Defi TVL Plunges More Than 50% Since April 3, Terra Implosion Impacts Trust
The effect of Terra’s fall echoes a grim warning on the fragile ecosystem of the decentralized finance (defi). There are radical changes following Terra’s fallout, as the total value locked (TVL) in defi has plummeted from $231 billion to today’s $112.29 billion, losing 51.38% in 42 days.
The total value locked in defi today is just above the $100 billion mark at $112.29 billion. While the TVL has been sliding since almost reaching an all-time high on April 3, last week’s Terra chaos removed most of the TVL held in decentralised finance protocols.
It is notable that from $231 billion TVL 42 days ago on April 3, the Terra blockchain held $30.45 billion or 13.15% of the $231 billion aggregate at that time. Terra held the second-largest TVL in defi and today, Terra is in the 14th position with only $500.38 million
Out of Sunday’s $112.29 billion, Ethereum dominates the TVL in defi with 63.63% of the aggregate in defi or $71.09 billion. The second largest TVL in defi is tethered to Binance Smart Chain (BSC) with 7.71% of the $112.29 billion or $8.62 billion held on BSC.
A significant change this week is the downfall of Curve’s defi dominance, as Makerdao is now the largest defi protocol in terms of TVL size. Makerdao dominates by 9.40% with its $10.56 billion TVL and Curve now holds $8.76 billion.
Curve’s current TVL is very different than it was on April 3, when it was $21.17 billion roughly 42 days ago. The top 28 defi protocols today have seen significant TVL reductions during the past seven days. While Makerdao leads is still down 13.73% this week and Curve is down 49.18% than to past week. Lido has shed 46.37% and the defi application Aave has lost 21.94% this week.
The third largest defi application in terms of TVL a week ago, Anchor has dropped to the 58th position after losing 97.76% this week. Stats show that Anchor has $309.78 million total value locked in the lending protocol today.
17 defi protocols have at least $1 billion or more as far as TVL size is concerned. There’s still $419 billion in smart contract protocol tokens today with ethereum leading the pack. Terra now holds the 18th position in terms of smart contract platform token market capitalisations.
While Terra’s issues impacted across the entire crypto economy, the carnage affected decentralised finance the most. Not only was trust shaken to the core, but well over $100 billion was removed from defi in less than a week’s time.
It’s likely going to take some time before trust is restored, and the $100 billion lost is recovered to the defi ecosystem. Out of all the defi chains, Ethereum benefited the most as dominance has increased a great deal since last week. Although, Ethereum still felt the impact, as the chain lost 31.53% during the past seven days.
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