DeFi’s $70B slide – Is crypto’s trust problem getting worse?
TVL has fallen consistently over the past year.
DeFi is having a difficult year, with a marked rise in hacks and security breaches. As more protocols get exploited, investor confidence is taking a hit.
This loss of trust could be one reason why capital is moving out of DeFi.
DeFi TVL falls 39% in 2026
DeFi’s capital base has been falling throughout 2026. According to data from CryptoRank, total DeFi TVL has fallen every month this year. In fact, the number has dropped from around $115 billion in January to nearly $70 billion in June.
YTD decline was at about 39% too so, it’s not been a short-term dip.
This comes after a big phase in late 2025, when DeFi TVL was above $150 billion. Since then though, the market has calmed down and capital has moved out of riskier projects.
Ethereum [ETH] still has the largest share, but even its dominance has not been enough to stop the overall decline. Most major chains have seen pressure this year, with TRON [TRX] and Hyperliquid [HYPE] being rare exceptions with 5% and 7% growth, respectively.
Hacks affecting trust in DeFi?
Alarm bells get louder when you consider this alongside the rise in security breaches. According to CryptoRank, Q2 2026 recorded 85 hacks, making it the busiest quarter for crypto exploits by incident count.
While losses have not crossed past dollar-value peaks, the frequency of attacks is enough to make users sleep with one eye open.
The capital outflow can also be chalked down to a confidence problem. When users see repeated exploits across protocols, they are less likely to keep funds locked on-chain.
AMBCrypto previously reported that DeFi’s TVL has already fallen from nearly $178 billion to around $72.5 billion. Stablecoin supply stayed close to $315 billion too.
While liquidity has not disappeared from crypto, investors are more selective about where they put their money.
With 2026 already seeing 121 hacks and nearly $1 billion in losses, security is now a major pressure point for DeFi. Until protocols prove they can protect capital better, TVL recovery will most certainly remain uneven.
Final Summary
- DeFi TVL has dropped by 39% YTD to nearly $70 billion.
- Q2 2026 saw 85 hacks, while 2026 losses neared $1 billion.
