![]() Fast forward to March and we saw the Meerkat Finance Exploit which was a yield farming protocol on the Binance Smart Chain which was reported being hacked one day after it went live resulting in approximately 73,000 BNB being lost (approximately 13 million dollars). It is evident that these hacks are a result from smart contract exploits, which many thought were indominable. The hackers borrowed millions of stablecoins from Cream Finance’s IronBank, doubling their loans after every succeeding one. This time, the protocol lost a whopping 37 million dollars. Not only did Yearn Finance suffer an exploitation, but Alpha Homora’s Iron Bank Exploit also occurred during the same month because of their very own flash loan feature as well. The hackers were able to successfully attack the platform by exploiting the flash loan feature on Yearn Finance, which arbitraged from other DeFi platforms within the blockchain sphere. This allowed the hackers to garner approximately 2.7 million dollars in profit after having to spend over 8 million dollars in fees. Being one of the largest aggregators in the space, this allowed hackers to siphon 11 million dollars worth of users funds from the Dai Vault through a smart contract exploitation. In February 2021, DeFi platform Yearn Finance had a flash loan attack as Yearn Finance is one of the largest aggregators in the space, this comes as no surprise. It is important to highlight the numerous attacks that have occurred in 2021 alone to garner perspective on how much of a risk you can be in if you don’t take necessary precautions. Just because a DeFi application has been audited, doesn’t mean that it can’t be hacked this is an unfortunate truth within the web of blockchain technological applications, especially ones in their infancy. Put that into perspective, one billion dollars in less than two years has been stolen by numerous investors and that could be you if you ignore the risks of not securing your cryptocurrency assets. This Chart Above Analyzes How, In Accordance To How Fast DeFi Has Taken Off, The Amount Of Hacks That Have Occurred Coinciding With It: Notice, Todays Hack Hasn’t Been IncludedĪs DeFi has risen as a dominant force in the blockchain space, hackers and malevolent entities have capitalized on such a paradigm and over the course of the last two years (including Tuesday’s attack), DeFi hackers have effectively stolen over 1 billion dollars since 2020. ![]() Decentralized finance is no longer exclusive to Ethereum many blockchains such as Binance Smart Chain, Polygon, Aergo, ICON, Vechain (and many more) have conceived of their own blockchain applications dedicated to decentralized finance. and earn interest at rates unheard of in your traditional savings account. Such intermediaries such as brokerages, exchanges or banks are traditional financial entities that operate as an intermediary, enabling your finances to be at the mercy of organizations other than yourself although this maybe enticing, many individual’s wish to have complete autonomy and control over their own finances.ĭeFi utilizes smart contract technology, such as Ethereum to allow individuals to borrow, lend, speculate on the price of securities, cryptocurrencies, stocks, bonds, real estate etc. Centralized financial intermediaries are non-existent in the world of DeFi and non-custodial applications are the embodiment of how DeFi operates. But what is decentralized finance, and how has it impacted the way monetary instruments operate? Decentralized finance is, in essence, an umbrella term that consolidates cryptocurrency or blockchain applications geared towards disrupting traditional financial intermediaries. 611 Million Dollars Was Stolen Today In The Largest DeFi Hack In Cryptocurrency Historyĭecentralized finance, otherwise known as DeFi, has revolutionized the paradigm of traditional finance as we know it.
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