2024 is turning out to be a nightmare for the crypto world. We're talking about losses that are just insane—over $2.1 billion already! And get this, that's a whopping 72% increase compared to last year. As someone who's been around the block (pun intended), it's eye-opening to see how things are shifting between Centralized Finance (CeFi) and Decentralized Finance (DeFi).
I mean, just look at the stats. According to Cyvers, this year has already surpassed all of last year's losses, and we still have a quarter left! In case you missed it, CeFi platforms are basically getting wrecked. Hacking incidents have shot up by nearly 1,000%! Remember when we thought Mt. Gox was bad? Now we've got breaches like the DMM Bitcoin exchange loss of $305 million.
And while DeFi isn't exactly sipping tea and relaxing, it's interesting to note that its losses have actually decreased by 25% this year compared to last. Still lost $171 million though... so yeah.
Cyvers did a deep dive into the types of incidents happening and wow... there were 131 reported incidents this year alone! That's almost triple from last year at this time. Smart contract exploits are still a thing—79 incidents so far—but what's really alarming is access control violations accounting for $1.62 billion in losses.
So what can we do about it? Well, Cyvers suggests some pretty solid measures:
Seems simple enough right? But then again... how many times have we said that before?
One thing that struck me is how different regulatory compliance looks for CeFi vs DeFi. CeFi platforms are basically begging to be regulated with all their KYC and AML practices; they know they’ll get shut down otherwise. But DeFi? It's like the Wild West out here.
In CeFi, there's some comfort in knowing that there's a central authority probably losing sleep over making sure no one hacks them (and taking all our money if they do). Meanwhile, in DeFi land, good luck trying to explain your loss of funds due to some exploit no one audited.
As someone who dabbles in both worlds, I can't help but feel a bit uneasy. CeFi feels like it's on borrowed time with these hacks piling up; one more big breach and people might just pull their funds en masse. On the other hand, DeFi's lack of regulation leaves us all exposed in ways we might not fully understand yet.
So yeah... maybe double-check those wallets folks; things could get worse before they get better.
