• Tue. Jun 18th, 2024

2023 Marks Lowest DeFi Exploit Losses in Two Years, Data Shows

Walter Swift

ByWalter Swift

Dec 17, 2023

In 2023, the Decentralized Finance (DeFi) sector experienced a significant decrease in losses due to exploits, with total losses amounting to around $1 billion. This development, highlighted in a recent post by IntoTheBlock, indicates the lowest point in DeFi exploit losses since 2020, marking a notable recovery in the market.

The data revealed shows a substantial reduction in losses compared to the previous two years, reflecting a positive trend in the DeFi space.


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Significant Reduction in DeFi Losses to Exploits in 2023

A recent analysis by IntoTheBlock has revealed a notable trend in the Decentralized Finance (DeFi) space for 2023, indicating the lowest losses to exploits since 2020. The data shows that slightly over $1 billion was lost to various exploits within the DeFi sector this year. Although this amount is still considerable, it is markedly less than the losses recorded in the last two years.

In 2022, the DeFi space faced its highest ever recorded losses due to exploits, amounting to over $53.5 billion. Comparatively, 2021 witnessed nearly $4 billion in losses, while 2020 saw the lowest at $157.2 million. This year’s reduced figure represents a significant decrease and a positive shift in the security of DeFi platforms.

Notable DeFi Exploits of the Year


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Despite the overall decrease in losses, 2023 still saw several major DeFi hacks, leading to considerable financial impacts. High-profile incidents this year involved platforms like SushiSwap (SUSHI), Bonq, and SafeMoon (SFM), among others.

One significant event occurred around April 9th, when SushiSwap, a popular Decentralized Exchange (DEX), fell victim to an exploit. This security breach led to a loss exceeding $3.3 million for at least one user.

The cause of the exploit was traced to an approval-related bug in the RouterProcessor2 contract. This incident briefly impacted the market price of SUSHI, which later stabilized once the vulnerability was addressed and rectified.

Another notable exploit happened in February, targeting the BonqDao platform. This smart contract exploit resulted in a staggering theft of approximately $120 million from its protocol. Such incidents, though fewer in number this year, underscore the ongoing challenges and risks associated with DeFi platforms. 

These events highlight the importance of continual vigilance and the implementation of robust security measures in the DeFi space to prevent future exploits and protect user assets.

Bonq Protocol and SafeMoon Hit by Major Exploits

The Bonq Protocol attack enabled the exploiter to manipulate the price of the AllianceBlock (ALBT) token, causing a severe impact on the protocol’s operations and token valuation.

In a similar vein, SafeMoon faced a substantial exploit in March. The Safemoon token liquidity pool (LP) suffered a loss of nearly $9 million in tokens. This breach was executed by exploiting a vulnerability in the smart contract.

Attackers took advantage of a defective feature, allowing them to conduct multiple token exchanges in a single transaction. This led to the theft of billions of SFM tokens, which were then extracted from the LP.

Following this incident, the SFM token, much like SUSHI, saw a significant drop in its value. These exploits not only resulted in substantial financial losses but also highlighted the critical need for enhanced security measures and thorough auditing of smart contracts in the DeFi space to prevent similar occurrences in the future.

Trends in DeFi Total Value Locked (TVL) Over the Year

The DeFi Total Value Locked (TVL) has experienced notable fluctuations throughout the year, as indicated by data from DeFiLlama. An analysis of the TVL trends reveals a significant decrease from previous years, with a downward trajectory that began towards the end of 2022 and persisted into the following year.

Despite this initial decline, the TVL started showing a mild uptrend from October, indicating a potential recovery phase in the DeFi market. This gradual growth has continued, and as of the latest data, the DeFi TVL stands at approximately $51.3 billion.


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Walter Swift

Walter Swift

Walter Swift is an adept crypto writer, known for his deep insights into the decentralized world. His pieces artfully break down complex blockchain topics, making them accessible to a broad audience. With a passion for emerging technologies, Walter's articles are a beacon for crypto enthusiasts and novices alike.

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