The decentralized finance (DeFi) sector experienced a notable downturn in Q1 2025, with total value locked (TVL) dropping to $156 billion due to a major Bybit exploit and economic uncertainty, according to DappRadar. This decline is particularly significant as it follows a 27% drop from the previous quarter. The report reveals that while some protocols remained resilient, the overall industry sentiment remained cautious. 27% drop in total value locked (TVL) was observed in Q1 2025. This downturn stems from a combination of factors including a major $1.4 billion Bybit exploit and prevailing economic challenges. DappRadar analysts highlight the combined impact of systemic market vulnerabilities and the resulting disruptions on DeFi’s performance.