Layer by Layer Issue 20: Polkadot, Cosmos, Terra, and Avalanche

Exploits in crypto are a tale as old as time. In an ever-evolving and fast-paced industry deeply involved with the transfer, storage, and programmability of money, exploits are a constant reminder of both the captivating capabilities and the risks unlocked by this new realm of digital money. Exploits can come in many different forms, technically complex or otherwise, and targets can range from unassuming individuals to central exchanges and DeFi protocols. 

In a bizarre story that continues to unravel as of this writing, the 2016 hack of the Bitfinex exchange that resulted in the loss of 119,756 BTC now appears to possibly have been executed through an act of cunning social engineering. In recent years, the rise of DeFi and the dramatic increase in value stored in smart contracts has engendered an era of exploits carried out by penetrating weaknesses in smart contract code or protocol design. With growing amounts of capital stored on-chain in smart contracts, the incentive for hackers to probe for critical bugs in these contracts is greater than ever.