Solana ecosystem DeFi protocol Carrot officially announced its transition into "finality." According to AiCoin, the Carrot team confirmed that due to the catastrophic impact from the previously occurred Drift vulnerability exploitation incident, the protocol is unable to sustain ongoing operations and has decided to officially shut down. According to the disclosed liquidation pathway, Carrot has set May 14, 2026, as the deadline for withdrawing remaining funds from Boost, Turbo, and CRT. After this date, the system will initiate the deleveraging process, aimed at reducing all leverage to zero, thereby releasing all liquidity for CRT redemption. Although Carrot has promised that if funds can be recovered from the Drift incident in the future, they will be distributed as originally planned, at the protocol level, this participant in the Solana ecosystem has substantially moved towards shutdown.

Carrot's demise is not an isolated case, but the recent follow-up trends of DeFi security incidents are showing significant "differentiation" characteristics. Unlike Carrot, which was forced to close due to insolvency, the perpetual contract protocol Aftermath Finance on the Sui network, after suffering a $1.14 million loss from an attack on April 29, quickly advanced the fund recovery efforts through collaboration with the Sui Foundation and Mysten Labs and promised full compensation to users; meanwhile, Sweat Economy (SWEAT) faced an extreme crisis where attackers instantly controlled 13.71 billion tokens (about 65% of the total supply). By pausing contracts and collaborating with exchanges like MEXC, they ultimately achieved full restoration of user balances. From Carrot's reluctant exit to Aftermath and SWEAT's perilous survival, and to the Ethereum Foundation's substantial funding for protocol security and core infrastructure listed in the Q1 2026 funding list, DeFi security has become not just an occasional "black swan," but is evolving into a core variable that determines the life and death of protocols and reshapes user decisions.

Carrot liquidation countdown: From external vulnerabilities to protocol shutdown

As a once-active member of the Solana ecosystem, Carrot's exit appears particularly rushed. According to the official announcement, Carrot has officially confirmed the closure and shutdown of the protocol, with the direct trigger pointing to the previously occurred Drift vulnerability exploitation incident. The Carrot team described the situation as extremely severe, stating that the incident had a "catastrophic impact" on the protocol's ongoing operations, causing its capital structure and liquidity support to become unsustainable. According to the liquidation schedule, May 14, 2026, is set as a crucial time anchor, marking the final deadline for users to withdraw remaining funds from the Boost, Turbo, and CRT pools.

After the May 14 deadline, Carrot will enter a substantive deleveraging phase. The protocol plans to execute a comprehensive liquidation operation on the system, reducing the leverage multiples of all positions to zero. The core logic here is to forcibly release all available liquidity locked in the system, converting it into a withdrawable state, prioritized for CRT holders' redemptions. For users, this means that after the specified period, assets that were originally in active strategies will lose their leverage effect, becoming static assets awaiting redemption. This "hard landing" approach intuitively reflects the vulnerability of nested DeFi protocols under risk transmission when facing external protocol security impacts.

Although the liquidation path has been clarified, there remain long-term uncertainty variables. Carrot has committed in the plan that if it succeeds in recovering the lost funds related to the Drift incident in the future, it will offer compensation to related parties according to the previously established distribution plan. However, currently, there is a lack of information regarding the progress of recovering these funds and the specific distribution timetable. This lack of a timeline in commitments often means extremely high variability in the on-chain asset disposal process, with affected users potentially facing long waiting periods. This protocol-level liquidation triggered by a single external vulnerability also provides an extreme example of risk boundaries in a DeFi market that emphasizes "composability."

Also affected, why couldn't Carrot withstand the external risk shock?

According to AiCoin data, Carrot, as a yield aggregation protocol within the Solana ecosystem, has a business model that highly relies on deep coupling with other underlying protocols. The official announcement clearly defines the Drift vulnerability exploitation incident as having a "catastrophic impact," which directly reveals the structural risks behind DeFi composability: when underlying liquidity or strategy sources encounter security shocks, upper-level protocols often lack sufficient risk buffer space. Although Carrot's own contract was not directly attacked by hackers, its core asset exposure or strategy routing may be strongly bound to the Drift protocol (the specific coupling method awaits further disclosure by the official), and this transmission of external risks rapidly compromised its business sustainability within a very short time, forcing the team to make a decision to shut down the protocol before the asset net value further deteriorated.

Carrot's product lines such as Boost and Turbo exhibit typical leveraged designs, aimed at capturing higher yields by enlarging positions. However, leverage, while enhancing returns, significantly weakens the protocol's fault tolerance in extreme situations. According to the announcement, Carrot plans to conduct thorough deleveraging operations and reduce all leverage to zero after the withdrawal deadline of May 14, 2026. This forced zeroing action inversely corroborates that the protocol previously maintained a high leverage exposure; when external risks triggered a chain reaction, high leverage quickly consumed the protocol's net value. For users, Carrot's downfall offers a profound lesson: when participating in yield repackaging protocols, it is crucial not only to focus on nominal returns but also to penetrate the underlying structure, assessing its dependency on a single external protocol. Once there are security cracks in the underlying strategy or partnership protocols, the leverage designs of upper-level protocols often transform into amplifiers of loss.

Sui Aftermath's self-rescue path after $1.14 million attack

On April 29, 2026, the Sui ecosystem's perpetual contract protocol Aftermath Finance suffered a severe vulnerability attack. According to GoPlus analysis, the attacker illegally obtained ADMIN permissions for the `add_integrator_config` function and precisely exploited the sign mismatch vulnerability existing in the `calculate_taker_fees` function. Through repeated malicious extractions of tokens for profit, the protocol lost over $1.14 million in a short period. After the attack occurred, Aftermath immediately entered a paused operation status to prevent further losses, and the outbreak of this technical vulnerability has once again sounded the alarm for on-chain protocol permission management.

Unlike Carrot, which fell into a "death spiral" due to damage to the underlying protocol, Aftermath Finance's response path post-incident showcased stronger ecological support. The Sui Foundation and Mysten Labs quickly intervened after the attack, publicly stating that they would actively assist Aftermath in advancing fund recovery efforts and commit to ensuring the protocol's ongoing operation on the Sui network. On April 30, Aftermath officially confirmed the total loss of $1.14 million and made a clear commitment to the community: the team is focused on fund recovery and expects to complete full compensation for affected users within the next 48 to 72 hours.

This model, backed by core chain-level institutions with promises of rapid compensation, provides significant reference for DeFi protocols' "post-disaster reconstruction" after hacker attacks. For users, such certainty in compensation expectations is crucial to maintaining trust; for the protocol itself, rapid market intervention and efficient fund scheduling allow it to retain survival opportunities even when facing life-threatening blows. Compared to Carrot's indefinite wait for recovery, Aftermath's case demonstrates that deep support and rapid response mechanisms from underlying public chain ecosystems often serve as critical turning points for whether a protocol can survive security incidents.

SWEAT contract controlled for 30 seconds, users retreat unscathed

In contrast to Aftermath's compensation plan, Sweat Economy displayed another repair path based on "emergency stopping" and "centralized collaboration" when facing sudden security vulnerabilities. According to AiCoin data, on Wednesday, the SWEAT token contract encountered a serious vulnerability attack, during which attackers quickly drained multiple foundation accounts in just 30 seconds. During this time, attackers controlled approximately 13.71 billion SWEAT tokens, which accounted for about 65% of the total supply, with the total market value of the involved assets at approximately $3.5 million based on market prices at the time. Such high concentration of chips meant that if the attackers successfully sold off, the token's liquidity pool would face catastrophic damage.

To address such extreme on-chain anomalies, the SWEAT team adopted a high-pressure intervention approach: upon detecting the attack, they rapidly paused the token contract to lock down on-chain transfers. Subsequently, the project team quickly contacted the key nodes attempting to liquidate by the attacker—centralized exchange MEXC and DeFi platform Rhea Finance. Through multi-party coordination, MEXC successfully froze the attackers' related accounts, while Rhea Finance accordingly paused all trading pairs for SWEAT. This cross-platform coordinated response cut off the last exit for fund outflow, ultimately allowing all affected user funds and balances to be fully restored, and the protocol operations to return to normal.

From a risk governance perspective, SWEAT's case reveals the differentiated strategies currently employed by DeFi projects when responding to attacks. Unlike protocols that pursue complete decentralization and immutability, SWEAT retained the ability to pause contracts and leveraged its deep collaborative relationships with centralized trading platforms (CEX) to construct a defensive barrier. This strategy, although compromising some degree of decentralization, clearly shows superior loss mitigation efficiency against high-frequency, high-value liquidity crises compared to pure on-chain conflicts. Currently, the team plans to submit a detailed incident report to law enforcement and initiate evidence collection analysis to further clarify the attack path.

Ethereum Foundation intensifies investment in ZK and protocol security: Infrastructure is catching up

As several ecological protocols fall into liquidity crises or shutdowns due to security vulnerabilities, the defensive logic of underlying infrastructure is shifting from passive remediation to active investment. According to publicly available information, on April 29, 2026, the Ethereum Foundation officially announced its funding and ecological support list for Q1 2026, with a clear emphasis on "proactive security." This funding focus heavily revolves around cryptography, zero-knowledge proofs (ZK), protocol security, and core infrastructure, aiming to enhance the robustness of underlying components to cope with increasingly complex on-chain attack threats. At the execution level, optimizations for mainstream execution and consensus clients like Geth, Erigon, and Lighthouse have received direct support, while the construction of network monitoring tools following the Pectra upgrade has also been prioritized to enhance performance and attack resistance under extreme fluctuations.

In addition to fortifying client-level security, the foundation also injected funds into more fundamental research on node security and cryptography. Specific projects include HSM key management systems, validator security tools like Vero, and the DISC-NG node discovery mechanism, all aimed at enhancing the reliability of node layers and institutional compliance capabilities. In the ZK space, funding covers Poseidon hash function analysis, Gröbner Basis attack research, anti-quantum and homomorphic mixed encryption exploration, as well as formal verification for RISC-V zkVM. This deep dive into the mathematical underpinnings and virtual machine security reflects the industry's systematic upgrade in security awareness: transitioning from merely relying on smart contract audits towards deeply validating computational integrity and cryptographic primitives.

Furthermore, the transparency of the developer ecosystem and user interaction has also received notable enhancement. Upgrades to the BuidlGuidl education system, development of WalletConnect clear signing libraries, and continuous approval of transparency projects like L2BEAT indicate that Ethereum is attempting to minimize potential losses due to permission misguidance or information gaps in similar security incidents through a dual approach of "user safety education" and "data transparency." This paradigm shift from individual projects responding to attacks independently to mainstream public chains proactively investing in security infrastructure signifies that the industry's risk awareness has entered deeper waters, progressively constructing a more resilient ecological barrier through the standardization and toolification of underlying protocols.

From Carrot's curtain call to full compensation: the next round of DeFi risk premiums

The final shutdown of Carrot and the aftermath of Aftermath Finance and SWEAT events reveal the survival differentiation of current DeFi protocols under extreme risks. According to AiCoin statistics, Carrot, due to the Drift vulnerability incident leading to operational hindrances, has set May 14, 2026, as the deadline for fund withdrawal and plans to release liquidity for CRT redemption through "deleveraging" operations that reduce leverage to zero. In contrast, Aftermath Finance, after suffering a $1.14 million attack on April 29, swiftly advanced its user compensation plan to full repayment within 48 to 72 hours with the support of the Sui Foundation and Mysten Labs; meanwhile, SWEAT successfully reclaimed the 13.71 billion tokens (approximately 65% of the total supply) once controlled by attackers through contract suspension and collaboration with exchanges like MEXC. This differentiation indicates that a protocol's risk resistance capability no longer solely depends on code logic but also on its reliance on a single external strategy, whether it has chain-level resource backing, and whether it has a transparent redemption/compensation timeline.

Looking forward, the risk premium of the DeFi ecosystem will revolve around deterministic execution. Variables to closely monitor in the future include: Carrot's deleveraging progress after May 14 and the distribution expectations for the recovered Drift funds; the actual completion of Aftermath's compensation plan in early May; and the accountability progress of SWEAT in cooperation with law enforcement. Meanwhile, the Ethereum Foundation's Q1 funding for Geth client optimizations, L2BEAT transparency tools, and ZK formal verification reflects that mainstream public chains are attempting to mitigate systemic risks through underlying standardization. For funds, the security boundary of protocols is shifting from merely being "vulnerability-free" to "resilient," meaning whether there exists a clear path for fund recovery and ecosystem support under extreme shocks.

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