As 2023 draws to a close, a recently published report has highlighted the performance of the Decentralized Finance (DeFi) sector. The data in the report revealed the extent of losses caused by exploits in the field throughout the year.
Critical Report from IntoTheBlock!
According to a post by IntoTheBlock, 2023 is expected to record the lowest DeFi losses due to exploits since 2020, with just over 1 billion dollars lost. This year, various exploits in the DeFi space led to these losses. Although this figure still seems significant, it is much lower when compared to the losses of the past two years.
The disclosed data showed that in 2022, more than 53.5 billion dollars were lost due to exploits, marking the highest recorded loss. In 2021, the loss was approximately 4 billion dollars, while the lowest loss was recorded in 2020 with 157.2 million dollars. Throughout the year, numerous DeFi hacks caused the loss of millions of dollars.
On April 9th, reports were published about an exploitation of SushiSwap. The Decentralized Exchange (DEX) suffered a loss of over 3.3 million dollars for at least one user. The exploit, caused by a flaw related to the approval in the RouterProcessor2 contract, led to a temporary drop in the SUSHI price. However, after the security vulnerability was addressed, the prices returned to normal. Also, in February, BonqDao experienced a significant smart contract exploit, leading to an estimated theft of 120 million dollars from its protocol. The Bonq protocol fell victim to an Oracle attack that allowed malicious actors to manipulate the price of the AllianceBlock (ALBT) token.
Similarly, around March, SafeMoon encountered an exploit resulting in the loss of approximately 9 million dollars worth of tokens from its Safemoon token liquidity pool (LP). Attackers manipulated a faulty feature in smart contracts to conduct multiple token swaps in a single transaction. This exploit resulted in the theft of billions of locked Safemoon SFM tokens from an LP.
The SFM token, like SUSHI, experienced a significant drop following this exploit. An analysis of the Total Value Locked (TVL) in DeFi on DeFiLlama indicated a notable decline compared to previous years. The chart shows the downturn that began towards the end of 2022 continuing. However, a slight upward trend was noticed from October onwards, and since then, gradual growth has continued. At the time of writing, the DeFi TVL was valued at around 51.3 billion dollars. While signs of recovery are visible in the market, it remains to be seen whether the sector will continue to defend against DeFi attacks in the coming year.
