A report on DeFi scams; What is the most common cause of fraud?

According to recent reports, the second quarter of 2023 saw a significant increase in decentralized finance (DeFi) hacks and scams, resulting in a total loss of more than $204 million to users in the field. The report, which analyzes data from the Rekt database, shows that 117 such incidents were reported during the period, a sevenfold increase from the same quarter in 2022.
The most common cause of frauds has been about authorization and access. For example, a fraudster gained unauthorized access to a wallet, resulting in a loss of $75.8 million, followed by abuse and fraud.

Buy digital currency for 10 thousand tomans!

At Aruz Plus exchange, you can trade all digital currencies with only 10,000 Tomans and with zero fees!

Beginning

The top five frauds in Q2 were against Atomic Wallet, Fintoch, MEV-Boost, Bitrue and GDAC, with Atomic Wallet issues alone accounting for around 17% of all losses. The report also noted that while more than $208.5 million was initially lost, approximately $4.5 million was recovered through prosecutions, deals with hackers and other recovery methods.
According to the CertiK report, despite the increase in hacks and scams in the DeFi space, losses in the second quarter were actually lower than in the first quarter; Where more than $320 million was lost from January to March. However, the continued growth of the DeFi sector, along with the increasing sophistication of cyber attacks, suggests that these incidents will continue to be a challenge for the crypto industry.
The DeFi sector has been hailed as a key driver of innovation and financial inclusion, but it also carries significant risks for investors. The lack of regulation and oversight, combined with the complex and rapidly evolving nature of DeFi protocols, means that investors should exercise caution when entering this space. To mitigate these risks, DeFi platforms and investors must implement strong security measures and adopt best practices for risk management. This includes conducting due diligence on projects before investing, using multi-factor authentication, and avoiding the use of centralized maintenance solutions.