DeFi Lending Markets Show Low Hack Loss Rates Despite Ongoing Security Concerns

Lenders using decentralized finance (DeFi) borrowing platforms on Ethereum Virtual Machine (EVM) chains and Solana lost only around $3 for every $10,000 deposited over the last 12 months, according to new research shared by Keyring Network founder Alex McFarlane. The findings suggest that DeFi lending markets remain relatively resilient despite growing concerns over crypto hacks and protocol exploits.

Using data from DefiLlama collected on May 17, McFarlane analyzed non-bridge lending exploits across major DeFi protocols. The study found total gross losses of $30.9 million against an average Total Value Locked (TVL) of $99.6 billion, resulting in a gross loss rate of 3.1 basis points. After accounting for recovered funds, the net realized loss rate dropped to roughly 3 basis points.

For individual crypto lenders, this means the annualized hack-loss expectation was approximately $3 for every $10,000 deposited across leading EVM and Solana lending platforms. The analysis excluded bridge-related exploits, oracle manipulation incidents, and isolated protocol-specific failures.

McFarlane compared the probability of DeFi lending losses to the annual rate of fatal slip-and-fall accidents in the United States, arguing that the sector’s actual realized risk is lower than many investors assume.

DefiLlama data shows that DeFi hacks have totaled $7.75 billion historically, though excluding bridge exploits reduces losses to $4.52 billion. This highlights how bridge-related attacks have disproportionately impacted the broader DeFi industry.

Hack recoveries also helped reduce losses significantly. In EVM and Solana lending markets, around 20% of stolen funds were recovered. One of the most notable examples remains the Euler Finance exploit in 2023, where the attacker eventually returned all stolen assets.

Meanwhile, DeFi developers continue emphasizing simpler and more secure protocol designs. Industry contributors argue that leaner smart contract architecture may play a critical role in reducing future vulnerabilities as DeFi adoption continues to grow in 2026.