According to a report, hackers have stolen $1.3 billion from cryptocurrency platforms

DeFi is open source and runs on a blockchain network. Anyone with access to the internet may look at the source code, audit it, and see all of the transactions.
Decentralized finance (DeFi) markets are becoming a haven for cybercriminals. According to a report by blockchain data platform Chainalysis, hackers stole $1.3 billion from exchanges, platforms, and private businesses combined in the first three months of this year.

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According to the business, DeFi methods were responsible for 97 percent of all cryptocurrencies stolen in the first three months, up from 72 percent in 2021 and only 30 percent in 2020.

DeFi is built on the peer-to-peer idea, which eliminates the need for middlemen. DeFi democratises finance by displacing traditional centralised institutions such as banks, brokerages, and non-bank financial companies (NBFCs) (Non-Banking Financial Companies).

Individuals and institutions are increasingly studying DeFi, which gives quick and inexpensive access to cash, as well as efficient lending and borrowing, as a result of the tremendous surge in bitcoin investments.

A DeFi protocol makes use of smart contracts, which are computer programmes that operate on the blockchain network.

Users of the DeFi protocol can use their wallets to communicate with these smart contracts and transfer funds, borrow, lend, or use any of the DeFi’s services.

“The coding that DeFi protocols are based on is the reason to why they are progressively being hacked.” The majority of hacking attempts are caused by smart contract code weaknesses, which hackers exploit to obtain access to user funds, according to Johnny Lyu, KuCoin’s chief executive officer.

Because DeFi platforms are decentralised, hackers can target specific weaknesses in the software suites, which are exposed due to the open source nature of the programmes, according to Lyu.

DeFi is open source and runs on a blockchain network. Anyone with access to the internet may look at the source code, audit it, and see all of the transactions.

Many of today’s DeFi projects are launched hastily, with little investment in building a solid security team, making them vulnerable to hackers, according to Lyu.