Decentralized finance (DeFi) security saw a 40% reduction in financial losses in 2024 compared to the previous year, attributed to enhanced protocols, stronger bridges, and advanced cryptographic measures. According to the annual Web3 Security Report by block security firm Hacken, DeFi’s improved security measures contrasted with a challenging year for centralized finance (CeFi).
CeFi experienced a significant increase in breaches, with losses reaching $694 million in 2024, more than double the previous year. Centralized exchanges became targets for access control vulnerabilities and other security risks. The report highlights the stark difference between DeFi’s progress and CeFi’s struggles, shedding light on the vulnerabilities of centralization.
In 2024, DeFi saw a notable decrease in financial losses, dropping from $787 million in 2023 to $474 million. Bridge-related exploits, a historical vulnerability in DeFi, decreased from $338 million to $114 million. Despite advancements like Multiparty Computation (MPC) and zero-knowledge proofs (ZKPs), challenges remain, with access control vulnerabilities contributing to nearly half of all losses.
On the other hand, CeFi experienced a surge in breaches, with losses totaling $694 million in 2024, attributed to access control exploits. Incidents like the DMM Exchange and WazirX hacks, involving compromised private keys and multisignature vulnerabilities, resulted in significant thefts from the exchanges. Hacken’s CEO emphasized the need for stricter key management practices and automated monitoring systems in CeFi security.
The significant difference in financial losses between DeFi and CeFi sectors underscores the need for improvement in both industries. Hacken’s CEO emphasized the importance of addressing security gaps and adopting better practices to mitigate risks. The report’s findings align with Chainalysis’ report, which revealed that North Korean hackers stole over $1.3 billion in crypto assets across 47 incidents in 2024.