Data proves that bad financial parameters of decentralized finance (DeFi) were reduced to 40% in 2024 compared to the previous year because of the higher collapse protection and the usage of complicated cryptographic formulas.
However, centralized finance (CeFi) experienced increased breaches within the year; $694M were reported missing, according to the Hacken Web3 Security report.
DeFi Losses Drop as Advanced Security Measures Strengthen Protocols
The DeFi protocols submitted that the loss had reduced from $787 million in 2023 to $474 million in 2024.
This growth was mainly due to the expansion of other technologies, such as MPC and specific ZKPs, that reinforced security. This could be attributed to the fact that bridge-related exploits have been a concern in DeFi since last year when losses dropped from $338 million to $114 million.
However, the weakness is still manifested today. Faulty permission and access management issues led to about 44% of DeFi frauds, such as the $55 million cyberattack on Radiant Capital.
Based on the data, CeFi projects experienced more than double the number of hacks in 2024 compared to the previous year, $694 million. Exploits Are due to Bad Private Key Management, Bad Multi-Signature Features, and Centralized Control, as elucidated by Hacken.
Major incidents included:
- DMM Exchange hack (Q2 2024): Employed vulnerable private keys to create 305 million dollars.
- WazirX hack (Q3 2024): Multisignature Frauds were targeted, leading to $230M in lost assets.
According to Hacken’s co-founder and CEO Dyma Budorin, such results show “severe CeFi operational security shortcomings” and that the industry must improve regarding security.
The huge development trend of DeFi and the relative issues of CeFi may show the development trends in both industries. Budorin also underlined the importance of increasing key management by having an even higher standard than the one described above. According to Budorin, the threats may be mitigated by implementing monitoring processes of key robotics.
This call for better security is in light of what Chainalysis set up, showing that hackers from North Korea Conducted 47 cyber heists in 2024, stealing over $1.3 billion in crypto assets.
DeFi has already pointed to how it addressed higher security requirements, while CeFi’s weaknesses are straightforward lessons for the rest of the Crypto community.
Encouraged by this advancement, industry leaders call on the Web3 community to embrace due security measures to enhance the protection of assets of decentralized and centralized platforms.
This news is republished from another source. You can check the original article here
