DeFi TVL Is On The Cusp of Dropping To Lowest Level Since June 2021

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It should not be surprising that DeFi platforms struggle massively these days. The Total Value Locked in the industry is about to drop below $100 billion for the first time since Mid-2021. Dwindling crypto prices aren’t helping much, although the overall appeal of decentralized finance wanes too. 

DeFi TVL Keeps Dropping

When the prices of all [popular] crypto assets go down, it will affect various aspects of the broader industry. One such aspect is the Total Value Locked across decentralized finance protocols, products, and services. These projects thrive when prices go up and attract plenty of liquidity. Conversely, users will eagerly remove liquidity when momentum sours and move funds to a non-custodial wallet.

Additionally, the assets locked in these protocols remain subject to intense volatility. As the bearish pressure isn’t relenting, the TVL metrics will drift lower. A fresh 7.21% decline has been recorded these past 24 hours, bringing the metric to $103.34 billion. It is a matter of time until it goes below $100 billion, levels not seen since June 2021. 

As one would expect, all of the protocols continue to bleed TVL today. Substantial losses have been recorded by Curve (-15.82%), Lido (-17.76%), and Convex Finance (-15-91%). These are weekly and not daily changes, but they are still problematic. On the monthly scale, Lido has lost over 29.3%, followed by MakerDAO’s 19% and Curve’s 17.78%. Nothing to be happy about and no immediate recovery in sight either.

Decentralized exchanges seem to fare slightly better, surprisingly. Uniswap has a monthly loss of 7.51%, primarily due to this week’s TVL increase of over 8%. PancakeSwap is down by nearly 3% for the month, as this week saw an outflow of 2.69%. Still respectable trends given the overarching momentum triggering double-digit percentile losses with ease. It will be interesting to see if DEXes can sustain this “small drop” for much longer, though.

Tron Is Still in The Green

Whereas all major networks and chains continue to bleed Total Value Locked, there is one exception. Tron, which recently claimed the third spot by TVL from Avalanche, has a weekly deficit of 2.89%. However, its monthly performance is +55.74%. It is a very different trend compared to all other networks and one that offers a glimmer of hope.

Unfortunately, there isn’t much excitement elsewhere. Weekly losses for all networks range from 5.72% and 17.37%. That latter figure applies to Fantom, a network that has been battered for DeFi TVL in recent months. Sadly, things head in the same direction for Ethereum, BNB Chain, Avalanche, Solana, polygon, Arbitrum, and everything else. Mixin and Kava, two other networks noting growth this month, try to cling to their TVL gains. 


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