Smart contracts signify on-chain activity, including the creation of tokens or NFT. Some smart contracts reflect more complex processes, like trading, swaps, or identities. In 2024, newer blockchains are outperforming based on smart contract count.
Ethereum is not the leader in terms of contracts deployed. Telegram’s native blockchain has the biggest number of contracts deployed.
Telegram is incompatible with the Ethereum Virtual Machine (EVM) and uses a different approach to building smart contracts. The chain also creates contracts using the FunC programming language while operating as an open-source network. Telegram hosts apps in multiple categories, including wallets, marketplaces, gaming, social spaces, and others.
The peak position of Telegram arrives after months of active user growth.
"plan to repeat the feat on telegram/@ton_blockchain" https://t.co/vnYBR5xksk pic.twitter.com/PvQgE7GZrQ
— Token Terminal (@tokenterminal) June 6, 2024
Telegram is a blockchain that hosts multiple trading bots that require automation for its decentralized services. It also offers a sample of contracts that can be used as templates for other projects.
Read: Is it Necessary to Implement a Smart Contract Kill Switch?
Following Telegram, Polygon is the second most widely used L2 solution. Polygon has been selected to deploy contracts during the DeFi, Web3 and gaming boom in 2021, contributing to the total count of smart contracts.
Polygon offers a layer of safety through its native blockchain explorer, where users can at least verify the smart contract’s address. Polygon is also the leader based on the number of contract deployers. On Telegram, the great number of contracts may be due to centralized activity or a single entity issuing a series of contracts.
Other networks that invite a big number of contract deployers include TRON, Arbitrum, ZKSync Era, and BNB Chain. The outlier in that category is Base, the tokenless blockchain by Coinbase. It is among the leaders based on several smart contract deployers. More than 887.5 onchain entities deployed smart contracts to the Base blockchain.
The smart contract metric adds to the picture of the dominating networks in 2024. Both L1 and L2 networks compete with Ethereum in terms of different metrics. ETH is still dominating in terms of fees, as well as platforms with a high count of active wallets. However, the generation of smart contracts may be a proxy metric for activities, including more developers or a trend of creating new tokens.
One reason for the high count of smart contracts is the need to launch a new contract for each meme token. Most leading chains saw a wave of meme tokens created, especially affecting the faster, scalable chains with minimal fees. Telegram is also ideal due to the low expenses for moving funds or utilizing contracts.
Checking smart contracts is a per-case task
The mass deployment of smart contracts in Solidity, Python, or other languages exposes users to malicious behaviors. Usually, a project advertises its audit status, and it is up to end users to check the audit status of projects.
Also read: Gala Games (GALA) Recovers Funds from Unauthorized Token Generation
BNB Chain and Ethereum remain the most attacked networks. Some contracts have also shown vulnerabilities in the past but without actual exploits. Most smart contracts also have some role in decentralized finance or value operations, where even a small vulnerability can be costly and directly affect markets. Due to a logic flaw, smart contracts are especially vulnerable to bridges, wrapped protocols, or other contracts that can generate new tokens.
In the past month, smart contract vulnerabilities affected Telegram’s TONUp, taking away around $106K from a flawed smart contract. Similar attacks happened to BNB Chain apps Yon and RedKeyGame.
One of the biggest hacks in the past week was the Velocore DEX, which lost $6.8M in ETH due to a smart contract vulnerability.
#Velocore exploit. The DEX #Velocore was attacked with a loss of ~$6.8M, due to a underflow when calculating fees.The lesson is that the #unchecked block should be in a safe context that never underflow/overflow, otherwise a $6.8M worth lesson would be taken. https://t.co/tF0eosSSgo pic.twitter.com/0cW3MPzIuc
— Daniel Tan (@DanielSlothx) June 3, 2024
Someone also attacked the Orion liquidity aggregator. Overall, smart contracts in the DeFi sector were often the target of attacks, as they hold the most value and locked tokens. TLN Protocol on BNBChain lost around $280K through a smart contract vulnerability in the past week.
Vulnerabilities affect even bigger projects, like Gala Games, where a hacker generated 5B new GALA tokens. Some projects try to have some control over their contracts, including a halt to block production.
Cryptopolitan reporting by Hristina Vasileva