According to a report released today by blockchain security firm Hacken, decentralized finance (DeFi) protocols saw a sharp decline in exploits in 2024, while centralized finance (CeFi) platforms more than doubled their losses in due to security vulnerabilities.
DeFi platforms feature better security mechanisms
In his “Annual Web3 Security Report,” Hacken outlined general trends in the cryptocurrency industry regarding scams and security infrastructure. The report notes that total losses from security failure in 2024 were $2.91 billion.
DeFi protocols accounted for $474 million in losses this year, down 40% from $787 million in 2023. This sharp decline reflects the growing adoption of advanced security techniques, such as zero-knowledge cryptography. and multi-party computation, across the DeFi ecosystem.
One of the key factors contributing to the reduction in DeFi exploits has been the sharp decline in cross-chain bridge hacks. Losses from these attacks have steadily decreased, from $1.89 billion in 2022 to $338 million in 2023, and finally to $114 million in 2024.
In contrast, CeFi platforms, including cryptocurrency exchanges, reported $694 million in losses in 2024, more than double the $339 million recorded in 2023. CeFi accounted for nearly a third of all Cryptography-related incidents, highlighting persistent vulnerabilities in centralized systems.
Gaming and metaverse projects were another major target in 2024, responsible for almost 20% of all crypto-related hacks, with $389 million in losses. The biggest gaming breach/metaverse of the year was the PlayDapp exploit in Q1 2024, which resulted in a $290 million loss.
Phishing scams also remain a major concern, causing more than $600 million in losses this year. These scams highlight increasingly sophisticated social engineering tactics in the Web3 space.
In November, the industry faced a $129 million address poisoning attack. As a reminder, address poisoning phishing involves attackers sending small transactions from an address that closely resembles the one the victim interacted with, tricking them into mistakenly sending funds to the fraudulent address when future transactions.
Memecoins and Rugpulls continue to attack users
While memecoins were all the rage for most of 2024 – particularly on the Solana (SOL) blockchain due to its low transaction costs – a significant proportion of them preyed on investors through scams pre-sale and celebrity-endorsed rug prints.
A notable example is the Hawk Tuah memecoin, launched by viral influencer Hailey Welch, popularly known as “Hawk Tuah Girl”. The coin’s value dropped by 95% shortly after its launch, causing serious backlash from the wider Web3 community.
The rise in memecoin scams also highlights the need for better investor education, especially when engaging in such speculative assets. At press time, Bitcoin (BTC) is trading at $98,921, up 5.8% in the past 24 hours.
