The latest report from blockchain security firm Hacken shows a significant decrease in security breaches in decentralized finance (DeFi) protocols compared to centralized finance (CeFi) platforms in 2024. According to the annual “Web3 Security Report,” total losses due to security failures in the cryptocurrency industry reached $2.91 billion. DeFi platforms experienced $474 million in losses, a 40% decrease from the previous year, thanks to the adoption of advanced security measures like zero-knowledge cryptography and multi-party computation.
One of the major factors contributing to the decline in DeFi exploits was the decrease in cross-chain bridge hacks, with losses falling from $1.89 billion in 2022 to $114 million in 2024. On the other hand, CeFi platforms, including cryptocurrency exchanges, reported $694 million in losses in 2024, more than double the losses from the previous year. CeFi accounted for nearly one-third of all crypto-related incidents, highlighting the vulnerabilities in centralized systems.
Gaming and metaverse projects were targeted heavily in 2024, accounting for nearly 20% of all hacks and resulting in losses of $389 million. The PlayDapp exploit in Q1 2024 was the largest gaming/metaverse breach of the year, leading to a $290 million loss. Phishing scams also remained a significant concern, causing over $600 million in losses, showing the increasing sophistication of social engineering tactics in the Web3 space.
Memecoins were popular in 2024, particularly on the Solana blockchain, but many of them turned out to be scams targeting investors through presale scams and celebrity-endorsed rug pulls. One example is the Hawk Tuah memecoin, launched by viral influencer Hailey Welch, which saw its value plummet 95% shortly after launch, causing backlash from the Web3 community. The rise in memecoin-related scams highlights the need for greater investor education when dealing with speculative assets.
To address these security issues, both DeFi and CeFi platforms need to continue implementing advanced security measures to protect users and prevent future exploits. Education and awareness among investors are crucial to help them avoid falling victim to scams and phishing attacks. As the cryptocurrency industry continues to evolve, staying informed about best security practices and being cautious when interacting with new projects will be key to protecting investments and assets in the digital space.
