Decentralized finance (DeFi) has had a tough year, with the total value locked (TVL) in DeFi protocols dropping almost 39% since early 2026. A new CryptoRank report says TVL fell from about $115 billion in January to just over $70 billion, mainly because of a broad crypto market correction and a record number of security breaches.
Major hacks, like the $293 million KelpDAO exploit, led to billions being withdrawn from lending platforms such as AAVE. Even with these challenges, analysts say the current DeFi market is much more resilient than in past crypto bear markets.
CryptoRank says most of the decline happened after a sharp correction that followed the crypto market peak in October 2025. When Bitcoin rose above $122,000, a big liquidation event wiped out over $19 billion in leveraged positions. This led to widespread deleveraging in digital assets and made investors less interested in DeFi products.
Security problems made market sentiment even worse. The report counted 121 hacks in DeFi protocols this year, with about $942 million stolen. While hacks were not the only reason TVL fell, CryptoRank said repeated attacks hurt user confidence and sped up capital outflows.
A major shock happened in April when the KelpDAO exploit led to about $293 million being stolen. Blockchain intelligence platform Nansen said this caused weeks’ worth of expected withdrawals to happen in just a few days. AAVE alone saw nearly $15 billion in deposits withdrawn within four days after the attack.
The second quarter saw the highest number of crypto exploits ever, with 83 separate attacks on blockchain protocols. Even though the number of incidents was a record, the total amount stolen was still less than the historic losses of previous years.
Industry experts say this does not mean security has improved. Dmytro Matviiv, CEO of HackenProof, thinks attackers are now targeting smaller and less protected projects as the bigger protocols get better at defending themselves.
Alvin Kan, Chief Operating Officer at Bitget Wallet, believes the recent hacks could end up making the sector stronger by encouraging users to move to more secure and established DeFi platforms with stable revenue models.
Even with a tough year, analysts note that DeFi has been more resilient than during the 2021-22 crypto winter. While money has left riskier protocols, institutional interest in tokenized assets and blockchain finance is still growing. This suggests the sector could recover when overall market conditions get better.
CryptoRank: DeFi TVL Falls to Around $70B, Down 39% YTD
According to CryptoRank, DeFi TVL has declined every month in 2026, falling from about $115B in January to around $70B, down 39% YTD. DeFi has seen 121 hacks so far this year, with losses of about $942M, including 85… pic.twitter.com/S7FJQ4jGAX
— Wu Blockchain (@WuBlockchain) June 24, 2026
Stay informed with the latest trends in Web3, blockchain innovation, and cybersecurity updates at 3verseTV
You need to login in order to Like
Leave a comment