DeFi on-chain leverage returns to 2021 levels after $13B withdrawals

Binance Research said leverage rose not because borrowing surged, but because hacks and security concerns drove users to pull collateral from DeFi platforms, leaving the market more fragile.

41d ago

Fact Check

The Binance Research official X post directly confirms every element of the claim: on-chain leverage reached ~38% matching 2021 levels, driven by TVL compression (collateral withdrawals) rather than new borrowing demand, following ~$13B in TVL outflows from April's DeFi exploits. crypto.news corroborates the same framing including the hacks/security-concern cause, and Binance's own May 2026 report documents the record $635M April exploits and DeFi TVL decline. The primary official source and independent reporting are fully consistent.

Summary

DeFi’s on-chain leverage has climbed back to 2021 levels after users withdrew $13 billion from DeFi (decentralized finance) platforms, Binance Research said. The report said the move was driven by hacks and security concerns rather than a fresh wave of borrowing. That matters because leverage can rise mechanically when the collateral base shrinks: with less capital backing outstanding positions, the market becomes more sensitive to price swings, liquidations, and liquidity stress. Binance Research said the reduced collateral pool has left the sector more fragile.

Terms & Concepts

DeFi: Decentralized finance services on blockchain networks.
on-chain leverage: Borrowing or exposure built directly on blockchain-based platforms.
collateral base: Assets pledged to back loans or positions.