DeFi Users Prioritize Yield Over Protection, Putting Billions at Risk of Hacks

Decentralized finance (DeFi) has been touted as a financial system without intermediaries, yet transparent and accessible to anyone worldwide. However, a closer look at the sector reveals that it is still exposed to significant risks, particularly when it comes to hacks.

The DeFi sector has seen billions of dollars in losses due to exploits, with $7.7 billion lost since its inception. In April 2026 alone, over $600 million was lost in security events, with Drift and Kelp DAO hacks leading the way. Despite these incidents, the industry is still struggling to provide adequate insurance protection for its users.

One of the main reasons for this lack of protection is that many DeFi users prioritize yield over protection. Paying 2%–3% in insurance premiums can significantly cut into profits, especially in strategies built on narrow margins. As a result, most DeFi insurance protocols have collapsed under the same risks they were built to cover.