October was a banner month for crypto, but that’s not good news


A sad month of October – The decentralized finance (DeFi) is a constant innovation ecosystem. Unfortunately, the smart contracts on which it is based are variable security. So well, that each week of new hacks deals make headlines. October was not to be outdone, with several hundred million dollars stolen.

Hack DeFi: $657 million gone

The sphere of decentralized finance frequently makes headlines in the crypto media for hacking business.

Unsurprisingly, the month of October did not miss the call. Indeed, according to data compiled by the company PeckShield, 44 different hacks were recorded in the month of October. These were perpetrated on 53 different protocols.

In total, these are no less than 760 million dollars that were stolen, making October the bloodiest month for DeFi. October is closely followed by March, with $709 million stolen from DeFi protocols.

Amount of DeFi hacks month after month.
Amount of DeFi hacks month after month.

This staggering figure is notably due to the massive attack recorded by the BNB Smart Chain. Indeed, a hacker managed to find a flaw in the Binance Token-Hub, a bridge connecting the BNB Beacon Chain and the BNB Smart Chain. In total, the attacker managed to steal more than $500 million in BNB tokens.

To this sum are added the $100 million stolen from the Mango Markets protocol, deployed on Solana. Fortunately, part of the funds was returned by the attacker after negotiation.

We can also cite hacks that have targeted protocols TransitFinance, TeamFinance or TempleDAO.

Top 10 biggest DeFi hacks of October 2022.
Top 10 biggest DeFi hacks of October 2022.

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The year 2022 much worse than 2021

The decentralized finance (DeFi) ecosystem emerged at the end of 2019. Quickly, in 2020 the first smart contract attacks were recorded. Although the phenomenon was still contained, 250 million dollars had been stolen in 2020.

A situation that quickly escalated in 2021. Indeed, the number of attacks exploded, driving the amount stolen to new heights. Thus, these are more than 1.55 billion dollars that were stolen in 2021.

Unsurprisingly, the year 2022 follows the trend that was emerging in the two previous years. Thus, two months from the end of the year, it has already broken all records.

Since January, about 200 attacks allowed hackers to steal the astronomical sum of 2.98 billion dollars. It is almost certain that the 3 billion dollar mark will be exceeded before the end of the year. A sad record for DeFi and its defenders.

Lack of security and lack of auditing

The saddest thing about this case is the fact that most of these hacks could have been avoided. Indeed, many DeFi protocols are emerging and opening their doors to the public even before having verified their contracts.

Thereby, it is essential for DeFi protocols that their smart contracts are audited by competent teams. Unfortunately, the pricing and lack of availability of these specialized companies make these audits costly and tedious.

As a result, we see protocols emerging that are successfully raising several million dollars from TVL, without their contracts having been verified.

Fortunately, bug bounty campaigns aimed at rewarding users who have discovered a flaw are increasing. Moreover, in some cases the exploited protocols manage to negotiate with their attacker. This was recently the case of Transit Finance which was able to recover 70% of the stolen funds.

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