DeFi is back to 2021-level risk conditions.
According to Binance Research, the April DeFi exploits triggered approximately $13 billion in TVL outflows. As a result, total locked liquidity contracted sharply, while the on-chain leverage ratio rose to around 38%, matching levels last seen in 2021.
The increase in leverage was not driven by new borrowing demand, but by the shrinking liquidity base. In other words, debt levels remained while collateral and capital inside DeFi declined.
Even after the market pullback, a full deleveraging cycle has not yet occurred. This means DeFi remains vulnerable: another decline in prices could intensify liquidations and increase pressure across protocols.
According to Binance Research, the April DeFi exploits triggered approximately $13 billion in TVL outflows. As a result, total locked liquidity contracted sharply, while the on-chain leverage ratio rose to around 38%, matching levels last seen in 2021.
The increase in leverage was not driven by new borrowing demand, but by the shrinking liquidity base. In other words, debt levels remained while collateral and capital inside DeFi declined.
Even after the market pullback, a full deleveraging cycle has not yet occurred. This means DeFi remains vulnerable: another decline in prices could intensify liquidations and increase pressure across protocols.