Crypto losses topped $1 billion in the first half of 2026 as the industry recorded its highest number of hacks in a six-month period, according to onchain security platform Blockaid.

Ethereum and Solana recorded the largest losses from incidents affecting their networks, with roughly $332 million and $326 million in stolen funds, respectively, Blockaid said in its H1 2026 security report published Tuesday.

Blockaid tracked 212 security incidents during the period, with the largest single exploit coming from KelpDAO at $292 million, while the platform verified 3.4 times as many high-threshold exploits in H1 2026 as across all of 2025.

Code exploits drove Ethereum incidents, while breaches of keys and signing infrastructure accounted for most Solana losses, according to the report.

Ethereum losses reflected the risks of high-value protocols

Ethereum incurred the highest losses from incidents in H1 2026, with attackers primarily targeting vulnerabilities in applications built on the network.

Blockaid said code exploits dominated Ethereum incidents by count, with major losses also linked to key compromises involving Humanity Protocol and StablR. CoWSwap, an Ethereum-based decentralized exchange, was the only major Ethereum incident in the report classified as a user mistake.

Blockchain losses by network in the first half of 2026. Source: Blockaid.

Blockaid identified several common attack methods targeting Ethereum, including bugs in bridges and smart contracts, unauthorized access to privileged accounts and market manipulation techniques.

The report said Ethereum remains a major target because it hosts many of the crypto industry’s most valuable applications, including restaking platforms, stablecoins and decentralized exchanges.

Solana losses surged as attackers shifted focus

Solana incurred nearly as much in losses as Ethereum during the first half of 2026, a sharp increase from the roughly $127 million in stolen funds the network recorded during 2025.

“2025 had $2.58 billion lost across 63 incidents, concentrated in Q1 by Bybit’s $1.5 billion, with Ethereum and Arbitrum the top chains by stolen-fund flow,” Blockaid CEO Ido Ben-Natan told Cointelegraph.

Blockchain losses by network in 2025. Source: Blockaid.

The change did not stem from a rise in smart contract exploits. Instead, compromised keys accounted for more than 98% of Solana’s losses, driven largely by incidents involving Drift Protocol and Step Finance, which Blockaid linked to North Korea-linked cyber groups.

Unlike Ethereum, where attackers primarily exploited vulnerabilities in protocol code, Solana incidents targeted signer infrastructure and organizational security, while a handful of code exploits involving Raydium and Volo accounted for the remaining losses.

Magazine: A quantum roadmap would push Bitcoin much higher: Charles Edwards

Solana price fell about 5% from its July 27 high near $77 to $73 on July 28 as a break below short-term support triggered long liquidations.

Solana price drops back toward $73

According to data from crypto.news, Solana (SOL) price traded near $73.20 at the time of writing after falling from an intraday high around $77 during the previous session. The move represented a decline of about 5% from peak to trough.

The pullback followed SOL’s latest rejection from the upper half of a descending channel visible on the 4-hour chart. Buyers pushed the token toward $77 on July 27 but failed to challenge the channel’s upper boundary or the wider $78 resistance area.

Selling accelerated after SOL lost the $75 level, which had supported several earlier intraday rebounds. The token subsequently fell toward $73 before entering a narrow consolidation range.

The daily chart showed SOL trading below the Murrey Math major support-and-resistance pivot at $75. Its July 28 candle recorded a low of $72.86, although buyers prevented a sustained fall below $73.

SOL’s decline also came as capital showed a preference for Ethereum. ETH recently reclaimed $1,900, while SOL remained trapped below its July resistance range.

Crypto trader Daan Crypto Trades noted that the pair was beginning to lose its horizontal support area.

“[Solana] needs to break this local consolidation before we can start looking at the range high again.”

Daan added that Ethereum’s recent strength against Bitcoin had left Solana behind, making the ETH ecosystem more attractive while SOL remained weak.

Long liquidations accelerated the sell-off

The three-day CoinGlass liquidation heatmap shows that Solana’s slide cut through several leveraged trading zones between $75 and $73.

SOL first dropped sharply below $75 before falling through another band of liquidity around $73. The move likely forced leveraged long traders to close their positions, adding market sell orders to an already weak spot market.

The heatmap shows that the largest nearby concentrations now sit on both sides of the current price. A bright liquidity band has formed around $72.40–$72.70, while additional clusters are visible near $73.80–$74.20.

This positioning could keep short-term price action unstable. A move below $73 may attract SOL toward the lower liquidity pool, while an initial rebound could target the accumulated positions around $74.

Further liquidation interest is visible near $75 and $76.50. Those levels could act as upside targets if buyers regain control, but they may also become resistance because traders caught in the decline could use a recovery to exit positions.

The liquidation data support the view that derivatives positioning magnified the decline. However, the charts alone do not establish that institutional sell blocks caused the move.

SOL indicators point to weak momentum

Solana remains inside a descending parallel channel that has guided its 4-hour price action since the early-July peak above $83. The channel has produced a sequence of lower highs, including rejections near $79 and $77.

SOL is now approaching the channel’s lower half. The lower boundary sits close to $70, making that level the next broader technical support if $73 fails.

The 4-hour relative strength index has fallen to 35.57, below its signal average of 47.33. The reading shows that sellers control short-term momentum, although SOL has not yet entered the conventional oversold zone below 30.

Aroon readings also favor the downside, with the stronger line at 78.57% compared with 57.14% for the opposing measure. The indicator reflects the recency of price highs and lows rather than the size of a move, but its current configuration is consistent with SOL’s recent lower low.

On the daily chart, the average directional index stands at only 11.54. An ADX reading below 20 normally indicates a weak trend, suggesting SOL is still consolidating rather than entering a confirmed directional breakdown.

That weak reading leaves room for false moves around support. SOL could briefly sweep liquidity below $73 before recovering, particularly if selling pressure in the derivatives market eases.

Solana price levels to watch next

The first level buyers need to recover is $74. A move above that area would allow SOL to challenge the $75 pivot, which has changed from support into near-term resistance.

A daily close above $75 would weaken the immediate bearish case. Bulls would then need to clear $77–$78 and break above the descending channel to reopen a path toward the July high around $83.

Failure to reclaim $75 would leave SOL exposed to another test of the $72.50 liquidation cluster. Below that area, the channel boundary near $70 becomes the next likely target.

The daily Murrey Math chart places the bottom of the broader trading range at $68.75. That level may provide stronger support if a breakdown below $70 develops. A deeper correction could then extend toward the $62.50 pivot, although the current low ADX reading does not yet confirm such a move.

Fed decision adds risk for US traders

US investors are also awaiting the Federal Reserve’s next policy decision. Interest-rate expectations, movements in the dollar and Treasury yields can affect demand for high-risk assets such as SOL.

Treasury yields eased on July 28, while oil prices also fell as markets responded to renewed hopes for diplomacy in the Middle East. Brent traded below $87 and US crude near $81, reversing part of the inflation-driven pressure seen earlier in the week. The pullback reportedly followed a pause in attacks and renewed hopes for a US-Iran agreement.

That means SOL’s latest decline appears more closely linked to its technical breakdown and leveraged positioning than to a fresh rise in oil or Treasury yields. The Fed decision could still determine whether US liquidity conditions help SOL recover $75 or push it toward lower support.

When DeFi dashboard Zapper announced this month that it would shut down after nearly seven years, it joined a growing list of decentralized finance projects that have folded in 2026.

Bitcoin DeFi platform Botanix, Solana portfolio tracker Step Finance, DeFi analytics platform Parsec and DEX aggregator Odos Protocol also wound down or are winding down this year after multiple market cycles.

The carnage isn’t limited to DeFi — RootData has tracked 101 “dead” crypto projects in total this year as of July 26 — but it accounts for more than half the cadavers.

Is it simply a case of bear market blues, or is there more to it than meets the eye?

Botanix’s founders pointed to weak demand when announcing the platform’s closure, and told Cointelegraph in June that onchain activity consolidating around a few venues like Hyperliquid and big centralized exchanges hastened Botanix’s decline.

While complaints the overall industry is consolidating into a fewer, larger venues are common, Artemis Research’s Alex Weseley tells Magazine that’s not the case in DeFi:

“The prevailing narrative has been that concentration is increasing in DeFi, caused by a series of exploits and capital rotation into the most ‘Lindy’ protocols. But the data disagrees.”

So, why are projects that survived the collapse of Terra, the implosion of FTX and the grip of Chokepoint 2.0 shutting down today? If the 2022 bear market didn’t kill these DeFi protocols, what is it about the 2026 market structure that is finishing them off?

Capital has rotated rather than exited

According to Artemis data, concentration across tracked DeFi protocols has actually drifted lower since 2024.

And while each major sector still has one dominant player like Uniswap in decentralized exchanges, Aave in lending and Jupiter in perpetuals by locked capital, “every one of those leaders holds a smaller share of its sector now than it did two years ago,” Weseley explains.

Liquidity concentration by sector (TVL Herfindahl index). Source: Artemis

He argues that onchain activity has shifted into different corners of the crypto economy rather than leaving the ecosystem altogether.

“The economics didn’t disappear; they rotated to adjacent apps (Hyperliquid, Polymarket, pump.fun), so classic DeFi viability shrank even as total onchain fee generation stayed high.”

Related: Mark Cuban-backed DeFi dashboard Zapper shutters after 7 years

In this view more protocols are competing for a slice of the pie, making each slice smaller.

Markus Levin, co-founder of blockchain infrastructure company XYO, says today’s landscape holds little resemblance to the early days of DeFi.

“The DeFi space is much more competitive than it was during the last bear cycle,” Levin tells Magazine.

“Early DeFi projects benefited from first-mover advantage and a relatively small field of competitors. Now, there are thousands of protocols competing for the same users and liquidity.”

Wesley explains it’s more instructive to look at revenue generation to work out where economic activity is occurring in DeFi, rather than the more common measure of total value locked (TVL).

“TVL is the right tool for the narrow ‘liquidity’ question but misleads elsewhere,” Wesley says.

“Fees and revenue are best, because they measure economic viability directly and expose shifts that TVL and headline usage hide.”

Artemis estimates the number of DeFi applications generating at least $1 million in monthly fees climbed to around 33 or 34 in mid-to-late 2025 before falling back to roughly 25 or 26 during the first half of 2026. The number generating more than $10 million in monthly fees roughly halved over the same period.

The rules for attracting capital have changed

DeFi risk management firm Gauntlet argues the broader market remains healthy, despite numerous DeFi protocols shutting down this year.

“Demand is the strongest it has ever been,” Nicholas Cannon, chief business officer at Gauntlet, tells Magazine. “Stablecoin supply keeps growing, and traditional finance is moving toward DeFi rather than away from it.”

101 crypto projects have died so far in 2026 alone. Source: RootData

According to Gauntlet, the defining change since the previous market slump is that investors have become more selective and aren’t as easily distracted by short-term yield farming token incentives.

“What changed is that capital got discerning. In previous cycles, liquidity followed incentives wherever they pointed. Today it follows sustainable yield, track record, and curation. Incentives still have a role in bootstrapping, but they no longer carry a protocol on their own.”

Levin says that institutional capital in particular is more selective in 2026, favoring platforms with established track records over protocols luring users with shiny token incentives.

“The projects that survive this cycle are likely to be the ones that already have meaningful user distribution or can reach users beyond the traditional DeFi audience,” he said, and that may prove to be a tougher test than the bear market itself.

Tokenized assets, stablecoins and emerging areas such as agentic DeFi are examples of where new experimentation is taking place.

Related: ARK pushes back against a16z’s ‘TradFi wants blockchain, not DeFi’ claim

Infrastructure is consolidating while innovation moves higher

One consequence of the industry’s maturation, Cannon said, is that fewer teams are trying to build the next Aave or Uniswap. Instead, they’re using established DeFi infrastructure as a foundation for their products and services.

The trend is also reflected in where investment dollars are flowing. DeFi lender Morpho announced a $175 million raise to bring institutional lending onchain in June, one of the sector’s largest fundraises, while agentic DeFi startup Alpaca raised $135 million in July to build infrastructure for AI-powered financial applications.

Monthly protocol fees: Classic DeFi vs new-guard apps. Source: Artemis

Morpho Labs co-founder Merlin Egalite says the next generation of successful protocols will increasingly focus on distribution rather than competing directly with established infrastructure.

“The protocols growing fastest will be the ones embedded into the platforms where users already are. Fintechs, wallets, exchanges building on top of you rather than competing with you.”

Egalite also argues that future growth will come from making DeFi infrastructure easier for traditional financial firms to adopt.

“The next wave of growth comes from fintechs, banks, and platforms that want to embed DeFi infrastructure without rebuilding it,” he says.

Magazine: Fears of AI-driven DeFi hack epidemic overstated for now — but not for long

Under the policy, foreign law enforcement agencies must route certain requests through Mutual Legal Assistance Treaties, or MLATs. The treaties provide a formal process for governments to exchange evidence and information in criminal investigations, but requests can take considerably longer than direct cooperation with an exchange.

The change represents a departure from Binance’s previous approach, under which it worked directly with authorities to freeze suspicious accounts and provide information about users under investigation, the NYT said.

“Binance has not slowed its cooperation with global law enforcement,” a spokesperson said in an email to CoinDesk. “On the contrary, we have increased our cooperation year over year, while navigating the increasing complexity of government approaches to crypto regulation and data protection.”

The spokesperson said Binance continues to prioritize collaboration with law enforcement agencies worldwide, including in the U.S. and Europe. Binance said its assistance goes “beyond any legal obligation upon us and what traditional financial services firms typically do.”

“This is a deliberate strengthening of the controls and safeguards that govern how we cooperate, which is consistent with the standards expected of a regulated institution,” the spokesperson added.

The NYT’s report follows a similar account from The Information this month, which cited a Justice Department (DOJ) memo warning federal prosecutors handling crypto cases that they should prepare for less assistance from Binance when seeking to freeze or seize assets. Binance denied that its cooperation with U.S. authorities had changed.

Japan’s central bank is in focus this week as its next interest-rate meeting comes amid new 40-year yen lows against the US dollar.

Key points: 

• The Japanese yen is approaching new 40-year lows against the US dollar, nearly beating its latest record from last week.
• The Bank of Japan will decide on interest-rate changes on July 31, with rates already at 1%, their highest since September 1995.
• Analysts have been warning that the yen carry trade could unwind again, repeating a major crypto headwind from 2024.

Dollar-yen seeks to reclaim 40-year record

Data from TradingView showed USD/JPY approaching 164 on Tuesday, just a fraction below new 40-year highs seen last week.

USD/JPY 12-month chart. Source: Cointelegraph/TradingView

The yen’s status as a funding currency is making BoJ monetary policy have an outsized influence on global markets. Japan’s currency markets are characterized by minimal capital controls and unmatched liquidity among non-dollar currencies. 

Japan’s persistent current account and trade surpluses in earlier decades along with systemically low interest rates have made JPY the most important global funding currency. However, since Japanese inflation picked up in 2022, this has created the risk of carry trade unwinds accompanied by a liquidity crunch. 

On Thursday and Friday, the Bank of Japan (BoJ) will decide on whether to adjust its benchmark rate, which at 1.0% is currently at its highest since 1995.

Markets expect rates to stay the same, with market-implied probabilities of a rate hold at 98%, given that policymakers enacted their latest raise in June. Prediction service Polymarket puts the odds of no change at 99% as of Tuesday.

At the time, however, the BoJ suggested that fresh hikes would come later. In a summary from the June meeting, it referenced inflationary trends in the form of the Consumer Price Index (CPI), coupled with historically low rates in place for the past three decades, as grounds for the change.

“As for the future conduct of monetary policy, given that underlying CPI inflation has been approaching 2% and financial conditions have been accommodative, it is appropriate for the Bank to continue to raise the policy interest rate and adjust the degree of monetary accommodation, in response to developments in economic activity and prices as well as financial conditions,” BoJ said.

Since then, a concurrent headwind, the weakening of the yen, has gathered pace, staying above the key 160 level against the dollar despite a dip following the June rate hike.

The BoJ previously noted the potential for a weaker yen to weigh on CPI growth, constricting consumer spending power.

“Attention should also be paid to the point that, with firms’ behavior shifting more toward raising wages and prices recently, exchange rate developments are, compared to the past, more likely to affect prices, and that such moves could affect underlying CPI inflation through changes in inflation expectations,” its Outlook for Economic And Prices document, issued after its April meeting, read.

Yen carry trade unwind risks global spread

For crypto traders, developments in the yen are of key importance.  The yen carry trade, which can act as a liquidity source for crypto markets, is heavily influenced by BoJ moves to stabilize the yen’s exchange rate against the dollar. As Cointelegraph reported, interventions in August 2024 sparked a snap “unwinding” of the carry trade, with an immediate detrimental impact on Bitcoin and altcoins.

Related: Rate path still divides investors: Five things to know in Bitcoin this week

Now, with USD/JPY building on new 40-year highs, concerns of a repeat are growing.

“That trade only works if two conditions remain intact. Japanese interest rates remain exceptionally low. The yen remains broadly stable or continues depreciating,” analyst Ricky Ho wrote in his latest X commentary on Monday.