JPMorgan says persistent security flaws curb DeFi’s institutional appeal

A $20 billion hit from the KelpDAO exploit highlights systemic risks, while flat ETH-denominated growth and a shift to stablecoins point to ongoing fragility in DeFi. What to know : JPMorgan said hacks and stagnant capital levels in decentralized finance continue to weigh on DeFi’s institutional appeal, highlighted by a $20 billion hit from the KelpDAO exploit. Bridge and infrastructure exploits remain the main risk, with losses tracking 2025 levels and undermining trust. Investors are rotating into stablecoins like USDT as a flight to safety during stress, the bank said.