Naoris Protocol, a prominent cybersecurity firm, has recently reported a significant increase in the number of cybersecurity hacks on Web3 and DeFi platforms during Q1 2023. The analysis reveals a total of 19 reported hacks in this period, as compared to 16 in Q1 2022 and 10 in Q1 2021.

Financial Impact

Between January 1st, 2023 and April 14th, 2023, 22 cyberattacks were reported, amounting to over $265 million in losses. The most significant single hack in Q1 2023 saw Euler Finance lose $197 million. Despite the increase in the number of attacks, the average amount stolen per attack dropped slightly to $13,287,684 in Q1 2023 from $16,203,571 in Q1 2022.

Targeting Protocol Logic

The most common form of attack during the first quarter of 2023 was targeting weaknesses in protocol logic, with 11 such hacks reported, totalling $230 million in losses. This is almost double the number of similar attacks in Q1 2022, which saw six protocol logic attacks amounting to $471.8 million in losses.

Ecosystem Attacks on the Rise

The analysis also highlighted four attacks in Q1 2023 targeting weaknesses in the interaction between multiple protocols, classified as Ecosystem attacks. There have been three more reported attacks of this type since April 1st. Additionally, two infrastructure attacks and two rug-pulls were reported.

A Comprehensive Database

OODA has been compiling a comprehensive Web3 incident database based on their research to categorize the compromises and document the root causes that affect cryptocurrencies, DeFi, NFTs, and Web3 in general. This database aims to provide insights into how innovators can develop robust cyber risk management approaches and reduce the potential for consequential attacks.