DeFi's $20B Shock Is a Stress Test, Not a Collapse, Proponents Say

DeFi’s recent bloodletting isn’t the end — it’s a stress test, proponents say The decentralized finance sector has taken a beating in headlines this month: total value locked (TVL) fell by roughly $20 billion, and attackers drained about $1.1 billion from projects — including a high-profile $292 million bridge exploit tied to Kelp DAO. Pundits and security veterans were quick to declare the industry fragile. “DeFi isn’t safe anymore because AI is becoming ‘superhuman’ at hacking,” warned Manuel Aráoz, former OpenZeppelin CTO and co-founder. One commentator on X went further: “DeFi is dead.” But not everyone sees a collapse. Andrew Forson, president of DeFi Technologies, told CoinDesk the narrative is overly pessimistic and narrowly focused on a handful of exploited protocols. “DeFi is way more than those protocols that have been hacked,” he said. “Those who don’t know that are suffering from deep ignorance.” What’s really happening Forson argues the recent shocks are more like a rigorous lesson than a fatal wound — a public stress test that highlights weaknesses and accelerates fixes. His key points: - Stablecoins remain the sector’s backbone: Forson noted that major stablecoins — led by Tether’s USDT and Circle’s USDC — are functioning effectively and seeing growing institutional usage. “Everybody else is trying to recreate that,” he said at the Digital Money Summit in London. - Massive Treasury backing: According to BIS data Forson cited, stablecoins held positions in U.S. Treasury bills exceeding $153 billion as of December 2025 — a size he says rivals or exceeds the Treasury holdings of some nation-states. - Explosive flows and growth: Chainalysis estimates stablecoins moved more than $35 trillion last year, and forecasts cited in the conversation put future annual flows in the hundreds of trillions to over a quadrillion dollars by 2035. Forson also claimed core stablecoin volumes are growing 20–30% month-over-month. - Core networks remain intact: Despite chatter about “superhuman” AI hackers, Forson pointed out there have been no successful attacks on Bitcoin or Ethereum themselves, nor on the core stablecoins USDC and USDT. Transparency as a security feature Forson flips a common criticism on its head: open-source code and on-chain transparency, often presented as a liability, are actually powerful defenses. “When something goes wrong, everybody sees it, everybody talks about it and they fix it,” he said — a contrast he drew with legacy banking, where failures can remain hidden in “private buckets” for years. He compared DeFi’s iterative hardening to historical financial reforms: just as Wall Street added automated circuit breakers after the 1987 crash, DeFi protocols learn, patch and evolve quickly because they run 24/7 and expose issues in real time. A young industry, not a dead one “Toddlers learn to walk by falling,” Forson said, reminding critics that blockchain-based finance is only about 16 years old and that setbacks are part of technological maturation. He warned that if traditional financial incumbents sit out this period, they risk ceding market share to more nimble entrants. That threat isn’t hypothetical: major institutions including Morgan Stanley, BlackRock, JPMorgan and Charles Schwab have already introduced crypto services or moved toward tokenization of financial markets. Bottom line The current TVL decline and string of hacks have rightfully prompted scrutiny and demand for better security. But industry leaders like Forson argue the picture is more nuanced: systemic foundations such as stablecoins and base-layer networks remain robust, capital flows are expanding, and the public, continuous nature of DeFi accelerates discovery and remediation of weaknesses. For proponents, this episode is less a death knell than a high-profile, painful maturation milestone.