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DeFi Sees 40% Fewer Financial Losses as CeFi Struggles With Breaches
The decentralized finance (DeFi) sector has witnessed a significant decline in financial losses, with theft-related losses plummeting by 40% compared to the previous year. This remarkable drop is attributed to enhanced security protocols, including robust bridges and advanced cryptographic techniques.
On the other hand, the centralized finance (CeFi) sector has faced a stark reality, with an alarming increase in security breaches. The annual Web3 security report by Hacken revealed that CeFi losses surpassed $694 million in 2024, a staggering figure that highlights the need for immediate action.
The decline in DeFi-related losses is a testament to the industry’s commitment to strengthening its security infrastructure. The improved bridge security and cryptographic techniques have significantly reduced the risk of thefts, resulting in a substantial decrease in financial losses.
In contrast, CeFi has faced a stark reversal. Despite their emphasis on centralization, CeFi platforms have become more vulnerable due to the lack of robust security measures. The devastating attacks on DMM and WazirX, resulting in $305 million and $230 million losses respectively, serve as stark reminders of the importance of private key management and advanced monitoring systems.
Hacken CEO Dyma Budorin warned about the “critical gaps” in CeFi’s operational security, emphasizing the urgent need for better private key management and more sophisticated monitoring systems. The growing threat from hackers, including North Korean groups, underscores the pressing requirement to bolster security measures across both DeFi and CeFi sectors.
The contrast between DeFi and CeFi is stark, with the decentralized sector making significant strides in improving its security posture while the centralized counterpart has shown a concerning lack of progress. As we move forward, it is imperative for both sectors to prioritize cybersecurity to protect users’ funds and maintain trust in the industry.
Sources:
* “DeFi security improves as theft-related losses drop 40% | CryptoSlate”
* “CeFi Security Report: 2024 Highlights the Risks and Consequences of Centralized Finance”
Source: crypto-economy.com
