Blockchain analysis company Chainalysis reports a more than 50% decrease in the value of cryptocurrency assets pilfered by cybercriminals in 2023 compared to 2022. The significant reduction is attributed largely to a decline in hacking incidents targeting decentralized finance (DeFi) platforms.
According to Chainalysis’ latest report, hackers managed to steal only $1.1 billion from DeFi protocols in 2023, a substantial decrease from $2.5 billion in 2021 and $3.1 billion in 2022. The number of DeFi hacks also saw a year-over-year decline of 17.2%, accompanied by a 7.4% drop in the median loss per DeFi hack.
The report highlights the pivotal role played by DeFi protocol hacks in the substantial increase in stolen crypto observed in 2021 and 2022. In 2023, the value stolen from DeFi platforms witnessed a significant 63.7% drop year-on-year.
Mar Gimenez-Aguilar, a lead security architect and researcher at blockchain security firm Halborn, suggests that the decrease in value stolen from DeFi platforms indicates improvements in smart contract security implemented by operators. Additionally, the decline in DeFi activities last year resulted in fewer protocols for hackers to target.
The report emphasizes the uncertainty regarding whether the reduction in DeFi hacking is primarily due to enhanced security practices or the overall decrease in DeFi activity, suggesting it’s likely a combination of both factors.
Chainalysis cautions about potential consequences if the decline in DeFi activities is the primary reason for the decrease in hacking losses. It suggests monitoring the situation closely to determine whether DeFi hacking experiences a resurgence in tandem with another DeFi bull market, potentially leading to higher total value locked (TVL) and a larger pool of DeFi funds for hackers to target.