DeFi Chains Struggle to Recover Amidst Security Breaches and Outflows

Several decentralized finance (DeFi) blockchains are facing significant challenges, resulting in tens of millions of dollars in user asset outflows. According to data from DefiLlama, multiple DeFi chains have lost approximately 90% of their total user deposits over the years, particularly since the last crypto cycle.

Harmony’s Struggles

On-chain analyst 0xThoor identified Harmony, an Ethereum Virtual Machine-compatible blockchain, as the biggest drop in terms of DeFi total value locked (TVL). Launched in 2019, Harmony’s layer-1 mainnet reached its peak in January 2022, with a TVL of over $1.4 billion. However, six months later, North Korean hacker group Lazarus stole $100 million from Harmony’s Horizon bridge, leading to a steady decline in user deposits. By early 2025, Harmony’s TVL had plummeted to $1.7 million, a 99% drop from its all-time high.

Other Affected DeFi Chains

Other DeFi projects, such as Aurora, Moonrise, Canto, and Evmos, have also experienced significant declines in their TVL, with losses of at least 90%. Even Polygon, a popular Ethereum-based scaling solution, has lost 92% of its TVL, with crypto deposits on the layer-2 solution dropping from $9.9 billion in 2021 to $700 million in early 2025.

“Many more TVL charts will look like this over the coming years.”

Current State of DeFi

The total DeFi TVL currently stands at over $106 billion, down from $175 billion in 2025. Despite major protocol collapses, emerging projects like Coinbase-incubated Base and Bitcoin DeFi operability may propel the on-chain ecosystem to new heights as adoption accelerates.

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