Learning from the Past: DeFi’s Top 10 Security Incidents

DeFi's top 10 security incidents that shaped the future of decentralized finance

The DeFi movement is in full force, and technological innovation is ongoing. However, there have been some notable growing pains experienced along with this rapid rise. DeFi is no different from other new technologies in that there are those eager to take advantage of any flaws.

Here are the top 10 DeFi hacks are listed below:

1. Ronin Network – $625M

One incident that cost more than $500 million to recover from ranks first on the list of DeFi hacks. When hackers were able to access the Ronin network and discover a hole in the sidechain, $625 million was stolen. Notably, players of Axie Infinity bridge assets mostly through the Ronin Network. One of the most well-liked play-to-earn games is Axie Infinity. To get prizes, users gather, compete, and breed their Axies. Notably, each Axie has unique qualities that increase its scarcity and worth.

2. Poly Network – $601M

A further $268 million worth of tokens are also secured in an account that needs credentials from both the hacker and the Poly Network. The Poly network offered the hacker immunity and $500K in exchange for returning the money, which adds interest to the issue. Naturally, the hacker declined the offer because there was no way to be sure that government officials wouldn't decide to pursue criminal charges for such a daring robbery.

3. Wormhole Bridge – $325 M

The Wormhole Bridge is yet another tragic account of DeFi networks being breached and suffering significant losses. A crucial cross-chain DeFi bridge is the Wormhole bridge. By removing friction points, the idea seeks to increase liquidity. To enable assets to cross across to other networks, the network specifically employs a procedure called wrapping.

4. Nomad Bridge – $190M

The market was unprepared for the Nomad Bridge hack. By exploiting a weakness, they developed that allowed them to extract more money than they had put in, hackers were able to make off with a sizable $190 million in cryptocurrency. Before the network administrators discovered the scam, this process was repeated a startling 1175 times.

5. Beanstalk Farms – $182M

A DeFi system powered by algorithmic stablecoins was Beanstalk Farms. Algorithmic stablecoins differ from most stablecoins in that they make use of protocols and digital currency reserves. It should be noted that although this kind of stablecoin has been around for a long, it has proven to be very challenging to maintain.

6. Wintermute – $160M

Wintermute was a well-known DeFi liquidity platform that made the mistake of employing the Vanity Wallet as its main user storage. Hackers could use address recreation attacks to siphon $160 million from the network thanks to the Vanity Wallet's attack vector.

7. Compound – $150M

Compound has always been among the best-performing DeFi liquidity markets in the industry. A combination of poor coding and malicious hackers caused the network to suffer a significant $150M loss. A smart contract bug, commonly known as the "Leaky Tap," caused fresh tokens to be created arbitrarily.

8. Vulcan Forged $140M

One of the first successful play-to-earn network attacks to cause hundreds of millions of dollars in losses was the Vulcan Forged breach. Access to a wide variety of well-known P2E games helped the platform become more prominent. Users could also use the several DeFi solutions available to boost their ROIs after winning.

9. BadgerDAO – $120M

2,100 BTC and 151 ETH were lost in the BadgerDAO attack that took place in December 2021. The BadgerDAO served as a fast gateway from the Bitcoin realm to the DeFi universe. Everything went awry when hackers discovered a flaw in the platform's user interface.

10. Horizon Bridge – $100M

In comparison to many previous hacks on this list, the Horizon Bridge exploit happened quite recently. $100M was stolen from this cross-chain bridge in June 2022. Harmony, the bridge's operator, was compelled to temporarily halt operations in order to stop the attack and stop more losses.