Report: Frequent Hacks of DeFi and Stagnant TVL Weaken Institutional Interest

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ME News, April 24 (UTC+8): JPMorgan’s latest report says that recent DeFi security incidents—including Kelp DAO—together with the long-term stagnation of Ethereum-denominated TVL continue to curb institutional interest in DeFi. The report notes that in the cross-chain bridge attack involving Kelp DAO, the hacker minted approximately 292 million rsETH out of thin air, used as collateral on Aave to borrow real ETH, leading to about $230 million in bad debt and triggering capital outflows from pools not directly connected to the attacked assets—highlighting the fragility of DeFi’s high interconnectedness. The analysis says that the scale of crypto hacker activity and attack losses this year is similar to 2025, and that bridge security remains a weak link. In risk events, funds tend to withdraw from DeFi and shift to Tether USDT, which has deeper liquidity and a more direct settlement/withdrawal route, forming a “safe-haven” pattern; however, this advantage has not yet been clearly reflected in the growth of USDT market capitalization. JPMorgan concludes that ongoing security loopholes and stagnant TVL jointly suppress DeFi’s appeal to institutions. (Source: PANews)
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