A $285 Million Crypto Hack and Falling Rates Rock DeFi World (1)

Decentralized finance, once among the most dynamic corners of the digital-asset industry, is under pressure from almost every direction.

Yields on some of DeFi’s most popular lending products have fallen near that of a vanilla government bond. Activity across a slew of blockchain networks has slowed. A $285 million hack blamed on North Korean state-backed operatives has renewed doubts about the security of a sector that has spent years insisting it was maturing.

The lending market shows the strain. On Aave, the largest decentralized lending platform with around $26 billion in deposits, the rate on USDT — a widely ...