CredShields Report: 83% of $3.6B Web3 Losses Caused by Access Control Failures, Not Code Bugs
CredShields Research Exposes Critical Gap: 83% of Losses Stemmed from Access Control and Infrastructure Failures, Not Smart Contract Bugs
Report Marks End of “Audit-Only” Security Era; Calls for Fundamental Shift in Web3 Defense Strategy
CredShields, in collaboration with SolidityScan and Web3HackHub, released its comprehensive State of Web3 Security 2025 report, revealing that the cryptocurrency and blockchain industry lost over $3.6 billion to security incidents in 2025 with a dramatic shift in attack patterns that challenges conventional security approaches.
The report’s most striking finding: 83% of all losses originated from access control and infrastructure failures, not the smart contract vulnerabilities that have historically dominated security discourse. This represents a fundamental transformation in Web3’s threat landscape.
2025: The Year Security Became an Organizational Problem
“2025 will be remembered as the year Web3 security stopped being a smart contract problem and became an organizational one,” said Shashank, co-founder of CredShields. “The Bybit breach alone $1.45 billion lost due to compromised infrastructure demonstrated that our industry’s fixation on code audits has left critical operational vulnerabilities completely exposed.”
The research, analyzing 134+ publicly disclosed incidents throughout 2025, documents a clear pattern: while automated scanning and audits successfully reduced basic contract flaws, attackers adapted by targeting human and operational weaknesses that exist outside the blockchain itself.
Key Findings:
Loss Distribution by Attack Vector:
- Access Control & Privileged Abuse: ~43% ($1.55B)
- Infrastructure & Hot Wallet Compromise: ~40% ($1.45B)
- Logic & Accounting Errors: ~12% ($430M)
- User-Layer Attacks (Phishing): ~4% ($140-150M)
- Oracle Manipulation: ~1% ($30-35M)
Who Lost the Most:
- Centralized Exchanges: ~56% of total losses
- DeFi Protocols: ~39%
- Individual Users/Wallets: ~4%
Geographic Concentration:
- Ethereum and EVM chains absorbed ~70% of losses, primarily due to capital concentration rather than inferior security
The Bybit Effect and Beyond
While the $1.45B Bybit breach in February dominated first-half losses, the second half of 2025 revealed an even more troubling pattern: persistent $10-100M losses across multiple incidents, including:
- Balancer v2 & forks: $128M (logic/accounting errors)
- Stream Finance: $93M (access control)
- Bitcoin phishing victim: $91M (social engineering)
- BtcTurk: $48M (hot wallet compromise)
- GMX: $42M (smart contract logic)
“The absence of mega-breaches in the second half wasn’t a victory it was a diffusion,” noted Indranil, CredShields co-founder. “The same root causes didn’t disappear; they distributed across more targets, creating a broader and more persistent attack surface.”
Critical Challenges Exposed
The report identifies ten systemic security gaps that must be addressed:
- Control Plane Security Is Under-Engineered – Admin keys, upgrade authority, and multisig workflows remain weakly protected
- Infrastructure Remains a Single Point of Failure – Hot wallet architecture continues to enable catastrophic losses
- Access Control Is Now the Most Expensive Vulnerability Class – Replacing reentrancy as the dominant economic risk
- Composability Risk Is Underpriced – DeFi protocols inherit unquantified risks from dependencies
- User-Layer Security Has Institutional Impact – Single phishing incidents now exceed $90M
- Front-End Attacks Bypass All Defenses – Compromised UIs circumvent smart contract security entirely
- Security Is Static, Attacks Are Adaptive – Point-in-time audits cannot protect live systems
- Detection and Response Are Too Slow – Many incidents escalated due to delayed detection
- Threat Intelligence Is Fragmented – Knowledge doesn’t propagate between projects
- Governance and Accountability Are Undefined – Unclear ownership of security decisions
2026 Predictions and Recommendations
Based on comprehensive data analysis, the report forecasts diverging security trajectories for 2026:
Likely to Improve:
- Ethereum (enhanced infrastructure practices post-Bybit)
- Arbitrum (increased scrutiny of DeFi mathematics)
Likely to Worsen:
- Base (rapid user growth creating new attack surfaces)
- BNB Chain (long tail of low-quality deployments)
The research team proposes eight evidence-backed priorities for 2026:
- Security-first architecture by default
- Continuous AI-powered threat detection
- Infrastructure and access control hardening
- Third-party and API security governance
- Secure composability and DeFi standards
- User-centric security design
- OWASP-aligned global security standards
- Ecosystem-wide threat intelligence collaboration
About the Research
This report builds on CredShields’ commitment to security education and standards development, supported by a grant from the Ethereum Foundation’s Ecosystem Support Program. CredShields contributes to the OWASP Smart Contract Security project, including the OWASP Smart Contract Top 10 (2025), with research powered by SolidityScan’s Web3HackHub incident registry.
“Web3 will not become safer by auditing more contracts,” the report concludes. “It will become safer by engineering control, resilience, and accountability into every layer of the stack.”
In response to the systemic gaps identified, CredShields will release a comprehensive 2026 Security Standards Guide for application security and Web3 in the coming weeks.
Download the Full Report
The complete State of Web3 Security 2025 report is available at https://credshields.com/resources#state-of-web3-security-2025
About CredShields
CredShields is a leading Web3 security research and education organization dedicated to advancing blockchain security standards. Through SolidityScan and Web3HackHub, CredShields provides continuous security monitoring, vulnerability detection, and threat intelligence to the global blockchain ecosystem. The company is an active contributor to the OWASP Smart Contract Security project and recipient of Ethereum Foundation support.
Media Contact: [email protected]
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Website: credshields.com
For interview requests with CredShields founders or technical briefings on specific findings, please contact [email protected]
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