Aug 13, 2021 • 6M

Letter #33: PolyNetwork and the Biggest Hack in DeFi History

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Joshua Guest
Your one-stop shop for Bitcoin education!
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Dear Readers,

Various areas of “Crypto” have exploded in popularity over the past several years, and Decentralized Finance (DeFi) has certainly seen its fair share of that growth: the total amount of money sitting in DeFi applications has ballooned from less than $1 billion U.S. dollars in May 2020 to around $80 billion as of this writing.

As DeFi has grown, so too have the risks associated with using it. Whether from flaws in the protocols’ software or exit scams perpetrated by the entities to which we entrust our Bitcoin, losses have mounted for users across the DeFi landscape.

Perhaps the most common risk to DeFi protocols and their users is that of external hacks. CipherTrace, a leading blockchain analytics company, estimates that over $350 million USD worth of assets were stolen from DeFi during just the first seven months of 2021. That number was quickly dwarfed earlier this week by a single hack perpetrated against an up and coming protocol in the space: PolyNetwork.

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