Certik is a Blockchain security and auditing company. It has revealed that decentralized financial protocols are most vulnerable to hacks due to centralization in 2021. This data is present in Certik’s latest report, where the company also examines the growth of defi in 2021, and how other chains such as Avalanche and BSC rose as alternatives to Ethereum’s high fees.
In 2021, $1.3 billion will be spent on centralization costs and defi protocol implementations
Certik, an auditing and security firm that specializes in blockchain, released a new report, which revealed centralization problems in defi protocol were hackers’ most frequent attack vector in 2021. Single points of failure were used to exploit $1.3 million, according to Certik. Certik performed 1,737 smart contracts audits between 2021 and identified 286 discrete centralization vulnerabilities. According to the report:
DeFi’s ethos is against centralization and presents major security threats. Malicious insiders and hackers can exploit single points of failure.
BZX was one of these protocols. In November, an attacker used an email with malicious macros to hack two private keys. At that point, the attacker gained control over $55 million of this protocol. This attack is part of what company calls privileged ownership vulnerability.
Certik on Multichain Tendencies and Defi Growth
It also acknowledges the tremendous growth in defi environments last year. Certik reports that volume traded on decentralized exchanges (dex), total defi value in protocols, quadrupled and revenue for Ethereum has skyrocketed. According to the report, Ethereum’s growth has been acknowledged:
The smart contract-driven and decentralized Ethereum applications are attracting a lot of attention. DeFi, NFTs, ENS (Ethereum Name System), and others have contributed to this increase.
However, due to the challenges Ethereum has faced in scaling, a number of competitors managed to take a third of Ethereum’s defi dominance. Certik states that Binance Smart Chain, Solana, Terra, Avalanche, Fantom, and Polygon were the more popular chains chosen as alternatives for users’ defi activities.
Even though Ethereum block space trading is at a premium price, it reached $153 billion TVL. The decentralization debate is now more complicated due to user migrations to other chains. Solana (one of the chains that is supposed to be moving to replace Ethereum) has experienced constant difficulties, as it was formally acknowledged by their team.
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