The $292 million exploit of Kelp DAO and the subsequent fallout across crypto lending markets hit decentralized finance (DeFi) at a pivotal moment.

Just as Wall Street firms pushed deeper into onchain markets, the incident has exposed how fragile parts of the system remain and how much work is left before institutions can scale their exposure.

In the weeks leading up to the hack, private credit giant Apollo Global Management (APO), which oversees $900 billion, inked a strategic partnership with Morpho to support lending markets with an option to acquire governance tokens of the protocol, too. Around the same time, the world’s largest asset manager BlackRock (BK) brought its tokenized money market fund onto decentralized exchange …