Trust in Decentralized Finance Rattled After $100 Billion Left the Defi Economy

Confidence in decentralized finance shaken after $100 billion exits challenge economy – Defi Bitcoin News

The impact of Terra’s demise continues to highlight the fragility surrounding the decentralized finance ecosystem. Things have changed a lot after the Terra fallout, with Total Booked Value (TVL) in the given position dropping from $231 billion to $112.29 billion today, losing 51.38% in 42 days.

Davy TVL drops more than 50% since April 3, Terra compression effect challenges the economy the most

The total value booked today is just over $100 billion at $112.29 billion. While TVL has been slipping since it nearly hit an all-time high on April 3, last week’s Terra chaos removed most of the TVL held in decentralized finance protocols.

In addition to acquiring $231 billion from TVL 42 days ago on April 3, the Terra blockchain had $30.45 billion, or 13.15% of the $231 billion total at the time. Terra got the second-largest TVL in the challenge and today, the Terra ranks 14th with just $500.38 million.

Confidence in decentralized finance shaken after $100 billion left the challenge economy
Total Locked Value (TVL) in decentralized finance (Defi) on May 15, 2022.

Out of $112.29 billion on Sunday, TVL is dominated by Ethereum in a showdown with 63.63% of the total, or $71.09 billion. The second largest TVL in the challenge is tied to the Binance Smart Chain (BSC) with 7.71% of the $112.29 billion or $8.62 billion held on BSC.

Another significant change this week was the fall of Curve’s control of the challenge, with Makerdao now the largest challenge protocol by TVL volume. Makerdao holds 9.40% control with TVL valued at $10.56 billion, and Curve now owns $8.76 billion.

Curve’s current TVL is very different from what it was on April 3, when it was $21.17 billion roughly 42 days ago. Today’s top 28 recognition protocols have seen significant reductions in TVL over the past 7 days. While Makerdao is ahead, it is still down 13.73% this week, while Curve is down 49.18% over the past week as well. Lido lost 46.37% and challenge app Aave lost 21.94% this week.

After being the third largest Divi app by TVL a week ago, Anchor has fallen to the 58th place after losing 97.76% this week. Statistics show that Anchor has $309.78 million total value locked into its lending protocol today.

17 specific protocols have at least $1 billion or more in terms of TVL volume. There are still $419 billion in smart contract protocol tokens today with ethereum leading the way. Terra now ranks 18th in terms of smart contract platform market capitalization.

While Terra’s problems spread across the entire crypto-economy, the massacre affected decentralized finance the most. Not only was the confidence shaken to the core, but over $100 billion of the challenge was removed in less than a week.

It will likely take some time before trust is restored, and the lost $100 billion is put back into the challenging ecosystem. Of all the challenging chains, Ethereum has benefited the most as the dominance has increased significantly since last week. Although Ethereum is still feeling the impact, the chain has lost 31.53% over the past seven days.

Tags in this story

Aave, Anchor, Arbitrum, Avalanche, Binance Smart Chain, Bridges, BSC, Cross-chain Bridges, crypto assets, cryptoslam.io, Curve.finance, decentralized finance, DeFi, Defi Apps, Defi Protocol, Defillama.com, Ethereum, Fantom, lending app, Lido, makerdao, NFT sales, Polygon, ronin, Solana, Terra

What do you think of today’s challenge situation? What do you think of the lost trust and wiped 100 billion dollars away from the challenge space? Tell us what you think about it in the comments section below.

Jimmy Redman

Jamie Redman is the head of news at Bitcoin.com News and a technology financial journalist based in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.




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