Decentralised Finance (DeFi) sector is still reliant on centralized networks, breaching which has become easier for cybercriminals over the years. In 2021, the centralized elements of the DeFi protocol were breached by cyber criminals, costing over $1.3 billion (roughly Rs. 9,606 crore) in losses, as per a report. DeFi allows financial products to appear on a public blockchain network which is not regulated by a central bank or intermediary.
In a new, blockchain research firm CertiK said that 44 DeFi hacks were responsible for losses worth $1.3 billion (roughly Rs. 9,606 crore) last year.
The vulnerable points in the DeFi systems were those still working on regulated servers rather than on the blockchain network.
“Centralisation is antithetical to the ethos of DeFi and poses major security risks. Single points of failure can be exploited by dedicated hackers and malicious insiders alike,” the report said.
DeFi systems, the majority of which are built on theBlockchain, aim to provide an autonomous and decentralized option for financial services.
Thesector bagged nearly $60 billion (roughly Rs. 4,43,310 crore) by December 2021, the report said.
Recently, aby analytics firm ImmuneFi claimed that DeFi hacks and related scams exceeded $10 billion (roughly Rs. 73,885 crore) over the past year.
However, researchers have also noted that elements of thelike the DeFi sector will continue to get safer as more workload shifts from servers to blockchain networks.
The losses recorded in 2021 represented only 0.05 percent of crypto’s total market capitalisation, down 17 percent from the previous year.
TheThe market rose to a capitalization of $3 trillion (roughly Rs. 2,15,66,720 crore), the highest it has even been so far last year.
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