Euler Finance, a lending protocol which suffered a $200M hack last month, is facing an uphill battle. After miraculously recouping nearly all lost funds, the question is, can Euler recover from the attack? Data on the top five hacks of DeFi protocols says no. A survey of the top five hacks in dollar terms shows that each protocol’s total value locked is down by at least 96 since it was hacked. Overall TVL across DeFi decreased significantly less relative to each protocol’s TVL loss since each hack, suggesting that it’s not just depressed asset prices that are responsible for the dips. In the case of Euler Finance, DeFi’s most recent major hack, the project’s token is down roughly 28% since the announcement of a successful recovery on April 3, suggesting that investors are still not enthused about the project’s chances. There’s been personnel turnover too, with its head of risk stepping down on April 19. Michael Bentley, the co-founder and CEO of Euler Labs, the company behind the protocol, called the days after the hack “the hardest of his life,” on Twitter. In a follow-up with The Defiant, he said that the departure of Euler’s head of risk was not related to the hack. Flash Loans and Price Manipulations. Of course, each hack was different. Beanstalk’s involved a type of hyper-short loan called a flash loan, followed by a governance attack.
Full analysis : Most DeFi Protocols Fade After They’re Hacked.
No doubt, DeFi Protocols are the hardest hit by security incidences in 2022 and 2023. But it is worth noting that they are nowhere close to the amount lost in mainstream crypto security incidents. OODA has been compiling a comprehensive Web3 incident database based on our research to categorize what compromises are taking place as well as document the root causes that plague Cryptos, DeFi, NFTs, and Web3 in general. Tracking root causes provides comprehensive insights into how innovators can create robust cyber risk management approaches and reduce the potential for consequential attacks. You can access the OODA comprehensive Crypto Incident tracker here.
