Work in Progress
After the Hack
Over its history, DeFi has been subject to over $9 billion in hacks. There's an abundance of technical analysis on DeFi hacks, but there is scant information on what happens to projects and their users afterwards. How often do projects survive? Do users ever get made whole?
We scoured hundreds of Discord channels, Telegram groups, and Twitter threads gathering the data needed to answer the question: what happens after the hack?
Cases
Takeaways
Do projects ever survive a major hack?
Many DeFi founders take a fatalistic view of hacks, striving to prevent them with best security practices but assuming that a hack will probably be project-ending.
In our dataset, 25 out of 64 (39%) of projects survived the hack. So, a project surviving a hack is more likely than many think.
Yes, almost 40% of projects survive for one year after a hack.
39%
Survival rate
How often are funds recovered?
Recovering at least some portion of the lost funds - either via technical means or via negotiation with the attacker - is relatively common, occurring in 44% of the hacks in our dataset.
Breaking it down a bit further, 28% of projects recover funds via technical intervention, 31% had funds returned to them by the hacker or law enforcement and 16% of projects recovered funds by both means.
Almost half of projects recover some portion of lost funds.
44%
Recovered funds
Do projects that recover funds survive more often?
For the lucky projects that are able to recover at least a portion of the funds, the survival rate ticks up to 50%. And for the unlucky projects, it dives down to 31%.
Though partial recovery is common, full recovery and recovery through the efforts of law enforcement appear to be quite rare.
Yes, projects that recover funds survive more often.
1.64x
Higher survival rate
Do projects that reimburse users survive more often?
Projects reimbursing users at a high rate (>80%) had a survival rate of 65% while those reimbursing at a low rate (<25%) had a survival rate of just 14%.
Yes, projects that reimburse users survive significantly more often.
4.6x
Higher survival rate for high reimbursers
When funds can't be recovered, how does reimbursing users affect survival?
Looking only at projects that were unable to recover any funds, though the sample size is small, the impact of reimbursements on survival is striking.
Among the 26 projects with a reimbursement rate of less than 25%, only 12% of them survived. Conversely, among the 10 projects with a reimbursement rate above 25% the survival rate soared to 80% and the 6 projects reimbursing above 60% had a 100% survival rate.
When funds can't be recovered, making users whole massively improves a project's survival chances.
6.9x
Higher survival rate for high reimbursers when funds can't be recovered
Methods
Starting from the list of hacks from DefiLlama, we filtered out all exit scams and projects that had less than $1 million in TVL at the time of the hack. This resulted in a dataset of 64 hacks.
Each hack was then manually researched and then categorized according to a few attributes: whether the project was still operational at reasonable scale one year after the hack, whether funds were ever recovered by the team, and to what degree funds were reimbursed to users.
The research process consisted of examining communication made by the project, information publicly available on the internet, and discussion carried out by their community on Twitter, Telegram and Discord.
Data
Work in Progress
Protocol
Some Funds Recovered?
Reimbursement Rate
Survived?
Gamma Strategies
80%
Raydium
80%
Euler Finance
100%
Superfluid
80%
Levana
80%
WOOFi
0%
Curve Finance
80%
Stars Arena
90%
Lodestar Finance
40%
Sturdy Finance
100%
Agave
50%
Inverse Finance Frontier
90%
Ankr
95%
dForce
100%
Mango Markets v3
58%
Paraluni MasterChef
100%
0VIX
20%
Sentiment
100%
Pike Finance
100%
Moola Market
93%
KyberSwap Elastic
100%
Revest Finance
0%
Multichain Hack 1
50%
Poly Network Hack 1
100%
Arcadia Finance
0%
Yield Protocol
100%
DFX Finance
5%
Conic Finance
0%
8ightdao
0%
Rodeo Finance
80%
Exactly Protocol
15%
Indexed Finance
50%
PancakeBunny
20%
Qubit Finance
0%
Vee Finance
0%
Cashio
0%
Merlin DEX
0%
Belt Finance
10%
Raft Finance
0%
Aperocket
0%
MonoX Finance
0%
LeetSwap
90%
Orbit Bridge
20%
Value DeFi
42%
Xtoken
15%
Crema Finance
80%
Tender.fi
100%
Nexera
100%
LendHub
0%
Nirvana Finance
66%
Steadefi
33%
ElasticSwap
0%
Blizz Finance
0%
Hundred Finance
26%
EraLend
50%
Rari Capital
100%
BonqDAO
0%
Multichain Hack 2
0%
RocketSwap
0%
Cover Protocol
50%
Poly Network Hack 2
0%
Nomad
19%
Grim Finance
10%
Deus Finance
77%