A review of token prices after major hacking incidents revealed that only BNB coin showed significant recovery, up 19.2% one month after BNB Chain suffered a hack that led to a $100 million loss.
That’s according to a new report by the crypto bug bounty platform Immunefi, analyzing the impact of 63 hacks in 2022 on prices of the affected protocols' native tokens. Over $3.9 billion was lost in web3 due to hacks and scams in 2022, according to Immunefi.
Token prices plunge
On average, token prices dropped 13% in the first 48 hours after a hack and 19.6% after 120 hours. Notable examples include Impermax Finance's IMX token, whose 99.6% drop was the largest both 48 and 120 hours after being exploited, and Skyward Finance's SKYWARD token, with a 97.3% price drop 48 hours after the hack and a 93.7% drop 120 hours afterward. The remaining top 10 token price drops included GERA, UVT, QANX, ANA, L2DAO, LMT, TIC, LODE, QBT and ELEPHANT.
BNB fell just 3.2% in the 48 hours following BNB Chain’s hack before recovering. One month after their respective hacks, the other tokens had not recovered and were still down 77.7% on average.
Though Ronin Network suffered the biggest exploit, leading to a $625 million loss, its RON token fell just 19.8% in the first 48 hours after the incident. Other major hacks, including Harmony’s Horizon bridge and Mango Markets’ DeFi trading platform, also didn’t make the top 10, with their ONE and MGNO tokens down 11.5% and 42.5%, respectively.
The importance of bug bounties
The amount of capital held in smart contracts makes web3 particularly attractive to malicious actors. Bug bounties incentivize white hat hackers to examine a project’s code for vulnerabilities, helping to make crypto safer by reducing the risk of exploits.
Immunefi claims to have paid out over $70 million in bounties and saved over $25 billion in user funds across protocols like Chainlink, The Graph, Synthetix and MakerDAO. The highest bounty facilitated by Immunefi was a $10 million award for a vulnerability discovered in Wormhole, a generic cross-chain messaging protocol.
Earlier this month, Immunefi identified Ethereum as white hat hackers’ blockchain of choice, followed by Solana, Avalanche, Cosmos and Tezos.
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