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- Cryptocurrency related crimes have decreased massively, reducing by more than 50% in the last year
- There has been a simultaneous increase in decentralised finance (DeFi) oriented scams and hacking incidents
- Improved DeFi protocols will be introduced in the coming year to prevent such hacks from occurring
There has been a significant rise in crimes related to decentralised finance (DeFi). However, good news for crypto users prevails as digital assets witness significant reduction in hacks and scams.
Not A Smooth Sail For DeFi
In contrast to earlier years, crypto news in 2020 has not been overwhelmed by significant trade hacks and Bitcoin theft worth millions of dollars. In any case, many crimes have still taken place, with most of them attacking the decentralized finance sector.
DeFi has been one of the principle drivers of the cryptocurrency market force in 2020. It is unsurprising that the developing monetary scene has been a magnet for cyber attackers and programmers. The process behind such hacks generally involves the presence of unaudited smart contracts combined with cloned codes. This is a major area of weakness for the experimental finance sector, frequently bringing about the theft of large amounts of dollars in cryptocurrency.
Report by CipherTrace
A report published by CipherTrace in November 2020 expressed that during the main portion of the year, DeFi took up 45% of all crimes related to cryptocurrency. The hacks which took place resulted in the loss of more than $50 million worth of digital assets. Post July, that figure reduced by half, as indicated by the report.
Addressing Cointelegraph, CEO of CipherTrace, Dave Jevans, cautioned of a likely administrative crackdown. He said that DeFi hacks currently hold the majority of all digital money hacks that took place in 2020, a pattern that is being observed by numerous regulators.
Many Hacks And Attacks Target DeFi
Most of the flash loan manipulations and smart contract exploits that have taken place in the past year will serve to strengthen and solidify the developing digital finance environment. Intelligent and highly secure DeFi conventions are probably going to be introduced within a year. However, as protective protocols are established, hackers and cyber criminals will find more profitable ways to access digital assets as well.
Tremendous amount of alertness and vigilance is expected to dive into the current ecosystem of DeFi. Despite this, it has evolved significantly in a particularly brief timeframe, and the decentralized monetary scene is definitely advancing with time.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
