Web3 Projects Lose Billions to Hacks in 2022. A Growing Concern for Developers?
In a recent report by CertiK, web3 projects were found to have lost more than $2 billion due to hacks in the first half of 2022. This represents a staggering total, with the losses surpassing those of the entire year in 2021. For me as a developer, the rise in threats in the web3 arena is a cause for concern which reinforces the need for robust security measures.
Web3 technology is aimed at realizing a decentralized and privacy-focused internet; however, the increasing number of attacks challenge the purpose of rebuilding trust. The Poly Network hack in August 2021 remains the largest web3 hack, with over $600 million worth of tokens stolen but later returned. In contrast, the Ronin Network suffered a permanent loss of around $552 million in Ethereum and USDC.
Despite a 42% decrease in funds lost in the last quarter, the numbers remain alarming. CertiK’s report identifies a sharp increase in flashloan and phishing attacks, with Beanstalk Farms, Fei Protocol, and DEUS Finance 2 among the worst hit. Fortunately, rugpulls and exit scams have seen a decline in comparison to the previous year.
Critics of the web3 ecosystem argue that the decentralized nature of the projects makes them more vulnerable to attacks, and these incidents exemplify the industry’s challenges. However, proponents of web3 technology believe that growing pains are expected in a young, evolving sector.
In the long run, developers and stakeholders in the web3 ecosystem must prioritize security measures and continuously innovate to identify and counter threats. The web3 community can learn from these incidents and implement better practices to protect the privacy and financial interests of users. Nonetheless, the development of web3 technology continues to progress, and the benefits it offers can outweigh the risks if effective safeguards are put in place.
