- In 2022, the NFT market value surged 122 times to $12.2 billion since 2020.
- From various bridges and protocols, over $3.4 billion was hacked last year.
- 53.6% of investors prefer hot wallets to store funds after the FTX crash.
While the crypto market experienced a harsh winter in 2022, with significant fluctuations, the number of NFT holders increased by 250%, from 1.5 million to 3.7 million. This resulted in the NFT market value skyrocketing 122 times to $12.2 billion since 2020.
As the market continues to grow, so do hackers and bad actors, with over $3.4 billion in total value hacked last year. In a recent study, 50.4% of investors worldwide reported experiencing crypto hacks and exploits only in 2022.
Contextually, the study revealed that investors with less than one year of experience believe that most hacks and exploits are the result of technical flaws and loopholes in the protocol, whereas investors with more than one year of experience believe that fake covers for projects to rug pull are the main causes of most hacks.
Several high-profile hacks and collapses rocked the industry and had far-reaching consequences for the global financial system. Of all the protocol hacks that 2022 experienced, Ronin Bridge is considered to be the largest one, exploiting $625 million, followed by the Binance Bridge hack, which compromised around $570 million. FTX is close behind, with $477 million exploited.
Meanwhile, the study shows that “scam” has been the most prevalent criminal activity over the years, frequently accounting for 50% or more of all other criminal activities. Sanctions and stolen funds are among the other activities that tend to use DeFi.
The study also highlighted how investors’ perspectives changed in the wake of the FTX crash, emphasizing that Hot Wallets — which received responses from 53.6% of crypto investors — became the most popular way for investors to store their money.
DeFi’s revenue, on the other hand, plummeted 55% to $1.54 billion in 2022. Surprisingly, only 13% of DeFi users are skeptical about future government regulation. Moreover, owing to the rapid pace of innovation in DeFi, which has brought with it a number of risks such as security flaws, regulatory uncertainty, and liquidity issues, three out of five investors were concerned about DeFi security risks and complications.
On a positive note, as various parties clash over the best way to govern this rapidly evolving crypto space, the increasing scrutiny and regulation of the crypto market is anticipated to reach a crescendo in 2023, with 58% of respondents stating that they believe regulation and funding will push DeFi to mass adoption.
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