DeFi TVL Struggles to Recover After Hitting Two-Year Low

DeFi TVL Struggles to Recover After Hitting Two-Year Low
  • DeFi TVL is down 79% from its peak. Ethereum is still the king of DeFi, with a 58% market share.ย 
  • DeFi tokens hit more than 80%.

Decentralized finance has taken a hit over the past year as the cryptocurrency bear market deepens. As a result, on January 1, 2023, DeFi TVL fell to its lowest level in almost two years. Over the weekend, the total value locked across all DeFi protocols crashed to $44.2 billion.

This is the lowest level since February 2021, according to DeFiLlama. It has since recovered slightly, now standing at $45.3 billion. Additionally, TVL is currently 79% below its all-time high of $213,000, which is a more significant drop than the crypto markets, which are currently 72% below their total peak capitalization of just over $3 trillion in November 2021.

defitvl23.jpg.optimal Forks Daily

Ethereum Still King

The DeFi TVL chart is very similar to the crypto market cap chart. TVL is denominated in USD, which influences the prices of crypto-collateral. Therefore, the decline may not be due to users abandoning DeFi, but rather an overall drop in the value of the collateral. Lido’s liquid staking platform is the market leader with 13.5% and a TVL of around $6 billion.

Most of this is ETH staking. However, Lido also offers liquid staking services for other crypto assets. DeFi pioneer MakerDAO is a close second with a similar TVL and market share. The stablecoin performance platform Curve Finance is the third largest protocol. He was jailed with around $4 billion. Ethereum is still the king of decentralized finance, with a 58% share of the entire ecosystem and $26.3 billion TVL. Additionally, Binance BNB Chain ranks second with $5.3 TVL, which accounts for an 11.7% share. However, not all networks were losers.

Tron, Arbitrum, and Optimism have all experienced distributed financial growth or stable TVL levels over the past year or so.

DeFi Coins Remain in The Doldrums

Sector-related tokens and coins have been hit harder than their brethren. According to CoinGecko, the market cap of DeFi assets is down 80% from its all-time high. The trading volume of $1.5 billion in the last 24 hours.

Large-cap coins affected last year include Uniswap (UNI), Chainlink (LINK), Lido (LDO), Frax, and Aave. However, some are on the road today:

 

 

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