BNB and Ethereum chains are the most targeted by Web3 criminals, accounting for more than half of all losses. But what are BNB and Etherium? What’s a Web3 criminal? And should you be worried?
What’s a BNB chain?
A BNB chain is blockchain that supports different types of cryptocurrency, including BNB Beacon Chain’s native cryptocurrency of BNB Beacon Chain, as well as BEP20 tokens.
What’s an Ethereum chain?
Ethereum decentralized blockchain platform. This means that everyone in the network has a copy of the exact same data in the form of a distributed ledger. No one has to know anyone else in the chain (or trust tehm, for that matter) and if a member’s ledger is altered or corrupted in any way, it will be rejected by the majority of the members in the network. This peer-to-peer network securely executes and verifies application code, called smart contracts.
What’s a Web3 criminal?
Web3 is the third evolution of web technologies.
Web1 was the earliest form of the internet, which was used to simply search for and read information.
Web2 is the next iteration of the internet, which allowed for more participation and user generated content – think WordPress blogs and social media.
Web3 is the third phase of the web’s evolution and is based upon decentralised blockchains. Anonymity is a big feature of Web3. This is a reason why many believe it Web3 could see a spike in internet crime. And it looks like BNB and Ethereum blockchains will bear the brunt of this activity.
What’s the story?
Web3 criminals had a clear preference for exploiting the BNB and ETH chains, according to a data presentation by BanklessTimes.com. The site reports that the two blockchains accounted for 52% of all Web3 losses in Q3 2022. In total, the Web3 ecosystem lost over $428M in the quarter from hacking and other fraudulent activity.
BanklessTimes CEO Jonathan Merry attributes hacker preference for the two chains to their popularity. He explained the two host most DeFi projects providing malicious actors with a huge volume of targetable funds. Besides, these DeFi protocols often have vulnerabilities in their smart contracts, increasing their susceptibility to attacks.
Merry concludes, “The findings bring under sharp scrutiny the capacity of different Web3 projects to safeguard investor funds. Despite advancements in the sector’s security standards, hackers and fraudsters continue finding loopholes that they exploit. Clearly, the sector needs to do more to contain these threats.”
Should you be worried?
Despite the huge loss in funds, the data paints a positive picture of the Web3 ecosystem. Q3 2022’s figures indicate a 63% drop in the sector’s losses from the $1.15B it suffered in Q3 2021.
Hacks accounted for 93% of the lost funds, with fraud making up the remaining 7%. Hackers managed to make away with $398.9M from 30 different exploits. That’s a 67% decline from the sector’s losses to such acts in Q1 2022 ($1.22B).
DeFi Remains a Hacker’s Favorite
It’s been a tough quarter for Defi as it lost $423,423,783 across 36 incidents in Q3 2022. This is a significant decrease from the $670,608,280 in losses it suffered across 49 incidents in Q2, but it’s still a substantial number. The silver lining is that the number of Defi incidents has decreased by 36.8%.
On the other hand, CeFi has seen a huge increase in total losses too. The full story and statistics can be found here: BNB and Ethereum Chains Are the Most Targeted by Web3 Criminals Representing 52% Of Losses
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