Trust in Decentralized Finance Hits After $100 Billion Leaves Defi Economy – Defi Bitcoin News

The impact of Terra’s demise continues to reveal the fragility of the decentralized finance (defi) ecosystem. After Terra, things changed a lot, with Defi’s total value locked (TVL) plummeting from $231 billion to $112.29 billion today, a loss of 51.38% in 42 days.

Defi TVL plunges more than 50% since April 3, Terra implosion has biggest impact on Defi economy

The total value locked in Defi today is just above the $100 billion mark, at $112.29 billion. While TVL has been in decline since it nearly reached an all-time high on April 3, last week’s Terra chaos wiped out most of the TVL held in decentralized finance protocols.

The Terra blockchain holds $30.45 billion, or 13.15% of the $231 billion total at that time, in addition to the $231 billion TVL it received on April 3, 42 days ago. Terra has the second largest TVL in defi, and today Terra is only 14th with $500.38 million.

Trust in decentralized finance suffers after $100 billion leaves Defi economy
Total Value Locked (TVL) in Decentralized Finance (defi) on May 15, 2022.

Of the $112.29 billion on Sunday, Ethereum dominated the TVL in Defi with 63.63% defi or $71.09 billion. The second largest TVL in Defi is pegged to Binance Smart Chain (BSC), accounting for 7.71% of the $112.29 billion or $8.62 billion held by BSC.

Another big change this week was the downfall of Curve’s defi dominance, as Makerdao is now TVL’s largest defi protocol by scale. Makerdao has a 9.40% share with its $10.56 billion TVL, while Curve now has $8.76 billion.

Curve’s current TVL is much different than it was on April 3, when it was $21.17 billion about 42 days ago. The TVL of today’s top 28 Defi protocols has decreased significantly over the past 7 days. While Makerdao leads the pack, it is still down 13.73% for the week, with Curve also down 49.18% last week. Lido is down 46.37% for the week and defi app Aave is down 21.94%.

Anchor fell to No. 58 after falling 97.76% this week after becoming TVL’s third-largest Defi app a week ago. Statistics show that Anchor has a total value of $309.78 million locked in lending protocols today.

In terms of TVL size, 17 Defi protocols have at least $1 billion or more. There are still $419 billion in smart contract protocol tokens today, with Ethereum leading the way. Terra currently ranks 18th in terms of smart contract platform token market capitalization.

While Terra’s problems have rippled through the entire crypto economy, the carnage has had the biggest impact on decentralized finance. Not only did trust shake to the core, but in less than a week, more than $100 billion was removed from defi.

It may take some time to regain trust, and the lost $100 billion is added back to the Defi ecosystem. Of all Defi chains, Ethereum has benefited the most as its dominance has increased significantly since last week. Still, Ethereum felt the impact as the chain lost 31.53% in the past 7 days.

tags in this story

ghost, anchor, arbiter, avalanche, Binance Smart Chain, bridge, Balanced Scorecard, cross-chain bridge, Crypto assets, cryptoslam.io, Curve Finance, Decentralized Finance, Decentralized Finance, Defi app, Defi Protocol, defi value lock, defillama.com, Ethereum, phantom, loan app, Lido, Mark Road, NFT sales, polygon, Ronin, Solana, the earth

How do you see the state of defi today? What do you think of the lost trust and the $100 billion wiped from the defi space? Let us know what you think about this topic in the comments section below.

Jamie Redman

Jamie Redman is the Head of News at Bitcoin.com News and a fintech reporter living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He is passionate about Bitcoin, open source code and decentralized applications. Since September 2015, Redman has written over 5,000 articles for Bitcoin.com News on the disruptive protocols emerging today.




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