JPMorgan diagnosed that hacking and capital stagnation phenomena hinder the attractiveness of DeFi for institutional investors. According to CoinDesk, JPMorgan stated, "The $20 billion loss from the KelpDAO hack highlighted the systemic risks of DeFi. Hacking and exploitation are core risk factors in cryptocurrency systems. This is because they directly erode trust in systems that rely on code rather than intermediaries. Even a single vulnerability can lead to massive losses. Despite improvements in smart contract auditing capabilities, infrastructure and bridge vulnerabilities remain major issues." JPMorgan added, "In this situation, investors are moving funds to stablecoins. Especially after this hacking incident, DeFi lending funds flowed into Tether (USDT), which has high liquidity and fast withdrawal capabilities, further increasing its preference as a safe haven asset."
