The $1.7 Billion Blind Spot: How Web2 Flaws Are Wrecking Web3 Projects from the Inside

From Time.fun to Mixin: Why Ignoring Web2 Security Dooms Decentralized Dreams

Introduction: The Time.fun Wake-Up Call

Just a few months ago, the Web3 project Time.fun was ethically hacked — not through a flashy smart contract exploit, but via a mundane Web2 vulnerability in their off-chain infrastructure. Attackers breached their backend, exposing private keys and user data. This incident isn’t an outlier. It’s a symptom of a systemic issue: Web3’s obsession with on-chain security has left its Web2 foundations dangerously exposed.

While decentralized protocols like Ethereum or Solana are engineered to resist cryptoeconomic attacks, their off-chain components — relayers, signers, and backend APIs — are often riddled with SQL injections, SSRF flaws, and misconfigured databases. The result? A staggering 65% of Web3 hacks in 2023 originated from Web2 weaknesses, costing over $1.7B in losses (Immunefi) @immunefi.

Let’s dissect two Web2 vulnerabilities sabotaging Web3 projects and how the industry can course-correct.

Current Trends: Web2 Exploits Dominating Web3 Headlines

Recent incidents highlight attackers’ shift to softer off-chain targets:

1. Mixin Network ($200M Loss, September 2023): Hackers exploited a compromised cloud database to steal private keys, bypassing blockchain security entirely.
2. Time.fun Breach (2024): Ethical hackers infiltrated the project’s backend through an unsecured API endpoint, accessing wallet-linked user data.
3. Poly Network Relayer Attack (2023): Attackers manipulated a relayer’s SQL database to censor transactions, enabling a $10M heist.

These aren’t “hacks” — they’re institutional failures to secure basic infrastructure.

Vulnerability 1: SQL Injection in Relayer Databases

The Threat

SQL injection (SQLi) allows attackers to execute malicious database queries through unsanitized user inputs. In Web3…