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Extended Crypto Winter Impacts Defi Landscape: Total Value Locked Reverts to February 2021 Levels
The decentralized finance (defi) sector is currently navigating the aftermath of a significant downturn in the cryptocurrency market that concluded in late August. Presently, the total value locked (TVL) in the defi space has experienced a considerable decline, dropping to a level last observed in the second week of February 2021.
Defi’s Struggle During Crypto Winter: TVL Decreases to $37 Billion
The total value locked within the defi ecosystem has been consistently decreasing, and as of September 1, 2023, it stands at approximately $37.59 billion. Reflecting back to February 9, 2021, this was the most recent instance when the TVL reached such a level, just before embarking on a surge towards its peak.
By May 11, 2021, the TVL surged significantly, reaching an impressive $121 billion, and it climbed even further to an astonishing $178 billion by November 8, 2021. Although there was a brief resurgence to $161 billion on April 2, 2022, the TVL has since been on a continuous descent following its all-time high.
The total value locked (TVL) in the defi sector on September 1, 2023, is at its lowest point since February 2021.
As of the first day of September in the current year, Lido claims the top spot among defi protocols based on TVL, boasting an impressive TVL of $14.06 billion. Following closely behind are Makerdao, Aave, Justlend, and Uniswap, completing the roster of the five leading defi protocols by TVL magnitude. Makerdao’s TVL stands at $5.05 billion, Aave at $4.49 billion, Justlend at approximately $3.33 billion, and Uniswap trailing closely with around $3.27 billion during this weekend.
Securing the sixth position is Curve Finance, with a TVL of $2.33 billion. While all six protocols experienced declines in percentages recently, Lido observed a slight increase of 0.73% in the past week, and Makerdao enjoyed a modest rise of 0.99%.
Within the landscape of defi TVLs categorized by blockchains, Ethereum remains dominant, claiming a substantial 57.26% share, equivalent to $21.427 billion locked. Trailing behind is Tron, securing the second position with a TVL of $5.223 billion, representing 13.96% of the market share. Subsequent to these are Binance Smart Chain (BSC), Arbitrum, and Polygon, forming the top five blockchains by TVL.
BSC demonstrated the strongest performance over the past week, experiencing an ascent of 2.35%, while Polygon registered a 0.90% increase. Conversely, the remaining three among the top five blockchains experienced losses throughout the week. Similar to other segments of the cryptocurrency industry, the defi sector is grappling with the enduring effects of an extended crypto winter.
Feel free to share your insights and viewpoints regarding the recent defi downturn in the comments section below.
Frequently Asked Questions (FAQs) about Defi Downturn
What is the current state of the defi sector in the cryptocurrency market?
The defi sector is currently grappling with the aftermath of a significant downturn in the cryptocurrency market. The total value locked (TVL) in defi has decreased to levels last seen in February 2021.
How has the total value locked (TVL) in defi changed recently?
As of September 1, 2023, the TVL in defi stands at around $37.59 billion. This mirrors the levels observed in the second week of February 2021. The TVL experienced notable surges in the past, with peaks of $121 billion in May 2021 and an astonishing $178 billion in November 2021.
Which defi protocols are leading in terms of TVL?
Among the leading defi protocols, Lido holds the top spot with a TVL of $14.06 billion. Other prominent protocols include Makerdao, Aave, Justlend, and Uniswap, contributing to the top-tier quintet of defi protocols based on TVL size.
How have these leading protocols performed recently?
While the leading protocols have experienced percentage declines, Lido saw a slight uptick of 0.73% in the past week, and Makerdao enjoyed a rise of 0.99%, providing some variations in their recent performance.
Which blockchains dominate the defi TVL landscape?
Ethereum is at the forefront of defi TVLs by blockchains, commanding a dominant market share of 57.26% with $21.427 billion locked. Tron follows with $5.223 billion, and Binance Smart Chain (BSC), Arbitrum, and Polygon complete the top five chains by TVL.
How have these blockchains performed recently in terms of TVL?
BSC exhibited the strongest performance in the past week with a 2.35% ascent, while Polygon showed a 0.90% increase. However, the other three top blockchains experienced losses during the same period.
What challenges is the defi sector facing?
Similar to other segments of the cryptocurrency industry, the defi sector is grappling with the lasting effects of an extended crypto winter. The prolonged market downturn has impacted TVL levels and protocol performances.
More about Defi Downturn
- Decentralized Finance (Defi) Explained
- Total Value Locked (TVL) in Defi
- Lido Protocol
- MakerDAO
- Aave Protocol
- Justlend
- Uniswap Protocol
- Curve Finance
- Ethereum Blockchain
- Tron Blockchain
- Binance Smart Chain (BSC)
- Arbitrum
- Polygon Blockchain
4 comments
defi takin’ a hit, TVL droppin’ like it’s Feb 2021 again, dang crypto winter chills hittin’ hard, wonder if it’ll bounce back, tough times for protocols, hodl on!
TVL in defi down, Feb 2021 vibes, protocols strugglin’, crypto winter bites, Ethereum leadin’ the pack, BSC climb, market’s a rollercoaster, hold tight folks!
Watching TVL dive, feels like déjà vu, Feb 2021 replay, Lido on top, protocols battlin’, crypto space bracin’, curious if upturn’s ’round the bend, stayin’ hopeful here!
Defi TVL slumpin’, like back in Feb 2021, protocols takin’ hits, blockchain wars ongoing, wonder what’s next, crypto winters testin’ nerves, strong hodl mentality needed!