Ethereum-based projects became the target for cybercriminals, accounting for 51% of the $2.3 billion in losses through hacks and exploits.
Cyvers, a cybersecurity firm, revealed that Ethereum was a target for hackers because it was the leading blockchain for DeFi projects. Besides Ethereum, BNB was another blockchain with notable losses through hacks and exploits.
The BNB Chain was responsible for 24% of the losses, while Arbitrum, Bitcoin, and XRP were responsible for 3%, 5%, and 4%, respectively. 81% of these losses were due to access control failure (weak permission and authentication mechanisms), creating a perfect loophole for hackers to exploit.
Hackers also exploited loopholes in smart contract codes to steal funds, with 19% of the stolen funds occurring through this method.
Top Web3 Hacks of 2024
The largest was the $305 million DMM Bitcoin exploit, followed by the $290 million PlayDapp breach and the $235 million WazirX attack. These incidents were largely attributed to poor access control systems, exposing significant flaws in security mechanisms across these Web3 projects.
Ethereum-based Muchables lost $97 million due to smart contract vulnerabilities exploited by a rogue developer. Also, address poisoning attacks contributed to $68 million of the total losses.
According to the report, losses through exploits continued to rise through the year, with Q3 recording the highest losses at $669 million. In Q4, there was a reduction in the losses, but $130 million was still lost.
Decline In Recoveries for Ethereum-Based Projects
Recovery efforts weren’t completely successful, with $620 million reclaimed in Q1 and $562 million in Q2. However, recoveries sharply declined during the second half of the year.
Only $93 million was recovered in Q3, followed by $25 million in Q4. The report also noted that delays in recovery often allowed malicious actors to divert the stolen assets and make them untraceable before security teams and authorities could intervene.
Cyvers suggested that Web3 projects create and implement standard monitoring processes and employ real-time vulnerability testing. It also recommended using AI-powered detection mechanisms to identify and address emerging threats.
An earlier report from Web3 security firm PeckShield revealed a 15% rise in crypto hacks and scams in 2024 compared to the year before, with decentralized finance protocols being the most targeted.
Disclaimer
This article is provided for information only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
