- Axie Infinity’s Ronin Network, in a blog, had suggested that somewhere around US$615 million were lost in USDC and Ethereum.
- This is one of the biggest DeFi scams to date, surpassing the US$611 million hack of the DeFi protocol Poly Network, which happened last year in August.
Decentralized finance (DeFi) has been one of the biggest topics of discussion of late. While many see it as a future of finance, it has also been riled with issues related to hacks and scams, which has forced the crypto community to rethink how safe the world of DeFi is.
One of the common issues identified with the DeFi protocol is with the smart contracts, which the illicit actors turn to hack into the various projects. The latest Axie Infinity’s Ronin Network hack once again exposes the vulnerabilities.
Axie Infinity’s Ronin Network in the blog had suggested that somewhere around US$615 million were lost in USDC and Ethereum. This is one of the biggest Defi scams to date, surpassing the US$611 million hack of the DeFi protocol Poly Network, which happened last year in August. The said hack saw 173,600 Ethereum tokens and 25.5 million USDC wiped off from the protocol.
Let’s look at the top 3 big DeFi hacks that have rocked the crypto world.
The Wormhole hack happened in January earlier this year, which saw it losing close to US$326 million in Wrapped Ethereum (wETH). The hacker managed to sneak through the protocol by minting the wETH without locking ETH in the Wormhole.
The on-chain analysts identified that more than 80000 ETH tokens were sneaked off from Wormhole to an unknown address, which already boasts over US$250 million worth of ETH. Besides, a few also indicated that the hacker also swiped off 40,000 ETH on Solana, which were traded for other assets. The hack was so vast that it sounded alarms as it suggested that ETH, bridged to Solana, could be dicey.
The Compound (COMP) hack happened in October 2021 and was worth US$150 million due to a bug that lets borrowers claim more than their intended share on the protocol. It was suggested that the bug saw vast amounts of COMP tokens being sent to the wrong addresses. Many experts claimed that this was nothing new, but it was the result of the issue that was there during the protocol’s upgrade.
Once the team identified that US$80 million was sent to the wrong addresses, they rushed to fix the issue. But by the time it could get the problem fixed, the COMP vaults had lost a further US$68.8 million.
The play-to-earn platform, which operates on top of Polygon Network, got severely hit in December 2021, which saw its users losing close to US$140 million. The hacker managed to breakthrough using Vulcan Forged’s centralized user wallets, which gave him access to the private keys to 96 crypto wallets. The private keys gave the hacker access to the platform’s asset portfolio feature, which made him merry with 4.5 million PYR tokens.
Calls for global collaborations
The growing DeFi hacks have forced the US and the UK regulators to raise voices for a global Collaboration in supervising DeFi. FED chair Jerome Powell recently at the BIS Innovation Summit said that though there has been significant development in the space, there is a need for a better collaborative effort to reduce the DeFi hacks.
Andrew Bailey, Governor of the Bank of England, seconded that opinion suggesting that the regulators must find a way to handle DeFi.
Once again, the latest hack proves that cryptos are a risky and volatile asset. Therefore, one must be on top of things when they enter the market and must do their market research thoroughly.
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