DeFi losses to exploits hit lowest point in 2 years

Journalist

Posted: December 17, 2023

• In 2023, the DeFi losses to exploits hit around $1 billion.
• The overall DeFi TVL increased to over $51 billion.

As the year comes to a close, a recent post has pointed out the performance of the Decentralized Finance [DeFi] space. The data in the post revealed the extent of losses due to exploits in the space throughout the year.

Less DeFi losses recorded

According to a post by IntoTheBlock, 2023 is expected to record the lowest DeFi losses to exploits since 2020. Slightly over $1 billion has been lost to various exploits in the DeFi space this year.

Though this figure may still appear substantial, it significantly pales in comparison to losses of the last two years. 

The amount of yearly losses to exploits in DeFi are set to reach their lowest since 2020.! pic.twitter.com/abwfDFMEB8

— IntoTheBlock (@intotheblock) December 16, 2023

The data showed that in 2022, over $53.5 billion was lost to exploits — the highest recorded losses. In 2021, the loss amounted to nearly $4 billion, while 2020 experienced the lowest loss at $157.2 million.

Some major Defi exploits of the year

Throughout the year, numerous DeFi hacks have resulted in the loss of millions of dollars, with notable incidents involving SushiSwap [SUSHI], Bonq, and SafeMoon [SFM].

Around the 9th of April, reports surfaced about SushiSwap falling victim to an exploit. The Decentralized Exchange (DEX) suffered a loss of over $3.3 million for at least one user.

The exploit, which was caused by an approve-related bug on the RouterProcessor2 contract, caused a temporary decline in the price of SUSHI. However, prices normalized after the vulnerability was addressed.

Also, BonqDao experienced a significant smart contract exploit in February, leading to an estimated theft of $120 million from its protocol.

The Bonq protocol fell prey to an Oracle hack that enabled the exploiter to manipulate the price of the AllianceBlock (ALBT) token.

Similarly, SafeMoon encountered an exploit around March, where the Safemoon token liquidity pool (LP) lost nearly $9 million worth of tokens.

Attackers manipulated a faulty feature in the smart contracts, conducting several token exchanges in a single transaction. This exploitation resulted in the theft of billions of Safemoon’s SFM tokens locked on an LP.

Like SUSHI, the SFM token experienced a substantial decline following the exploit.

How the DeFi TVL has fared YTD

An analysis of the DeFi Total Value Locked (TVL) on DeFiLlama showed a substantial decrease compared to previous years. The chart showed that the decline initiated towards the end of 2022 was persisting.

However, starting from October onward, a slight uptrend became noticeable, and gradual growth has continued since then. As of this writing, the DeFi TVL was around $51.3 billion.

As the market shows signs of recovery, it remains to be seen whether the industry will continue to fend off DeFi attacks in the coming year.