Home Blockchain OODA Loop – Web3 Lost Over $890 Million to Hacks and Scams in Q3 2023

OODA Loop – Web3 Lost Over $890 Million to Hacks and Scams in Q3 2023

by Sophie Smith

Web3, the decentralized web powered by blockchain technology, has faced significant challenges in terms of security in the third quarter of 2023. According to a research report by Beosin EagleEye platform, a subsidiary of Beosin, a blockchain security audit company, Web3 suffered losses amounting to approximately $890 million due to various security breaches, phishing scams, and rug pulls.

Breaking down the losses, it was revealed that 43 separate hacker attacks led to a cumulative loss of around $540 million. These attacks targeted different aspects of the decentralized ecosystem, including decentralized finance (DeFi) projects, non-fungible tokens (NFTs), and other Web3 platforms. Phishing scams accounted for an approximate loss of $66.15 million, indicating a growing concern for the vulnerability of users to fraudulent activities. Additionally, 81 incidents of rug pulls, where developers abandon projects and run away with investors’ funds, resulted in a total loss of approximately $280 million.

Among all the sectors targeted, DeFi suffered the highest number of attacks, with 29 reported incidents, making up 67.4% of all incidents. The popularity and financial potential of DeFi projects have made them a prime focus for hackers. In terms of financial losses, public chains such as Ethereum endured the most substantial damages, accounting for $227 million. Ethereum also faced the highest number of security incidents during the quarter, with a total of 16 reported cases.

Analyzing the attack methods employed by hackers, it was found that private key leaks were the most costly, causing losses of $223 million. This highlights the importance of securing private keys, as they provide access to users’ funds on the blockchain. Despite efforts to recover stolen assets, the report indicates only limited success, with only 10% of the stolen funds retrieved during the quarter.

The alarming aspect of this situation is that a significant portion of the stolen funds, approximately $360 million, remains under the control of the hackers. This represents a worrying 67% of the total losses. The growing sophistication of hackers and the decentralized nature of Web3 platforms make it challenging to regain control over stolen assets.

In order to combat these vulnerabilities and reduce the potential for consequential attacks, it is crucial to understand the root causes that plague the Web3 ecosystem. OODA, a research and analysis firm, has been compiling a comprehensive Web3 incident database to document and categorize compromises within the Cryptos, DeFi, NFTs, and Web3 sectors. Tracking these root causes provides valuable insights that can help innovators create robust cyber-risk management approaches.

By identifying the common vulnerabilities and weaknesses within Web3 platforms, developers, investors, and users can work together to enhance security and protect their assets. As the web continues to evolve with the adoption of blockchain technology, it is essential to prioritize cybersecurity to ensure the trust and confidence necessary for the success of the decentralized future.

To access the OODA comprehensive Crypto Incident tracker and stay informed about the latest security breaches in the Web3 space, you can visit their website [here](https://www.oodaloop.com/cryptocurrency-incident-database/).

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