Decentralized finance (DeFi) platforms have suffered significant losses due to a series of exploits in February, with at least $21 million in crypto being drained from seven protocols, according to DeFi data analytics platform DefiLlama. Among the notable incidents were the flash loan reentrancy attack on Platypus Finance, which resulted in $8.5 million in losses, and the price oracle attack on BonqDAO, which saw an exploiter manipulating the price of AllianceBlock (ALBT) token, causing a loss of an estimated $120 million, although the attackers reportedly only managed to cash out $1 million due to a lack of liquidity on BonqDAO.
Other exploits included a reentrancy attack on Orion Protocol, resulting in a loss of roughly $3 million, and another on dForce network, leading to around $3.65 million in losses. However, in a surprising turn of events, all funds were returned to dForce when the attacker revealed themselves to be a white hat hacker. The attack on Platypus Finance was also notable because the team announced their intention to return 78% of the main pool funds by reminting frozen stablecoins.
Smart contract exploits were also prevalent, with the algorithmic stablecoin project Hope Finance losing roughly $2 million due to a smart contract exploit, and multichain exchange aggregator Dexible experiencing a loss of $2 million worth of cryptocurrency through an exploit that targeted the app’s selfSwap function.
Additionally, BNB Chain-based DeFi protocol LaunchZone suffered a loss of $700,000 worth of funds due to an attacker leveraging an unverified contract.
These incidents come after blockchain data firm Chainalysis revealed in its 2023 Crypto Crime Report that hackers had stolen $3.1 billion from DeFi protocols in 2022, accounting for more than 82% of the total amount stolen in the year.
Despite the losses, the DeFi space continues to grow, with the total value locked (TVL) in DeFi protocols reaching over $104 billion as of February 28, according to DefiLlama. The platform also noted that the number of users on DeFi platforms has steadily increased since 2020, with over 5.8 million unique addresses interacting with DeFi protocols in February 2023.
These incidents highlight the need for continued vigilance and improvement in DeFi security measures to prevent such exploits from occurring. While the DeFi space has seen significant growth and innovation in recent years, it is clear that security remains a crucial concern that must be addressed to ensure the continued success and sustainability of the ecosystem.