Despite the rise of decentralized finance (DeFi), cryptocurrency investors appear to be sticking to centralized exchanges (CEXs) over DeFi tools, according to a new report.

Crypto investors are more comfortable holding their assets on CEXs because decentralized exchanges are still more vulnerable to the threat of hacks. This is according to a joint report by the blockchain data firm Chainalysis and Bitfinex exchange, issued on Oct. 13.

According to the study, the risks of hacks associated with CEXs have dropped significantly over the past few years, while various DeFi platforms have become increasingly hacked.

The total value stolen from centralized crypto platforms has dropped by 58% from $972 at its peak in 2018 to $413 in 2021, according to data from Chainalysis. The amount of hacks on CEXs has continued to drop this year, as $80 million has been stolen from centralized crypto platforms so far in 2022.

In contrast, DeFi hacks have been booming recently, with DeFi-related hacks now accounting for 96% of theft losses, already standing at $2.2 billion in 2022.

Additionally, year-end Bitcoin (BTC) balances on centralized platforms have remained near all-time highs in 2022 despite the ongoing cryptocurrency winter. According to Chainalysis, year-to-date Bitcoin balances for centralized exchanges now amount to 6.9 million BTC or an 11% increase from 6.2 million BTC three years ago.

It’s important to note that the study was limited to services and protocols, not taking into account the exploits of noncustodial or personal wallets. “We hope to publish research related to personal wallets in the near future,” a spokesperson for the joint report said.

Kim Grauer, director of research at Chainalysis, noted that CEXs are no longer prime targets for hackers as they were in the early days of crypto because such platforms have managed to improve security and compliance significantly. Many CEXs have specifically implemented more stringent secure operating systems like distributed denial-of-service protection standards and audited third-party security system checks.

“We’ve found in our research that many crypto fundamentals have been remarkably stable this year, despite the market turmoil,” Grauer stated, adding:

“HODLers are holding, and if anything, we saw an increase in the accumulation of crypto by longer-term holders. Much of this crypto is being held on centralized exchanges.”

Bitfinex chief technology officer Paolo Ardoino also pointed to the increasing resilience of centralized exchanges against hackers. Ardoino told Cointelegraph that he recommends investors use noncustodial hardware wallets to better protect their funds, stating:

“My advice for those holding Bitcoin and crypto is always to self custody in cold storage. [...] That being said, CEXes are becoming safer places to leave your crypto with the advent of 2FA and more stringent security measures.”

Despite DeFi’s currently massive vulnerability to hacks, Ardoino still finds DeFi an interesting trend that may make a meaningful contribution to the crypto’s overall growth.

Related: $100M drained from Solana DeFi platform Mango Markets, token plunges 52%

“The growth of DeFi is comparable to that of natural systems in nature,” the chief technology off said, adding that DeFi will “inevitably grow and flourish as the technology evolves and new communities are drawn to the space.” He stressed that security remains a “perennial concern for DeFi protocols.”

The total value locked in DeFi-related smart contracts peaked at $180 billion in November last year, dropping to $53 billion. Despite the DeFi industry shrinking this year in line with the ongoing overall crypto winter, the sector has continued to see a wide number of hacks.

TempleDAO, a yield-farming DeFi protocol, became one of the latest platforms to suffer a DeFi exploit, losing more than $2.3 million to a hack on Oct. 11. In September, cryptocurrency firm Wintermute lost about $160 million due to a DeFi hack, while its centralized finance operations were not affected.