One specific method of hacking decentralized finance (DeFi) protocols is on the rise, according to blockchain data platform Chainalysis.
In a new blog post, the market intelligence firm estimates that hackers stole a total of $386.2 million from DeFi protocols in 2022 using a type of attack known as “oracle manipulation.”
Oracle manipulation involves hackers artificially inflating the trading volume of a low-liquidity token on a DeFi protocol, which is designed to spike the token’s price.
Chainalysis notes that hackers will often use flash loans to secure the initial capital needed to inflate the token’s trading volume, then trade the designated token for a more stable crypto asset after pumping up the price.
The firm estimates there were 41 separate oracle manipulation attacks in 2022,
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