This is the second part of this article. This is the first part.
In this second part, you will discover more important insights about the dappradar report.
Security Challenges
We recorded a loss of $340 million due to security breaches. With this record, businesses and users must protect their assets against exploits. Let’s look into what this entails.
Hack Incidents
Among the cryptocurrencies, Ethereum and BNB chains had 28% each of the total security breaches. 8% of hack incidents were on Solana, and 36% were on Polygon and Arbitrum.
Source: DappRadar
Effects of Access Control Problems
Access control issues represent only 23% of the cases, accounting for 75% of the total amount embezzled. This is why their financial implications are more significant than other forms of cyberattack. The ‘Other’ category included 36% of the incidents, leading to 15% of the total losses. Flash loan attacks and rug pulls represented another 13% of the incident. Phishing had a 3% occurrence, leading to 0.4% of total losses.
Notable Security Breaches
- DMM Bitcoin Hack: One of the most significant events covered was the theft of $305 million. The $305 million was from DMM Bitcoin, a centralized exchange based in Japan.
- Gala Games Incident: Another significant attack involved an access control vulnerability in the GALA token contract. A hacker completed a steal. It resulted in the creation of 5 billion GALA tokens after the hacker exchanged 592 million tokens for $21.8 million worth of ETH. This occurrence affected the ETH price and led to a 20% decrease.
- Lykke Exchange Breach: One of the most notable hacking incidents happened to Lykke. The hacker made away with users’ funds, including over $22 million. They had to suspend withdrawals to fix the issue.
- Sonne Finance Exploit: Sonne Finance fell victim to an exploit leveraging a known vulnerability in Compound v2 forks, resulting in a $20 million loss.
- Holograph Hack: Holograph also experienced hacks. It suffered a $14.4 million hack when a former developer exploited a smart contract vulnerability to mint 1 billion HLG tokens.
Source: DappRadar
Addressing Security Challenges
- Enhanced Access Control: When Dapps improves access control, it can prevent access to digital assets and reduce security breaches.
- Threat Monitoring: When we watch our wallet and Dapp activities, we can respond to threats before it is too late. Threat monitoring is accessible through the implementation of monitoring systems.
- User Education: Being knowledgeable about security measures will give you an edge. To secure your digital assets, you should learn about phishing and how to avoid it. Dapps should create educational content about security measures and practices.
Future Outlook
Web3 has remained bullish, with an increase in UAW engagement, NFT trading, and developments in DeFi. New Layer 2 (L2) solutions increase scalability and lower transaction costs. New L2 solutions will contribute to Dapp’s development.
Emerging Trends
- Memecoins and SocialFi: Some memecoins remain relevant in the Web3 space but can still impact trading. SocialFi platforms are also providing more decentralized solutions to global social networking giants.
- Airdrop Farming: Airdrop farming increases UAW, but projects need more utilities than airdrops. Platforms that go beyond airdrop will strive to provide users with a ‘sticking’ factor to remain relevant.
Conclusion
Security incidents remain challenging for the Web3 industry, but the sector is advancing. To build trust, we must ensure we access the best security practices. The Dapp industry continues to grow, and we must all work together to ensure our assets are safe.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted risk tolerance levels of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses you may incur due to any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.