Footprint Analytics Analyst: Zoni
Data Source: REKT Overview in 2021
This post is part of our Year in Review series.
This post is part of our Year in Review series.
In the cryptocurrency world, REKT (derived from the English word "wrecked", originally meaning "destroyed", the term refers to the project being attacked) currently has 4 main attack methods:
Exit Scam: Refers to the project running away with money during or after it goes online
Honeypot: It is to induce investors to deposit funds into an unstable smart contract project with hidden traps. Once the funds are deposited, only the project party can unlock the locked assets
ExploitAttack: refers to the use of DApp, network or smart contract vulnerabilities to launch attacks
According to Footprint Analytics, more than 600 projects were REKTed in 2021, a third of which suffered financial losses, totaling $2.2 billion.
Footprint Analytics: REKT Overview in 2021
Compared with 2020, about 450 new projects were hacked, resulting in 10 times the loss of funds. From more data comparison and analysis, this paper has the following findings.
Footprint Analytics: Yearly REKT Number & Fund
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Footprint Analytics: Number of REKT by Type, Yearly Comparison
Footprint Analytics: Distribution of REKT by Type, Yearly Comparison
Most of the Exit Scams happened between August and September, mainly on the BSC and Polygon public chains.
Footprint Analysis: Monthly Exit Scams by Chain
As for Honeypots, September was the worst month, especially on the BSC chain, accounting for almost 70% of such scams.
Footprint Analysis: Monthly Honeypots by Chain
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Compared with the previous year, the number of attacks on BSC increased from 9 to 319; the new chain Polygon in 2021 was also affected by 12%.
Footprint Analytics: Number of REKT by Chain in 2020 (left) and 2021 (right)
Exit Scams and Honeypots are the two main types of attacks on projects on the BSC chain. It is worth noting that the Exit Scams broke out in August, when BSC was experiencing a surge in the number of projects and the accumulation of locked positions. The more in-depth reasons will be analyzed later in this article.
Footprint Analytics: Number of REKT by Type of BSC
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Footprint Analytics: Fund Lost Amount by Chain & Type in 2020
Footprint Analytics: Fund Lost Amount by Chain & Type in 2021
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A total of 10 transactions involving a loss of more than US$50 million
A total of 76 transactions involving capital losses ranging from US$1 million to US$50 million
A total of 107 transactions between USD 10,000 and USD 1 million
A total of 19 transactions with financial losses below USD 10,000 (excluding financial losses)
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Footprint Analytics: Attacks Causing Lost More Than 50M
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Footprint Analytics: TVL of All DeFi Protocols
Footprint Analytics: Number of DeFi Protocols
Another reason is that more and more hackers have noticed that the amount of locked projects on the blockchain is increasing. By the end of 2021, the amount locked on the entire network will exceed 270 billion US dollars.
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Why the largest number of REKT occurred on the BSC chain?
As the "Layer 2" public chain of Ethereum, most of the projects on BSC are imitation disk projects established by simply forking the Ethereum protocol. Many of these projects have carried out micro-innovations without a deep understanding of the original protocol. Some belong to the leek cutting project and have no long-term development plan to directly copy the code.
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Footprint Analytics: TVL of BSC in 2021
Footprint Analytics: TVL of BSC in 2021
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How to avoid not being REKT
In 2021, more and more people are entering the cryptocurrency world.
Some people bought some tokens, some invested in DeFi projects, and some bought expensive NFTs, and even spent a lot of money to fry land in the metaverse to become the neighbor of real celebrities. More and more decentralized network activity means more hacks, scams and attacks.
Therefore, DeFi developers should pay more attention to security awareness, such as logically checking the code, eliminating possible loopholes, and seeking help from a professional audit team.
Investors will need to do more due diligence as the booming blockchain industry attracts more bad projects. If you are just starting to invest in projects in the cryptocurrency world, please note the following:
For new projects that provide excessively high reward returns, the skyrocketing currency price may be a pull from the project side
Be wary of suspicious links in communities, or private messages from strangers, or even search engine results, which may lead to phishing traps
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About Footprint Analytics:
Footprint Analytics is a one-stop visual blockchain data analysis platform. Footprint assisted in solving the problem of data cleaning and integration on the chain, allowing users to enjoy the zero-threshold blockchain data analysis experience for free. Provide more than a thousand tabulation templates and a drag-and-drop drawing experience, anyone can create their own personalized data chart within 10 seconds, easily gain insight into the data on the chain, and understand the story behind the data.
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The above content is only a personal opinion, for reference and communication only, and does not constitute investment advice. If there are obvious understanding or data errors, feedback is welcome.
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