2022 was one of the worst years in recent memory for the crypto space. While there have been many positive developments, there have also been huge losses, hacks and scams.
dapradar recent report Discover some important crypto market events, and security issues that shook the markets in Dapp World 2022. Before looking at the worst parts, let’s highlight some of the positive developments in 2022.
crypto positive in 2022
The blockchain space crossed several milestones in 2022. Some of them include technological and simple regulatory upgrades. Milestones to be achieved in 2022 include the following;
- full implementation and merger of Ethereum POS network in September
- Implementation of the Cardano Vasil upgrade
- Creation of a new regulatory framework for crypto in 2022
- Registration of a multiple cryptocurrency exchange network
crypto hit by attacks
The DappRadar report traces the performance of hosting Dapps and blockchain throughout the year. However, their primary focus was on hacks and vulnerabilities by various Dapps.
Hacks and attacks have been explored within the industry to learn from the vulnerabilities. DappRadar reports that there were a number of attacks involving crypto networks in 2022, totaling around 312.
Data from DappRadar indicated that the losses recorded for the entire year reached almost $48 billion. Although the amounts recorded were high, according to their analysis, most of the damage was driven by a small number of strikes.
The report shows that most of the funds were not lost through decentralized platforms, but actually on centralized platforms like LUNA.
Except for Terra, the quantum of scams was low.
Apart from Terra, 2022 scams have reportedly generated relatively little loss. In fact, according to the analysis, the total volume of scams was significantly lower than that of Terra.
An analytical chart from DappRadar indicates that between January and April, the lost funds in the Dapp landscape totaled nearly $1 billion. The number of scams per month ranged between 9 and 25 in the four months.
After the collapse of Terra in May, market conditions tightened, and since then there have been several major scams and crashes. A deficit of $2 billion was recorded in June. Later, the deficit reached $1 billion in October.
As the year almost came to an end, in early November, more massive crypto scams took place, with $4 billion lost. In this entire year, there were an average of 25 hacks and scams every month. According to the analysis, the average monthly loss was $345 million.
Centralized network recorded more losses
The DappRadar report also states that most of the attacks within the year took place on centralized networks. Centralized platforms like LUNA and other crypto exchanges suffered the most damaging attacks, totaling $44 billion in the year.
Furthermore, the specifics of blockchain covered in the report are deeply explored.
The report states that on average, the amount stolen per hack was 30% higher on the Ethereum blockchain than on the BNB chain. However, the amount per hack was higher than that of the Ethereum blockchain. bnb On-chain, the total value indicates that more was stolen from the BNB chain ($1.578 billion) than from Ethereum ($1.02 billion).
carpet pulling became popular
According to the report, there were around 119 incidents involving crypto rug pulling. Interestingly, the amount stolen was close to $200 million, indicating an average loss of $1.6 million per rug.
access control violation
The next most common hack was the access control breach, with 30 incidents occurring throughout the year, and a total loss of $1.02 billion. An access control breach is simply unauthorized access to a blockchain network.
flash loan attack
DappRadar also reported a number of instant loan attacks throughout the year, with approximately $240 million lost to the industry from around 20 incidents. 20 exit scams were reported, one popular type of rug pull, registering as much as $50 million in damage.
Common Exploits Hack, Phishing and Oracle Incidents
There were about nine phishing attacks that only cost the industry $0.01 billion. Losses totaling $0.05 billion were also reported in approximately seven Oracle incident reports. Simple exploit hacks peaked at 19 incidents in the year, causing $220 million in losses throughout the year.
The DappRadar chart provides a complete view of attacks throughout the year. As seen, rug pulls were the highest, but the earned value is relatively low compared to other losing fund models.
Top crypto scams highlighted by DappRadar
terra luna saga
Biggest and costliest attack in the crypto ecosystem in 2022 terra lunait’s falling. According to statistics, the collapse of the Terra Luna network resulted in a loss of about $40 billion in just a few days. Whatever happened in 2022 cannot even remotely be compared to the damage caused after the Terra explosion.
The timing of the events before and after the fall of Terra is surprising. The trouble all started in early May when the UST stablecoin, the Terra network’s native stablecoin, lost its $1 peg. For the purpose of clarity, 1UST had the same value as $1. Therefore, this stablecoin can be used as a direct replacement for the dollar in online markets.
However, based on reports, the UST peg dropped from its $1 dollar peg to as low as $0.3, $0.7 within a few hours. Due to the de-pegging, LUNA, the backing coin of UST, immediately lost value. In a matter of hours, LUNA fell from $87 to less than a dollar. In fact, as of May 13, the price of LUNA had dropped to around $0.0012. The $40 billion network fell below $1 million in a matter of days.
Reports indicate the possibility of dishonesty on the part of other investors including market manipulation. However, nothing conclusive has been shown to prove wrongdoing.
The collapse of Terra Luna resulted in a huge loss of $40 billion in just two crypto tokens. However, reports indicate several minor rug pulling and exploits during the year. Dapp Radar reports that this drop alone was larger than all DeFi scams recorded in 2022 combined.
fall of origin
the fall of Produce According to a report by DappRadar, the network is considered to be the second biggest scam of the year 2022. The fall of Genesis resulted in massive losses of around $2.8 billion.
While the platform’s problems began months earlier, it made its final bow sometime in November. In fact, in late November and early December, Genesis said that obtaining a $1 billion loan would help keep them afloat.
However, before all these problems, Origin was already in a deal to be defended by FTX. Furthermore, the lender had $175 million in the FTX account, so was forced to prevent any withdrawals due to pre-existing market conditions.
Celsius network explodes
Another network that died in June this year was the popular lender Celsius, Upon its death, Celsius reported a loss of $1.2 billion on June 13. This lending and earning platform has filed for Chapter 11 bankruptcy, reporting a $1.18 billion shortfall on its financial statements.
Celsius had assets of $4.3 billion, with liabilities of $5.5 billion.
Bankruptcy proceedings continue to this day, and Celsius is still spending large amounts of money, despite publicly announcing a lack of operating funds. The collapse of the Celsius network is the third largest crypto network failure recorded in 2022.
ftx falls apart
a few weeks ago, ftxOne of the three largest crypto exchanges globally, suffered one of the industry’s most widely watched failures. The exchange fell from glory, was nearly saved by Binance, but ended up filing for bankruptcy.
FTX Group was a collection of several crypto-focused brands, and had relationships with most of the major crypto exchanges.
The investigation into this fall has raised more questions than answers, particularly related to the financial transactions of the dead exchange. The most recent reports suggest that the exchange service provider conducted fraudulent transactions using its self-created token, FTT, and funded purchases of the Apex Network.
Bitcoin sheik is a name given to Ponzi scheme runner Francisco Valdevino da Silva, who stole approximately $766 million from investors, promising them high returns. According to reports, many celebrities and football players are among the biggest losers of this scheme. This scam is undoubtedly the biggest scam of the year.
Axi Infinity’s Ronin Bridge exploit
ronin is associated with exploitation xi infinity The Dapp world in 2022 had one of the biggest problems. To keep transaction fees low, Axie Infinity created Ronin Bridge. However, Ronin Bridge opened an unanticipated vulnerability that led to a massive hacking. The hack stole $578 million (173.6k ETH). It was later revealed that the Lazarus hack group was involved in the attack.
bnb chain recovered
A few weeks ago, in mid-October, there was a massive hack on the BNB chain, which resulted in the loss of nearly 2 million BNB tokens, worth $586 million. While the attacker manipulated and could have gotten away with $586 million, the report states that validators stalled the network. In this way, the attacker only stole $150 million.
Other issues in the Chainalysis report
Ethereum to remain the dominant protocol in 2022
As DappRadar reports, Ethereum remains the most dominant decentralized application host in 2022. Ethereum is the second largest blockchain ecosystem after bitcoin and the most prominent host for smart contracts.
Statistical analysis indicates that despite massive problems in the crypto landscape, Ethereum maintained its superiority over every other decentralized application host. According to the report, the TVL of Ethereum for the DeFi protocol stood at $32.12 billion, while other platforms were indicating a TVL of around $39.65 billion.
Ethereum’s dominance stems from the fact that it is a blockchain focused solely on hosting decentralized applications. However, a number of other networks are set to rise in 2022, with some gaining strong market share.
While Ethereum dominance is almost 100%, DappRadar reports that dominance dropped to 74.56% from 2021 values. Reports indicate that Binance Smart Chain reclaimed its position as the second largest DeFi host, recording a 62.5% decrease to $6.5 billion.
Gaming, gambling and DeFi were the most popular dapp categories
The report also explored various subcategories of decentralized applications and their performance in 2022. According to DappRadar, Dapps can be sub-categorized into DeFi, Games, and Gambling.
DappRadar’s analysis indicates that in 2022, gaming decentralized applications will outpace other market competitors throughout the year. Therefore, according to DappRadar, gaming Dapps dominated as the most prevalent category. For example, charts from DappRadar show that game Dapps averaged 622,620 dUAW, increasing by 85% to 1,152,255 dUAW in 2022.
The charts also suggest that DeFi Dapps registered a modest growth of 2% in unique active wallets to 652 thousand wallets in 2022.
One of the biggest gainers this year was gambling Dapps, which reported a 100% increase in UAW, from 53k to nearly 110k. This indicates that the world of gambling has grown two-fold within the blockchain space.
Other subcategories also grew modestly over the year, with NFTs recording 33% more UAVs in 2022 to 178k. Interestingly, charts from DappRadar show that the high-risk category of decentralized applications reported a 291% increase in UAW from 2021 to 2022. In this period, high-risk Dapps registered 145k wallets.
This guide explores the insecurity issues highlighted by DappRadar affecting crypto networks and investors in 2022. The problems caused huge losses, with the total running up to $48 billion.
The DappRadar report also points to the problem of insecurity and uncertainty that still exists in the cryptocurrency landscape. However, investors are still losing out due to network mismanagement, hacking, and more.
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