DeFi is having a tough year with a noticeable increase in hacks and security breaches. As more protocols are used, investor confidence is taking a hit.
This loss of trust could be one reason for capital to exit DeFi.
DeFi TVL drops 39% in 2026
DeFi’s capital base is declining throughout 2026. According to data from CryptoRank, total DeFi TVL has dropped every month this year. In fact, that figure dropped from $115 billion in January to about $70 billion in June.
The YTD decline was also around 39%, so this is not a short-term decline.
This follows a major milestone in late 2025, when DeFi TVL reached over $150 billion. However, since then the market has calmed down and capital has withdrawn from risky projects.
Ethereum (ETH) it still has the largest share, but even its dominance was not enough to stop the overall decline. Most major chains have seen pressure this year. TRON (TRX) And Hyperfluid (HYPE) Rare exceptions, with growth of 5% and 7% respectively.
Are hacks affecting trust in DeFi?
When you consider this, the alarm bells get louder increase in security breaches. Accordingly CryptoRank85 attacks were recorded in Q2 2026, making it the busiest quarter for crypto exploits by number of incidents.
Although the losses have not exceeded the dollar value peaks, the frequency of attacks is enough to make users sleep with one eye open.
Capital outflow can also be attributed to the trust issue. When users see repeated exploits across protocols, they become less likely to keep funds locked on-chain.
AMBCrypto was previously reported He said DeFi’s TVL has already dropped from about $178 billion to about $72.5 billion. Stablecoin supply also remained close to $315 billion.
Although liquidity has not disappeared in cryptocurrency, investors are being more selective about where to put their money.
With 121 attacks already and nearly $1 billion in losses in 2026, security is now a major pressure point for DeFi. Until protocols prove they can better preserve capital, TVL’s recovery will certainly remain uneven.
Final Summary
- DeFi TVL has fallen 39% year-to-date to approximately $70 billion.
- While there were 85 attacks in the second quarter of 2026, losses in 2026 approached 1 billion dollars.
