I Experienced More than 10 DeFi Scams: On DeFi Users' Perception of Security Breaches and Countermeasures
<|reference_start|>I Experienced More than 10 DeFi Scams: On DeFi Users' Perception of Security Breaches and Countermeasures: Decentralized Finance (DeFi) offers a whole new investment experience and has quickly emerged as an enticing alternative to Centralized Finance (CeFi). Rapidly growing market size and active users, however, have also made DeFi a lucrative target for scams and hacks, with 1.95 billion USD lost in 2023. Unfortunately, no prior research thoroughly investigates DeFi users' security risk awareness levels and the adequacy of their risk mitigation strategies.   Based on a semi-structured interview study (N = 14) and a follow-up survey (N = 493), this paper investigates DeFi users' security perceptions and commonly adopted practices, and how those affected by previous scams or hacks (DeFi victims) respond and try to recover their losses. Our analysis shows that users often prefer DeFi over CeFi due to their decentralized nature and strong profitability. Despite being aware that DeFi, compared to CeFi, is prone to more severe attacks, users are willing to take those risks to explore new investment opportunities. Worryingly, most victims do not learn from previous experiences; unlike victims studied through traditional systems, DeFi victims tend to find new services, without revising their security practices, to recover their losses quickly. The abundance of various DeFi services and opportunities allows victims to continuously explore new financial opportunities, and this reality seems to cloud their security priorities. Indeed, our results indicate that DeFi users' strong financial motivations outweigh their security concerns - much like those who are addicted to gambling. Our observations about victims' post-incident behaviors suggest that stronger control in the form of industry regulations would be necessary to protect DeFi users from future breaches.<|reference_end|>
@article{liu2024i,
    title={I Experienced More than 10 DeFi Scams: On DeFi Users' Perception of
  Security Breaches and Countermeasures},
    author={Mingyi Liu, Jun Ho Huh, HyungSeok Han, Jaehyuk Lee, Jihae Ahn, Frank
  Li, Hyoungshick Kim, Taesoo Kim},
    journal={arXiv preprint arXiv:2406.15709},
    year={2024},
    archivePrefix={arXiv},
    eprint={2406.15709},
    primaryClass={cs.CR}
}