What to know:
- Despite high-profile hacks and a $20 billion drop in total value locked, DeFi advocates argue that critics are overstating security risks and ignoring the sector’s broader growth.
- DeFi Technologies president Andrew Forson says the stablecoin layer is thriving, with more than $150 billion in U.S. Treasuries backing coins like USDT and USDC and transaction volumes growing 20% to 30% a month.
- Forson contends that open blockchain transparency and continuous 24/7 operation make DeFi more resilient than traditional finance, as Wall Street giants such as BlackRock, JPMorgan and Morgan Stanley rush into tokenization and crypto services.
Decentralized finance (DeFi) is facing scrutiny after a significant decline in value – dropping $20 billion in total value locked (TVL) – and a surge in security breaches, including a $292 million hack of the Kelp DAO bridge, resulting in over $1.1 billion lost.
According to Manuel Aráoz, a former chief technology officer at OpenZeppelin, the increasing sophistication of AI is making it much easier to hack DeFi platforms, raising serious safety concerns. Some observers are going so far as to say that DeFi is no longer viable, as expressed in a recent post on X.
Andrew Forson, head of DeFi Technologies, strongly disagrees with the idea that recent hacks define the entire DeFi space. In a CoinDesk interview, he stated that focusing solely on those incidents demonstrates a significant lack of understanding of what DeFi truly is.
I recently attended the Digital Money Summit in London, and the conversation heavily focused on central bank digital currencies, or CBDCs. However, what struck me is that stablecoins like Tether’s USDT and Circle’s USDC are already functioning remarkably well. It seems like everyone else is attempting to build something that these stablecoins have essentially already achieved.
As an analyst, I’ve noticed a pattern where critics of decentralized networks often exaggerate the impact of small, isolated code vulnerabilities. It seems they do this to discredit the technology and boost their own reputations, while simultaneously overlooking the significant progress and achievements happening within the decentralized space. They’re focused on minor flaws and missing the bigger picture.
As a researcher tracking the DeFi space, I’ve been watching a fascinating trend unfold. While bridge failures, like the recent $11 million incident, grab all the attention, something much more fundamental is happening with stablecoins. We’re seeing incredible institutional interest and investment. I recently learned from Forson that stablecoins were holding over $150 billion in U.S. Treasuries by the end of 2025 – that’s a larger amount than held by Saudi Arabia or Germany! These treasuries aren’t just sitting there; they’re the foundation backing these currencies and stablecoins, and they’re primarily used within the DeFi ecosystem.
My research indicates that as of December 2025, stablecoins held over $153 billion in U.S. Treasury bills, based on data from the Bank for International Settlements.
Volumes expanding
Contrary to concerns about a failing market, Forson highlighted that trading volume for major stablecoins is actually growing by 20% to 30% each month.
Chainalysis, a company specializing in blockchain data, reports that stablecoins saw over $35 trillion in transactions last year. They predict this number could grow to between $730 trillion and more than a quadrillion dollars by 2035.
Despite concerns about advanced AI hackers, the fundamental security of major networks like Bitcoin, Ethereum, USDC, and Tether remains strong. There haven’t been any successful attacks on their core systems, as highlighted by Forson.
Many security leaders see the open nature of blockchain code as a weakness, especially with the rise of AI. However, Forson argues the opposite: the transparency of blockchain is actually what makes DeFi so secure.
Forson highlighted a key benefit of the DeFi world: its transparency. He explained that when issues arise, they’re immediately visible to everyone, sparking discussion and leading to quick solutions.
He compared this to older, traditional banks, where problems can hide unnoticed for years – sometimes in isolated systems – before an internal or external review reveals them.
Wall Street embracing crypto
Drawing on lessons from past corporate failures like Enron, Forson pointed out that financial systems consistently develop new protections in response to market crises. For example, after the 1987 stock market crash, Wall Street implemented automatic systems to limit losses.
Because DeFi runs around the clock, any weaknesses in its systems are quickly discovered, thoroughly tested, and fixed much faster than in traditional banking, where improvements happen behind closed doors.
Just like toddlers learn to walk by stumbling, the blockchain industry is still young – only 16 years old – and bound to have its share of mistakes and experiments. As Forson pointed out, this doesn’t mean we should dismiss the entire field of decentralized finance.
Forson ended by stating that Wall Street firms need to get involved in this area now, or they risk losing customers to competitors who do.
Wall Street is quickly moving towards digitizing the stock market, and major companies like Morgan Stanley, BlackRock, JPMorgan, and Charles Schwab have already begun offering crypto-related services in various ways.
Read More
- Gold Rate Forecast
- 10 Most Powerful Versions of Superman, Ranked
- 10 Best Free Games on Steam in 2026, Ranked
- 10 Greatest Manga Endings of All Time
- GBP CNY PREDICTION
- Forza Horizon 6 Car List So Far: Confirmed Highlights, Cover Cars, DLC, and Rewards
- Forza Horizon 6 PC Issues: Fix Crashes, Stuttering, Steam Errors, and Game Pass Problems
- 38 Years Later, Murder, She Wrote’s Most Overlooked Episode Still Pulls Off TV’s Greatest Crossover
- Mark Zuckerberg & Wife Priscilla Chan Make Surprise Debut at Met Gala
- 007 First Light: Release Date, Story, Gameplay, Cast, Editions, and Platforms
2026-05-28 19:37