The DeFi sector has shown its capacity to withstand significant challenges after a $292 million cyber attack on April 18 revealed systemic vulnerabilities, according to a report by Standard Chartered. The attack, which targeted KelpDAO and subsequently affected AAVE, the largest DeFi lender, led to a sharp decline in liquidity, with deposits plummeting by approximately 38% and active loans decreasing by 31%, mirroring a bank-run scenario. Despite this, the bank maintains its projection that tokenized real-world assets will reach a market capitalization of $2 trillion by the end of 2028, driven by sustained growth in DeFi lending and stablecoin liquidity. As stated by Geoff Kendrick, head of digital assets research at Standard Chartered, 'We still anticipate that tokenized real-world assets will achieve a market capitalization of $2 trillion by the end of 2028, representing a significant increase from the $35 billion recorded in October 2025.' The persistence of hacks and exploits poses a fundamental risk to the crypto ecosystem, undermining trust in systems that rely on code rather than intermediaries.

The complexity and interconnected nature of blockchain infrastructure amplify these risks, with cross-chain bridges, in particular, expanding the potential attack surface and contributing to substantial losses due to their intricate designs and shared systems. Repeated exploits can erode confidence, pushing users and institutions to the periphery, inviting stricter regulation, and slowing adoption, thus making security a crucial constraint on the growth of crypto. In response to the incident, AAVE and a coalition of DeFi firms swiftly committed over $300 million to stabilize the system, which, according to the report, helped normalize conditions, easing yields and facilitating the recovery of deposits. The bank noted that the incident is accelerating structural upgrades, with AAVE's V4 upgrade and the forthcoming Ethereum Economic Zone aiming to reduce reliance on cross-chain bridges, a frequent target in major crypto hacks.

Meanwhile, Wall Street bank JPMorgan highlighted that persistent security flaws and stagnant capital levels in DeFi continue to hinder its appeal to institutional investors, as evidenced by the $20 billion impact of the KelpDAO exploit.