New data from DeFiLlama shows that losses from hacks on the EVM and Solana-based decentralized finance (DeFi) markets have been surprisingly low over the past year, at just three dollars for every $10,000 deposited. The analysis, cited by Keyring Network founder Alex McPharlane, provides a clearer picture of the real risks faced by users in the sector.
Quantifying the risk
According to the data, total hacking losses from the DeFi lending protocols, excluding bridge attacks, were approximately $30.9 million over the past twelve months. Against an average Total Value Locked (TVL) of $99.6 billion, this means a loss rate of roughly 0.03%, or three basis points. McPharlane emphasized that this figure is already low and the net loss is even smaller when successful fund recovery is taken into account.
Chargebacks reduce the net impact
Notable recoveries, such as fully recovering funds stolen from Euler Finance in a payday loan attack, further reduce effective costs for users. This recovery shows that while security issues remain a concern, the ecosystem’s ability to respond and recover assets is improving.
Implications for insurance and risk management
The analysis suggests that hacking risks in the DeFi lending markets are becoming increasingly quantifiable. This development is important for the feasibility of insurance products and risk management strategies. Now that loss rates are measurable in basis points, protocols and underwriters can improve price coverage, potentially making DeFi lending more accessible to both institutional and retail users.
Conclusion
The data challenges the perception that DeFi lending is inherently high risk, showing that actual losses from hacks are minimal relative to the capital secured. As the industry matures, this quantifiable risk profile could pave the way for broader adoption and more sophisticated risk mitigation tools.
Frequently asked questions
Question 1: What does the analysis say about the losses from DeFi lending hacking?
The analysis found that losses from hacks on the EVM and Solana-based DeFi lending markets averaged $3 per $10,000 deposited over the past year, or a loss rate of approximately 0.03%.
Question 2: What data source was used for the analysis?
The data comes from DeFiLlama, a leading analytics platform for DeFi protocols, and quoted by Keyring Network founder Alex McPharlane.
Question 3: Why is this data important to DeFi users?
It shows that hacking risks are quantifiable and relatively low, supporting the development of insurance products and risk management strategies, potentially making DeFi lending more secure and attractive.