DeFi Market Loses $12 Billion to Crime in Two Years

According to a new report by crypto analytics firm Elliptic, the DeFi sector has lost around $12 billion in crime between 2020 and 2021, with around $10.5 billion being lost since the start of this year. Of the total amount lost over the past two years, $10 billion were lost from protocols, on account of fraud.

Attacks on DeFi projects that resulted in losses from the projects and its users accounted for a mere $2 billion of the total losses suffered. On a positive note however more than $720 million lost in direct attacks were eventually recorded recovered, making this kind of attack far less worrisome.

$5.5 billion was lost via code exploits, $5.3 billion was lost on account of economic exploits, and $1 billion was lost as a result of admin Kee exploits during these two years. Surprisingly, ‘rug pulls’ or exit scams accounted for just $18 million of losses from the DeFi market. Rug pull scams frequently make the headlines, and are one of the leading causes for loss of investor confidence in DeFi protocols and the overall market.

The most targeted among the DeFi Projects were lending apps, which accounted for 34% of the total losses suffered by the sector in 2020 and 2021. This was followed by DEXs, which suffered 17.1% of losses, asset management apps (16.4%), and cross chain bridges (13.5%).

With Etehreum being the undisputed king of DeFi, 71% of the total attacks suffered were on the theory of Blockchain, losing as much as $8.6 billion. 21% of the attacks were launched on projects hosted on Binance Smart Chain, causing a loss of $2.5 billion.