A recent $292 million exploit on April 18 has not broken the decentralized finance sector, but rather shown its ability to withstand significant challenges, according to Standard Chartered. The incident involved a hack on KelpDAO, which then impacted AAVE, the largest DeFi lender, as stolen tokens were utilized as collateral for borrowing other assets. This led to a sharp decline in liquidity, with deposits on the liquidity protocol dropping by approximately 38% and active loans by 31%, characteristic of a bank-run scenario. Despite this shock, the bank still anticipates that tokenized real-world assets will reach a market capitalization of $2 trillion by the end of 2028, driven by ongoing growth in DeFi lending and stablecoin liquidity.

In a report, Geoff Kendrick, the head of digital assets research at Standard Chartered, noted, 'We still project that tokenised real-world assets will reach a market cap of $2 trillion by end-2028, up from $35 billion in October 2025.' The persistence of hacks and exploits in the crypto space continues to pose a significant risk, undermining trust in systems that rely on code rather than intermediaries. These risks are exacerbated by the complexity and interconnected nature of blockchain infrastructure, with cross-chain bridges, while expanding functionality, also increasing the attack surface and accounting for substantial losses due to intricate designs and weak validation. Repeated exploits can erode confidence across the ecosystem, pushing users and institutions away, inviting stricter regulation, and slowing adoption, making security a critical constraint on the growth of crypto. In response to the incident, AAVE and a coalition of DeFi firms quickly committed over $300 million to stabilize the system, which, according to the report, helped 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, Wall Street bank JPMorgan highlighted that persistent security flaws and stagnant capital levels in DeFi continue to hinder its appeal to institutions, following a $20 billion impact from the KelpDAO exploit.