While 2020 has been a landmark year for the crypto space, there have been a few notable letdowns. Despite the growing mainstream acceptance of virtual currencies, some governments are still creating policies that stifle innovation, placing their countries at a disadvantage in the emerging digital economy.
Decentralized finance was a major talking point going into the year, and the market segment did not disappoint, with massive growth in investment throughout 2020. However, rogue actors continuously deployed elaborate scams, riding on DeFi hype to fleece victims.
Apart from that, several projects suffered opportunistic profiteering attacks with flash loan exploits and arbitrage, draining funds from liquidity pools. While there is an argument for not calling these events “hacks,” they offer in stark relief some of the growing pains of the DeFi space as participants work toward actualizing the end goal of democratizing finance.
Still, in 2020, crypto exchanges are leaving substantial funds in vulnerable hot wallets. While cryptocurrency theft declined significantly during the year, reports of platforms getting hacked and user deposits and data being siphoned is no less a setback than it was in previous years, even if such news hardly affects the markets these days.
Regarding the exchanges, 2020 is coming to an end, and several high-profile platforms have yet to adopt protocol improvements such as Segregated Witness, or SegWit. Users are still paying more in transaction fees than they should, while some argue that the exchanges continue to operate like altcoin casinos.
Mounting DeFi scams
Back in February, Cointelegraph reported that DeFi was pivoting from a niche market and moving toward mainstream adoption. At the time, the total value of Ether (ETH) locked in the market had recently crossed the $1 billion milestone.
Currently, the total value locked in DeFi is almost $14 billion, with an expanding cast of projects and protocols offering diverse services such as…