www.banklesstimes.com
HomeNewsBNB and Ethereum Chains Are the Most Targeted by Web3 Criminals Representing 52% Of Losses
BNB and Ethereum Chains Are the Most Targeted by Web3 Criminals Representing 52% Of Losses

BNB and Ethereum Chains Are the Most Targeted by Web3 Criminals Representing 52% Of Losses

Last updated 15th Dec 2022
Disclosure
  • BNB and ETH chains are the most targeted by web3 criminals.
  • The two contributed 52% of the Web3 ecosystem losses in Q3 2022.

Web3 criminals had a clear preference for exploiting the BNB and ETH chains, according to a data presentation by BanklessTimes.com. The site reports that the two blockchains accounted for 52% of all Web3 losses in Q3 2022. In total, the Web3 ecosystem lost over $428M in the quarter from hacking and other fraudulent activity.

BNB chain had the most exploits, 16, representing 28.6% of all malicious attacks on Web3 protocols. That was followed by ETH, which reported 13 instances working to 23.2% of the total hacks. Solana and Avalanche came in third, accounting for 6.8% of the sector's losses after suffering 4 incidents each.

What is The Reason Behind These Exploits?

BanklessTimes CEO Jonathan Merry attributes hacker preference for the two chains to their popularity. He explained the two host most DeFi projects providing malicious actors with a huge volume of targetable funds. Besides, these DeFi protocols often have vulnerabilities in their smart contracts, increasing their susceptibility to attacks.

The findings bring under sharp scrutiny the capacity of different Web3 projects to safeguard investor funds. Despite advancements in the sector's security standards, hackers and fraudsters continue finding loopholes that they exploit. Clearly, the sector needs to do more to contain these threats.
BanklessTimes CEO, Jonathan Merry

A Positive Outlook

Despite the huge loss in funds, the data paints a positive picture of the Web3 ecosystem. Q3 2022's figures indicate a 63% drop in the sector's losses from the $1.15B it suffered in Q3 2021.

Hacks accounted for 93% of the lost funds, with fraud making up the remaining 7%. Hackers managed to make away with $398.9M from 30 different exploits. That's a 67% decline from the sector's losses to such acts in Q1 2022 ($1.22B).

Again, Q3's losses were 39% less than Q2's, which stood at $650.3M. Likewise, they represent a 60% drop from the $994M loss that the sector recorded in Q3 2021. Even the losses from fraudulent activity dipped 82% YoY to $29.8M.

DeFi Remains a Hacker’s Favorite

It's been a tough quarter for Defi as it lost $423,423,783 across 36 incidents in Q3 2022. This is a significant decrease from the $670,608,280 in losses it suffered across 49 incidents in Q2, but it's still a substantial number. The silver lining is that the number of Defi incidents has decreased by 36.8%.

On the other hand, CeFi has seen a huge increase in total losses in Q3 2022 compared to Q2 2022. The sector lost $5,294,300 across 3 incidents, a massive increase from the $90,000 lost in Q2. Nevertheless, it's still a tiny fraction of the losses suffered by Defi projects.

Defi platforms remain a soft target for hackers because of their decentralized nature. CeFi platforms, in contrast, tend to have robust security owing to their centralized nature.

Elizabeth Kerr

Elizabeth Kerr

Elizabeth is a financial content specialist from Manchester. Her specialities include cryptocurrency, data analysis and financial regulation.