DeFi hacks: What they are, how they happen, and how to avoid them

When you use DeFi, a system that lets you lend, borrow, and trade crypto without banks, powered by smart contracts on blockchains like Ethereum. Also known as decentralized finance, it gives you control—but also makes you responsible for your own security. DeFi hacks aren’t science fiction. They’re real, frequent, and often exploit simple mistakes in code or user behavior. In 2022 alone, over $2 billion was stolen from DeFi protocols. These aren’t brute-force break-ins. They’re clever tricks that take advantage of logic flaws, rushed audits, or users clicking the wrong thing.

Most smart contract exploits, flaws in the code that runs DeFi apps, allowing attackers to drain funds or manipulate prices happen because developers skip proper testing or rely on third-party libraries with hidden bugs. One famous case? The Poly Network hack in 2021, where a flaw in the cross-chain bridge let someone move $600 million in minutes. It wasn’t a secret backdoor—it was a typo in a function that didn’t check if the user owned the tokens they were transferring. Then there are crypto wallet thefts, when users unknowingly approve malicious contracts that drain their entire balance. You think you’re swapping tokens, but you’re actually giving a hacker permission to take everything in your wallet. No password gets stolen. No device gets hacked. You just click "Approve" on a fake screen that looks exactly like the real one.

DeFi isn’t broken—it’s just dangerous if you don’t know what you’re doing. The same tools that give you 15% yields on stablecoins also let scammers mimic legitimate apps with near-perfect clones. And once your funds are gone, there’s no customer service line, no bank to call, no refund policy. The blockchain doesn’t care. That’s why knowing how these hacks work is the first step to avoiding them. You don’t need to be a coder to stay safe. You just need to understand what approvals mean, how to spot fake websites, and why "free tokens" are almost always traps.

Below, you’ll find real breakdowns of the most common DeFi hacks, the protocols that got hit, and what users could’ve done differently. Some posts show you how a single line of bad code wiped out millions. Others warn you about fake airdrops that look like real DeFi rewards. None of them are theoretical. Each one happened. And each one could’ve been prevented.