$50 Million Lost: The Top 19 DeFi Cryptocurrency Hacks of 2020

Key Takeaways

  • The DeFi surge in 2020 led to more than a dozen hacks over several months.
  • More than $50 million was lost due to bugs, exploits, and hacks.
  • Although some losses were recovered, DeFi users need to stay vigilant when interacting with applications.

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DeFi is nothing short of a revolution. Automated blockchain-based financial primitives open a world of possibilities to disrupt traditional finance and make it more accessible.

This immense potential attracted a massive wave of users and investors to the space. In a matter of months, the total value locked (TVL) in DeFi protocols reached more than over $13 billion

TVL on DeFi
Source: DeFi Pulse

Meanwhile, activity on the DeFi epicenter blockchain, Ethereum, skyrocketed. The benefits appear to be endless, too. 

Bringing financial activity on-chain allows for automation, trustless setups, and transparency. 

However, it also creates numerous attack vectors, impossible in traditional finance. 

DeFi Hacks

The majority of DeFi projects are open-source, meaning that code is easily accessible via GitHub for inspection both by well-intentioned and malicious users. If wrongdoers find bugs first, they can steal other users’ funds.

Besides bugs in code, DeFi applications are vulnerable to external exploits as well. DeFi’s efficiency mostly depends on composability, meaning that the more projects that are interconnected, the more value they can provide. Hence, exploiters can game the system and cause protocols to behave in ways not intended by developers.

The irreversibility of blockchain transactions exacerbates the situation. If hacks occur, funds are likely lost for good, though some projects will reimburse users from their pockets.

The following is a collection of over a dozen hacks and exploits within DeFi in 2020. 

The Top 19 DeFi Hacks of 2020

1. bZx – $954,000

Although DeFi experienced explosive growth after introducing the Compound liquidity mining program, the space has been brewing since…

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