Circle · Wall Street · JPMorgan · CoinDesk
Toddlers learn by falling: Why DeFi's $20 billion TVL drop is just a market stress-test
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The decentralized finance (DeFi) sector has been hit by recent criticism and negative commentary following a $20 billion drop in total value locked (TVL) and $1.1 billion lost to hacks like the $292 million Kelp DAO bridge exploit.
Key facts
- The decentralized finance (DeFi) sector has been hit by recent criticism and negative commentary following a $20 billion drop in total value locked (TVL) and $1.1 billion lost to hacks like the $292
- Blockchain intelligence firm Chainalysis estimates that stablecoins moved more than $35 trillion last year, a figure that is expected to reach anywhere between $730 trillion to over a quadrillion
- Stablecoins held positions in U.S. T-bills exceeding $153 billion as of December 2025, according to the Bank for International Settlements (BIS)
- Stablecoins at the end of 2025 held over $150 billion in U.S. Treasuries," Forson revealed
Summary
Despite high-profile hacks and a $20 billion drop in total value locked, DeFi advocates argue that critics are overstating security risks and ignoring the sector’s broader growth. DeFi Technologies president Andrew Forson says the stablecoin layer is thriving, with more than $150 billion in U.S. Treasuries backing coins like USDT and USDC and transaction volumes growing 20% to 30% a month. Forson contends that open blockchain transparency and continuous 24/7 operation make DeFi more resilient than traditional finance, as Wall Street giants such as BlackRock, JPMorgan and Morgan Stanley rush into tokenization and crypto services. DeFi isn't safe anymore because AI is becoming 'superhuman' at hacking, former OpenZeppelin CTO and co-founder Manuel Aráoz said this week.