According to a report by security platform Immunefi, approximately 46% of cryptocurrencies lost due to exploits in 2022 were a result of traditional Web2 flaws. The report categorized the Web3 exploits and concluded that almost half of them originated from “infrastructure” or centralized elements. This highlights the importance of addressing these vulnerabilities to secure the crypto ecosystem.
Web2 Flaws Leading to Crypto Losses
The report from Immunefi sheds light on the vulnerabilities in Web2 infrastructure that have resulted in significant crypto losses. Web2 refers to the traditional internet, where most websites and applications operate.
Immunefi’s analysis shows that cybercriminals are exploiting flaws in the centralized infrastructure of the traditional web to siphon off cryptocurrencies. These flaws could include weaknesses in hosting services, data centers, cloud storage, or centralized exchange platforms.
The reliance on these centralized elements makes them attractive targets for hackers. By identifying and exploiting these vulnerabilities, cybercriminals can gain unauthorized access to crypto wallets and steal funds.
The Need for Secure Web Infrastructure
Securing Web2 infrastructure is crucial to protecting the crypto ecosystem. By addressing the flaws in centralized elements, the industry can reduce the risk of exploitation and safeguard users’ funds.
To achieve this, developers, organizations, and platform providers must prioritize security measures. Enhancing the security of hosting services, data centers, and cloud storage is essential to protecting against cyber threats. Additionally, centralized exchanges should implement robust security protocols to prevent unauthorized access to users’ wallets.
Web3 Exploits and Their Impact
The Immunefi report also studied Web3 exploits and their impact in 2022. Web3 refers to the decentralized web that utilizes blockchain technology and smart contracts. While Web3 offers greater security and transparency compared to Web2, it is not completely immune to vulnerabilities.
According to the report, the remaining 54% of crypto losses from exploits in 2022 were attributed to various Web3 vulnerabilities. These vulnerabilities could stem from flash loan attacks, decentralized finance (DeFi) protocols, or smart contract bugs.
Flash loan attacks, for example, involve exploiting the ability to borrow and repay funds within the same transaction. By taking advantage of temporary liquidity, hackers can manipulate prices or perform malicious actions.
DeFi protocols also fall prey to vulnerabilities, with smart contracts sometimes containing bugs or loopholes that allow attackers to exploit them. These vulnerabilities have resulted in substantial financial losses for users.
Addressing Web3 Vulnerabilities
To combat Web3 vulnerabilities, there is a need for increased security audits, bug bounties, and improvement of smart contract coding practices. Developers and blockchain projects should prioritize rigorous testing and auditing of their code to identify and fix vulnerabilities before deployment.
Bug bounties, where individuals are rewarded for discovering and reporting vulnerabilities, can play a crucial role in identifying and patching weaknesses in decentralized protocols. By incentivizing white hat hackers to find and report bugs, projects can benefit from external expertise and strengthen their security measures.
Conclusion
The Immunefi report highlights the significance of addressing both traditional Web2 flaws and Web3 vulnerabilities to improve the security of the crypto ecosystem. By securing the centralized elements of the web infrastructure and implementing rigorous security measures in decentralized protocols, the industry can reduce the risk of exploits and protect users’ funds. Furthermore, measures such as security audits, bug bounties, and improved coding practices can help identify and address vulnerabilities in a proactive manner. Overall, the crypto industry must remain vigilant and proactive in its efforts to enhance security and build trust among users.