DeFi Gets Safer, CeFi Faces Growing Security Woes in 2024

According to the Web3 Security Report, released annually by blockchain security firm Hacken, DeFi (decentralized finance) financial losses dropped by 40% in 2024. While the sector lost $787 million in 2023, this year losses amounted to $474 million. 

What led to improvement? The significant reduction was mainly due to improved protocols and fewer bridge exploits. The industry works much to improve the quality of its instruments. 

It would be great news if not for the poor performance of the CeFi (centralized finance) sector, which spoils the overall picture. Breaches of centralized exchanges doubled primarily due to access control vulnerabilities. The amount of losses in CeFi is $694 million this year. Another wide-spread issue is high-profile hacking. Notorious cases include Japan's DMM Exchange and India's WazirX Exchange.

These numbers paint a clear picture. DeFi is tightening its defenses, while CeFi struggles to address vulnerabilities, facing mounting challenges from a rising wave of security threats. 

It’s a stark reminder of security issues in the crypto space. For me, this highlights the importance of taking control. Trust, after all, is a double-edged sword. Why centralized exchanges have grown complacent remains a mystery to me. Fixing their glaring vulnerabilities would likely take less effort than maintaining them.

It’s a signal for crypto enthusiasts who shouldn’t rely solely on centralized platforms for asset storage. It’s not the safest bet. Consider taking greater control of your funds. It can be done through hardware wallets, self-custody solutions or decentralized platforms. It may seem like extra effort, but they give you the peace of mind that no breach or hack can take away. At the end of the day, your assets are your responsibility.

#Defi #CeFi #security