JPMorgan: Security flaws hinder DeFi institutional appeal

JPMorgan analysts report that persistent security vulnerabilities and stagnant capital levels continue to diminish decentralized finance's (DeFi) appeal to institutional investors. The KelpDAO exploit, resulting in a $20 billion loss, exemplifies the systemic risks stemming from bridge and infrastructure vulnerabilities, which remain a primary concern. This fragility is causing a shift towards stablecoins like USDT as a safe haven. The report also notes that while total value locked (TVL) has recovered in dollar terms, it remains flat in ETH, indicating limited organic growth and raising questions about DeFi's scalability for institutional adoption.