A report from blockchain security firm Hacken reveals a significant reduction in exploits targeting decentralized finance (DeFi) protocols in 2024, contrasted by a notable increase in losses experienced by centralized finance (CeFi) platforms due to security breaches. In its annual “Web3 Security Report,” Hacken highlights the cryptocurrency industry's evolving security dynamics.
The report indicates that total losses from security failures in 2024 amounted to $2.91 billion.
DeFi protocols reported $474 million in losses, marking a 40% reduction from $787 million in 2023. The decrease signals greater adoption of advanced security measures, such as zero-knowledge cryptography and multi-party computation. A notable factor contributing to this decline was the significant reduction in cross-chain bridge hacks. These incidents fell from $1.89 billion in 2022 to $338 million in 2023, reaching $114 million in 2024.
In stark contrast, CeFi platforms, including cryptocurrency exchanges, reported $694 million in losses in 2024, over double the $339 million recorded in 2023. CeFi incidents made up nearly one-third of all crypto-related security breaches, underscoring persistent vulnerabilities within centralized systems.
Gaming and metaverse projects were notably vulnerable in 2024, accounting for almost 20% of crypto-based hacks with $389 million in losses. The PlayDapp exploit in Q1 was the most significant breach, resulting in a $290 million loss. Phishing scams remained a pressing concern, causing upwards of $600 million in losses, driven by sophisticated social engineering tactics within the Web3 space.
In November, an address poisoning attack cost the sector $129 million. This scam involved attackers sending transactions from look-alike addresses, deceiving victims into mistakenly sending funds to these fraudulent accounts.
Memecoins gained considerable attention during 2024, especially on the Solana (SOL) blockchain due to its low transaction fees. However, many preyed on investors through presale scams and rug pulls endorsed by celebrities. A prominent case was the Hawk Tuah memecoin, launched by influencer Hailey Welch, known as "Hawk Tuah Girl." The coin's value declined by 95% soon after launch, triggering backlash from the Web3 community.
This trend highlights the critical need for enhanced investor education, especially concerning speculative assets. At the time of writing, Bitcoin (BTC) was trading at $98,921, reflecting a 5.8% increase over the past 24 hours.