The decentralized finance (DeFi) sector is currently facing scrutiny following a significant $20 billion decline in total value locked (TVL). Despite this downturn and reports of $1.1 billion lost to hacks, supporters of DeFi contend that the criticism is exaggerated and overlooks the sector's ongoing development.

Andrew Forson, president of DeFi Technologies, asserts that the stablecoin segment is flourishing, with over $150 billion in U.S. Treasuries backing coins such as USDT and USDC, alongside a monthly growth in transaction volumes of 20% to 30%.

Key Insights:

  • While high-profile security breaches have raised concerns, proponents argue that the risks are overstated and that the DeFi ecosystem continues to expand.
  • Forson highlights the resilience of DeFi, pointing to its transparency and round-the-clock operations as advantages over traditional finance, especially as major firms like BlackRock and JPMorgan enter the crypto space.
  • Despite the recent challenges, Forson emphasizes that the core of DeFi, particularly stablecoins, is experiencing substantial institutional acceptance.

Recent events have sparked a wave of negative sentiment towards DeFi, particularly following a $20 billion drop in TVL and significant losses from incidents like the $292 million Kelp DAO bridge hack. Critics argue that the rise of AI poses an increased threat to security in the DeFi landscape, with claims that it is becoming 'superhuman' in its hacking capabilities.

Forson, however, disagrees with these assertions, stating, "DeFi is much more than just the protocols that have been compromised. Those unaware of its breadth are simply misinformed." He referenced discussions at a recent conference, emphasizing that established stablecoins like USDT and USDC are functioning effectively amidst the chaos.

Forson argues that traditional finance and security experts often exaggerate localized vulnerabilities to undermine decentralized networks, neglecting the significant milestones being achieved in the sector. He points out that while failures like an $11 million bridge hack make headlines, the stablecoin base layer is gaining unprecedented traction in institutional investment. "By the end of 2025, stablecoins held over $150 billion in U.S. Treasuries," he stated, noting that this amount surpasses that of several countries’ central banks.

According to the Bank for International Settlements (BIS), stablecoins held positions in U.S. Treasury bills exceeding $153 billion as of December 2025.

Growth of Transaction Volumes

Forson stressed that rather than collapsing, the foundational volumes of stablecoins are expanding at a robust pace of 20% to 30% month-over-month. Blockchain intelligence firm Chainalysis reported that stablecoins transacted over $35 trillion last year, projecting figures could soar to between $730 trillion and over a quadrillion dollars by 2035.

Moreover, Forson noted that the core security of networks like Bitcoin and Ethereum remains intact, unaffected by the so-called 'superhuman' AI hackers. "There have been no significant hacks reported on the Bitcoin or Ethereum networks, nor on USDC or USDT," he remarked. He argued that the open-source nature of blockchain technology, often viewed as a liability, is actually a strength, as it allows for immediate visibility and rectification of issues.

Forson contrasted this with traditional banking, where systemic issues can remain hidden for years until discovered by auditors.

Wall Street's Crypto Adoption

He pointed out that financial institutions have historically had to create safeguards following market disruptions, drawing parallels to how Wall Street adopted automated stock-loss measures after the 1987 crash. DeFi's continuous operation allows for rapid identification and resolution of protocol vulnerabilities compared to traditional banking systems.

"Just like toddlers learn to walk by falling, the blockchain industry is still young at 16 years old," Forson explained, asserting that while errors will occur, they should not deter the entire field of finance. "If Wall Street firms do not engage with this space now, they risk losing market share to competitors who will."

Indeed, major players in finance, including Morgan Stanley, BlackRock, and JPMorgan, are actively pursuing tokenization and crypto services, indicating a significant shift towards embracing this new financial landscape.