The second quarter of 2022 was one for the books amid a tumultuous period of what I like to call market madness, and the evidence continues to pile up for the crypto markets. Q2 was fraught with massive crypto “losses” in the web3 ecosystem, about 97% of which were the result of hacks, according to a new report.
Immunefi’s Crypto Losses in Q2 2022 report identified $670,698,280 in losses in Q2, up 52% from $440,021,559 in the same period for 2021.
Most of those losses were limited to just four hacks: the decentralized stablecoin protocol Beanstalk lost $182 million; layer-1 blockchain bridging protocol Harmony Horizon lost $100 million; and decentralized financial (DeFi) protocols Mirror and TribeDAO lost $90 million and $80.34 million, respectively.
“With any disruptive technology there is a process of iteration, and building a bigger and better DeFi platform is currently based more on speed than on security.” Flux co-founder Daniel Keller
While $670 million is a huge number, total crypto losses fell 45.5% from about $1.23 billion in the first quarter of 2022, according to an earlier report from Immunefi.
It’s worth noting, though, that the first quarter spike is a bit skewed due to the biggest DeFi hack to date — a significant $625 million hack on the Ronin network in March. Without that hack, Q1 losses would have been more in line with Q2.
But as we enter the third quarter of the year, some market players believe that hacks are a trend that will continue regardless of current market conditions.