BroadChain News, April 24, 09:46, JPMorgan analyst Nikolaos Panigirtzoglou pointed out that persistent security vulnerabilities and sluggish growth in the decentralized finance (DeFi) sector continue to limit institutional investor interest.
Recent attacks related to Kelp DAO caused the total value locked (TVL) in DeFi to evaporate by approximately $20 billion within days. The attacker minted $292 million worth of unbacked rsETH tokens and borrowed real ETH on Aave, resulting in approximately $230 million in bad debt. Analysts believe that DeFi's interconnectedness could become a weakness during adverse events, and despite improvements in smart contract audits, cross-chain bridge security challenges persist.
TVL denominated in ETH has remained relatively flat, raising questions about whether DeFi can achieve the organic growth needed to support institutional adoption. Additionally, recent vulnerabilities are driving users toward the USDT stablecoin, which has become the preferred hedging tool for rapid exits on-chain.