When confidence in a financial system collapses, it collapses fast. The decentralized finance (DeFi) sector learned this lesson anew in May 2026 as nearly $14 billion in investor capital fled the space following a succession of high-profile cyberattacks, including a $290 million theft attributed to North Korean-linked hackers. The exodus represents far more than a temporary market correction—it is a stark reckoning with the structural vulnerabilities that plague crypto's supposedly trustless ecosystem, and a cautionary tale about what happens when innovation outpaces governance. The mechanics of the collapse are straightforward enough. Investors, confronted with evidence that even ostensibly sophisticated DeFi protocols remain vulnerable to state-sponsored attackers, made a rational calculation: the returns were no longer worth the risk. The sheer velocity of the capital flight—$14 billion in a matter of weeks—underscores how fragile confidence in decentralized platforms remains.…