DeFi Capital Plunges as Investors Flee Falling Yields and Rising Hacks

DeFi capital locked has dropped significantly from its peak in April 2022, falling to $36B, as traders exit for higher yields and less risk.

DeFi's "future of finance" narrative has faded as interest rates rose, increasing yields for traditional finance products like money market funds.

DeFi yields around 3-4% can't compete with yields from less risky products like Vanguard's money market fund at over 5%.

Emerging DeFi narratives around liquid staking, RWAs, derivatives haven't sparked interest like the DeFi summer of 2020 when yields hit 18-35%.

DeFi hacks have proliferated, with over $1.8 billion stolen in crypto hacks in 2023, further deterring capital.