Decentralized finance (DeFi) may be the hottest trend in the cryptocurrency world, but that does not make it impervious to cybercrime. If anything, you could argue that DeFi projects are at greater risk of being hacked now because they are constantly in the news cycle, and hackers always love to learn about new potential targets.
The EasyFi protocol is an example of a DeFi project that recently fell victim to a cross-chain attack. In the short history of DeFi technology, no other project had suffered such great losses. At the time Easyfi was hacked, the losses were equivalent to $120 million. In and of itself, DeFi is supposed to add yet another layer of security to blockchain networks, but this technology has quite a few moving parts, and anything can go wrong at any time.
You would think that DeFi would not be particularly vulnerable to cybercrime in 20211, especially when considering that major tokens such as Bitcoin, Ethereum, and Bitcoin Cash have not experienced significant attacks on their respective blockchain networks; however, it is important to remember that DeFi projects work as side chains that make them more visible to potential attackers.
EasyFi is staying classy and doing the right thing in terms of responding to the attack. The development team has rolled out a compensation plan that will include issuance of future tokens that can be transferred to the digital currency wallets of users who were affected by the cyber attack. An interesting tidbit of information about this incident is that hackers made a mistake in terms of executing the second part of their nefarious plan. The thieves tried to be their own fence when they attempted to exchange the stolen tokens; however, they ran into the issue of low liquidity at the exchanges that would have handled their transactions. In other words, the hackers did not get away with the amounts they were hoping for.
The DeFi community is keeping a close eye on how this EasyFi situation unfolds. Some analysts think that poor security with regard to storing cryptographic keys may have played a part in the heist, but EasyFi has not commented on this issue.