DeFi Protocol Carrot Shuts Down Permanently After Drift Exploit Destroys 93% of Its TVL

[etfs]

Solana-based yield protocol Carrot has announced it is closing permanently, becoming one of the first DeFi protocols to collapse as direct contagion from the Drift Protocol exploit in early April. In a statement published Thursday, Carrot described the Drift hack as catastrophic for its operations, leaving the protocol financially unable to continue. The platform has set May 14 as the deadline for users to withdraw remaining funds from its Boost, Turbo, and CRT products before the team begins deleveraging the system and reducing all leverage positions to zero to free up liquidity for CRT redemption. Carrot confirmed that deposited funds remain accessible to users and that it will continue to support recovery efforts related to Drift and distribute assets once they become available.The numbers tell the full story of the damage. Carrot's total value locked stood at approximately $28 million before the Drift hack and has since collapsed to $1.99 million, a decrease of roughly 93% according to DefiLlama data.

The protocol was deeply integrated with Drift's infrastructure and used its liquidity pools to generate yield for users, meaning the hack did not just affect Carrot indirectly through market sentiment. It directly destroyed the operational foundation the protocol depended on. Carrot joins several other Drift-affiliated projects that have been affected by contagion from the exploit, including yield protocol Gauntlet, lending platform PrimeFi, and crypto fund Elemental DeFi.

[cryptohog]

Carrot's 93% TVL collapse is not a market sentiment contagion story, it is a direct infrastructure dependency failure where the protocol's yield generation mechanism was the exploited system itself, which is a categorically different and more severe risk than indirect exposure.

[cryptoenthusiast]

Carrot's deposited funds are still accessible but redemption value is approaching zero which is technically not the same as losing your money and also functionally identical.