In the crypto world, there are 4 main ways you can get REKT (“experience significant financial loss due to shady malfeasance”—in crypto terms.)
- An exit scam is a project that simply vanishes with investors’ money during or after going live.
- A honeypot lures investors into vulnerable contracts that contain hidden traps locking their assets
- An exploit attack takes advantage of vulnerabilities in applications, networks, and operating systems.
- A flash loan attack involves taking out a flash loan (a form of uncollateralized lending) from a lending protocol and manipulating the market in your favor.
According to Footprint Analytics, over 600 projects got REKT in 2021. One third of these were recorded to encounter fund loss, accumulating to the amount of $2.2 billion.
Compared to 2020, approximately 450 more projects were hacked, causing 10x more funds being lost. Looking at the data, here are the findings.
Finding 1: Exit Scams and Honeypots Were the Most Popular Crypto Scams
Exit scams and honeypots accounted for 50% and 30% of all scams in 2021, respectively. Compared to the previous year, the percentage of honeypots has increased by 16%.
Most exit scams happened between August and September, mostly on BSC and…
