The Ethereum blockchain has become the main target for cybercriminals in 2024, with the platform bearing the brunt of the year’s major losses in the cryptocurrency sector. A new report from Cyvers reveals that the Web3 ecosystem suffered over $6 billion in losses due to hacks, exploits and cyberattacks. Surprisingly, Ethereum accounted for 51% of these losses, highlighting the vulnerabilities inherent in its decentralized finance (DeFi) infrastructure.
A year of increased cyberattacks in Web3
The report paints a worrying picture of the growing number of attacks in the cryptocurrency space. In 2024, the Web3 ecosystem saw an increase in losses of 40% compared to the previous year. Hackers have targeted blockchain projects, exchanges and DeFi platforms, with Ethereum being hit the hardest. This increase in attacks demonstrates the growing sophistication of cybercriminals and signals the need for better security measures across the industry.
The year’s losses were broken down into quarterly figures: the first quarter saw $517 million drained from various platforms, while the second quarter increased slightly to $587 million. In the third quarter, damage peaked at $669 million. However, the fourth quarter saw a sharp decline, with only $130 million lost during this period. Despite the drop in losses last quarter, the overall figure for 2024 remains high, and experts have warned that these losses could continue to rise if security flaws are not fixed.
Ethereum: a prime target for hackers
Ethereum’s dominance in the DeFi space has made it particularly vulnerable to cyberattacks. The platform’s large user base and high liquidity have attracted hackers looking for profitable exploits. Ethereum’s role as the backbone of many decentralized applications (dApps) and smart contracts has only increased its exposure. Hackers have been able to exploit a range of vulnerabilities, from flaws in smart contracts to weaknesses in access control systems.
Although Ethereum took the biggest financial hit, other blockchains have also been targeted by bad actors. Binance Smart Chain (BNB Chain) accounted for 24% of overall losses, while other major networks like Bitcoin, XRP, and Arbitrum also saw significant breaches. However, none of these platforms were hit as hard as Ethereum, which continued to see the most severe damage.
Access control vulnerabilities and smart contract exploits
Access control failures were a major factor in losses in 2024. According to Cyvers, 81% of stolen funds were due to failures in authentication mechanisms and poor authorization management. These vulnerabilities exposed users and platforms to hackers who were able to gain unauthorized access to digital wallets and funds.
In addition to access control issues, smart contract exploits were responsible for the remaining 19% of stolen funds. Attackers used coding errors in smart contracts to manipulate decentralized applications, allowing them to siphon assets from users’ wallets. These exploits demonstrated the need for improved code audits and better security practices across the industry.
Notable Hacks in 2024
Several high-profile incidents made headlines in 2024, highlighting the vulnerability of cryptocurrency ecosystems. For example, DMM Bitcoin suffered a $305 million hack, while PlayDapp lost $290 million in another breach. WazirX, a cryptocurrency exchange, was also the victim of a $235 million attack, while Radiant Capital had $55 million stolen from its platform. Although some funds were recovered in the first months of 2024, collection efforts declined as the year progressed, with only $25 million recovered in the fourth quarter.
The Path Forward for Ethereum and Web3 Security
The increasing frequency and scale of cyberattacks against Ethereum and other blockchain networks highlights the growing need for robust security protocols. Evolving hacking techniques combined with the increasing complexity of Web3 technologies require greater attention to cybersecurity. Ethereum’s important role in DeFi makes it an attractive target, but the broader crypto space needs to improve security to ensure the long-term stability and trust of decentralized financial systems.
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