Toddlers learn by falling: Why DeFi’s $20 billion TVL drop is just a market stress-test

DeFi Technologies president Andrew Forson says the stablecoin layer is thriving, with more than $150 billion in U.S. Treasuries backing coins like USDT and USDC.

Melinda 2 weeks ago 6 minutes read

Toddlers learn by falling: Why DeFi's $20 billion TVL drop is just a market stress-test

Finance

Share this article

Toddlers learn by falling: Why DeFi’s $20 billion TVL drop is just a market stress-test

DeFi Technologies president Andrew Forson says the stablecoin layer is thriving, with more than $150 billion in U.S. Treasuries backing coins like USDT and USDC.

By Olivier Acuna|Edited by Jamie Crawley

May 28, 2026, 4:33 p.m. 3 min read

Make preferred on

Andrew Forson, DeFi Technologies (Olivier Acuna/CoinDesk) — Andrew Forson, the president of DeFi Technologies, says decentralized finance is more than just lending protocols. (Olivier Acuna/CoinDesk)

What to know:

Despite high-profile hacks and a $20 billion drop in total value locked, DeFi advocates argue that critics are overstating security risks and ignoring the sector’s broader growth.
DeFi Technologies president Andrew Forson says the stablecoin layer is thriving, with more than $150 billion in U.S. Treasuries backing coins like USDT and USDC and transaction volumes growing 20% to 30% a month.
Forson contends that open blockchain transparency and continuous 24/7 operation make DeFi more resilient than traditional finance, as Wall Street giants such as BlackRock, JPMorgan and Morgan Stanley rush into tokenization and crypto services.

Andrew Forson, president of DeFi Technologies, has an entirely opposite view and a bit of criticism of his own: “DeFi is way more than those protocols that have been hacked,” Forson said in an interview with CoinDesk. “Those who don’t know that, are suffering from deep ignorance.”

“We’ve been at a conference where people are talking a lot about central bank digital currencies (CBDCs) and centralized bank money.” he added, referring to the recent Digital Money Summit in London. “But the elephant in the room is that you have Tether’s USDT and Circle’s USDC, and it’s working pretty much perfectly. Everybody else is trying to recreate that.”

Forson said that traditional finance and security alarmists significantly overstate localized code exploits to score reputational points against decentralized networks, completely missing the history milestones happening right under their noses.

While a $11 million bridge failure makes immediate headlines, the absolute core of the DeFi sector, the stablecoin base layer, is seeing unprecedented institutional adoption. “Stablecoins at the end of 2025 held over $150 billion in U.S. Treasuries,” Forson revealed. “That is more than Saudi Arabia. That is more than Germany in terms of their central banks and governments. All of those treasuries are used to back currencies and stablecoins that are predominantly used foremost in DeFi.”

Stablecoins held positions in U.S. T-bills exceeding $153 billion as of December 2025, according to the Bank for International Settlements (BIS).

Volumes expanding

Far from an ecosystem in collapse, Forson emphasized that core stablecoin volumes are expanding at a rate of 20% to 30% month-over-month.

Blockchain intelligence firm Chainalysis estimates that stablecoins moved more than $35 trillion last year, a figure that is expected to reach anywhere between $730 trillion to over a quadrillion dollars by 2035.

Furthermore, the network security layer remains completely untouched by the “superhuman” AI hackers hyped by security firms. “You haven’t heard of any core hacks to the Bitcoin or Ethereum networks,” Forson noted. “You haven’t heard of any core hacks to Circle’s USDC or Tether’s USDT.”

While security executives look at the open-source transparency of blockchain code as a fatal liability in the age of AI, Forson flips the argument on its head: onchain clarity is actually DeFi’s ultimate defense mechanism.

“One of the good things about the whole DeFi space is the transparency,” Forson explained. “When something goes wrong, everybody sees it, everybody talks about it and they fix it.”

He contrasted this with traditional legacy banking, where systemic errors can sit obscured in “private buckets” for years before a corporate auditor notices or publicizes a breach.

Wall Street embracing crypto

Recalling historic corporate collapses like Enron, Forson noted that financial systems have always had to engineer safeguards after market shocks – just as Wall Street introduced automated stock-loss provisions following the 1987 crash.

The fact that DeFi operates continuously – 24 hours a day, 365 days a week – means protocol gaps are exposed, stress-tested, and permanently patched exponentially faster than in any closed-door banking system.

“Toddlers learn to walk by falling,” Forson said, reminding critics that the entire blockchain space is only 16 years old. “There will always be people, entities, and technologies that have errors or push the envelope. But it doesn’t mean you completely shut down that entire field of finance.”

Forson concluded saying that “if the Wall Street players don’t participate in this space now, they will lose market share, because someone else will.”

However, the fact is that Wall Street is racing to tokenize the entire stock market and major financial institutions, including Morgan Stanley, BlackRock, JPMorgan, Charles Schwab, all have rolled out crypto services one way or another.

More For You

Asset manager Grayscale delays IPO plans as crypto listing boom loses steam

By Will Canny|Edited by Aoyon Ashraf

3 hours ago

Grayscale’s decision to delay its IPO highlights the growing caution across the crypto industry as volatile markets and weak investor demand weigh on public listing plans.

What to know:

Grayscale has paused its IPO plans due to unfavorable market conditions and is unlikely to resume preparations before Q4, according to a source.
The crypto asset manager, which filed confidentially for a U.S. IPO last November, is one of the industry’s largest firms and oversees products including the Bitcoin Trust…

Read full story

Latest Crypto News