Pay Off
Loss Reduction: DeFi losses fell from $787 million in 2023 to $474 million in 2024.
Bridge Exploits Decline: Losses from bridge-related vulnerabilities dropped sharply, from $338 million in 2023 to $114 million in 2024.
Advanced Security: Protocols implemented cutting-edge technologies like multiparty computation and zero-knowledge proofs,* strengthening defenses.
Challenges Remain: Access control vulnerabilities still accounted for nearly half of all DeFi losses, including the $55 million Radiant Capital hack.
CeFi: Breaches on the Rise
Record Losses: CeFi breaches more than doubled, with losses soaring to $694 million in 2024.
Major Incidents:
DMM Exchange Hack: $305 million stolen in Q2.
WazirX Hack: $230 million lost in Q3.
Weak Security Practices: Poor private key management and vulnerable multisignature setups were key factors behind these attacks.
Lessons and Industry Gaps
Hacken’s CEO, Dyma Budorin, emphasized the need for stricter security practices in CeFi, including better private key management and automated monitoring systems. He also pointed out that attackers continue to exploit weak points, as evidenced by North Korean hackers stealing $1.3 billion in crypto across 47 incidents this year, according to Chainalysis.
*Zero-knowledge proofs: A cryptographic method allowing one party to prove something to another without revealing sensitive data.
