Footprint Analysis: Over 600 Projects Earned REKT in 2021, $2.2B Loss | Annual Report 2021

In the crypto world, there are 4 main ways to earn REKT (“experiencing significant financial loss due to suspicious misconduct” in crypto terms).

  • A exit scam it is a project that simply vanishes with investors’ money during or after its launch.
  • TO jar of honey lures investors into vulnerable contracts that contain hidden traps that lock their assets
  • A exploit attack exploits vulnerabilities in applications, networks and operating systems.
  • TO flash loan attack It involves getting a quick loan (a form of unsecured loan) from a lending protocol and manipulating the market in your favor.
Footprint Analysis: Summary of REKT in 2021
Footprint analysis: REKT Overview in 2021

According to Footprint Analytics, more than 600 projects obtained REKT in 2021. A third of these were registered to find lost funds, accumulating the amount of $2.2 billion.

Compared to 2020, approximately 450 more projects were hacked, resulting in the loss of 10 times more funds. As for the data, here are the results.

Footprint analysis: number and fund of annual REKT
Footprint analysis: Annual REKT Number and Fund

Finding 1: Exit Scams and Honeypots Were the Most Popular Crypto Scams

Footprint analysis: number of REKT by type, annual comparison
Footprint analysis: REKT number by type, annual comparison

Exit scams and honeypots accounted for 50% and 30% of all scams in 2021, respectively. Compared to the previous year, the percentage of honeypots has increased by 16%.

Footprint analysis: distribution of REKT by type, annual comparison
Footprint analysis: REKT Distribution by type, annual comparison
Footprint Analysis: Monthly Exit Scams by Chain
Footprint Analysis: Monthly output chain scams

Most of the exit scams occurred between August and September, mainly at BSC and Polygon.

Footprint Analysis: Monthly Honeypots by Chain
Footprint Analysis: Monthly Honeypots by chain

Regarding honeypots, September was the most severe month, especially in BSC, accounting for almost 70% of this type of scam.

Finding 2: BSC made up 53% of REKT attacks

Compared to the previous year, the number of attacks on BSC increased from 9 to 319. Polygon, a new blockchain in 2021, also received 12% of the worst part.

Footprint Analytics: Number of REKTs per chain in 2020 and 2021
Footprint analysis: REKT number by Chain in 2020 and 2021

Exit scams and honeypots were the two main types of attacks against BSC. It is worth noting that the former had a big bang in August, probably due to the rapid growth in the number of projects in BSC and the funds accumulated in these projects. This will be explained later in the article.

Footprint Analysis: Number of REKT by Type of BSC
Footprint analysis: REKT number by Type of BSC

Finding 3: 67% of all lost funds occurred on Ethereum

Although most of the attacks occurred on BSC, more funds were lost on Ethereum, mainly through exploitation attacks and flash loans. The amount of money lost grew by 500% compared to 2020.

Footprint analysis: amount of funds lost by chain and type in 2020
Footprint analysis: Lost fund Quantity by chain and type in 2020
Footprint analysis: amount of funds lost by chain and type in 2021
Footprint analysis: Lost fund Quantity by chain and type in 2021

Here is the list of fund loss attacks:

Of the previous attacks, 50% of them have lost between $10,000 and $1 million of funds, another 35% were between $1 million and $50 million.

Poly Network was the biggest victim of all, losing $602 million to an exploit in August. The biggest victim of the flash loan was Cream Finance, where $130 million was lost.

Footprint analysis: attacks causing losses of more than 50 million
Footprint analysis: attacks that cause Lost more than 50 million

Why are scams and attacks thriving in 2021?

One of the reasons for the increasing number of attacks stems from the rapid growth of blockchain DApps. The current number of DeFi protocols reached 977 across 86 chains.

Footprint analysis: TVL of all DeFi protocols
Footprint analysis: TVL of all DeFi Protocols
Footprint analysis: number of DeFi protocols
Footprint analysis: Number of DeFi Protocols

Another reason is that more and more hackers have noticed the rise of TVL from crypto and blockchain projects.

Why did BSC see the most attacks?

Most projects on BSC, a Layer 2 chain to Ethereum, have been built simply by forking the Ethereum protocols. Many of these have little innovation, long-term development plans, or an understanding of the basic logic behind the code.

These factors make projects vulnerable to hackers, who can easily discover loopholes in a protocol. Once the TVL accumulated in similar projects grows enough, it’s time for them to make attacks.

Also, the low gas fees at BSC make carrying out attacks much more feasible.

Footprint Analytics: TVL of BSC in 2021
Footprint analysis: TVL of BSC in 2021
Footprint Analytics: TVL of BSC in 2021
Footprint analysis: TVL of BSC in 2021

Thoughts on not getting REKT

In 2021, more and more people entered the crypto world.

Some bought some tokens, some invested in DeFi projects, and some still bought NFTs, or even moved in next door to celebrities in the metaverse. Widespread adoption of this technology means more hacking, scams, and attacks.

Therefore, DeFi developers should focus more on security awareness, such as performing logical checks on code to rule out potential vulnerabilities and seeking help from professional audit teams.

Investors will need to do more due diligence as the thriving blockchain industry attracts more bad actors. If you’re just starting out, watch out for:

  • Projects with crazy incentives.
  • Suspicious links in group chats, direct messages from strangers, or search engine results. Never send your private key or seed – This is the most important rule to protect yourself from phishing attacks.
  • Airdrops that claim to give you astronomical returns for your tokens.

The only way to not have REKT is to stay calm and think clearly.

Benefits for CryptoSlate Reader

From January 11 to 25, 2022, click this hyperlink on CryptoSlate to get a 7-day free trial of Footprint Analytics! New users only!

Date and author: January 13, 2022, [email protected]

Data source: REKT overview in 2021

This article is part of our Year in Review series.

What is footprint analysis?

Footprint Analytics is an all-in-one analytics platform for blockchain data visualization and insight discovery. Cleans and integrates on-chain data so users of any experience level can quickly start researching tokens, projects, and protocols. With over a thousand dashboard templates plus a drag and drop interface, anyone can create their own custom charts in minutes. Discover blockchain data and invest smarter with Footprint.

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