Web3 technology, which utilizes blockchain and decentralized systems, is gaining popularity due to its potential to transform various industries. However, the increased use of web3 has also increased security risks as malicious actors seek to exploit vulnerabilities in the sector.
According to the recent report from Blockchain Security firm Boesin, bad actors’ operations may have slowed down since the year began. After surviving a dreadful 2022 hacking-filled year, the Web3 ecosystem still suffers several attacks.
Bad Actors Slowed But Still Prey On Web3
The Web3 space recorded a slowdown in bad actors’ activities; Boesin reported that the sector experienced 61 attacks and 41 rug pulls in the Web3 space in 2023. All of these attacks in the ecosystem mount to a loss of $295 million to bad actors in Q1. A figure lesser than the total amount lost in any of the quarters in 2022.
With the year beginning on a positive side in terms of market perspective, March has recorded the most attack in 2023. According to the report, a total of $235 million was lost in Web3 in March alone, accounting for about 79.1% of all losses in 2023 Q1.
The attacks recorded in March include the Euler Finance hack, which resulted in nearly $200 million lost from the protocol, and the Bitcoin ATM maker General Bytes, which got hacked and lost over $1.5 million in the same month.
Boesin noted, “Rug pulls continue to occur frequently this quarter, with 56% of the exit scams involving amounts less than $100,000.” The rug pulls, or scams, in Q1 only accounted for $20.34 million.
Ethereum Remains The Most Targeted
Given the network is the largest of all total amounts locked in decentralized finance (DeFi), Ethereum has always been the target for most bad actors looking to prey on the industry developing stage. According to Boesin’s report, Ethereum was the most affected in Q1, with 80.8% of losses in Q1 attacks.
The blockchain suffered 17 major hacks in Q1 2023, accounting for approximately $238 million in losses. The Binance Chain (BNB), on the other hand, emerges second on the list of most attacks in Q1 2023.
With 31 exploits and 41 rug pulls occurring on the network, BNB Chain suffered an overall loss cumulation of $19.48 million. According to the research, 67% of the losses this quarter came from flash loans, with eight of these occurrences resulting in an amount nearing $198 million in losses.
Algorand recorded only a slight loss due to the issue relating to the MyAlgo wallet. Additionally, compared to last year, Solana has improved, with the chain recording little to no loss from attacks this quarter.
Beosin’s report indicates that while the Web3 sector is still vulnerable to attacks and rug pulls, the overall loss has decreased in Q1 2023. This trend suggests that the industry is becoming more aware of the importance of robust security measures and is taking steps to address the issue.
Regardless of the news circulating in the industry, the global crypto market has maintained composure. Over the past 24 hours, the global crypto market capitalization has surged by 2% at the time of writing, with a value above $1.3 trillion.
Featured image from Unsplash, Chart from TradingView