The developers also proposed relaunching the protocol before July “a leaner, perps-native exchange with an emphasis on security.”

“The Drift team is taking considered measures to ensure that users are made whole, and that Drift restores itself as the leading perpetuals DEX on Solana,” they said in an update posted on the exchange’s website.

“The team has made internal hard decisions to restructure and operate as lean as possible, focusing entirely on recovery and relaunch.”

But various elements of the recovery plan will have to be approved by Drift tokenholders — and, if all goes according to plan, victims could wait years to break even.

On April 1, hackers were able to trick Drift administrators into approving bogus transactions. The hackers made off with crypto worth $295 million, forcing Drift to suspend trading and other activity. Blockchain analysts have since said North Korea was likely behind the hack.

Should it pass, Drift’s proposal would lead to a lengthy recovery process for users who want to be fully compensated for their losses.

Users would be issued a “recovery token” representing a claim on a "recovery pool” that would be gradually filled by Drift revenue, as well as crypto committed by Tether and other organizations that offered help after the hack. The claim would be proportional to the amount that each user lost, according to an update on the Drift website.

Drift earned $19 million in revenue in 2025. At that rate, it could take nearly eight years for the recovery pool to reach $295 million, assuming Tether and other partners honour their promise to commit a combined $147 million to Drift recovery efforts.

Users who don’t want to wait would be able to redeem their recovery tokens under par as soon as the recovery pool tops $5 million in assets. Drift proposed seeding the pool with just under $4 million in stablecoins.

The recovery tokens would be transferrable, letting people bet on the success of Drift’s business model, which is changing dramatically in the wake of the hack.

According to the proposal, the new Drift would drop “earn” products that resemble high-risk, high-yield savings accounts, and focus on a perpetual futures exchange running on slimmed-down code — a change that would limit hackers’ opportunities to find exploitable bugs.

The protocol would accept fewer collateral assets and offer only the most popular and liquid assets for trading.

Drift would also delay work on a mobile application and a new liquidity model it had unveiled just three months earlier.

Its rebrand as a “security-first” exchange, administrators would be required to follow a formal security protocol that includes dedicated devices and quarterly security training sessions.

The proposal had little affect on the Drift token, which was trading just under $0.04 before and after Tuesday’s announcement.

“This will take time but the structure is in place, ecosystem partners are committed and the work is underway,” the proposal concluded.

Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.

GM, Tim here.

Decentralised finance is notorious for being home to some pretty wacky ideas with dubious commercial viability.

Yet over the past year, developers have stumbled on one that not only works, but also happens to be quite profitable: letting users buy and sell virtual versions of trading cards.

Onchain marketplaces that allow users to speculate on the prices of Pokémon, One Piece, and sports cards have soared over the past year. They generated a combined $11 million in revenue last month, according to data from DefiLlama, generated on its new Pro dashboard.

Revenue on DeFi TCG marketplaces is up more than 9X year-over-year, with top marketplaces generating over $11M in April.

Chart created with DefiLlama Pro pic.twitter.com/3pUpFnQMhM

— DefiLlama.com (@DefiLlama) May 4, 2026

That’s no small sum for an idea that was basically unproven just over a year ago.

The success comes as trading cards — particularly Pokémon — continue their popularity. Nostalgia, financial speculation, and a post-pandemic boom in collectibles have caused prices to soar in recent years.

Pokémon cards, as measured through the Card Ladder Index, have produced a roughly 4,000% cumulative return since 2004, vastly outperforming the S&P 500, an index of the top 500 US stocks, which is up 513% over the same period.

Pokémon card factories are operating at maximum capacity. Despite producing over 10 billion cards annually, they cannot keep up with demand, resulting in ongoing shortages.

Packs of cards from popular sets now routinely resell for more than their recommended retail price, fuelling speculation from investors.

Logistical issues

For avid collectors, buying and selling trading cards comes with a host of logistical problems.

Like most markets for collectables, illiquidity makes it difficult to buy and sell at scale, and often involves additional costs such as auction and postage fees.

Those issues are exacerbated for those who want to invest larger amounts. It’s not uncommon for investors looking to play the trading card market to buy hundreds of the same card, or shipping pallets of unopened packs in the hope they will be worth more in the future.

So, it makes sense for investors who want to trade the red hot market to gravitate to DeFi platforms that offer exposure without having to hold onto the cards themselves.

Most platforms work similarly. Users send cards and boxes of sealed packs to the companies, who verify their authenticity, store them, and issue digital versions on blockchains like Solana and Polygon as non-fungible tokens, or NFTs.

It’s reminiscent of how gold exchange-traded funds made buying and selling the yellow metal cheaper and more accessible, albeit on a much smaller scale.

Many platforms also offer so-called gacha machines that mimic the experience of opening packs of cards. Users pay a set price and receive a random card in the machine, which could be of a higher value than the price paid, the platforms say.

Redemption delays

The question among both investors and those running onchain marketplaces is whether the trading card gravy train will continue.

Pokémon card prices have gone up a lot already. Charizard cards from the first ever set of Pokémon cards produced in 1999 can sell for up to $550,000 in perfect condition.

The same cards could be bought for between $1,500 and $2,000 around 10 years ago.

If prices start to fall, the NFTs that represent the cards could see steeper declines than the rest of the market.

Although platforms let users redeem their digital trading cards for real ones, there’s a delay in doing so — the cards have to be shipped to their owners, after all.

If investors rush to exit the market, they will likely be willing to sell the NFT cards for less than the current market rate to account for the delay.

Yet for now, the trading card mania shows little sign of slowing.

Top DeFi stories of the week

This week in DeFi governance

VOTE: World Liberty Financial supporters vote to unlock tokens for founders, team, and early investors

VOTE: Lido DAO votes on proposal to use first-loss mechanism to cover Kelp DAO-related losses

VOTE: Arbitrum DAO votes to approve release of Ether frozen following Kelp DAO hack

Post of the week

Crypto Twitter reacts as Coinbase CEO Brian Armstrong cuts 700 jobs and boasts that non-technical employees at his company are using AI to write and ship code.

pic.twitter.com/wS9AkezYg2

— VKTR (@0xVKTR) May 5, 2026

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Between 2022 and 2023, Uniswap’s decentralised autonomous organisation, or DAO, loaned out 12.5 million UNI to the nonprofit Uniswap Foundation and several top delegates in a bid to boost governance participation.

According to Erin Koen, the proposal’s author and governance lead at Uniswap Labs, the protocol’s governance is now much more active, meaning that the loaned tokens have served their purpose.

“Today, Uniswap’s governance environment looks very different,” Koen said.

“UNI holders have been actively delegating voting power, and since DUNI was established, passed proposals have averaged roughly 75 million votes in turnout, exceeding quorum by approximately 88%.”

DUNI, Uniswap’s Decentralized Unincorporated Nonprofit Association, is a legal entity that recognises onchain governance votes as legally binding and shields DAO members from personal liability for collective decisions.

Truly decentralised? 

The proposal to take back the loaned tokens comes as Uniswap Labs and the Uniswap Foundation work to address criticism that the protocol’s governance system isn’t as decentralised as it appears to be.

Critics have previously argued that the Uniswap Foundation holds too much influence. They say it often makes key decisions unilaterally or pushes proposals without sufficient community input.

Others lament how much of the decision-making at the DAO happens behind the scenes, and how large token holders and venture capital firms — in Uniswap’s case a16z crypto — dominate voting power, creating circumstances where smaller holders have little real say.

The situation has even attracted the attention of US Representatives.

Sean Casten, a Democrat from Illinois, questioned Uniswap DAO’s decentralisation during a hearing regarding the Clarity Act in June.

Misalignment issue 

In response, Uniswap Labs and the Uniswap Foundation authored a proposal aiming to align incentives across Uniswap Labs, the Foundation, and the DAO, which passed a DAO vote in December.

Its main objectives are to add fees to the Uniswap protocol and use the proceeds to buy UNI tokens and remove them from circulation, accelerate protocol growth, and to merge the Uniswap Labs and the Foundation, among other things.

That, in addition to other changes, such as setting up a legal entity for the DAO, incentivising governance participation, and reforming governance processes are all aimed at increasing governance decentralisation.

There are now 56 delegates with greater than 1 million UNI of voting power, according to data compiled by Snapshot, a DAO voting platform.

Taking back the loaned governance tokens also resolves a potential incentive misalignment, Koen said.

When the tokens were distributed, the Uniswap community selected delegates based on their participation in governance. However, it didn’t ensure alignment between delegates’ voting power and economic exposure.

In other words, delegates with little of their own skin in the game could potentially command an outsized amount of voting power in the DAO.

“The potential for this misalignment should not persist indefinitely when the original reason for implementing it is no longer a concern,” Koen said.

The vote to return the governance tokens to the DAO ends on May 8. So far, 53% of votes have been cast in favour, 46% voting to abstain, and a negligible amount against the proposal.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The hearing, scheduled by a federal judge in New York, is part of a fast-moving legal skirmish that has complicated an industry-wide effort to compensate the victims of an April 18 hack allegedly executed by North Korean hackers.

That exploit saw hackers make off with nearly $300 million in rsETH stolen from the Kelp DAO protocol. The hackers then used the stolen crypto as collateral to borrow other, more liquid assets on Aave, the largest protocol in decentralised finance.

But several organisations were able to freeze some of the stolen crypto before it could be laundered. Arbitrum DAO was the most successful, freezing crypto worth about $71 million.

Arbitrum DAO is poised to send that crypto to a recovery fund meant to compensate users affected by the hack. But other people who have been victimised by North Korea are now trying to claim the frozen assets, citing decade-old, multimillion-dollar legal judgments against the pariah nation.

On Friday evening, attorneys for those victims served Arbitrum DAO a restraining order forbidding the cooperative from transferring any “property interests of the Democratic People’s Republic of Korea.”

The victims include Han Kim and Yong Kim, relatives of a South Korean minister who was abducted and presumably killed by North Korean agents in 2000. Han Kim and Yong Kim secured a $330 million judgement against North Korea in US federal court in 2015, according to the restraining order.

On Monday, Aave stepped into the fray.

Aave LLC filed an emergency request, asking the court to throw out the restraining order “to avoid catastrophic injuries to the Aave Protocol, its users, and the DeFi system writ large.”

Aave was "rejecting the baseless claim that stolen property title belongs to the thief," founder Stani Kulechov wrote on X. "We will keep fighting for the DeFi community."

The victims “showed up, contending – based on conjecture from posts on the internet – that the thief was North Korea, and that by stealing the assets for a few hours, North Korea somehow became the rightful owner of those assets,” the company said in its filing.

“The Immobilized Assets do not belong to North Korea or any affiliated entities. Instead, the Immobilized Assets belong to the users of the Aave Protocol.”

Arbitrum DAO began voting on Thursday to transfer the assets to the recovery fund. That vote ends on May 7, a day after the emergency hearing.

“If the Immobilized Assets remain subject to a freeze and are not made available to restore value to the Aave Protocol users, the entire DeFi ecosystem risks being destabilized,” Aave LLC wrote.

Moreover, a freeze would create “unconscionable incentives,” according to the company.

“No one would dare to stop a thief from stealing funds or property if the reward for being a Good Samaritan was a legal battle,” it wrote.

In a statement on the Arbitrum DAO governance forum, the Arbitrum Foundation said on Monday it was “in active consultation with counsel to assess the situation.”

“Given the fluid nature of this matter, we are carefully evaluating potential next steps to ensure any response is measured, appropriate, and aligned with the long-term interests of the Arbitrum community,” the nonprofit wrote.

Judge Margaret Garnett, of the Southern District of New York, gave the plaintiffs until noon Tuesday to respond to Aave’s emergency motion. Both sides will make their case before the judge during an 11 am hearing on Wednesday.

Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.

Over the past month, 29 crypto projects have suffered hacks or exploits, the highest monthly tally in the industry’s history, per DefiLlama data.

Among them were two standouts: The hacks of Solana-based exchange Drift, and Ethereum-based restaking app Kelp DAO, which resulted in a combined $579 million loss.

The situation has sparked a crisis of confidence among the industry’s most ardent believers and left them questioning whether the tradeoffs inherent in decentralised technology are worth the trouble.

In recent years, the number of crypto hacks — and the amounts stolen — have edged higher.

The fast-moving and experimental DeFi space, once notorious for exploits, was thought to have matured. But now it’s back in the limelight — and not for the right reasons.

“Right now, DeFi seems to be the primary target,” Michael Pearl, vice president of strategy at crypto security firm Cyvers, previously told DL News. “In general, everything has shifted now to hacking humans rather than hacking systems.”

Single points of failure  

The problem, according to Michael Egorov, founder of DeFi protocols Curve Finance and Yield Basis, is centralisation.

“We need to reduce the number of single points of failure as much as possible,” Egorov said in a statement shared with DL News. “The goal of DeFi design should be to minimise human-centric points of failure, not add to them.”

The attacks on Drift and Kelp DAO both ultimately came down to centralised weak points.

North Korean hackers compromised two Drift employees through an elaborate social engineering campaign. This gave the hackers the power to make admin changes to the protocol, allowing them to steal some $285 million from users.

As for Kelp DAO, the instance of the LayerZero crypto bridge the protocol relied on was configured to only require a single operator, which hackers exploited to steal $273 million.

Yet centralisation is not the only way DeFi protocols are getting caught out.

Last month, 24 out of the 29 incidents — almost 83% — were caused by code bugs.

Crypto security experts previously told DL News that advances in artificial intelligence are making it cheaper, easier, and faster for hackers to attack DeFi protocols.

Bad actors are now using the large language models that power AI chatbots like ChatGPT and Claude to search through thousands of lines of code a second. Before, they had to do so manually.

Despite code bugs being the root cause of the majority of hacks, they only accounted for $42 million of April’s $635 million in losses — around 6.6%.

Not the biggest loss 

Despite a record 29 hacks, April wasn’t the worst month by the amount of funds lost.

In December 2020, hackers reportedly stole some $3.5 billion.

Yet this month is often considered an outlier because the vast majority of that figure came from the hack of wallets belonging to LuBian, a Bitcoin mining company.

Neither LuBian nor the suspected hacker have ever publicly acknowledged the breach, and it remained unnoticed for almost five years.

Arkham Intelligence, the blockchain data platform that discovered the hack, said it was likely due to LuBian's use of a flawed private key generation algorithm that left it susceptible to brute-force attacks.

The next biggest loss came in February last year when North Korean hackers swiped $1.5 billion from crypto exchange Bybit.

Additionally, hackers also stole slightly more than in April in August 2021, March 2022 and October 2022 respectively.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

On Thursday, the layer 2 blockchain, which lists Ethereum co-founder Vitalik Buterin among its early investors, launched its MEGA token, airdropping some 500 million tokens to those who bought them during the project’s October public token sale.

The token began trading at 11 am London time and initially rose to an all-time high of $0.38, according to CoinGecko data.

But it quickly began to sell off, dropping some 55% to trade at around $0.17.

Despite the volatility, those who bought the token during the public sale are still in profit. MegaETH sold the tokens at a clearing price of $0.0999 each, raising just under $50 million.

The project also sold 500 million tokens via a $10 million funding round on Echo, the early stage investing platform, at $0.02 each.

MegaETH’s wobbly launch comes as investor appetite for new crypto tokens dwindles.

The crypto market has been in the lurch since October, when it experienced a huge, structural crash that triggered over $19 billion in leverage liquidations.

Since then, investors' interest has been mostly limited to established cryptocurrencies, such as Bitcoin.

Slow start 

MegaETH is an Ethereum layer 2 network which touts itself as the first “real-time blockchain” capable of over 100,000 transactions per second.

The project previously secured $30 million in venture funding, almost $28 million by selling NFTs, and another $50 million selling tokens, bringing its total raise to around $108 million.

Yet despite the huge amount of funding, MegaETH has been slow to take off.

After launching in February, the blockchain has only seen $314 million in deposits to DeFi protocols, with top DeFi lender Aave accounting for just over 71% of its total deposits, per DefiLlama data.

Ethereum, the biggest blockchain for DeFi, hosts some $63 billion of deposits to protocols.

MegaETH isn’t the only hyped-up blockchain to see its token fall after launch.

Plasma, a high‑performance blockchain built for stablecoin payments, launched its XPL token in September. After a brief rally that saw the token hit an all-time high of $1.68, it began to fall. The token now trades at around $0.09 — a 94% drawdown.

Monad, another blockchain designed for extreme speed and scalability, launched its token in November. It’s down some 43% from its all-time high set shortly after its launch.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

On Wednesday, the Sky Frontier Foundation released the Q1 2026 financial results for the $13 billion lender, revealing it made nearly $124 million in gross revenue, and almost $61 million in net revenue in the first three months of the year.

It’s the highest income the protocol has made since it launched as MakerDAO back in 2017.

Yet the market doesn’t seem to be impressed by the record figures. Sky’s governance token has registered a decline of around 2.4% since the results were announced publicly.

Sky, like many decentralised finance protocols, operates as a type of digital cooperative called a decentralised autonomous organisation, or DAO.

Here, those who hold the Sky governance token can suggest and vote on changes to the protocol. The Sky token trades at almost a $2 billion market value, per CoinGecko.

Sky’s record earnings come as institutional interest in onchain apps that provide yield on crypto assets continues to grow.

DeFi protocols — including Sky — are rushing to make themselves more attractive to traditional finance players by repackaging their products and paying for risk ratings from established firms like S&P Global Ratings and Fitch.

Institutional interest

In fact, its primarily institutional interest which the Sky Frontier Foundation attributes to Sky’s blow-out quarter.

Sky’s gross revenue came in at $13 million more than the nonprofit’s estimate, and was buoyed by higher-than-expected growth of the protocol’s USDS stablecoin.

“From our understanding, this outperformance in USDS growth was driven by growing institutional demand for risk-adjusted yield onchain,” the foundation said.

“Feedback across the Sky Agent Network indicates that allocators are conducting more rigorous due diligence than ever before.”

In addition to Sky beating its previous quarterly revenue record, the protocol also produced a $46 million protocol surplus against a net loss of $13.5 million in the same quarter last year.

Protocol surplus refers to the revenue the protocol made over a target previously set by governance participants.

No buybacks?

One potential reason the positive results haven’t translated into more interest in the Sky governance token is the protocol’s hesitancy to conduct buybacks.

On March 14, Sky Governance approved a capital restructuring that shifted how the protocol allocates surplus funds. Rather than directing the majority of earnings to token buybacks and staking rewards, that money now goes towards building a $150 million solvency reserve.

While such a fund improves Sky’s resilience, and may help institutional investors feel more comfortable using the protocol, it does little to immediately impact the Sky token’s value.

“The message we observed from Sky Governance is that Sky Protocol is building for long-term resilience over short-term distributions,” the Sky Frontier Foundation said.

“Sky Reserves currently stand at $50.90 million, and as reserves grow toward the target, buyback and distribution rates will scale back up.”

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

There’s been a silver lining to this month’s devastating Kelp DAO/LayerZero hack: DeFi United, an impromptu, crowdsourced recovery fund.

The fund, orchestrated by Aave, has tentatively raised more than $302 million to date, much of it from DAOs and crypto businesses within the blast radius of the hack.

That’s enough to fully cover the April 18 exploit, in which hackers affiliated with North Korea stole some $293 million in rsETH from Kelp DAO by targeting its faulty implementation of a LayerZero-provided bridge — technology that lets Kelp move assets between different blockchains.

The hackers deposited $200 million of the stolen assets as collateral on Aave and borrowed large amounts of Ether. This left Aave with at least $177 million in unrecoverable bad debt.

Aave wasn’t hacked, but it may have been the prime victim. Its deposit base fell by nearly 50% as spooked investors withdrew their crypto.

Aave Labs CEO Stani Kulechov said he would contribute 5,000 Ether worth about $11 million to the DeFi United fund. Other Aave contributors have also pledged money to the effort.

Arbitrum DAO, Mantle, and Consensys have pledged at least 30,000 Ether apiece. Ether.Fi and Lido DAO have pledged 5,000 and 2,500, respectively. Kelp DAO and LayerZero have also said they would pitch in.

More surprising, however, is the fact that businesses and people largely unaffected by the hack have also jumped in to help.

Though they haven’t contributed to the fund, the Solana Foundation and Tron founder Justin Sun both plan on depositing stablecoins in Aave, a move that can help stabilize lending markets there. Both name-checked DeFi United when announcing the moves.

Count crypto VC Haseeb Qureshi among those heartened by DeFi’s kumbaya moment.

“I might have to take back everything I said criticizing Ethereum rainbows and unicorns,” he said, referring to the vaguely utopian and communal ethos among many prominent Ethereum developers.

“Sometimes rainbows and unicorns are exactly what a community needs. Very surprised this all came together through donations.”

But it hasn’t been without controversy.

Michael Bentley, the former CEO of Aave competitor Euler Labs, called it “good marketing.”

“'DeFi United’ has a much nicer ring to it than ‘bailout,’” he wrote on X.

The effort has even been controversial in the Aave governance forum.

TokenLogic, an Aave DAO service provider, proposed contributing 25,000 Ether — worth $57 million on Tuesday — from the cooperative’s treasury.

But some members had concerns. Tokédex founder Robby Greenfield noted that it asks much of the DAO “without requiring, as a precondition, any systemic reform to prevent the exact same failure from recurring.”

Other members had similar qualms. Still, TokenLogic advanced the proposal to the voting stage, arguing that changes to Aave’s risk management practices were a separate, parallel conversation.

“Conditioning disbursement on deliverables in a separate workstream would introduce delays and ambiguity at a moment that requires broader, industry-wide, aligned action,” it wrote on the forum. Voting began today.

The hack caused a crisis of confidence in crypto. The recovery effort provided a much-needed boost of morale. Now, we have to wait and see whether the whole fiasco will lead to the kind of reform that can turn this niche corner of world finance into a mainstream product.

Top DeFi stories of the week

This week in DeFi governance

VOTE: Lido DAO votes to contribute 2,500 Ether to DeFi United Recovery fund

VOTE: Aave DAO votes to contribute 25,000 Ether to DeFi United

VOTE: Aave DAO votes to formalise buyback pause

Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.

On Tuesday, DeFi United, a coalition of several protocols that includes the top decentralised finance lenders, published a technical implementation for restoring the backing for rsETH, the token stolen in the attack.

“DeFi United has secured sufficient ETH commitments to restore full backing,” Aave said in the outline, adding that the plan is to restore rsETH backing without socialising losses among the protocol’s users.

On April 18, North Korean hackers stole $293 million from Kelp DAO by tricking the protocol into releasing unbacked rsETH tokens.

The attackers deposited some of these tokens as collateral on Aave and Compound, then borrowed large amounts of Ether, leaving the pair with a combined $246 million in bad debt.

If DeFi United’s plan is successful, Aave and Compound users whose assets were withdrawn by the hackers using the dummy rsETH collateral will get them back in full.

The Kelp DAO hack is one of several major crypto thefts in recent months.

The spree has sparked a crisis of confidence within the DeFi community, with many industry insiders questioning if the trade-offs inherent in decentralised technology are worth the trouble.

Restoring the backing

DeFi United will start restoring rsETH’s backing by converting committed Ether into the asset in multiple tranches.

This will replenish rsETH’s backing so that every token in circulation will once again be fully collateralised by real Ether.

At the same time, the $246 million worth of rsETH still sitting in the hacker’s positions on Aave and Compound will be cleared via controlled liquidations, Aave said. To do this, the protocols will temporarily lower the oracle price of rsETH via governance votes to enable the liquidations.

Oracles are trusted data feeds that publish the prices of crypto assets on blockchains. DeFi protocols like Aave rely on them to know how healthy lending positions are.

Potential risks

While the plan is fairly straightforward, there are some potential risks, Aave said.

Liquidating the hacker’s positions requires governance proposals to pass and execute correctly on both Ethereum and Arbitrum, the layer 2 blockchain where the hacker sent some of the stolen funds. This, and other parts of the plan, are subject to governance votes among the respective protocols’ DAOs.

There’s also a chance the hacker could try and sabotage the recovery.

“Deliberate interference by the attacker could result in incomplete deficit accrual, requiring additional liquidation steps to fully resolve the positions,” Aave said.

Aave and DeFi United plan to start executing the rsETH recovery in the coming days, Aave Labs CEO Stani Kulechov said on X.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Sporting some $5.3 billion in deposits, Tron is the fifth biggest blockchain for decentralised finance. It has a cult following thanks to its billionaire founder, and a strong user base across Asia and several developing countries.

Yet despite its size, Aave has yet to deploy code there. Sun wants that to change.

“TRON and HTX stand together with AAVE jointly supplying $20M USDT to AAVE Core V3 Market in a show of support to bring AAVE to TRON. DeFi United!” Sun said in a Monday X post.

HTX, a Seychelles-based crypto exchange, is also owned by Sun.

The Tron founder’s pledge of support comes after North Korea stole some $293 million from KelpDAO, an Ethereum DeFi protocol, on April 18.

The hackers deposited $200 million of the stolen assets as collateral on Aave and borrowed large amounts of Ether. This left Aave with at least $177 million in unrecoverable bad debt.

A coordinated effort among big names in DeFi, coupled with partial recoveries of the stolen funds, have helped Aave plug the hole. So far, the lender has secured $160 million — around 80% — of the needed coverage.

Sun previously pleaded with the Kelp DAO hackers to return the stolen funds.

Aave on Tron

Whether or not to deploy Aave on the Tron blockchain isn’t a new debate.

In April last year, Aave-Chan Initiative, an Aave DAO service provider, ran a vote to see if DAO members were interested in a potential Tron deployment.

The vote passed and Aave-Chan Initiative called for the publication of a formal request for comment on the deployment, which ran between April 30 and August 22 that year. Several Aave DAO service providers, including Chaos Labs and LlamaRisk, provided feedback and risk recommendations.

Yet since then, there’s been little progress.

Sun’s comments — coupled with his $20 million liquidity injection — could help reignite discussions, and potentially lead to a binding onchain vote over whether to expand Aave to Tron.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The security firm Cyvers’ vice president of strategy told DL News that suspicious characters have approached him at crypto conferences, trying to sell him the moon.

“I have had a few cases where I suspected that I was being socially engineered,” he said.

“A person approaches you telling you a story that is too good to be true — who wants to invest in your company, wants to buy your product, and then they send you a link that seems suspicious.”

Social engineering is a strategy cybercriminals use to trick victims into clicking links laced with malware. It’s a kind of psychological manipulation that tricks people into letting their guard down. It is often the first point in digital attacks against crypto projects and can come from anywhere.

For instance, the Lazarus Group, the infamous North Korean hacking collective, has a history of using LinkedIn and fake job ads to woo victims.

The $1.5 billion Bybit hack in February 2025, a January $282 million theft from a single crypto holder, and, this month, the Drift Protocol attack are just some of the heists that started with a social engineering.

And it’s getting worse. In October, crypto security firm Elliptic warned that social engineering attacks against crypto projects are on the rise. It’s part of growing concern among blockchain sleuths and traders that have noticed an explosion in cybercrime this year.

‘Primary target’

A small selection of headlines since the start of the year paint a harrowing picture.

The team behind Drift, a popular Solana-based exchange, was approached at a conference by seemingly well-meaning businesspeople before the project was drained for nearly $300 million.

In early April, a hacker minted $1.2 billion of counterfeit crypto out of thin air by tricking HyperBridge, a crypto bridge, into creating unbacked tokens.

Days later, Justin Sun, one of the industry’s most recognisable billionaire moguls, begged North Korean hackers believed to be behind the Kelp DAO hack to come forward and negotiate.

Last year saw hackers make away with record amounts of crypto. They stole more than $2.5 billion, according to DefiLlama data. So far this year, criminals have stolen $786 million from crypto projects.

While decentralised finance protocols were singled out, centralised systems — including America’s biggest exchange, Coinbase — were the biggest target.

Now, hackers are enthusiastic about DeFi again. The fast-moving and experimental space, once notorious for exploits, was thought to have matured, but it’s back in the limelight — and not for the right reasons.

“Right now, DeFi seems to be the primary target,” Pearl said. “In general, everything has shifted now to hacking humans rather than hacking systems.”

Hacking humans

What’s leading to the surge in thefts? Security experts point to humans as the central point of failure.

“The initial point of compromise often begins with people,” Matt Price, vice president of investigations at Elliptic, told DL News, adding that artificial intelligence was helping bad actors get better at sharpening social engineering techniques.

The biggest hack in the history of crypto, the $1.5 billion theft from crypto exchange Bybit, happened after attackers posing as a trusted open-source contributor convinced a developer to install dodgy software.

Attacks this year have panned out in a similar vein.

Drift Protocol was targeted by hackers who had built relationships with the exchange’s team, posing as members of a legitimate trading organisation, according to blockchain security firm Chainalysis.

They then tricked Drift employees into signing transactions they did not fully understand, handing over admin control. They got away with almost $300 million in stolen assets.

Just an excuse? 

Hackers have access to more sophisticated technology since the explosion of better and cheaper AI models — and it’s helping, according to some.

Lawmakers grilled cybersecurity experts at a joint hearing by the Subcommittee on Border Security and Enforcement, and the Subcommittee on Cybersecurity and Infrastructure Protection this week, and the consensus was that hackers are more efficient and can work faster thanks to AI tools that previously weren’t readily available.

And security experts last month told DL News that cybercriminals were increasingly using AI to search for bugs in DeFi protocols and then take advantage of errors auditors may have missed.

But others are sceptical — and think the AI narrative is being used as an excuse.

“There’s this story that DeFi is trying to play of ‘we’re up against this unimaginable threat of AI that’s going to find the most minute, obscure vulnerability’,” David Schwed, chief operating officer at SVRN and an industry cybersecurity veteran, said.

“That’s not what’s happening here. It is: you build something incredibly shitty and insecure, [hackers] are just able to find it quicker.”

Schwed, who led development for BNY Mellon’s digital asset offerings, added that unless DeFi projects start thinking like traditional financial companies and put security at the forefront of what they do, hacks will continue to happen.

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

“No, sorry, it’s private. I can’t show you,” Dariotis remembers saying.

This was not the first time he’d faced off with his teachers. Having first dipped his toes into stock trading at age nine with the help of his father, a portfolio manager, Dariotis had found himself not just managing his own assets but those of a sprawling group of investors.

“It caused a lot of problems,” Dariotis told DL News.

For instance, he couldn’t show his computer screen to his teacher while he was doing trades.

“That was probably my initial introduction to why privacy mattered,” Dariotis said.

Now, the 22-year-old is planning to help crypto traders keep their trading strategies private.

In May, Dariotis will launch GoDark, a decentralised exchange, or DEX, for onchain perpetuals, a kind of financial contract that allows trading in an asset’s price movement.

The upcoming launch will put the company on a collision course with Hyperliquid, the industry leader.

GoDark’s unique selling point?

To deliver something traders have sought for a long time: dark pools that keep their trading strategies secret.

What is a dark pool?

Despite the slightly sinister-sounding name, dark pools are common within traditional finance. They enable traders to hide their orders.

That means that competitors cannot frontrun or copy them before they are completed. It gives them an advantage in the cut-throat competition over razor-thin margins. It also allows them to place big orders without causing supply shocks in markets.

The practice was officially recognised by the US Securities and Exchange Commission as far back as 1979.

'You’re basically just playing poker with your cards on the table, face up'

In crypto, where everyone can see your orders in real time, dark pools have so far been mostly an elusive prospect due to the inherent transparency of blockchains.

“You’re basically just playing poker with your cards on the table, face up,” Dariotis said.

The traders GoDark has spoken with say they have to change their strategies every two or three weeks to avoid being copied by competitors, which means they lose their edge, Dariotis said.

Others have pointed out this issue.

Changpeng Zhao, the co-founder of crypto exchange Binance, called for the ability to hide orders on DEXs in June.

“I have always been puzzled with the fact that everyone can see your orders in real-time on a DEX,” Zhao tweeted. “The problem is worse on a perp DEX where there are liquidations.”

Some, like Hyperliquid rival Aster, have already launched dark pools or similar privacy features for their users.

Dariotis says they fail to fully hide the orders.

“They're just taking those orders away from the order book, but you could fully see the transaction settle onchain, to and from the wallet,” he said. “You can see the amounts, and you could actually see in the trades feed the details of that order. It's not inherently fully private.”

Other privacy tools, like the crypto mixer Tornado Cash, are being hounded by regulators because criminals and sanctioned entities use them to launder money. That means traders don’t know whether the funds being swapped are clean, Dariotis argues.

“Just as importantly, those types of interfaces, while they may be private, offer really poor execution because of their swap interface — there's large amounts of slippage,” he said, referring to the price discrepancy that can occur between placing a trade and when it’s executed.

“There's no proper price discovery in the order books.”

$4 million seed round

GoQuant, Dariotis’ institutional digital asset trading firm that was founded back in 2022, developed GoDark in collaboration with Copper and GSR. Both firms backed GoQuant’s $4 million seed round in May 2025.

The new DEX for perps will hide orders by processing them through a series of offchain nodes operated by the GoDark protocol.

Those nodes are responsible for order matching, but the people hosting them won’t be able to see the details of what they’re matching, Dariotis said.

That is done using zero-knowledge proofs, a cryptographic method that provides only the necessary information — and nothing more — to verify and perform order-matching actions.

To avoid the protocol being misused, GoDark will geolock certain regions that aren’t on any US sanctions list. It has also integrated with Chainalysis to prevent incoming funds from illicit sources.

Retail first

GoDark’s target customer on day one will be retail customers who already trade on Hyperliquid.

Dariotis also opens the door to the institutional clients that GoQuant caters to — such as hedge funds, family funds, banks and proprietary trading firms — to join the fray further down the line.

He aims to see “about $100 million a day in volume” by the second month of trading.

Hyperliquid and Aster, by comparison, see $6 billion and $2 billion in daily trading volume, according to Defillama.

“There’s a lot of [traders] that care about privacy,” Dariotis said.

Eric Johansson is the managing editor at DL News. Got a tip? Email him at eric@dlnews.com.

Beyond the financial damage inflicted, the latest incident, a $293 million theft from crypto app Kelp DAO, has killed morale and sparked a crisis of confidence across many parts of the $2.7 trillion industry.

To make the attack possible, hackers from the hermit kingdom compromised an application built on top of LayerZero, a popular app for sending crypto between unconnected blockchains. This allowed hackers to send a fake message instructing the application to release the funds to them.

If that wasn't bad enough, the hackers returned days later to use LayerZero to send portions of the stolen funds to different blockchains as part of an elaborate laundering scheme.

So far, the North Korean hackers have sent at least $500,000 through LayerZero, onchain records show.

It’s the first documented instance in which the same app served as both the attack vector and one of the methods used to launder the stolen funds.

LayerZero did not immediately respond to a request for comment.

‘Standardised business operations’

State-funded North Korean hackers have plagued the crypto industry for almost a decade.

But in recent years, their attacks have become more organised, sophisticated and damaging to the industry.

Last year, North Korean attackers stole an unprecedented $1.5 billion from Bybit by compromising employees at Safe, the crypto exchange’s wallet provider.

“We are seeing these actors treat exploits as standardised business operations, characterised by infrastructure reuse and the exploitation of settlement corridors with the efficiency of a global enterprise,” Matt Price, vice president of investigations at Elliptic, a crypto security firm, told DL News.

In response, crypto security researchers have urged developers to shore up their defences.

“Security is no longer just about the integrity of the protocol’s code. Operational security is now equally critical,” Yajin Zhou, co-founder of blockchain security firm BlockSec, told DL News. “If the operational rails are weak, the code's security becomes irrelevant.”

David Schwed, chief operating officer at SVRN and a cybersecurity expert who led development of BNY Mellon’s digital asset offerings, told DL News earlier this week that projects need to hire seasoned chief information security officers and empower them to bring in teams of experts to build robust security systems.

Crypto security firm Halborn has also warned against projects that create single points of failure, which attackers can exploit with devastating consequences.

Laundering schemes

Hackers can’t just send stolen crypto to an exchange to cash it out; it would be easily spotted and confiscated.

To avoid this, hackers set up elaborate laundering schemes that split the money into small chunks and repeatedly send it across different wallets and blockchains to help distance it from its source.

That’s where LayerZero comes in. Hackers used it to send a portion of the stolen funds from Arbitrum, a layer 2 blockchain, to Tron.

In addition to preventing the hacks in the first place, security researchers are also pressing developers to make it more difficult for hackers to launder stolen funds.

One way is to block wallets identified as belonging to hackers from sending transactions to bridges. Another is to use safeguards to recover the funds the hackers stole.

This is what Arbitrum’s Security Council chose to do on Monday: take back some $71 million stolen in the Kelp DAO hack, which North Korean operatives had sent to the blockchain.

To be sure, LayerZero handled only a comparatively small amount of laundering.

Other crypto bridges, such as Thorchain, are consistently the preferred choice for North Korean hackers.

Following last year’s hack of Bybit, North Korean hackers also used Thorchain to launder $900 million in stolen funds.

“Everyone say thank you to Thorchain for providing such a valuable service to DPRK and helping them get away once again,” said security researcher Taylor Monahan after North Korean hackers used Thorchain to swap nearly $175 million stolen from Kelp DAO into Bitcoin.

“Thorchain’s decentralised nature does not fully insulate it from the legal ramifications of facilitating illicit transactions,” Yuriy Brisov, a partner at crypto legal consulting firm D&A Partners, previously told DL News.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

France’s national weather agency, Météo-France, is investigating precisely this question after filing a complaint with local authorities over allegations its weather data in Paris had been manipulated.

On April 6 and April 15, recording devices at Charles de Gaulle Airport recorded a dramatic spike in temperature in the evening.

Given how striking the rise in temperature — and its quick descent — Météo-France suspects foul play.

“Based on physical findings regarding one of our instruments and an analysis of sensor data, Météo-France has indeed filed a complaint with the Roissy Air Transport Gendarmerie Brigade regarding the tampering with an automated data processing system,” the agency confirmed with DL News.

Meanwhile, a handful of new Polymarket accounts won big betting on the weather in Paris on these two days.

One Polymarket user under the handle of Hoaqin won nearly $14,000 by betting $735 that the temperature in Paris would indeed reach 21 degrees Celsius on April 6. They bagged another $2,200 betting that the highest temperature would not be 18 degrees that same day.

The account was created less than 30 days ago.

Another user, Jiuzhou, turned $500 into more than $3,000 betting that the highest temperature in Paris on April 15 would hit 22.

“What makes the Charles de Gaulle readings so striking is not just the magnitude of the spike, but its signature: a sharp, isolated jump at a single station in the early evening, absent from every neighbouring observation,” Ruben Hallali, meteorologist and CEO of Sereno, told DL News. His company certifies weather data for insurance policies.

What’s more, says Hallali, is how closely this anomaly occurred precisely within the settlement window of a financial bet.

“In 15 years of operational meteorology, that is not something weather does on its own," Hallali said.

Polymarket back in the spotlight

This isn’t the first time Polymarket, one of the world’s most popular prediction markets, has found itself at the centre of manipulation claims.

Digital sleuths are highlighting unusual, ultra-lucky traders in specific markets on these platforms.

Just hours before US special forces captured Venezuelan President Nicolás Maduro in January, a brand-new Polymarket account bet more than $30,000 on his ouster.

The account’s total payout exceeded $436,000, sparking major concern that they had intimate knowledge of the government’s classified military operation.

Lawmakers in the US have since been busy writing draft bills to rein in such activity as these platforms grow in popularity.

Interference

As for the weather sensor in Paris, some have suggested clear interference — namely, from a hair dryer.

Hamali suggests it’s not that far fetch’d.

"Weather stations are designed to measure the atmosphere, not to resist deliberate interference,” he said.

“A portable heat source held near the sensor housing for a few minutes is enough to raise the recorded temperature by several degrees without leaving any obvious trace.”

Polymarket didn’t immediately return a request for comment.

Liam Kelly is DL News’ Berlin correspondent. Contact him at liam@dlnews.com.

Yet it is also the biggest single cause of the thefts that increasingly plague the industry.

Compromises of the password-like private keys that control access to crypto wallets account for an eye-watering $8.5 billion in stolen onchain assets. That’s almost half of all hacks that have taken place over the past 10 years, according to DefiLlama data.

It’s a sobering statistic, and one that throws into question not just the idea of self-custody, but the $2.7 trillion industry built around it.

Yet despite its pitfalls, self-custody can be done safely, David Schwed, chief operating officer at SVRN and a cybersecurity expert who led development for BNY Mellon’s digital asset offerings, told DL News.

The problem, Schwed said, is that most crypto projects operate on shoestring budgets, are incentivised to build quickly, and don’t want to get slowed down by what they see as excessive security measures.

Projects need to hire seasoned chief information security officers and empower them to bring in teams of experts to build out proper security systems.

“If you do that, absolutely you can build self-custody,” Schwed said.

Crisis of confidence

The crypto industry has been shaken to its core in recent weeks after North Korean hackers stole a combined $579 million from two major decentralised finance projects, Drift and Kelp DAO.

The hacks triggered a crisis of confidence in DeFi. Industry insiders have started to question if the trade-offs inherent in decentralised technology are worth the trouble.

Yet the two attacks weren’t ultimately down to novel bugs or vulnerabilities in underlying code, as many before them were. Instead, the hackers exploited weak points in the security of the projects or other systems they relied on.

For Drift, hackers broke into the project’s internal systems by getting contributors to download malware following a months-long social engineering campaign.

At Kelp DAO, attackers compromised infrastructure providers in LayerZero’s decentralised verifier network, which the project relied on to know who to release funds to.

Competitive business

There are several reasons why security isn’t at the front of such developers’ minds, Schwed said. Investors in early-stage crypto projects often pressure developers to build out their product, get it to market, and work to gain traction as fast as possible, he said.

Crypto is a competitive business. Projects that make it to market first are often able to solidify their positions and bat away competition. Aave, the biggest DeFi lending protocol, was originally founded in 2017 as ETHLend. Uniswap, the biggest decentralised exchange, was among the first to launch back in 2018.

Then there are the costs. Bringing in a proper security team involves hiring a chief information security officer and at least three to five people at minimum, and that’s going to eat into the budgets of even the most well-funded projects, Schwed said.

The culture within scrappy crypto startups is also an issue.

A competent chief information security officer will want to put in so many controls and roadblocks that developers will feel like they’re not going to be able to build quickly enough, Schwed said. Often, the choice is made to simply not hire one, or bring in someone who is less experienced or takes a more lax approach to security.

“I look at their LinkedIn profile, and right before this they were an individual contributor engineer at a company, and now they’re head of security?” Schwed said, describing those people who he has seen leading security at some crypto projects.

“You don't have that experience to be that leader, to really force certain procedural safeguards,” he said.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The billionaire creator of the Tron network said World Liberty Financial had, among other accusations, unjustly frozen his WLFI tokens, the project's native voting token.

“They wrongfully froze all of my tokens, stripped me of my right to vote on governance proposals, and have threatened to permanently destroy my tokens by ‘burning’ them — all without any proper justification,” Sun said, referring to the project’s leadership.

World Liberty Financial was launched in 2024 and co-founded by various members of US President Donald Trump’s family, namely his three sons, as well as the sons of billionaire real estate developer Steve Witkoff, who serves as the White House’s special envoy to the Middle East.

President Trump is a co-founder emeritus of the project, according to marketing materials.

Sun bought some $75 million worth of the project’s WLFI token in late 2024 and early 2025. Shortly after, the US Securities and Exchange Commission paused an investigation into Sun over alleged securities violations.

In March 2026, the SEC settled the case after he agreed to pay a $10 million penalty. He denied any liability.

The relationship between Sun and World Liberty Financial’s leadership has soured considerably since.

Brewing feud

Sun’s latest claims come less than a week after the project’s leadership threatened legal action against the Chinese crypto entrepreneur over “baseless allegations” about the project's operations.

On April 12, the Tron founder alleged that the WLFI team implemented a secret backdoor to control user assets, freeze tokens, and treated “the crypto community as a personal ATM.”

Sun had his tokens frozen in September after he sent $9 million WLFI tokens to the HTX crypto exchange, which he owns.

World Liberty Financial declined to comment. Sun did not immediately respond to DL News’ request for comment.

The project’s token is down nearly 76% from its all-time high set in October 2025. The project's market cap now sits at roughly $2.5 billion.

Update, April 22: Included note that World Liberty Financial declined to comment.

Liam Kelly is DL News’ Berlin correspondent. Contact him at liam@dlnews.com.

The crypto mood is grim.

At $293 million stolen, this weekend’s Kelp DAO-LayerZero exploit is the 10th largest in the DefiLlama database. Last year’s Bybit heist was nearly five times larger.

And yet it has triggered a crisis of confidence that might surpass the gloom of 2022, when people were genuinely afraid that crypto might not survive a series of multibillion-dollar bankruptcies that dragged Bitcoin to $16,000.

So, what could be worse than death? Why is the mood so foul? After all, Bitcoin has gone up over the past week.

Across X, the industry watercooler, crypto developers and investors are posting with the stunned tone of people who think they’ve spotted a lie — that the tradeoffs inherent in decentralised technology aren’t worth the trouble, and, in any case, the technology isn’t all that decentralised when push comes to shove.

Crypto investor Jon Wu summed it up this way (punctuation added for legibility): “Man, I know DeFi is not fully over, but it feels over. And not in the normal bear market kind of apathy-and-zero-vol-dead-chart kind of way — in the, ‘I don’t know, maybe atomic composability of arbitrary financial instruments secured by one-of-ones was a mistake’ kind of way.”

The Solana Foundation’s Seraphim Czecker put it more succinctly: “Feels like DeFi’s Lehman moment,” he wrote, in a nod to Lehman Brothers, a major US investment bank that collapsed in 2008, setting off the financial crisis that led to the Great Recession.

Now, DeFi developers need to improve the technology’s risk profile, wrote investor Simon Dedic, who called security “one of the most underfunded and least exciting verticals to work in.”

“The risk-reward ratio of DeFi simply isn't attractive enough anymore,” he wrote. “DeFi was actually supposed to eliminate the risk of a middleman and make finance more secure by letting you take control of your own assets. But it feels like we've achieved the exact opposite.”

The hack impacted Kelp DAO, of course, but it also led to the accumulation of bad debt on Aave. So many users have fled Aave — deposits have fallen nearly 40% over the past seven days — that it has lost the title of “largest DeFi protocol,” ceding it to Lido.

The hacker or hackers made off with more than 116,000 rsETH and almost took another 40,000 worth $92 million. But they were blocked by Kelp DAO, which paused relevant smart contracts in the nick of time.

The hacker swapped the stolen crypto on decentralised exchanges and borrowed against it on lending protocols, like Aave, using Ethereum and Arbitrum.

Kelp DAO wasn’t the only organisation that took action. Aave froze rsETH reserves. And, in a near-unprecedented move, Arbitrum’s 12-member security council froze about 31,000 Ether worth $72 million sitting on the blockchain.

Griff Green, a member of the security council, said he and his colleagues did not make the decision lightly.

Arbitrum founder Steven Goldfeder called it “one of the most complex decisions ever made in Arbitrum governance history.”

“This process was extremely distributed and coordinated by independent actors,” he wrote. “In a world where security councils exist, Arbitrum’s is a masterclass.”

Security researcher Taylor Monahan celebrated the move.

But crypto attorney Gabriel Shapiro noted that freezing funds to reverse a hack calls into question the entire concept of DeFi, which was meant to enable peer-to-peer finance, to remove middlemen with the power to censor transactions, good or bad.

Arbitrum’s decision opens up a whole new can of worms, according to Curve Finance founder Michael Egorov.

“Many will probably re-evaluate whether using Arbitrum is safe after this,” he wrote. “Also if they can freeze anyone — hard to argue that some TradFi regulations are not applicable to the chain itself. It is not neutral infrastructure.”

He suggested an industry powwow to come up with best practices for securing DeFi protocols.

A pseudonymous Yuga Labs employee who, aptly in this moment, goes by “Quit,” said the solution is simpler than freezes and security convocations. The solution is to stop being a degen, seeking exotic, layered, yield bearing assets.

“Confidence in DeFi is at an all time low right now,” Quit wrote. “We need to go back to basics. No reason somebody looking to deposit ETH to borrow USDC should be vulnerable to contagion from a bridge for liquid restaked rsKxyzstETH.”

Top DeFi stories of the week

This week in DeFi governance

VOTE: Morpho votes to authorise incentives on Tempo


PROPOSAL: Aave DAO debates pausing tokens to address Kelp DAO hack


PROPOSAL: Lido DAO debates proposal to increase transparency and consistency in node operator assessment


Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.

Zero-knowledge proof systems, including networks such as Aleo and Aztec, and mixers such as Railgun and PrivacyPools, rely on information-theoretic systems which are secure even against infinitely powerful attackers because of how information is structured and shared, not because of encryption.

That makes them mathematically immune to quantum attacks, according to a Coinbase-led study co-authored with researchers from Stanford and the Ethereum Foundation, and shared with DL News.

Their findings come amid growing concern over rapid advances in computing hardware that are expected to impact cryptographic systems.

That threat has been heard at the top of Wall Street. In January, finance leaders, including UBS CEO Sergio Ermotti, Jefferies’ head of equity strategy Christopher Wood, and hedge fund manager Ray Dalio, all sounded the alarm on Bitcoin’s vulnerability.

In March, Google shook the crypto world with a report warning that new quantum computers could crack the encryption that protects Bitcoin, Ethereum and other cryptocurrencies in as little as nine minutes.

“We firmly believe that a large-scale fault-tolerant quantum computer will eventually be built, and that blockchains need to prepare for this eventuality,” the study said.

At the same time, the report makes clear that the threat is not imminent and that preparation — not panic — is the correct response.

It is a recommendation shared by brokerage firm Bernstein, which described quantum computing earlier in April as “neither existential, nor novel, and also not limited to crypto.”

Who’s most vulnerable?

The most exposed assets are those secured by elliptic-curve signatures, in which the public key is already visible onchain, the researchers found.

Bitcoin is a prime example, the Coinbase researchers say. Roughly 6.9 million coins are held in addresses whose public keys have been revealed. About 1.7 million of those are old pay-to-public-key outputs, including early “Satoshi-era” coins.

Once a sufficiently powerful quantum computer exists, those keys could be harvested and broken. The largest whale addresses — some holding more than 1,000 Bitcoin — would be the first logical targets.

The report suggests these addresses function as the canary in a coal mine. If they move unexpectedly, markets will know something seismic has happened.

Research from Chaincode Labs suggests that between 20% and 50% of all Bitcoin — some $900 billion worth — could be vulnerable in such a scenario.

Meanwhile, Bitcoin contributors are advancing proposals such as BIP360 to address signature vulnerabilities before they materialise.

The Ethereum Foundation has published its own four-part roadmap to upgrade its $260 billion network by the same date.

Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email him at lance@dlnews.com.

Forget $80,000 Ether. One day, it could be worth a quarter-million dollars, the organisation argues in a new paper.

That figure comes from the combined market value of gold and Bitcoin — roughly $31.1 trillion, according to the paper — as well as the assumption that Ether is “better money” than either.

With 121 million Ether in circulation, a market value of $31.1 trillion would equate to each coin trading just above $262,000.

“The path to $250,000 depends on this being understood: ETH is not a technology bet,” the paper reads. “It is a superior monetary asset with an economic property that gold and Bitcoin strictly cannot replicate: it compounds.”

Founded in August 2024, Etherealize has emerged as one of Ethereum’s most vocal champions on Wall Street.

Supported by Ethereum co-founder Vitalik Buterin and the Ethereum Foundation, its mandate is simple: convince traditional financial institutions to adopt Ethereum-based products.

Etherealize’s earlier prediction, laid out last year in a paper entitled “The Bull Case for ETH,” was an attempt to change perception of Ethereum among traders who struggle to understand the cryptocurrency.

Bitcoin proponents believe the world’s biggest cryptocurrency is “digital gold,” the earlier paper noted. Ether should be understood as “digital oil powering the digital economy.”

The latest paper takes a new tack, positioning Ether as a bearer asset, like gold or Bitcoin, but one that comes with the benefit of yield.

“Productive money will outcompete dead capital,” it reads.

Citing nineteenth-century economist Carl Menger, the paper states that any quality monetary asset must be scarce, fungible, divisible, portable, durable, verifiable, and censorship resistant. It must also have an established history and low carrying cost.

“ETH matches or exceeds gold and Bitcoin on every one except established history,” the paper reads, calling the cryptocurrency “The first monetary asset that compounds without counterparty risk.”

Some of its arguments will be familiar to any Ethereum bull.

Bitcoin security comes from miner revenue, and Bitcoin transactions are not expected to compensate for the regular halving of block rewards. That will leave the network vulnerable to a 51% attack, the paper claims.

Moreover, Bitcoin developers’ resistance to making protocol changes means they will be slow to react to that and other threats, such as quantum computers. Concentration within the Bitcoin mining sector challenges its status as a censorship-resistant asset.

And, of course, unlike gold, Ether can be taken or sent anywhere so long as its destination has internet access and its owners remember their wallets’ 12-word seed phrase.

But the paper also argues that Ether has a higher floor than gold or Bitcoin, courtesy of decentralised finance.

Using another metaphor, the paper compares Ethereum to a toll road leading to the world of decentralised finance.

But that value proposition has taken a hit this month. Since April 1, more than $606 million in crypto has been lost to hacks, according to DefiLlama data. And the latest hack has severely affected Aave, the largest DeFi protocol, leading to dramatic outflows and a crisis of confidence within the industry.

The paper doesn’t provide a timeline for the $250,000 estimate, and cautions that it is “not a prediction.”

“It is a statement about what ETH would look like if the market agreed with the argument of this report,” it reads. “Whether the repricing happens in five years or twenty is unknowable.”

Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.

The security council is a 12-member group elected by the Arbitrum DAO. Its primary function is to address critical risks associated with the Arbitrum blockchain and its ecosystem.

On Tuesday, it used its powers to transfer 30,766 Ether tokens to an intermediary frozen wallet, making them inaccessible to the hacker.

“We did not make this decision lightly, there were countless hours of debates, technical, practical, ethical and political,” Griff Green, a member of Arbitrum’s Security Council, said.

“But all it takes for evil to triumph is for good men to do nothing, so today, we decided to do something.”

The move is controversial because it goes against core principles of the crypto industry.

Blockchains are supposed to be permissionless and immutable, meaning nobody can change, freeze or transfer another user’s assets without their permission.

Taking back the stolen assets from the Kelp DAO hacker, as Arbitrum’s security council did, violates these principles. Even if the ability to freeze assets is only intended for emergencies, it means the system isn't fully permissionless. Someone has the power to intervene.

The right thing to do?

The Kelp DAO hack has shaken the industry.

On Saturday, North Korean hackers stole $294 million from the DeFi app through a sophisticated scheme that used forged cross-chain messages to trick the app into releasing tokens when it shouldn’t have.

In the aftermath, investors withdrew over $15 billion from DeFi protocols amid renewed fears over DeFi security.

While reclaiming $70 million is a win for those impacted by the hack, not everyone is celebrating.

Dozens of critics argue that it sets a dangerous precedent.

If the security council is able to coordinate and take back funds in this instance, they say, what is stopping law enforcement agencies from compelling them to do so in the future when it suits their needs?

Yet many prominent industry figures also agree with the council’s move.

“Hard choice, but seems like the right thing to do,” Dan Robinson, general partner at crypto venture firm Paradigm, said. “Decentralisation is not a suicide pact.”

“Every cell of my being is meant to be against what Arbitrum just did. Yet I understand their decision,” Marc Zeller, founder of Aave service provider Aave-Chain Initiative, said.

“People getting their money back matters more than convictions that would allow unc Kim to walk away with a payday,” referring to the leader of North Korea, Kim Jong Un.

The $70 million in confiscated funds can only be moved by further action by Arbitrum governance, coordinated with relevant parties, a post from the official Arbitrum X account said.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

On Saturday, hackers from the hermit kingdom struck Kelp DAO, a restaking app on Ethereum, stealing $294 million from users.

In the aftermath, investor deposits in major DeFi apps — measured by a metric called Total Value Locked — dropped by more than $15 billion, according to data from DefiLlama.

Deposits on Aave, the biggest DeFi app, fell by $10 billion — around 22% of its total deposits before the Kelp DAO exploit. Morpho and Sky, the next two biggest DeFi lenders, saw their deposits decline by $1.7 billion and $600 million respectively.

These protocols were affected by the hack because they had integrated Kelp DAO’s rsETH token, 116,500 of which was stolen by the hackers.

Even unaffected apps on different blockchains have been impacted.

Kamino, the biggest lending market on the Solana blockchain, also experienced some $280 million of outflows since April 18.

Blockchain-based DeFi apps which offer yields on crypto deposits are vying to draw in institutional capital as asset managers from the broader financial industry pile into the asset class.

Yet the risks of using DeFi apps are increasing.

North Korean hackers are getting better and better at breaking into them, for one thing.

The nation state’s ability to execute fewer but far more damaging attacks demonstrates “increasing sophistication and patience,” according to a December Chainalysis report.

At the same time, artificial intelligence is also making crypto hacking cheaper, easier, and faster. Bad actors are now using the technology to search through thousands of lines of code a second, identifying vulnerabilities that have slipped by developers and auditors.

Nothing new? 

Hackers targeting DeFi apps isn’t a new phenomenon. But what has investors spooked is that the trend is getting worse.

Last year was the worst on record for cryptocurrency hacks, with total losses exceeding $3.4 billion according to crypto security firm Chainalysis. The fact that losses this year have already surpassed $771 million doesn’t bode well.

Security experts have noted that the recent hacks from North Korea’s Lazarus Group are becoming more sophisticated compared to previous attacks.

In Saturday’s $293 million theft from Kelp DAO, the attackers forged a legitimate-looking cross-chain message which required deep coordination and relied on a complex, cross-chain setup.

When Solana-based app Drift was hacked for $285 million on April 1, it was the result of a months-long operation that combined social engineering and abuse of niche features in the Solana blockchain.

To be sure, even traditional financial institutions can fall prey to hacks.

In 2016, North Korean hackers tried to steal almost $1 billion in funds belonging to Bangladesh’s central bank. While the attackers were able to get away with around $101 million, most of the transactions were blocked.

But in DeFi, transactions usually can’t be blocked or reversed. Code is typically the final arbiter over what actions users can and cannot do, and if hackers find vulnerabilities or other points of failure, the money can be lost for good.

Based on previous DeFi thefts perpetrated by North Korean hackers, it’s likely only a small amount of the funds stolen in the Kelp DAO hack can ever be recovered.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Saturday’s $293 million exploit of Kelp DAO has pushed bridge security to the top of the crypto industry’s spotlight, says Ari Redbord, global head of policy and government affairs at TRM Labs.

“When the security model of a $300 million issuer reduces to one validator’s signing key, the attack surface stops being technical and becomes structural,” he wrote on Sunday.

The analysis follows an attacker draining 116,500 rsETH — about 18% of the token’s circulating supply — by triggering a function on LayerZero’s cross-chain messaging system. In simple terms, the attacker sent a fake message that told Kelp’s bridge money had arrived from another blockchain. The bridge believed the signal and released the tokens.

Kelp DAO is a liquid restaking protocol built on Ethereum that allows users to earn both standard staking rewards and additional restaking yield through EigenLayer.

When users deposit eligible tokens, they receive rsETH, a tradable asset that can be used across DeFi platforms while the underlying funds continue to secure multiple networks. In effect, the structure allows investors to keep their capital productive without locking it up, preserving liquidity while generating layered returns.

The attack adds to the $286 million loss Drift suffered on April 1, bringing this month's DeFi losses to over $550 million.

How do bridges work?

A cross-chain bridge is software that connects different blockchains, such as Ethereum and Arbitrum.

When users move tokens across chains, the bridge locks the original tokens and creates matching ones on the new chain. That process depends on validators — trusted computers that confirm whether a blockchain transaction is genuine.

The bridge was fooled into believing a fake message from another blockchain was real, so it released tokens it should never have. Because only one validator was configured to approve those messages, a single point of failure enabled the attacker to unlock hundreds of millions of dollars.

Kelp’s setup reportedly relied on a 1/1 Decentralised Verifier Network, or DVN. That means a single validator had the authority to approve cross-chain messages. Once that validator was compromised or fooled, the entire system trusted a fake signal.

The "blast radius" extended beyond Kelp. Aave, SparkLend, Fluid, and Upshift paused markets tied to rsETH, Redbord said.

Aave alone saw more than $5.4 billion in ether withdrawals as users moved to limit exposure, he added.

Two additional attempts to drain another $100 million were blocked after Kelp’s emergency multisignature wallet froze contracts within 46 minutes.

“The answer is to lean into defense: diverse validator sets on messaging layers, real-time monitoring on mint and burn flows, fast-acting pauser multisigs, and cross-protocol playbooks that assume contagion,” Redbord wrote.

“April has been a tough month for DeFi builders.”

Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email him at lance@dlnews.com

The Tron Network founder took to X to urge the people behind the heist that pulled over $293 million in rsETH tokens, a liquid staking token that allows users to earn Ethereum staking and EigenLayer rewards, to come to the negotiation table.

“Kelp DAO hacker, how much you want? Let’s talk,” Sun said on Sunday. “With Kelp DAO’s help, of course. It’s simply not worth it to sacrifice both Aave and Kelp DAO and let the go down over this hack. You can’t spend $300 million anyway.”

It is unclear what exactly prompted Sun to reach out to the hacker. The crypto billionaire didn’t immediately return a request for comment.

Onchain data shows that addresses linked to HTX, the crypto exchange owned by Sun, have sent hundreds of millions to accounts on Aave, a huge DeFi lender.

Over $1.4 billion in HTX’s reserves held in the USDT stablecoin were lent on Aave as of December, according to a Protos report.

Freeze

Sun’s comment highlights the severity of the attack. The digital thieves targeted rsETH, but because it can be used across other decentralised finance protocols, such as Aave, it risks dragging them down as well.

Despite freezing rsETH markets on its platform, Aave investors have fled the platform en masse.

Investors have pulled out almost 25% of the assets deposited into the protocol since the hack. The total value locked is now sitting at just over $34 billion.

In its latest update, Aave said on its official X account that rsETH remain frozen across “Aave V3 and V4.”

“Exposure to the incident is capped,” Aave said. “WETH reserves also remain frozen across affected markets including Ethereum, Arbitrum, Base, Mantle, and Linea. Aave is actively validating information and assessing potential resolutions.”

Kelp DAO hasn’t issued any official messages since the April 18 update, which said it had “identified suspicious cross-chain activity involving rsETH.”

Kelp DAO didn’t immediately return a request for comment.

The hack marks the biggest on an industry project since hackers stole $1.4 billion from Bybit in February 2025.

The Kelp DAO exploit brings the total crypto stolen from industry projects so far in 2026 to $771 million, according to DefiLlama data.

LayerZero, a cross-chain messaging protocol, has blamed the hacking collective the Lazarus Group with ties to the Democratic People's Republic of Korea for the heist.

“Preliminary indicators suggest attribution to a highly-sophisticated state actor, likely DPRK’s Lazarus Group, more specifically TraderTraitor,” LayerZero’s official X account said.

“This incident was isolated to KelpDAO’s rsETH configuration as a direct consequence of their single-DVN setup. There is zero contagion to any other cross-chain assets or applications.”

Eric Johansson is DL News’ managing editor. Got a tip? Email him at eric@dlnews.com.

That’s what appears to be the case after blockchain security experts on Saturday flagged nearly $300 million leaving Ethereum-based Kelp DAO.

First alerted by blockchain sleuth ZachXBT via his Telegram channel, a total of $293.7 million was drained from the protocol’s rsETH adapter — a tool allowing users to deposit liquid staking tokens and get rsETH in return.

Kelp DAO wrote on X that it had “identified suspicious cross-chain activity involving rsETH” and that it had paused rsETH contracts while it investigated the situation with security experts.

Earlier today we identified suspicious cross-chain activity involving rsETH. We have paused rsETH contracts across mainnet and several L2s while we investigate.

We are working with @LayerZero_Core, @unichain, our auditors and top security experts on RCA.

We will keep you…

— Kelp (@KelpDAO) April 18, 2026

The world’s biggest DeFi project, Aave, also posted on X that it had frozen rsETH markets on its peer-to-peer lending protocols Aave v3 and Aave v4.

“Aave’s contracts have not been exploited and this is an exploit related to rsETH,” the project’s official account wrote.

Security firm Cyvers confirmed the hack to DL News, and said the funds had been swapped back to Ethereum and Arbitrum. It added that the attacker received funding from coin-mixer Tornado Cash to pay gas fees.

Kelp DAO did not immediately respond to questions from DL News.

What happened

Kelp DAO is a liquid restaking protocol built on Ethereum. Suspicious money movements from its rsETH adaptor were flagged at around 2.50pm in New York.

Users receive Kelp DAO’s rsETH token when they deposit other liquid staking tokens, such as stETH or cbETH, into the adaptor.

They can then use rsETH across other DeFi protocols, like Aave, while continuing to earn staking rewards.

Stani Kulechov, Aave’s founder & CEO, wrote on X that “the asset does not have any borrowing power” and that Aave v3 and v4 have no exposure to rsETH. He reassured users that the freeze was to help Kelp DAO investigate.

rsETH has been frozen on Aave V3 and V4, the asset does not have any borrowing power as a measure due to KelpDAO bridge exploit that happened outside of Aave. Both Aave V3 and V4 does not have further exposure to rsETH. https://t.co/vt8j1BOUjB

— Stani (@StaniKulechov) April 18, 2026

The price of Aave’s native AAVE token was down 10% over the past 24 hours, according to CoinGecko. Other major DeFi tokens like stETH and wstETH also dropped by nearly 4%.

DeFi community reeling

Saturday’s attack comes as hackers seemingly step up their attacks on DeFi protocols.

Cybercriminals hit Solana-based Drift Protocol on April 1, making away with $295 million. Before that, decentralised exchange and automated market maker Balancer was hacked in November for $128 million.

In a smaller crime this week, criminals targeted popular bridge Hyperbridge, exploiting the protocol to mint $1.2 billion in counterfeit crypto. But they only managed to get away with $237,000 due to liquidity issues.

This is a breaking news story and will be updated.

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.

But the recovery plan has one condition: The deal, aimed at recovering the lost $286 million, means that Drift will use Tether’s USDT as its main stablecoin — and not arch-rival Circle's USDC.

“The recovery plan presents a clear, revenue-driven model that prioritises Drift users from day one,” Tether said in a statement.

Tether cares https://t.co/R2vTti2N0b

— Paolo Ardoino 🤖 (@paoloardoino) April 16, 2026

“Additionally, as part of the relaunch, Drift will transition its settlement asset from USDC to USDT, bringing more than 128,000 users and over 35 ecosystem teams onto USDT-based trading.”

Hackers on April 1 drained over $286 million from the Solana-based trading platform. Investigators have since accused North Korean cybercriminals of being behind the heist.

Tether said Thursday that it would give Drift Protocol $127.5 million as part of the recovery plan. Other unnamed partners are proposed to contribute $20 million, the statement said.

Tether did not immediately respond to questions from DL News. Drift Protocol refused to comment further.

The recovery process

Drift Protocol said in a plan that it would use the cash to fund a recovery pool for user losses — now at $295 million.

The exchange said it was working with law enforcement and blockchain forensics to recover the money.

Drift added that a special token would be issued to those who lost money. Each token would represent a claim on the recovery pool and will be transferable, Drift said.

The protocol will relaunch after it has been audited by two different security firms, OtterSec and Asymmetric.

Hackers were able to hack the protocol after they spent months building relationships with the Drift team, blockchain researchers said. They met them in person at conferences and pretended to be from a legitimate trading organisation.

The cybercriminals then tricked multisig signers into signing transactions they did not fully understand, handing over admin control. The criminals were then able to change protocol permissions and withdraw funds.

As part of the relaunch, Drift said that multisig signers would operate on dedicated signing devices and identities of signers would be “maintained on a need-to-know basis.”

DeFi woes 

Drift’s hack came as the decentralised finance space faces increased scrutiny over its security.

Before hackers targeted Drift, cybercriminals hit DEX and automated market maker Balancer for $128 million.

And this week, criminals targeted popular bridge Hyperbridge, exploiting the protocol to mint $1.2 billion in counterfeit crypto. Still, they only managed to pinch $237,000 due to liquidity issues.

Hackers last year made away with record amounts of cash by targeting DeFi protocols. To be sure, the lion’s share of the money stolen was from centralised exchanges.

David Schwed, a cybersecurity expert chief operating officer of Near protocol infrastructure firm SVRN, told DL News following the Drift hack that DeFi protocols need to put more energy into improving their security.

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.

There’s just one snag — there’s no one to sell them to.

The problem is that the trader owns 31% of the 8,227 Anthropic tokens issued by PreStocks, a platform that sells economic exposure of private companies before they go public.

DL News ran simulations for selling the trader’s stash through several major exchange aggregators on the Solana blockchain, where the tokens are issued.

The best result is that the trader could sell around 950 tokens at a 34% discount below the asset’s price of around $911 per token. That would allow them to cash out $572,000, about the same amount they spent buying the tokens in the first place. None of the exchanges could fulfill a swap for all the trader’s 2,593 tokens.

In short, while the trader may have made $1.5 million on paper, they currently have no easy way to cash out for anywhere close to that amount unless more buyers step in.

PreStocks says investors can request direct redemptions of their tokens. Yet the process costs money, requires passing know-your-customer checks, and ultimately depends on the platform’s ability to liquidate the underlying positions.

The situation highlights the pitfalls of investing in tokens that represent exposure to companies that don’t yet trade publicly.

Issuers often claim that their tokens are backed one-to-one by shares of private companies like Anthropic, SpaceX, and OpenAI. But investors don’t receive any of the same rights and assurances they would receive buying a company’s shares directly, or through a regulated platform.

‘Special Purpose Vehicles’

Launched in August, PreStocks advertises that retail investors can use the platform to gain exposure to private companies with no minimum investment, no paperwork, and no management or performance fees.

The platform provides these opportunities by setting up Special Purpose Vehicles, or SPVs, legal entities that acquire actual shares or exposure to the target private companies through secondary markets or private deals.

After doing so, PreStocks issues tradable tokens on Solana which are supposed to represent these shares or exposure at a one-to-one ratio.

The scheme gives retail investors the opportunity to gain exposure to private companies, something normally reserved for institutions and professional investors.

Yet it has also been criticised by many in the crypto industry.

In addition to the issues with cashing out large numbers of tokens, the biggest complaint is the lack of transparency surrounding the SPVs who supposedly hold the exposure that backs the tokens.

Multiple sources report that PreStocks said it will issue regular external audit reports and, upon request, provide individual verification for a fee.

So far, the platform has yet to do so. A spokesperson for PreStocks told DL News that third-party attestation reports are a work-in-progress.

There’s also the issue of mismatches between the valuations of PreStocks’ tokens and the companies they represent. These valuations depend on the platform's sourcing and market dynamics, which can diverge due to thin liquidity or speculation.

In February, Anthropic closed a Series G funding round which valued the firm at $380 billion. This puts the value of a single share in the firm at between $259 and $346 — far below the $911 price PreStocks’ Anthropic token trades at.

To be sure, it’s not an issue unique to PreStocks. Similar platforms that do not use blockchains for distribution also have the same problem. One such platform, called Hiive, lists Anthropic shares for trading at $849.

The PreStocks spokesperson said that last round prices are unrelated to prevailing secondary market prices, which often trade beyond news headline prices.

Update, April 16: Added comments from a PreStocks spokesperson.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Blockchain sleuth ZachXBT on Tuesday said he’d found that $9.5 million in Bitcoin, Solana, Tron, and other cryptocurrencies had been stolen in April after users downloaded a malicious app.

A spokesperson for Apple told DL News that the company removed the app due to its bait-and-switch functionality and that the developer’s account had been suspended.

Thank you @smart_money for this analysis. This is all correct. And I have to say Thankyou to whoever actually sent me a couple sats that was very cool of you. Just trying to keep my head up here and breathe. Getting robbed is no joke. Thankyou for clarifying my hack 🙏🏻🙏🏻🙏🏻 https://t.co/JUDMmplaf6

— G. Love (@glove) April 12, 2026

In 2024, Apple rejected over 320,000 app submissions that were found to be spam or copying other apps, and took action to prevent over 37,000 potentially fraudulent products from reaching users on the App Store, said the spokesperson.

Popular crypto wallet Ledger did not immediately respond to questions from DL News. 

High-profile case

The case first got attention at the weekend after American singer G. Love posted on X that he had lost 5.9 Bitcoins — worth over $436,293 at today’s prices — after downloading the app.

“I had a really tough day today I lost my retirement fund in a hack/scam when I switched my Ledger over to my new computer and by accident downloaded a malicious Ledger app from the Apple store,” he wrote. “All my BTC gone in an instant.”

G. Love, the frontman of G. Love & Special Sauce, said that he was “tricked” into putting his seed phrase into the app after downloading it.

I'm not it's all good. It's just hard to get scammed. Fuck all yall haters that called me a liar. I been in the crypto circus since 2017. Today they caught me off guard. It was my own damn fault for not being more diligent. But let it serve as a warning. There's so many scams https://t.co/mNa3DfqG3a

— G. Love (@glove) April 12, 2026

“I been in the crypto circus since 2017. Today they caught me off guard,” he added.

Neither G. Love nor his management responded to questions from DL News.

The theft

The theft saw crypto stolen from over 50 suspected victims between April 7 to 13, according to ZachXBT’s investigation.

Funds were then moved from crypto exchange KuCoin addresses and laundered through a centralised mixer called AudiA6, he noted.

The biggest losses came from three victims who lost a combined total of $7.25 million — mostly in the form of USDC and USDT, the investigator said.

Dodgy apps 

Cybercriminals have been using fake apps and ads for years to steal crypto.

In 2023, ZachXBT flagged that over half a million dollars in Bitcoin had been lost after users downloaded a fake Ledger crypto wallet app from the Microsoft App Store.

The rich and famous people aren’t immune to scams, either.

The same year, billionaire Shark Tank host and Dallas Mavericks owner Mark Cuban lost nearly $900,000 in crypto after accidentally downloading a fake version of crypto wallet MetaMask that popped up in the form of an advert on Google.

Cuban only realised he’d been targeted after DL News contacted him to flag the attack.

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.

GM, Tim here.

On Sunday, Aave creator and Aave Labs CEO Stani Kulechov made a bold proclamation: Aave will win.

Aave DAO, the cooperative that governs the $45 billion DeFi lender, had just passed a landmark vote that redefines its relationship with Kulechov’s company.

In exchange for the DAO providing funding to Aave Labs, starting with a whopping $25 million in stablecoins and 75,000 AAVE tokens, the firm will direct 100% of revenue from Aave-branded products directly to the Aave DAO treasury.

It addresses a months-long argument between the DAO and Labs over who should receive revenue from a swap feature on the Aave website, the main way to access the lending protocol.

There’s just one snag.

Three of Aave DAO’s biggest service providers — organisations that have been with the DAO for years — announced their intention to break from the collective in the leadup to the vote.

While each organisation has specific reasons for leaving, their complaints follow a common theme: a dislike of what they call a growing centralisation of power around Aave Labs.

Aave DAO departures

The Aave DAO strife comes as DeFi lenders compete to woo institutions dipping their toes into onchain finance.

Many protocols are compromising on decentralisation, openness and transparency in order to make themselves more attractive to investors used to the closed, permissioned world of traditional finance.

The question is if Aave is among the projects trading away those crypto ideals.

For Marc Zeller, founder of Aave DAO service provider Aave Chan Initiative, the answer is a resounding yes.

He slammed Aave Labs’ request for DAO funding, arguing that it didn’t meet the same transparency standards that his organisation and other service providers hold themselves to.

“We spent three years building a culture of accountability inside the Aave DAO,” Zeller said in a post on the Aave governance forum announcing ACI’s departure from the DAO. “When we applied those same standards to the entity requesting the largest budget in DAO history, the system stopped working.”

What’s more, Zeller and other DAO delegates have criticised Aave Labs employees for using their voting power to influence the Labs funding vote.

Zeller isn’t the only critic of Aave Labs’ perceived control over the DAO.

“Aave Labs believes that the whole Aave DAO and contributors should pivot in the direction they believe in, without sufficient consideration of existing contributors’ expertise,” said BGD Labs when it announced plans to cease contributions to Aave in February.

‘No room for friction’

Kulechov’s response seems to affirm the concerns of the DAO’s service providers.

“The DAO is taking a zero-bureaucracy approach,” he said in his Aave will win post. “There is zero room for friction.”

It sounds like Kulechov is saying the quiet part out loud.

Most proponents say DAOs are meant to function like a democracy. Token holders entrust their voting power to delegates who propose protocol changes and debate them in an open forum.

Delegates often disagree, and that’s recognised as healthy. Debate fosters intellectual growth, sparks innovation, and prevents groupthink, ultimately leading to better decision-making, so the argument goes.

So, if there’s no room for “friction,” as Kulechov puts it, is Aave DAO really a democracy, or something else?

Top DeFi stories of the week

This week in DeFi governance

VOTE: Aave DAO to decide if it will axe Aave V3 on Scroll blockchain

VOTE: Sky DAO votes to launch new cross-chain bridge for Avalanche blockchain

VOTE: Across DAO greenlights transition from DAO to US-based C corporation

Post of the week

Hyperbridge joked about getting hacked on April Fool’s Day. The protocol got exploited 13 days later.

@inversebrah get me in pic.twitter.com/72OZ0TgG8S

— Ethereum Intern (@ethereumintern_) April 13, 2026

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The new initiative is one of several planned UK rollouts this year in the firm’s bid to become an “everything exchange,” Keith Grose, Coinbase UK CEO, told DL News.

“This is our most important market outside of the US,” Grose said. “It's also where we have the most employees outside the US and the biggest presence outside of the US. The UK is a cornerstone for us.”

The launch will “show and demonstrate” to the government that DeFi can be safe, if handled correctly, Grose said.

The comments highlight Coinbase’s ambitious growth plans and its campaign to sway UK lawmakers to introduce crypto-friendly rules.

'DeFi mullet'

Coinbase previously rolled out the service in the US and Brazil.

The new launch will enable UK customers to access DeFi vendors like Uniswap and Aerodrome through the Coinbase app. Through the decentralised exchange trading integration, UK users will be able to trade assets that are native to Base, Coinbase’s layer 2 network. It also plans to rollout the offering to other networks like Solana.

“This will increase the number of assets they can trade on Coinbase from 300 to millions,” Coinbase said in a blog announcing the UK rollout.

The service is built on the idea of the “DeFi mullet” — easy Coinbase experience in the front and DeFi in the back — that exchange has championed for over a year.

Coinbase will work with “trusted third parties” to screen out and highlight risks to assets, such as a high ownership concentration, Grose said. A high ownership concentration could raise the risk of a rug pull, which is when creators of a project withdraw all or most of the liquidity, including the deposits made by investors, leaving token holders holding empty bags.

‘Everything exchange’

Coinbase has made no secret of its plans to become an “everything exchange’ where users can trade everything from stocks to memecoins.

These efforts have seen it debut stock market trading and predictions markets on the platform to, as CEO Brian Armstrong put it, “bring the world onchain.”

Most of these efforts have been made in the US, but Grose says more services will come to the UK.

Grose declined to say what other services Coinbase plans to roll out in the UK, but said to look for the services that the firm has launched in the US to “get a sense” of what’s coming.

“I have gray hairs for a reason — it’s shipping season,” Grose said.

Eric Johansson is DL News’ managing editor. Got a tip? Email him at eric@dlnews.com.

The hacker tricked the bridge into creating one billion of Polkadot’s DOT token on the Ethereum blockchain, multiple security experts reported on Monday. Although the haul had a paper value of some $1.2 billion, a lack of liquidity meant the hacker sold the tokens through decentralised exchange Uniswap for just over $237,000 worth of Ether, onchain records show.

Seun Lanlege, founder of Polytope Labs, the firm behind Hyperbridge, said the protocol has been paused while his team works to patch the bug.

A spokesperson for Parity Technologies, a Polkadot developer, told DL News that based on the information currently available, the issue does not indicate any vulnerability in Polkadot’s protocol, consensus, or audited core code.

Last year, hackers swiped over $649 million through code exploits, according to a report from Slowmist, a blockchain security firm.

Even battle-tested protocols like Balancer, whose code had been live on the Ethereum blockchain since 2021, were not immune. It lost $128 million in November after a hacker exploited a code bug.

In recent months, DeFi developers fear hackers are increasingly using artificial intelligence to find DeFi protocol vulnerabilities and exploit them.

Most vulnerable DeFi protocols

Hyperbridge was created by Lanlege and co-founder David Salami through Polytope Labs, a Lagos-based blockchain research company started in 2023.

The protocol lets users send assets between various unconnected blockchains, such as Polkadot and Ethereum. Hyperbridge launched on Polkadot in November 2024.

The root cause of the incident appears to be a forgery of the messages the bridge uses to ensure users can only withdraw tokens equivalent to the amount they deposit, BlockSec, a crypto security firm, said on X.

The hacker, BlockSec said, found a way to fake these messages. This allowed them to trick the protocol into creating one billion DOT tokens without depositing the same amount into the bridge.

At one point, crypto bridges were viewed as some of the most vulnerable DeFi protocols.

In 2022, a hacker used a bug in Wormhole, a crypto bridge that connected Solana to several other blockchains, to steal some $322 million. Like the Hyperbridge attack, the hacker tricked the bridge into letting them create fake tokens.

A month later, North Korean hackers stole some $625 million from a crypto bridge connecting the Ronin blockchain to Ethereum. This time, the theft resulted from the hackers gaining access to the password-like private keys that controlled the bridge.

While attacks against crypto bridges have become less common in recent years, many of the same design choices that make them vulnerable still remain.

Polkadot's DOT token has fallen around 5% over the post 24 hours.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

Ed Tubbs, Dogecoin Foundation developer, wrote on X on Friday that the teams are working on ways to send quantum-proof transactions on the second biggest proof of work blockchain.

“We’re still in the early experimental phase, but it's exciting to see real post-quantum proofs appearing on mainnet,” wrote Tubbs.

We've been running experiments on Dogecoin mainnet where we attach a post-quantum proof (using Falcon-512 and similar quantum-safe signatures) to normal Dogecoin transactions.

Here's how it works:

- We create a normal transaction like you would when sending DOGE.
- We add a… https://t.co/mi2ZCwKqnY

— Ed Tubbs (@EdTubbs) April 10, 2026

Quantum computers are still experimental but some in the crypto community have sounded the alarm about hypothetical advancements in the machines that could in the future be able to break Bitcoin’s cryptography.

Google researchers in March said that improvements in quantum computers may allow them to be able to break the cryptography protecting major cryptocurrencies in just nine minutes.

Flagging quantum-safe transactions

Tubbs said that the latest advancement will allow users of the Dogecoin network to send a quantum-safe proof transaction alongside a normal Dogecoin one.

The method works by embedding a compact cryptographic fingerprint — known as a commitment — into a standard Dogecoin transaction using the network’s existing OP_RETURN field, which can store small amounts of arbitrary data.

A second transaction then reveals the full post-quantum signature on-chain, with the small amount of DOGE used to carry it returned to the sender.

While still in an experimental phase, the work shows, according to Tubbs, that eventually users of the network will be able to send Dogecoin transactions and flag that they are quantum resistant.

Still, the crypto network is still not protected against the threat of quantum computers and the blockchain would still need to upgrade to be quantum resistant.

What Bitcoin and Ethereum communities are doing

Hayk Tepanyan, founder of BlueQubit, a quantum computing software developer, told DL News that cryptographically relevant quantum computers could be a reality in just three to five years.

Still, the industry is torn on how best blockchains should prepare.

Bitcoin treasury Strategy co-founder Michael Saylor, has said that while developers should get ready, the warnings are overblown.

But Ethereum co-founder, Vitalik Buterin, in February proposed a “quantum roadmap” to protect the blockchain from encryption-cracking computers.

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.

On April 1, hackers drained over $286 million from the Solana-based trading platform. Investigators have since pointed the finger at North Korean cybercriminals.

The incident highlights how decentralised finance still has a long way to go when it comes to its security, which will prevent it from being accepted among traditional finance, according to Ann Irvina Ravinther, former marketing lead at Drift Labs, the firm behind the trading platform.

“Trust needs to recover,” Ravinther told DL News.

“People already in crypto and DeFi are forgiving and think it’s part of progress but at some point the industry needs to mature if it’s going to be ready for retail.”

“Right now, it’s not,” she added.

Ravinther left Drift Labs in February, according to her LinkedIn profile.

Ravinther wrote on X following the hack that she had lost $76,000 in crypto because of the hack. It isn’t clear whether she has managed to recover the funds. She didn’t answer DL News’ questions on the matter.

I left Drift in Feb 2026 to write, and I kept my savings on the protocol. $76,000, lol.

Over the past few days, I’ve been following the bizarre story. North Korean state-affiliated attackers posing as a quant firm. They built relationships over six months, and onboarded…

— ann (@spicycilipadi) April 7, 2026

Security in the DeFi space is a major issue after a number of high-profile hacks last year. Most recently, in November, criminals stole $128 million from decentralised exchange and automated market maker Balancer.

In 2025, criminals stole over $2.5 billion in crypto, according to DefiLlama. So far in 2026, digital larcenists have stolen nearly $456 million.

The future of finance? 

The DeFi space is still experimental but has become more mainstream as of late, with even a US President Donald Trump-backed protocol, World Liberty Financial, promising to revolutionise the way people handle their money.

Still, security needs to improve if people are to trust DeFi, said Ravinther.

“In the five years that I’ve been in crypto, it is sad that security is still the story,” she wrote on X.

“How is this the future of finance?”

She added in an exchange with DL News: “It’s one of those things you think won't happen, and then it does.”

David Schwed, a cybersecurity expert chief operating officer of Near protocol infrastructure firm SVRN, told DL News that DeFi protocols aren’t focusing enough on security.

“I don’t see the effort being put in,” he said.

“They don’t have the budgets of the bank, they don’t have the maturity of the bank. They haven't been running for 50 or 60 years and really understand how to build out a proper security programme.”

What we know 

The Drift Protocol hack involved social engineering, according to blockchain analysts and security firms.

Cybercriminals for months built relationships with the Drift team, meeting them in person at conferences and pretending to be from a legitimate trading organisation, Chainalysis said.

Hackers then tricked multisig signers into signing transactions they did not fully understand, handing over admin control. The criminals were then able to change protocol permissions and withdraw funds.

The weak point was the humans in control of the project, not a fault in the protocol’s code, as seen with previous hacks.

“The core issue is not the number of signers, but the lack of understanding of transaction intent,” Deddy Lavid, CEO and co-founder of security firm Cyvers, told DL News.

“This is why security needs to move beyond signer-based trust toward transaction-level verification, where every action is evaluated based on what it actually does, not just who approved it.”

Drift Labs did not respond to questions from DL News.

The protocol’s official X page announced Tuesday that it was working with security researchers to put together a recovery plan.

“We recognise the impact this has had across our users and the builders who have integrated with us — many of whom rely on Drift as core infrastructure,” a Wednesday post read.

“We’re actively working on next steps and will share more once details are finalized.”

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.

In August, S&P Global Ratings gave the decentralised finance lender a B- credit rating, putting the protocol’s USDS and DAI stablecoins on par with government bonds from the Democratic Republic of the Congo.

As the protocols looks to attract more institutions, they're aiming to improve that rating.

“We’ve reached this dominant position within the current market. We need to grow into TradFi,” Sam MacPherson, CEO of Phoenix Labs, the core development team behind Spark and a core contributor to Sky, told DL News in an interview at EthCC in Cannes.

“We’re very focused on improving the weak points that the more traditional institutional players are looking at,” he said.

Capital from the traditional finance world is pouring into DeFi as blockchain technology becomes more accepted and adopted among the world’s biggest financial institutions.

DeFi protocols want to attract these new investors, and a good way to do so is by securing a strong score from a respected rating agency.

A credit rating indicates to investors the likelihood that a debt issuer will default on a loan or other debt instrument due to bankruptcy. They are vital for traditional financial firms because they help them manage risk in financial markets.

High-yield bonds, often called junk bonds, refer to any debt security rated lower than BBB- by S&P Global Ratings or Fitch.

Junior senior  

The first thing Sky and Spark plan to do is repackage the debt that backs the USDS stablecoin.

Sky’s users can mint USDS by depositing crypto assets such as Ethereum and stablecoins into Sky Vaults, which use those deposits to earn yield. Users can then exchange USDS for sUSDS, a yield-bearing version of the token, through Spark. Users cannot mint more USDS than the value of their collateral, meaning that loans are overcollateralised.

“There will be USDS, and there may be some degree of exposure to higher yield products, but it’s going to be packaged up in a way that the ratings agencies are going to be comfortable with the exposure,” MacPherson said.

At the same time, Spark plans to section off riskier, higher yield assets in a junior risk capital vault, likely in the second quarter of the year.

“This will be a first loss type of vault. There’s higher risk but also the return will be higher,” MacPherson said.

These kinds of structured financial products are common in traditional financial markets.

When borrowers repay debt, lenders holding so-called senior products get paid first, but usually at a lower return. This makes the products lower risk and popular with conservative investors.

Junior products, on the other hand, are riskier because they get paid last, but offer higher yields to compensate for potential losses.

Additionally, Sky and Spark have minimised their exposure to USDe, a synthetic dollar issued by fellow DeFi protocol Ethena, MacPherson said.

S&P Global Ratings previously assigned USDe a 1,250% risk weighting in its previous assessment of Sky due to the complex mechanism used to maintain the asset’s value.

Ratings rush

Sky isn’t the only crypto project to pay for a credit rating.

In 2022, Compound Prime, the institutional arm of DeFi lender Compound Finance, also received a B- rating for its senior unsecured debt from S&P Global Ratings.

In addition to traditional ratings agencies like S&P Global Ratings, Moody’s Ratings, and Fitch Ratings, several crypto native ratings agencies are also popping up.

Platforms like Credora offer credit analytics and risk assessment for DeFi lending, although the ratings they provide don’t yet hold the same weight among investors as the traditional agencies.

As of March 2026, Spark has received a B+ rating for its stUSDS Vault, equivalent to a BB- from traditional ratings agencies.

“It’s super important,” for DeFi protocols to receive these ratings, MacPherson said.

“There is a lot of suspect underwriting going on right now and there really needs to be this check on major vault lending markets,” he said.

Update, April 9: This story has been updated to distinguish references to Sky and Spark, a Sky subDAO.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The problem? "Crypto ideologues," as he puts it, are lambasting his institution-focused blockchain, Canton Network, and slamming it for not being as open and decentralised as they’d like, while other competitors avoid their wrath.

“Nobody made noise from the Ethereum ecosystem on all of these L2s that run literally a centralised sequencer,” Rooz said in an interview with DL News at EthCC in Cannes.

“You go on Base. Base can censor the living hell out of you. You go on Arbitrum. They can censor the living hell out of you.”

“The reality is, ‘Why Canton is getting a lot of the noise?’ It’s a compliment,” Rooz said.

This battle between crypto idealists and pragmatists comes as institutional interest in blockchain technology soars following full-throated support and regulatory approval in the US.

Existing blockchains such as Ethereum are being matched by newer offerings like Canton, and Stripe and Paradigm's Tempo, who are meeting the institutions where they are with tailor-made platforms.

Canton has quickly become a major contender since its 2024 launch. As of December, it claimed $350 billion worth of onchain assets move across the network daily, although this figure can’t be checked publicly like on Bitcoin or Ethereum.

In comparison, Ethereum’s daily decentralised exchange volume sits at around $1.3 billion, according to DefiLlama data.

No world without middlemen

Rooz, 45-years old, has led Digital Asset, the firm behind Canton Network, since 2019. He previously served as chief financial officer and chief operating officer after founding the firm in 2014.

'The point of blockchains is not to get rid of intermediaries.' — Yuval Rooz

He’s an alumni of the traditional finance industry, having worked as an analyst at Citadel and subsequently as a trader at DRW for a total of seven years. And he’s not afraid to challenge some of the crypto industry’s most dearly-held convictions.

“I’m not a believer in a world without middlemen,” Rooz said. “That it is an extremely naive way to think about the world.”

“The point of blockchains is not to get rid of intermediaries,” he said. “The point of blockchains is to reduce the competitive barrier that exists in today’s traditional world.”

They’re bold things to say at Ethereum’s biggest conference. Just weeks earlier, the Ethereum Foundation, the blockchain’s biggest nonprofit, put out a new mandate which reaffirmed its commitment to so-called cypherpunk principles — which include cutting out intermediaries.

“All work must be architected to be maximally unstoppable and to function without incorporating centralised intermediaries or kill switches,” the foundation said in the mandate.

The Bitcoin Whitepaper, commonly viewed as a guiding light for the industry, explicitly says the technology is designed to cut out middlemen.

Make way for Wall Street

Yet Rooz’s views are an accurate reflection of a broad industry trend. Crypto’s founding ideals are increasingly making way for pragmatism in the face of institutional capital.

Bitcoin, built to exist outside the influence of banks and governments, has become increasingly institutionalised. Firms like $14 trillion asset manager BlackRock package and sell the asset via exchange-traded funds, forsaking the network’s self-custody benefits.

Similarly, dozens of crypto projects are rolling out the red carpet for institutions to tokenise real-world assets like debt and real estate on their platforms, often by compromising on crypto’s ideals.

To be sure, many of the assets institutions are tokenising on blockchains are, and will remain, permissioned and centralised.

The question is whether the networks those assets run on should aim to remain as decentralised, open, and permissionless as possible, or make concessions in order to become more similar to the existing financial system, and therefore a more comfortable place for institutions to operate.

Rooz says it’s necessary.

“In order to get enterprises more comfortable and be able to move faster into this tech we had to do all kinds of gives,” he said.

To be sure, Rooz said networks like Ethereum, which prioritise decentralisation and openness above all else, are valuable.

“I just don’t believe that they are going to have material adoption,” he said.

“If you run $20 trillion worth of assets you can’t just say, ‘I’m just going to trust decentralised governance taking care of things.’ It’s just the reality of how the world operates.”

Truly a blockchain?

On the other side of the debate, organisations like the Ethereum foundation argue that ensuring blockchains like Ethereum are decentralised, open, and permissionless is non-negotiable.

“These are the conditions that make Ethereum worth using, and therefore worth building, and worth defending,” the Ethereum Foundation said in a recent blog post. “They must never be traded away for convenience: without them we have nothing.”

With Rooz’s views at odds with some of the technology’s die-hard believers, it’s not surprising that Canton has drawn a substantial amount of criticism.

That criticism often focuses on whether or not Canton is truly a blockchain, and truly permissionless.

Most people in the industry consider blockchains, by definition, to be immutable ledgers. In short, once a transaction is recorded it can’t be reverted, nor the attached data altered.

Canton Network breaks this standard by allowing the removal of historical data, a feature explicitly designed to help those using the network comply with EU privacy and security laws.

On Ethereum, anyone can help process transactions and earn staking yield, as long as they have the required Ether tokens. Canton, however, limits who is able to contribute to the network.

Becoming a so-called Super Validator on the network isn’t open to the public, and is typically given only to institutions and financial service providers. New Super Validators also require approval via a supermajority vote from existing Super Validators.

A Canton Network spokesperson told DL News any company can become a Super Validator if they can articulate what value they add to the network and meet specific criteria.

‘Crypto ideologues’

There’s a thesis behind Rooz’s compromises.

He said he believes real-world assets are where the majority of crypto growth will come from. Those assets are, by nature, permissioned. They require know-your-customer checks, are bound by regulatory and compliance needs, and require counterparty assurances.

'The world is not permissionless. Even if we wanted it to be permissionless, it’s just not.' — Yuval Rooz

So a system that specifically caters to those requirements is better than a fully open and decentralised platform like Ethereum, he said.

“The people who are screaming the loudest about this topic are the crypto ideologues that keep on confusing crypto assets versus real-world assets,” Rooz said.

“The world is not permissionless. Even if we wanted it to be permissionless, it’s just not.”

Another sticking point is that a large amount of CC, Canton’s native token used to pay for transactions and incentivise validators, was accumulated by Super Validator institutions who joined the network early on.

Critics argue this created an uneven playing field, and will discourage commitment from additional institutions.

Since its launch in November, the CC token has swelled to a $5.5 billion market value, resulting in vast profits for those early Super Validators.

To be sure, Ethereum’s creators set aside tokens for the Ethereum Foundation and the development team at its genesis. But they also allowed anyone to start mining the asset from the start, as opposed to Canton which limited the ability to earn tokens.

Measuring success

Just how successful Canton has been since its launch is also a matter of great debate.

The network’s creator has inked several deals with big names in the traditional finance world.

In December, market infrastructure giant DTCC partnered with Digital Asset to tokenise assets on Canton.

In January, Kinexys, J.P. Morgan’s blockchain business unit, unveiled plans to issue its bank deposit token JPM Coin on Canton.

Payments giant Visa and USDC stablecoin issuer Circle have also joined Canton as Super Validators.

Yet at the same time, it’s impossible to independently verify how much actual activity is taking place on Canton, or where that activity is coming from. That’s because the network is opaque by design, a necessity for its institutional users, Rooz said.

'If Canton vanished tomorrow, would there be any impact to the repo market?' — Austin Campbell

Critics argue the $350 billion in daily trading volume of US Treasury repurchase agreements Canton reports shouldn’t be viewed the same as activity on other blockchains.

“This is purely a post trade reporting secondary data feed,” Austin Campbell, a Wall Street veteran turned crypto industry figurehead said. “If Canton vanished tomorrow, would there be any impact to the repo market?”

Another common criticism is Digital Asset’s ties to DRW Holdings, Rooz’s former employer.

DRW is among the earliest, deepest, and most influential backers of Canton Network and Digital Asset, leading funding rounds, providing liquidity, and acting as a Super Validator and Canton Foundation member.

This broad involvement means the firm holds significant influence over Canton, which could be off-putting as the network tries to get more competing institutions to use it.

Campbell has suggested some of Canton’s early success was influenced by DRW paying partners to use the network, based on his conversations with industry insiders.

Don Wilson, CEO and founder of DRW, said his firm has never paid anyone to participate on Canton.

Campbell went on to clarify he has no first-hand knowledge of any payments being made, and said on social media he had received legal threats from DRW in response to his comments.

“DRW's lawyers should know this is not a great tactic,” Campbell said.

A Canton spokesperson declined to comment and directed DL News to DRW, who did not immediately respond to a request for comment.

Update, April 13: Added a comment from a Canton Network spokesperson.

Correction, April 14: A previous version of this story said that Canton Network's transaction volume can’t be independently verified. It has been updated to say that it cannot be checked publicly.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

GM. Eric here.

The organisations running many of the world’s biggest decentralised finance projects have officially been recognised by three US states.

Last week, Alabama and West Virginia joined Wyoming — which signed its version of the so-called Decentralised Unincorporated Nonprofit Organization Act into law in 2024 — by signing their own versions of the DUNA Act.

That’s a big deal. It means that DAOs have been granted legal existence. This will allow them to more easily work with regular businesses, appear in court, pay taxes, and reduce legal risks — and still remain supposedly decentralised.

“This is forward-looking policymaking at its best,” Miles Jennings, head of policy and general council at a16z crypto, said. “It embraces innovation, protects participants, and empowers internet-native communities to compete with big tech incumbents. And it comes at a pivotal moment in the effort to make the US the crypto capital of the world.“

The idea is that this gives DAOs a chance to stand on equal footing with centralised entities like companies. It is a huge weight of their shoulders for DAOs at a time when the DAO model has come under scrutiny.

A DAO is a community of token holders who can vote and propose amendments to a specific DeFi protocol. Their proponents envisage these organisations as a way to break away from the top-down structures of centralised companies.

But because of the lack of legal status, many protocols were forced to form foundations that were supposed to act as neutral stalwarts for the projects, Jennings and Aiden Slavin, policy partner at a16z crypto, wrote on April 4.

In some cases, that helped foster decentralisation and diffused risks, but in others they created opacity, inefficiencies and limited growth, Jennings and Slavin wrote.

They have also — as DL News has repeatedly reported — contributed to protracted internal squabbling that has eroded trust in these DAOs.

More states signing their versions of the DUNA Act could change that.

“With the United States moving towards legislative clarity, the separation and fiction of foundations is no longer necessary,” Jennings and Slavin wrote.

Top DeFi stories of the week 🤖

This week in DeFi governance ⚖️ 

VOTE:  Lido DAO weighs in on plan to use 10,000 stETH to buy back LDO token

ANNOUNCEMENT: Aave DAO adviser Chaos Labs leaves over risk ‘misalignment’

VOTE: Arbitrum DAO mulls improvements to its audit programme

Post of the week 💥

Ethereum’s next upgrade, Hegota, is coming in the latter half of 2026.

“Past a certain age, a man who has a deep understanding of the Ethereum roadmap can be a bad thing.” pic.twitter.com/YizdNJoroG

— Zack Voell (@zackvoell) March 31, 2026

Speaking to DL News, security research firm Cyvers said that the exploit was similar to the Bybit exchange hack of 2025, when North Korean cybercriminals made off with between $1.4 and $1.5 billion in crypto.

“This closely mirrors the Bybit hack, different technique, same root issue: signers unknowingly approving malicious transactions,” Cyvers said.

Critical information of parties related to the exploit have been identified. Drift is now sending an on-chain message from 0x0934faC45f2883dd5906d09aCfFdb5D18aAdC105 to the ETH Wallets that holds the stolen funds.

Wallet 1: 0xAa843eD65C1f061F111B5289169731351c5e57C1 (Timestamp…

— Drift (@DriftProtocol) April 3, 2026

The security firm added that hackers had socially engineered multisignature signers for the platform.

Drift Protocol is a non-custodial trading platform allowing users to use leverage without an expiry date. On Wednesday, it announced it was under attack after blockchain sleuths flagged $286 million had been drained from the protocol.

Its attack comes just months after decentralised exchange and automated market maker Balancer was hacked for $128 million.

How it happened

Blockchain analytics firm Elliptic on Thursday said they had linked the attack to the Democratic People’s Republic of Korea, claiming the on-chain behavior, laundering methodologies and network-level indicators match those of previous attacks from North Korean actors.

“It is a continuation of the DPRK’s sustained campaign of large-scale cryptoasset theft, which the US government has linked to the funding of its weapons programs,” the firm said in a blog post.

Security firm Peckshield said the attackers drained Drift Protocol’s liquidity by getting hold of the platform administrator’s private keys.

Cyvers told DL News that Drift’s administrators were essentially conned into thinking they were signing legitimate transactions.

“The attackers manipulated legitimate signers into approving malicious transactions without realizing it, typically by presenting them as routine or urgent actions through convincing messages or interfaces,” CEO & Co-Founder of Cyvers, Deddy Lavid, said.

Circle criticised

A huge amount of the crypto left the protocol in the form of USDC, leading some to criticise stablecoin issuer Circle for not working fast enough to freeze the funds.

Circle mints USDC and has the power to freeze funds by activating a function on the token’s smart contract to prevent specific wallet addresses from transferring or receiving tokens.

Blockchain sleuth and crypto detective ZachXBT wrote on X Friday that Circle was slow to act following the Drift hack.

1/ Welcome to the Circle $USDC files.

$420M+ in alleged compliance failures since 2022, including fifteen cases of the US-regulated stablecoin issuer taking minimal action against illicit funds. pic.twitter.com/OiWZz5MrVM

— ZachXBT (@zachxbt) April 3, 2026

According to the blockchain forensics expert, various bridges were used over six hours — including its own product, cross-chain transfer protocol — but the crypto giant did not step in and stop funds moving.

“Despite the attacker laundering funds over six consecutive hours across Circle’s own native bridge, no USDC was frozen,” ZachXBT wrote.

Circle did not respond to questions from DL News. 

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.

The publicly traded company is aiming the asset — which will be backed 1:1 by Bitcoin — at institutions.

“cirBTC is designed to provide institutions with a highly secure and neutral version of wrapped BTC,” Circle said on its website.

Circle Wrapped Bitcoin is coming.

Backed 1:1 by BTC and readily verifiable onchain, cirBTC is being built to work seamlessly with Circle infrastructure and the broader DeFi ecosystem.

Learn more: https://t.co/wWzVBZdIz1 pic.twitter.com/Db5U3InaNA

— Circle (@circle) April 2, 2026

The product will be available on Ethereum and Arc first, but will be “architected for a multichain future,” Circle said.

It comes as traditional financial players push further into the crypto space, showing interest and investing in products and protocols related to tokenisation and decentralised finance.

The product

Wrapped assets allow traders to use their Bitcoin holdings on other crypto networks via tokens that are one-to-one backed by Bitcoin.

It allows Bitcoin investors to interact with DeFi tools — which largely run on Ethereum — without having to buy other tokens.

Circle, which mints the second biggest stablecoin in existence, USDC, claims that its latest product will unlock “utility for institutional markets.”

Circle did not immediately respond to questions from DL News. 

Crowded market? 

A number of wrapped Bitcoin products already exist, including the original wBTC and crypto exchange Huobi’s hBTC.

The asset has had its controversies, too: In 2024, big players in the DeFi space expressed concern after crypto custodian BitGo announced it was working with BiT Global to help custody wBTC. Some said that Justin Sun’s involvement with BiT Global presented “an unacceptable level of risk.”

Coinbase ended up delisting the token and debuted its own wrapped Bitcoin, cbBTC.

Still, there is demand for Bitcoin on other crypto networks — including for institutions, Maple Finance’s Sid Powell told DL News.

“Circle already has strong infrastructure, broad distribution, and credibility across crypto and payments. If cirBTC integrates smoothly across DeFi, wallets and exchanges, it could become a meaningful player very quickly,” he said.

“There is still strong demand for Bitcoin liquidity in DeFi.”

Some, though, expressed concern over the product’s centralised nature. Richard green, managing director of institutional at Bitcoin infrastructure firm Rootstock Labs, told DL News that decentralised products were the best bet.

“This launch just trades one centralized middleman for another,“ he said. “In the conversations we’re having with institutions seeking to take their bitcoin from passive storage to productive capital, we consistently hear that they want decentralization.“

Wall Street’s DeFi push 

The idea with Circle’s cirBTC is that Bitcoin is used more on DeFi protocols, according to Rachel Mayer, VP of product at Circle and the Arc blockchain.

“Bitcoin is sitting on the sidelines of DeFi. Not because people don’t want yield or liquidity — it’s because they don't trust the wrapper,” she wrote on X.

$1.7T of bitcoin is sitting on the sidelines of DeFi. Not because people don't want yield or liquidity, it's because they don't trust the wrapper.

cirBTC is Circle's answer: 1:1 backed, onchain-verifiable, and built on infrastructure the market already trusts.

coming soon to… https://t.co/hJ2YNweiP6

— Rachel Mayer (@0xrachelita) April 2, 2026

“cirBTC is Circle’s answer: 1:1 backed, on-chain-verifiable, and built on infrastructure the market already trusts.”

Circle’s announcement comes as Wall Street titans show increased interest in the DeFi space. BlackRock, the world’s biggest asset manager, in February said it was working with decentralised exchange Uniswap and had invested in its native token.

And Hyperliquid, a decentralised perpetual futures exchange, this month received the green light from the S&P Dow Jones Indices to debut a new contract giving traders exposure to the S&P 500.

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.

On one side are the cypherpunks, the privacy-loving industry trailblazers who want to use the power of cryptography to cut out middlemen and empower users.

On the other side are those looking to sell crypto and its products to the traditional financial world, sometimes by compromising on the ideals baked into the technology by the former group.

It’s the latest, and perhaps the starkest, example of the identity crisis bubbling within Ethereum and the broader crypto industry.

Cypherpunks built the technology, bestowing it with their libertarian values. Now, however, it’s being packaged and sold to Wall Street by those who are at best hoping to convince the corporate world of the value of decentralisation and permissionless blockchains, or at worst, looking to make a quick buck at the industry’s expense.

Vibe shift

It’s no secret that the crypto industry has become more institutionalised in recent years.

When the US Securities and Exchange Commission approved Bitcoin exchange-traded funds in early 2024, it opened the floodgates to institutional capital. Asset managers are now allocating to crypto en masse, something unthinkable just two years ago.

It’s in-person conferences like EthCC and the dozens of side events orbiting it that really highlight the scale of the change.

At previous conferences, the now substantial cohort of traditional finance attendees was small or non-existent, Dennis Bree, head of institutional growth at DeFi lender Morpho and conference veteran of five years, told me.

He recounted a conversation with the head of digital assets at a major US bank. Two years ago, they weren’t allowed to attend in an official capacity, and if they wanted to go, they needed to do so on their own time and money, Bree said.

Now, the conference is packed with ambassadors from the traditional financial world — networking, forming partnerships, and allocating funds. Yet I also heard from many attendees that it seemed there were fewer people at the event this year compared to last.

Funding pressure

EthCC itself has embraced this shift. Whether out of choice or necessity, though, is less obvious.

As conferences get bigger, they inevitably need more money to run. Because of this, conference organisers can’t be as discerning as they might like when it comes to wealthy sponsors, according to Seth, chief of operations at privacy-focused Cake Wallet, a ruby-tier sponsor for EthCC.

This year, Canton network, an upstart blockchain that aims to cater to the traditional financial world and has received criticism from some industry leaders, was among the event’s top sponsors. Its branding was plastered over a popup cafe on the venue’s top floor, which cost $75,000 run for the four-day event.

The impact, according to Seth, is that Ethereum’s cypherpunk side becomes much less visible. People discovering crypto for the first time are going to have to dig deeper to find out about the cypherpunk values that underpin the technology, he told me.

To add to the funding pressure, one conferencegoer told me that EthCC lost some of its sponsors after the US and Israel attacked Iran on February 28.

Events some sponsors were also attending in the Middle East were cancelled due to the war, and they chose to reinvest all their resources in US-based conferences happening later in the year, I was told.

Bettina Boon Falleur, director of EthCC, told DL News some early sponsorship contracts were broken due to market conditions.

"We had some sponsors drop after another conference prior to ours was considered unsuccessful and they decided to cut attendance in general," she said. "With regards to the geopolitical situation between the US and Iran and its consequences, I cannot, to the best of my ability, name one of my potential sponsors who dropped due to that."

Then there’s the cost to the conferencegoers themselves. At $500, tickets to EthCC are pretty expensive compared to some other conferences.

By contrast, BTC Prague charges general attendees a much more affordable $21.

Danny Sanders, chief commercial officer at Trezor, told me that if he could change one thing about EthCC, he would make it cheaper for general attendees. Trezor, a crypto hardware wallet company, was at the event primarily for retail investors, not enterprise, he said.

“I haven't seen a general admission pass,” Sanders said. “I don’t even know what colour they are.”

‘I’m really hungry this year’

Everyone at the conference I asked said side events are still the primary reason to attend, both for the cypherpunks and the more institution and enterprise-focused people.

But the quality of the experience can vary.

“I’m really hungry this year, companies can’t afford to feed me,” I heard from one business development attendee.

According to the source, in previous years he had been lavished with three course meals plus drinks by prospective partners. Now he’s lucky if there’s finger food, the source said, reflecting that it could be a sign the industry is struggling.

Some of the events I attended were less reserved.

On Wednesday, Optimism and Austrian crypto broker Bitpanda hosted a blow-out party high in the hills overlooking Cannes to celebrate the launch of a joint blockchain called Vision Chain.

The venue, a 118,000 square foot villa and garden complex, boasted an infinity pool, a gym and a spa. Staff in black tie attire weaved between the guests, serving drinks and offering hors d'oeuvres.

“It’s definitely the kind of party you throw if you want to show you have money,” a fellow journalist at the event recounted to me from a conversation he had with an attendee.

A Bitpanda spokesperson told DL News the event reflected that the industry was maturing and moving closer to the traditional finance world.

Last month, Optimism Labs, the blockchain’s developer, said that the company was letting go of 20 employees in a significant layoff. Weeks before, Coinbase said it was ditching Optimism’s tech, which it uses for its Base layer 2 blockchain. The partnership with Coinbase generated $16 million for Optimism over its lifetime.

But not every event was so flashy and ostentatious.

On Tuesday, DeFi’s true believers huddled in a pub tucked away behind the designer brand shops and luxury hotels to reminisce about the industry’s glory days and share insights into what the next big trends in decentralised tech could be.

Yet it seems as if such events are getting rarer as the crypto industry becomes more institutionalised.

Ethereum’s mandate

The divide among Ethereum fans at the conference was perhaps not surprising given the strong signal from the Ethereum Foundation, the blockchain’s biggest nonprofit organisation, weeks prior.

On March 13, the foundation published a new mandate that reaffirmed its commitment to cypherpunk principles.

“To be a part of EF, our own teams must remember that Ethereum must, above all, remain censorship resistant, open source, private, and secure — CROPS,” the foundation said in the mandate.

“These are the conditions that make Ethereum worth using, and therefore worth building, and worth defending. They must never be traded away for convenience: without them we have nothing.”

Yet for most of the week, I saw these values give way to pragmatism in the face of institutional money.

It begs the question: Will crypto become subsumed by the leviathan of the traditional finance world? Is this inevitable, like what happened to the Internet?

Maybe. Yet many of those I spoke to were also optimistic that crypto’s cypherpunk roots will endure even as the traditional financial world brings the technology into its fold.

“They are here because of the cypherpunks,” Alex Cutler, CEO of Aerodrome creator Dromos Labs, told me.

Even if institutions are here to just make money, that’s ok, Cutler said. The important parts of the technology — decentralisation, censorship resistance, and openness — won’t get left behind, he said, because they offer a competitive edge.

“They need to integrate it, otherwise they will fail,” he said.

Correction, April 4: A previous version of the article stated that the EthCC sponsored coffee booth cost "six figures" to run. This has been corrected to $75,000.

Update, April 4: Added comments from Bettina Boon Falleur, director of EthCC.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

On Thursday, it received a D rating from CORE3, which aims to push DeFi protocols, centralised exchanges and crypto firms to shore up their security and increase transparency by assessing them on the probability that users could lose funds through them.

“The industry still suffers from all the same problems it had when I joined in 2017,” Dyma Budorin, CEO of HAI Group, the firm behind CORE3 and blockchain security firm Hacken, told DL News.

Many projects just want to make money fast and don’t think about the risks, Budorin said. “We need to put pressure on them.”

CORE3 officially launched on Thursday, and has assigned numerical risk ratings to 1,426 crypto projects and 253 exchanges based on publicly available data.

Lower scores indicate a lower probability of loss and correspond to A and B letter grades, while higher scores indicate more risk.

The projects CORE3 tracks can submit more information to change their risk scores. The firm will also reach out to projects itself to request more information, Budorin said.

Institutional interest

CORE3’s launch comes as more and more traditional finance firms look to invest in the crypto industry.

Many crypto firms who spoke with DL News during the EthCC conference in Cannes said those institutions need more risk profiling to feel comfortable investing.

It’s this need that CORE3 is attempting to fill.

To be sure, there are other crypto ratings agencies around, such as Credora and Metrika.

Some crypto projects, such as Sky, have previously paid to receive a debt rating from S&P Global Ratings, a leading credit rating agency in the traditional financial world.

Among the crypto-specific ratings firms, CORE3 advertises itself as the only one that makes its scoring system completely public, allowing anyone to see exactly why projects received the score they did.

“Maybe others will copy our methodology,” Budorin said. “That’s fine if we’re making the industry safer.”

WLFI’s score

World Liberty Financial’s 68.01 probability of loss score and corresponding D grade puts it among the bottom 50 worst scoring projects on CORE3. The worst scoring project currently is RealT, a fractionalised real estate investing platform.

Top risks at the $2.8 billion DeFi project include a lack of continuous onchain monitoring, which raises the chance of a delayed response should a security incident happen.

CORE3 also noted the lack of a structured bug bounty programme, which reduces proactive vulnerability discovery and raises the risk that attackers find issues first.

The project’s token structure, where insiders own the majority of tokens, is another major risk.

Budorin said he anticipates criticism over CORE3’s ratings system and requests feedback from the industry to help improve it.

“We are not the final word,” he said. “If a change to our methodology makes sense we will do it.”

World Liberty Financial didn’t immediately return a request for comment.

Update, April 2: A previous version of this article stated that World Liberty Financial received a 'DDD' grade, per the CORE3 website. CORE3 has clarified the grade should have been 'D.' The article has been updated to reflect this.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.

The Solana-based perpetual futures exchange’s native token, DRIFT, dropped sharply on the news. CoinGecko data shows it was trading hands for a little over $0.05 after dropping 11% over a 24-hour period.

“Drift Protocol is experiencing an active attack. Deposits and withdrawals have been suspended,” the Solana-based app’s team wrote via its official X account. “Proceed with caution until further notice.”

Drift Protocol is experiencing an active attack. Deposits and withdrawals have been suspended. We are coordinating with multiple security firms, bridges, and exchanges to contain the incident. This is not an April Fools joke. We’ll provide additional updates from this account as… https://t.co/03SRPq4fHj

— Drift (@DriftProtocol) April 1, 2026

It added that it was coordinating with multiple security firms, bridges and exchanges to contain the incident.

DL News reached out to Drift Protocol with questions but did not immediately receive a response.

Blockchain sleuths first posted on X Wednesday afternoon New York time that money was fast leaving the protocol. Blockchain data firm Arkham Intelligence, which tracks the DeFi platform’s vault, shows that its balance plunged on Wednesday.

Hi @driftprotocol, you may want to take a look: https://t.co/7ATmq4GJ5P

— PeckShield Inc. (@peckshield) April 1, 2026

Top names in the Solana ecosystem, including Mert Mumtaz, CEO of Solana developer platform Helius, were also quick to warn traders of the potential exploit.

not 100% fully certain yet, but it seems drift might be getting exploited

monitor your positions https://t.co/xaHqJNDHg2

— mert (@mert) April 1, 2026

Over $285 million in crypto — mostly in the form USDC — left the protocol, according to blockchain sleuths.

Tens of millions of dollars worth of Jupiter Perps, Fartcoin, and Wrapped Ethereum were also moved.

Drift Protocol is a non-custodial trading platform allowing users to use leverage without an expiry date.

Drift Labs, the firm behind the trading platform, in 2024 announced it was debuting a prediction markets platform to rival Polymarket.

Update, April 1: This story has been updated to include Drift Protocol's latest comments.

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at mdisalvo@dlnews.com.