April DeFi Breaches Hit 27 of 30 Days as Institutions Tokenize Assets and Issue Stablecoins on Public Blockchains

Breaches occurred on 27 of 30 days in April, which CertiK described as DeFi’s worst month in four years. Drift Protocol and Kelp Dao were hacked by North Korean cybercriminals, draining nearly $600 million from the two lenders. Panelists at the Proof of Talk conference in Paris said the losses illustrate why institutional capital remains outside decentralized finance.

Maja Vujinovic, CEO of investment and advisory firm OGroup, said growth will not occur until the security problem is solved. “I don't think you see a growth in DeFi until we fix the first problem ... which is the hacks,” she said.

Vujinovic added that bridges between blockchains remain an absolute problem. She said DeFi will not expand beyond its current user base until developers address the full technology stack. Ben Nadereski, co-founder and CEO at Solstice, a Solana-based DeFi yield protocol, told CoinDesk that repeated exploits stem from developers prioritizing new features over capital-management safeguards.

Stéphanie Cabossioras, chief strategy and global policy officer of Societe Generale Forge, described steps her firm has taken to close the gaps. Societe Generale Forge has tokenized structured products and green bonds on public blockchains and issued its own regulated stablecoins, EURCV and USDCV.

Cabossioras said the firm developed the stablecoins because tokenized securities lacked a corresponding cash leg on the blockchain.

That’s why we started to issue a stablecoin,” she said. She added that institutional clients prefer regulated custodians.

“In everyday life, anybody — individual, medium, or large enterprise — we want to have a trusted party,” Cabossioras stated. “We don't want to keep our assets in our private wallets, in our safes at home. We want to delegate this peace of mind to a third party.

Lenders are particularly interested in blockchain applications for back-office operations, CoinDesk reported.