Decentralized finance protocols lost roughly $13 billion in user funds during a series of exploits in April, according to onchain data. The outflows sharply compressed total value locked (TVL) across major lending platforms, while onchain leverage ratios climbed back to levels not seen since 2021.
How the exploits unfolded
Attackers targeted multiple DeFi protocols over the month, draining liquidity pools and exploiting smart contract vulnerabilities. The combined losses — estimated at $13 billion — represent one of the largest single-month thefts in the sector's history. Most of the stolen assets were bridged to Ethereum and then moved through mixers, investigators said.
TVL compression and leverage spike
The sudden outflows caused TVL across lending platforms to contract sharply. As liquidity evaporated, borrowers faced higher collateral requirements, forcing many to repay loans or face liquidation. The resulting deleveraging pushed onchain leverage ratios — a measure of borrowed funds relative to collateral — to levels last recorded during the 2021 bull run.
Platforms are now reviewing their risk parameters and oracle designs. Some have temporarily paused borrowing on affected assets. The question hanging over the market is whether the remaining TVL can sustain current lending activity, or if further outflows will trigger another wave of liquidations. No timeline has been given for when normal operations might resume.
