The second trimester of 2022 was one for the books in the midst of a tumultuous period of what I like to call market madness, and the evidence just keeps piling up for the crypto markets. According to a new report, the second quarter was filled with massive crypto “losses” across the entire Web3 ecosystem, approximately 97% of which were the result of hacks.
Immunefi’s Crypto Losses Q2 2022 report identified $670,698,280 in losses in Q2, up 52% from $440,021,559 in the same period in 2021.
Most of those losses were limited to just four hacks: decentralized stablecoin protocol Beanstalk lost $182 million; layer 1 blockchain bridging protocol Horizon Harmony lost $100 million; and decentralized finance (DeFi) protocols Mirror and TribeDAO lost $90 million and $80.34 million, respectively.
“With every disruptive technology, there is a process of iteration, and building a bigger and better DeFi platform currently relies more on speed than security.” Co-founder of Flux Daniel Keller
While $670 million is a huge number, total crypto losses are down 45.5% from around $1.23 billion in Q1 2022, according to a previous report by Immunefi.
However, it should be noted that the Q1 spike is a little off balance due to the largest DeFi hack to date – a massive $625 million hack on the Ronin network in March. Without this hack, first-quarter losses would have been more in line with second-quarter losses.
But as we enter the third quarter of the year, some market participants believe that hacks are a trend that will continue regardless of current market conditions.