DeFi Users on Edge After Three Security Incidents in Five Days

According to Blockworks, the first week of 2024 has seen three security incidents in the decentralized finance (DeFi) space, causing concern among users. South Korean cross-chain bridging project Orbit Chain lost $80 million in assets to hackers who raided the protocol's multi-signature wallet. The team is now working with domestic and international law enforcement to determine the next steps and ways to execute a viable recovery plan. Two days after the Orbit attack, cross-chain money market Radiant Capital lost an estimated $4.5 million in a flash loan attack. A bad actor manipulated the liquidity index of a freshly created native USDC market on Arbitrum to rapidly siphon crypto from the protocol, leading to pauses in lending and borrowing activities through Radiant. The attack left Radiant Capital with bad debt, and the team has since taken steps to re-capitalize, hoping that users could regain access to their deposits. The third incident involved liquidity management platform Gamma Strategies, where an estimated $3.4 million was lost. The attacker manipulated Gamma's accounting mechanisms to mint an excess of liquidity provider tokens, allowing them to illegitimately withdraw more than 1,300 ETH. Gamma has since shut off deposits on public-facing vaults to prevent further attacks. These continued exploits have raised concerns about the future of the DeFi space, with industry experts calling for more security audits and a change in the current paradigm.