DeFi hacks shake institutional confidence as risks outpace yields

Mikhail Putiatin, co-founder of the restaking protocol Symbiotic, said that repeated bridge exploits combined with shrinking yields are causing institutional investors to doubt whether decentralized finance still offers a favorable risk-return profile. The statement adds a prominent voice to a growing debate about DeFi's viability for professional capital.

The comment arrives as the total value locked in DeFi has stagnated after a sharp decline from 2021 peaks. Bridge hacks have drained hundreds of millions of dollars from cross-chain infrastructure, exposing vulnerabilities that institutional allocators find hard to accept. At the same time, yields on major lending protocols have fallen to low single digits, reducing the reward for locking up capital in unaudited smart contracts.

Institutions typically require multi-signature safeguards, insurance coverage, and proven track records before committing funds. DeFi's permissionless nature clashes with these requirements. Bridge exploits specifically undermine trust because they often involve code flaws that a centralized team cannot easily patch after deployment. Putiatin's critique highlights the structural tension between DeFi's ethos and institutional fiduciary duties.