JPMorgan says DeFi exploits and flat ETH-denominated TVL limit institutional appeal

JPMorgan analysts said persistent DeFi exploits and largely flat DeFi TVL in ETH terms continue to limit institutional appeal after the Kelp DAO hack erased about $20 billion from sector TVL in a few days. The analysts said the exploit minted $292 million in unbacked rsETH and left an estimated $230 million in bad debt on Aave. The analysts also said DeFi participants often shift toward Tether’s USDT during stress, while CryptoQuant said the exploit pushed borrowing rates higher across the sector.