Back in late 2020, I placed a candidate with one of the “next-gen DeFi protocols” that had just raised a massive Series A. The founders were ex-Google, the token had moon potential, and the project was picking up TVL faster than I could keep up. Fast-forward six months—boom. Exploit. Gone. Over $30 million vanished overnight. The candidate rang me in shock. He didn’t even know what to put on his CV anymore. That incident was one of the earliest signs for me that the Biggest DeFi Blowups aren’t always the ones that make headlines—but they can still wreck careers and reputations in a flash.
That moment stuck with me. Because in crypto—especially DeFi—what’s hot today can be toast tomorrow. And while everyone remembers the big collapses like Terra and Celsius, there are plenty of others that slipped under the radar.
So let’s talk about the Biggest DeFi Blowups you probably missed—but absolutely shouldn’t have.
Pickle Finance’s $20M Jar Drain
Ah, Pickle. The name alone should’ve been a red flag, but this yield aggregator actually had a solid user base and even partnered with Yearn Finance at one point. In November 2020, Pickle Finance was hit by a smart contract exploit that drained nearly $20 million from its DAI vault.
What’s wild is that the exploit didn’t rely on a bug in the code—it manipulated the logic between Pickle jars and the strategies they used. It was a case of too clever for their own good. And from a recruiter’s lens? I had candidates who worked on yield protocol audits telling me afterwards: “We’re tightening up everything—these vaults are a mess.”
Lesson? Complex doesn’t always mean secure. And don’t let memes write your protocol design.
bZx: The Triple Hit Wonder
I genuinely lost count of how many times bZx got exploited. Let’s just say it was more than two and less than five.
The first big one came in February 2020—a flash loan attack that manipulated pricing oracles and drained $350,000. Then again in the same month, different method, similar result. And finally, the worst one in 2021: a private key compromise that cost the project around $55 million.
Imagine trying to convince a developer to join after that. “Trust us, we’ve fixed it this time.” Yeah… good luck.
From the recruitment side, it was a nightmare. I had candidates ghost interviews, and others back out of offers last minute after doing a quick exploit history search. bZx rebranded to Ooki eventually, but reputational damage like that lingers.
Cover Protocol’s Phantom Mint
This one was particularly painful because I’d just been speaking with someone at Cover about helping scale their smart contract team.
Cover was a DeFi insurance platform—an ambitious one at that. But in December 2020, a whitehat hacker exploited a bug in the rewards contract to mint an unlimited number of COVER tokens… and then dumped them on the market. The token price collapsed, and so did community trust. This incident stands out as one of the Biggest DeFi Blowups, highlighting how even projects designed to provide security can fall victim to critical vulnerabilities.
They tried to relaunch, but by 2021, Cover Protocol shut down for good.
What went wrong? A lack of protocol-level safeguards. And frankly, poor internal code review processes. From my chats with engineers who worked adjacent to the team, it wasn’t that they were inexperienced—it’s that they were moving too fast.
Meerkat Finance’s Exit Stage Left
Imagine launching a protocol, getting $31 million in TVL in 24 hours, and then poof—it’s all gone.
That was Meerkat Finance in March 2021. Initially billed as a fork of Yearn on Binance Smart Chain, Meerkat got “hacked” just a day after launch. But investigators quickly noticed that the private key for the deployer wallet had been changed. Yep—an inside job.
And just like that, Meerkat vanished. No recovery, no refunds, no justice.
The kicker? I had junior devs messaging me the day before, asking if I thought Meerkat was worth applying to. Dodged a bullet there.
How This Changes Recruitment in DeFi
Each of these blowups—Pickle, bZx, Cover, Meerkat—they’ve shaped how candidates view risk, and how projects need to present themselves to talent.
These days, engineers ask about audit history, bug bounty programmes, and incident response protocols before they even talk salary. “Who audited your contracts?” is now a standard interview question—from the candidate side.
From my side as a recruiter, the biggest shift has been vetting not just the code or the tokenomics, but the culture. Fast-paced is fine. Reckless is not. If a DeFi startup tells me “we ship first, patch later,” I know exactly what kind of CV churn to expect six months down the line.
Final Thoughts (And a Bit of Advice)
If you’re hiring in DeFi—or looking for a job—don’t just look at TVL and token price. Dig into their history. Who audits them? Have they had incidents, and more importantly, how did they handle them?
And if you’re ever in doubt, remember this: some of the Biggest DeFi Blowups weren’t from bad actors—they were from good teams who moved too fast, skipped checks, and underestimated just how unforgiving crypto can be.
Stay sharp out there.
