A recent $292 million exploit on April 18 has not deterred the decentralized finance sector, with investment bank Standard Chartered describing it as 'bent, not broken'. The attack, which originated from KelpDAO and affected AAVE, the largest DeFi lender, led to a sharp decline in liquidity and a bank-run-like scenario, with deposits and active loans plummeting by 38% and 31%, respectively. Despite this, Standard Chartered maintains its outlook for tokenized real-world assets to reach a $2 trillion market cap by the end of 2028, driven by the continued growth of DeFi lending and stablecoin liquidity.According to Geoff Kendrick, head of digital assets research at Standard Chartered, '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 report highlights the persistent risks associated with hacks and exploits in the crypto space, which can undermine trust in code-based systems. Smart contract bugs, phishing, and cross-chain bridge flaws can expose significant pools of locked assets to substantial losses.
The complexity and interconnected nature of blockchain infrastructure amplify these risks, with cross-chain bridges, in particular, expanding the attack surface and contributing to billions of dollars in losses due to intricate designs and weak validation.The repeated occurrence of such exploits can erode confidence across the ecosystem, driving users and institutions away, inviting stricter regulation, and slowing adoption, thereby making security a critical constraint on the growth of crypto.In response to the incident, AAVE and a coalition of DeFi firms have committed over $300 million to stabilize the system, which has helped normalize conditions, with yields easing and deposits recovering. The bank notes 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. Wall Street bank JPMorgan has also weighed in, stating that hacks and stagnant capital levels in DeFi continue to hinder its institutional appeal, citing the $20 billion impact of the KelpDAO exploit.