KUALA LUMPUR, Nov 19 -- Billions of US dollars have been stolen from decentralised finance (DeFi) protocols, a flourishing alternative financial system that replaces traditional intermediaries with software running on blockchains, according to new research by Elliptic, the global leader in cryptoasset risk management.
Elliptic’s report DeFi: Regulation, Compliance and the Growth of DeCrime reveals that as of November this year, just over US$12 billion in losses were incurred by DeFi users and investors, due to the malicious exploitation of flaws in decentralised applications (DApps) such as decentralised exchanges (DEXs), lending protocols and asset management offerings. (US$1 = RM4.179)
These losses include direct loss of funds stolen from DApps, as well as losses suffered by holders of tokens associated with these protocols.
DeFi platforms have become increasingly popular in recent years, fuelling a boom in cryptoasset use. The ‘total value locked’ (TVL), a measure of the liquidity of DeFi services, increased by a factor of nearly 500, from US$500 million in November 2019 to just over US$247 billion today.
This rise in popularity of DeFi has attracted a significant increase in associated DeCrime, a term coined by Elliptic to denote financial crime that involves decentralised financial tools such as DApps.
Losses due to theft and crime across DeFi platforms have increased by 600 per cent from 2020, with US$10.5 billion being stolen since the beginning of 2021 compared with US$1.5 billion last year. More than US$12 billion in total has been lost due to malicious exploitation of DeFi.
In a statement, Elliptic Chief Scientist Tom Robinson said: “The DeFi ecosystem is an incredibly exciting and fast-moving space, with financial services innovation happening at light speed. This is attracting large amounts of capital to projects that are not always robust or well-tested. Criminal actors have seen the opportunity to exploit this.”
According to the report, the prevalence of DeFi theft and crime is largely due to the untested and immature nature of the technology available. Mistakes in the design and development of decentralised apps are the most common cause, giving rise to bugs which hackers can exploit, accounting for US$10.8 billion of all losses.
Elliptic is headquartered in London with offices in New York, Singapore, and Tokyo.
To learn more, visit www.elliptic.co.
-- BERNAMA
No comments:
Post a Comment