2020 has been an eventful year as businesses and family clamor stays afloat and braces the aftermath of the storm the pandemic has caused. In particular, Cryptocurrencies were able to persevere as the market soared significantly in value all year long. With Bitcoin prices gaining over 200% since early January 2020, this year has been eventful.
While economies worldwide struggled to stay afloat, the crypto economy blossomed with fruitful colors. However, COVID-19 and the respective retaliation to the virus entailed shutdowns of a large section of the global economy, locking down healthy citizens, and embarking financial chaos.
Contrarily, stocks, commodities, equities, and many traditional assets lost a significant value as the virus broke out, the bottom crashed on everything, including digital asset markets.
However, the Cryptocurrency market persisted, and a significant number of digital assets excelled and gained in value. Additionally, the newfound success also called for unwanted attention from cyber attackers, hackers, and scams.
While the Crypto ecosystem is establishing its place as an asset, many blockchain technologies are still experimental and speculative. Such weaknesses in technology often lead to breaches and risk to the cryptocurrencies stored within to be compromised, and there are still cases of exit scams and fraudulent ICOs.
In this article, we’ll be discussing the worst-performing cryptocurrency and Defi projects in 2020.
IOTA, a nonprofit organization with its flagship token, IOTA cryptocurrency, had to shut down its entire network amid a hacker breach in mid-February. Hackers managed to find vulnerable points in the official wallet app to compromise user accounts and funds.
Experts suggest that hackers used the third party integration to their advantage to steal over a million dollars worth of IOTA coins in under half an hour.
Aleph.im, a decentralized storage and computing network launched in early June 2020. The project was highly sought after as it solved issues through fast single cross-technologies and cross-chain solutions on their mainnet. The project was highly coveted as it had synced with NULS, Ehtereum, and Binance Chain. Months later, the project picked up the pace, peaking at $0.66 in August; however, the project has lost over 80% of its value today, priced at $0.14 heading into 2021.
With the Defi ecosystem blooming with fruitful colors in 2020, a lot of newer Defiprojects were introduced. Most of them succeeded; however, some of them failed. Interestingly, failure had a trend. Most unsuccessful tokens in 2020 were yield farming tokens, Kimchi Finance being one of them. Peaking at $3 in July, the yield farming token has lost over 99% of its value ever since.
Hackers bagged $25 million in a successful breach from the Lenf.me, the lending platform. Hackers utilized a chain of bugs and prominent features from different blockchain technology to organize a complex reentrancy attack.
The reentrancy attack enabled hackers to repeatedly withdraw funds in a loop before hackers’ verified their original transaction. Interestingly, the hackers had to return all the stolen funds after they had leaked an IP address during their attack.
Vault Age Solutions
VaultAge Solution, a cryptocurrency vault, scammed 2000 investors of over $13 million. VaultAge Solution offered a platform for traders to invest in cryptocurrencies; however, the CEO went into hiding after investors called for debt collectors to recover their funds.
KuCoin, a Singapore-based cryptocurrency exchange, was hacked for around $281 million. KuCoin’s security breach was among the largest cryptocurrency hacks in cryptocurrency history. Hackers infiltrated private keys to KuCoin’s hot wallets, gaining control over numerous amounts of various cryptocurrencies and ERC-20 tokens.
KuCoin’s flagship token, KCS, took a big hit. After peaking at 1.43$ in September, the token took a hit after being hacked. Currently, the token is priced at $0.6, the lowest low this year, losing around 60% in value ever since the hack.
Hackers obtained over $24 million worth of cryptocurrency assets from a popular Defi service called Harvest Finance. Harvest Finance, a web portal that allowed users to invest in cryptocurrencies and farm price variation for small profit yields.
According to Harvest Finance administrators, the hacker swindled $13 million of USDC and $11 million worth of Tether. The token peaked at $289 per token; however, after the recent hack, the token dropped to $96 per token; a 66% loss.
Akropolis, a cryptocurrency borrowing and lending service were compromised by a flash loan attack against its platform. The hackers were able to trick $2 million worth of DAI cryptocurrency in November 2020. After peaking at an all-time high of $0.04 in September, the token has lost 75% of its value, priced at $0.01 after the hack.
Compounder Finance, a smarter farming platform, and a Harvest Finance close, successfully stole over $11 million from their investors. Compounder Finance was an automated farming system that offered compound interest in cryptocurrencies and allowed investors to earn their CP3R tokens as a reward.
However, Compounder Finance orchestrated a successful rug-pull, also known as the unexpected removal of liquidity from a token, once the company has obtained enough funding from interested investors.
Compounder Finance was able to knick $11 million in Bitcoin, ETH, DAI, and other assets from the project.
PlusToken, a South-Korean based cryptocurrency, was promising to yield 9% to 18% monthly returns was actually a scam. It was presented in front of the investors (mostly based out of South Korea & China) with promising futures, asking them to store Bitcoin (BTC), Ethereum (ETH), and EOS on the platform. After having what is believed to be $6 Billion in the deposit (reported by China News) taken from four million users, they pulled an exit scam, and the investors were left out cold.
Since then, Chinese police managed to arrest over 100 people involved in this cryptocurrency scam.
With 2020’s success of the cryptocurrency market and Defi projects’ rise, the ecosystem has gotten its fair share of unwanted attention from infiltrators and malicious users. The year has been challenging; however, people are more cautious now heading into 2021.