JPMorgan says ongoing security vulnerabilities and stagnant Total Value Locked (TVL) continue to weaken DeFi's institutional appeal. The report states that the KelpDAO exploit wiped out approximately $20 billion in TVL within days. Attackers minted $292 million in uncollateralized rsETH via a cross-chain bridge and used it as collateral to drain funds from lending protocols, resulting in about $200 million in bad debt. JPMorgan pointed out that this year's hacking losses are on par with 2025 levels, with infrastructure and cross-chain bridge vulnerabilities remaining major risks. Meanwhile, DeFi's TVL has partially recovered in USD terms but remains largely unchanged in ETH terms, indicating limited organic growth. The report also noted that after the incident, funds flowed from DeFi lending to USDT, reflecting investors' continued shift to stablecoins during times of stress. (CoinDesk) https://(wublock123.com)/news/jpmorgan-says-security-flaws-weaken-defi-attractiveness-60040