A new report from Binance Research says April’s DeFi exploits triggered about $13 billion in outflows from major protocols. The wave of withdrawals sharply cut total value locked (TVL) and pushed on-chain leverage back to levels last seen in 2021.
According to Binance’s May market insights, DeFi TVL fell 10.7% month over month to about $82.7 billion by the end of April. The drop followed a series of hacks and exploits that erased roughly $635 million from protocols in a single month, the highest monthly total since the Bybit incident in February 2025.
Binance Research notes that April’s wave of exploits, led by major incidents at KelpDAO and Drift Protocol, triggered a much larger $13 billion rush for the exits as users yanked liquidity from lending markets and yield platforms. As TVL shrank faster than borrowing, the on-chain leverage ratio jumped to around 38%, roughly matching peaks seen during the 2021 DeFi boom.
Leverage Rises Without Real Borrowing Demand
Crucially, Binance Research says the higher leverage ratio did not come from a healthy rebound in borrowing demand. Instead, the metric rose mainly because the collateral base fell while outstanding debt stayed relatively sticky. In other words, the same pile of loans is now resting on a thinner layer of deposits and liquidity.
Analysts warn that “meaningful deleveraging has yet to materialize,” even after a broader market pullback. That means many positions that survived April’s stress still sit on elevated leverage, leaving DeFi more exposed if another major exploit or price shock hits.
The April numbers highlight how quickly confidence can evaporate when large protocols get hit. In some cases, a single bridge or collateral exploit sparked multi-billion-dollar TVL losses across multiple chains within days. Binance Research says the KelpDAO incident alone showed how stress can spread through DeFi’s “collateral, lending, liquidity, and leverage layers.”
Despite that, borrowing structures such as vault-style lending have held up and now account for nearly a quarter of total DeFi borrowing, up from almost zero in 2024. That resilience suggests some institutional and advanced users still view on-chain credit as attractive, even as casual liquidity providers pull back. Until leverage comes down more clearly, though, Binance Research argues that DeFi remains in a fragile state where security lapses can quickly translate into outsized market stress.
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