The decentralized finance sector has shown its capacity to absorb significant shocks, following a $292 million cyber attack on April 18 that exposed underlying vulnerabilities, according to a report by Standard Chartered. The exploit, which affected KelpDAO and had a ripple effect on AAVE, the largest DeFi lender, led to a sharp decline in liquidity, with deposits plummeting by 38% and active loans decreasing by 31%, characteristic of 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.

"Our forecast for tokenized real-world assets to reach a $2 trillion market cap by end-2028 remains unchanged, having grown from $35 billion in October 2025," stated Geoff Kendrick, head of digital assets research at Standard Chartered. The persistence of hacks and exploits poses a significant risk to the crypto ecosystem, undermining trust in code-based systems. Smart contract vulnerabilities, phishing, and cross-chain bridge flaws can expose substantial pools of locked assets to considerable losses.

The complexity and interconnected nature of blockchain infrastructure amplify these risks, with cross-chain bridges, in particular, expanding the attack surface and accounting for significant losses due to intricate designs and weak validation. Repeated exploits can erode confidence, driving users and institutions away, and potentially leading to increased regulatory scrutiny and slowed adoption, making security a critical 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, helping to normalize conditions, with yields easing and deposits recovering.

The bank noted that the incident is accelerating structural upgrades, including AAVE's V4 upgrade and the forthcoming Ethereum Economic Zone, aimed at reducing reliance on cross-chain bridges, a frequent target in major crypto hacks. Meanwhile, JPMorgan highlighted that persistent security flaws and stagnant capital levels in DeFi continue to hinder its appeal to institutions, citing the $20 billion impact of the KelpDAO exploit.