Hacks have cost Web3 companies more than $2Billion this year

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In the first six months of 2022, Web3 projects have lost more than $2 billion to hacks and exploits — more than all of 2021 combined.

That’s according to research from blockchain auditing and security company CertiK, which on Thursday released its Quarterly Web3 security reportThis report covers Q2 this year. The report depicts a grim picture of a crypto space that is still plagued by scams and hacks as well as phishing schemes. It also faces relatively new threats such as flash loan attacks.

CertiK focuses on the last threat category, which was created by flash loans. This decentralized finance mechanism allows borrowers to access large amounts of cryptocurrency in very short time periods. Flash loans can be used to manipulate a token’s value on exchanges or to purchase all governance tokens within a project. Then, you can vote to withdraw all the funds. What happened to Beanstalk April?.

In total, CertiK’s report claims that a total of $308 million was lost across 27 flash loan attacks in Q2 2022 — an enormous increase compared to just $14 million lost to flash loans in Q1.

The frequency of phishing attacks increased between Q1-Q2 of this year. CertiK recorded 290 in its most recent quarter, compared to 106 during the first three months. It was the main vector of the majority of phishing attempts. This is due to Discord’s continued popularity as the preferred social network for NFT and cryptocurrency scene. Security concerns are ongoing.

In slightly more positive news, so-called “rug pulls” — where the founders of a project halt development and abscond with the funds — are becoming less common, though tens of millions of dollars were still lost in this way. CertiK reported that $37.46 Million was lost to rug pullings in Q2 2011, a decline of 16.5 per cent from the previous quarter. The report also attributes some of this decrease to the Current crypto winterThis could be driving away less-experienced investors who may fall for scam projects.

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