DeFi's $70B Slide: Hacks and Security Breaches Erode Investor Confidence

The DeFi sector has been experiencing a significant decline in recent months, with its total value locked (TVL) dropping by 39% year-to-date to nearly $70 billion. This downturn is largely attributed to a rise in hacks and security breaches that have eroded investor confidence.

According to data from CryptoRank, DeFi's capital base has been falling throughout 2026, with TVL decreasing every month this year. In January, the figure stood at around $115 billion, but by June it had dropped to nearly $70 billion.

Ethereum (ETH) still holds the largest share of DeFi's TVL, but even its dominance has not been enough to stem the overall decline. Other major chains have also seen pressure this year, with TRON (TRX) and Hyperliquid (HYPE) being rare exceptions that have experienced growth.

The frequency of attacks in Q2 2026 was particularly high, with 85 hacks recorded during the quarter. While losses have not reached their peak dollar-value, the repeated exploits across protocols have made users more cautious about keeping funds locked on-chain.