According to Certik, Most Defi Hacks In 2021 Are About Centralization Issues – Defi Bitcoin News

Blockchain security and auditing firm Certik reports that the most common hacking vector in decentralized finance (defi) protocols is related to centralization in 2021. The data appears in a recent report from Certik, which also examines how defi and other chains such as Avalanche and BSC are rising as alternatives to Ethereum’s high fees in 2021.

$1.3 billion in centralized cost Defi protocols in 2021

a new one Report Centralization issues in defi protocols are the most common attack vector for hackers in 2021, according to a report released by blockchain security and auditing firm Certik. According to the company, $1.3 billion was exploited with a single point of failure. Certik conducted 1,737 smart contract audits in 2021 and found 286 discrete centralization risks. The report states:

Centralization goes against the spirit of DeFi and poses significant security risks. Both dedicated hackers and malicious insiders can exploit a single point of failure.

One of the protocols that suffers from this vulnerability is BZX, when attackers managed to use emails with malicious macros to phish two private keys in November. The attackers took control of $55 million from the protocol at the time. This is part of what the company classifies as a privileged ownership vulnerability.

Certik on Defi Growth and Multi-Chain Trends

The report also acknowledges that the DeFi environment has experienced tremendous growth over the last year. Transaction volume on decentralized exchanges (dex) has tripled, the total value locked in defi-based protocols has quadrupled, and Ethereum’s fee revenue has soared, Certik said. Regarding Ethereum’s growth, the report acknowledges:

Clearly, there is a huge demand for Ethereum-powered smart contract-driven decentralized applications. Other applications such as DeFi, NFTs, and ENS (Ethereum Name System) have all contributed to this growth.

However, due to Ethereum’s challenges in scaling, some competitors have managed to dominate a third of Ethereum’s market. Certik stated that Binance Smart Chain, Solana, Terra, Avalanche, Fantom and Polygon are the more popular chains chosen as alternatives for users’ defi activities.

Even with the Ethereum block space transaction premium, the chain reached a TVL of $153 billion. But as users migrate to other chains, the decentralization debate continues to deepen. Solana, one of the chains ostensibly replacing Ethereum, has been facing official troubles admit by its team.

How do you see Certik and what’s changing in defi in 2021? Let us know in the comments section below.

Sergio Goshenko

Sergio is a cryptocurrency journalist in Venezuela. He describes himself as late to the game, entering the crypto space when prices rose in December 2017. With a background in computer engineering, living in Venezuela, and being affected by the cryptocurrency craze on a social level, he offers a different perspective on the success of cryptocurrencies and how it can help the unbanked and underserved.

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