Why are some analysts still bullish on DeFi despite recent setbacks?

Supporters argue that recent hacks and a $20 billion decline in total value locked (TVL) do not reflect the overall health of decentralised finance. They point to growing stablecoin adoption, rising transaction volumes and increasing institutional participation as evidence that the sector continues to expand.

What caused the recent decline in DeFi TVL?

DeFi TVL fell by approximately $20 billion amid market volatility, lower crypto asset prices and concerns following several high-profile security incidents. TVL measures the value of assets deposited across DeFi protocols and often fluctuates with broader market conditions.

How much has DeFi lost to hacks recently?

Recent exploits reportedly resulted in more than $1 billion in losses across the sector, including the $292 million Kelp DAO bridge exploit. These incidents have renewed concerns about smart contract security and protocol vulnerabilities.

Why does Andrew Forson believe DeFi remains strong?

Andrew Forson argues that critics focus too heavily on isolated protocol failures while overlooking broader industry growth. He believes stablecoins, tokenisation and institutional adoption demonstrate the sector's long-term strength.

What role do stablecoins play in DeFi's growth?

Stablecoins serve as a core infrastructure layer for decentralised finance by facilitating trading, lending, payments and liquidity provision. Forson noted that USDT and USDC are backed by more than $150 billion in US Treasury holdings, highlighting their growing importance.

Are stablecoin volumes still growing?

According to Forson, stablecoin transaction volumes are increasing between 20% and 30% each month. Continued growth suggests that users and institutions are increasingly relying on stablecoins for blockchain-based financial activities.

Why does Forson say blockchain transparency is an advantage?

Blockchain networks allow transactions and protocol activity to be publicly visible in real time. Forson argues that this transparency helps the industry identify, discuss and fix vulnerabilities more quickly than traditional financial systems.

What is the argument against claims that “DeFi is dead”?

Supporters argue that network activity, stablecoin adoption and institutional interest continue to expand despite security incidents. They view hacks as growing pains in an emerging industry rather than evidence of systemic failure.

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DeFi growth continues despite TVL decline and hacks

Written by Mahathir BayenaPublished May 29, 2026, 3:31 AM

Recent criticism of decentralised finance has intensified following a $20 billion decline in total value locked and more than $1 billion in losses from high-profile exploits, but industry advocates argue the sector remains fundamentally strong.

Andrew Forson, president of DeFi Technologies, said critics are placing too much emphasis on isolated protocol failures while overlooking rapid growth in stablecoins and broader blockchain adoption.

“DeFi is way more than those protocols that have been hacked,”

Forson said.

Forson pointed to the stablecoin sector as evidence of continued momentum, noting that USDT and USDC are backed by more than $150 billion in US Treasury holdings and continue to serve as key infrastructure for decentralised finance.

He also said stablecoin transaction volumes are expanding by between 20% and 30% each month, reflecting growing demand despite concerns surrounding security incidents and market volatility.

Forson argued that blockchain transparency strengthens the sector because vulnerabilities and exploits are publicly visible and can be addressed quickly, unlike weaknesses in traditional financial systems that may remain hidden for years.

The comments come as major financial institutions including BlackRock, JPMorgan Chase, Morgan Stanley and Charles Schwab continue expanding their involvement in digital assets, tokenisation and crypto-related services.