By the end of this lesson you’ll be able to name the five ways a DeFi protocol loses its users’ money, say why an audit is evidence rather than a guarantee, and run a ten-minute check on any protocol before you put a cent into it.
Five ways the money goes
Chainalysis counted “over $3.4 billion in theft from January through early December 2025,” with the February attack on the Bybit exchange “accounting for $1.5 billion of that total.” Bybit is a centralized exchange, as is Binance, which reported about $6.3 billion stolen on 29 October 2026. Chainalysis found DeFi hack losses stayed low in 2024 and 2025 even as deposits recovered, but the ways DeFi loses money haven’t changed.
A bug in the code
Balancer, 2025
A manipulated price
Mango Markets, 2022
Stolen keys, or a fooled signer
Drift, 2026, and Bybit, 2025
A captured vote
Beanstalk, 2022
A hijacked website
BadgerDAO, 2021
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