DeFi Sees Signs of Recovery Amid Rising Stablecoin Inflows

The crypto market experienced a significant downturn in Q2 due to protocol exploits and widespread capital outflows. Over $20 billion exited DeFi protocols during this period, pushing total value locked (TVL) down to around $70 billion from its pre-October 2025 high of $150 billion.

Aave, the largest lending protocol, was particularly affected, with a 18% drop in TVL within 24 hours after the KelpDAO exploit. However, recent data suggests that interest in DeFi is picking up again, with Aave recording its strongest network growth since October 2021.

Stablecoin inflows are also signaling returning risk appetite, with Solana ending Q2 2026 with a record $16.6 billion in stablecoin supply and Stellar seeing a 32.6% increase in 30-day stablecoin transfer volume. Cardano's native stablecoin supply has grown by over 20% in the past week.

These metrics, combined with CryptoQuant's report that CeFi lending contracted 6% quarter-over-quarter to $23.3 billion, suggest that investors are becoming more comfortable deploying capital on-chain again. If sustained, this could mark one of the first measurable signs that Q2's risk-off sentiment is fading.