Decentralized Finance Lock-Up Value Sees Significant Decrease

One sentence summary – The total value locked in decentralized finance (DeFi) protocols has significantly decreased from its peak of $178 billion to less than $38 billion, reflecting a shift in investor sentiment and market dynamics, with Ethereum protocols holding the majority of the remaining value.

At a glance

  • Total value locked (TVL) in DeFi protocols has decreased from $178 billion to less than $38 billion.
  • Ethereum protocols hold the majority of the remaining value, with approximately $21.8 billion locked within these platforms.
  • The TVL briefly surged to approximately $50 billion in April but swiftly retracted below $38 billion.
  • Liquid staking protocols like Lido and Coinbase’s staking service offer a competitive alternative to lending protocols like Aave.
  • The recent hawkish monetary policy implemented by the US Federal Reserve may have made stablecoin yields less attractive to investors.

The details





The total value locked (TVL) within decentralized finance (DeFi) protocols has seen a significant decrease.

From a peak of $178 billion in November 2021, the TVL has dropped to less than $38 billion.

This represents a decrease of over $140 billion.

The decline reflects a shift in investor sentiment and market dynamics.

Ethereum protocols

Ethereum protocols hold the majority of the remaining value, with approximately $21.8 billion locked within these platforms.

The TVL dropped below the $40 billion mark shortly after the collapse of the centralized exchange FTX in November 2022.

The decline was further exacerbated by the collapse of major centralized crypto lenders such as BlockFi, Genesis, and Gemini Earn during the same period.

TVL surge and retraction

Despite relatively small declines in crypto values, the TVL briefly surged to approximately $50 billion in April.

However, it swiftly retracted below the $38 billion mark.

The $37.6 billion figure provided excludes funds locked in liquid staking protocols like Lido and Coinbase’s staking service.

Liquid staking allows investors to stake their assets and earn yield while maintaining trading liquidity.

This approach can be more appealing due to lower protocol risk and higher yield rates.

It offers a competitive alternative to lending protocols like Aave.

However, Aave has seen a decline in its TVL by 21% over the past month, currently standing at $4.5 billion.

Similarly, Curve Finance has experienced a 26% decrease, with its TVL now at $2.3 billion.

Impact of US Federal Reserve policy

The recent hawkish monetary policy implemented by the US Federal Reserve has contributed to increased yields on short-term government debt.

This development may have made stablecoin yields less attractive to investors.

Investors now have alternative options to consider.

The decline in DeFi lock-up value and the dominance of Ethereum protocols suggest a significant shift in the market.

It is crucial to monitor these trends closely.

These trends could indicate broader changes within the decentralized finance ecosystem.


Article X-ray

Here are all the sources used to create this article:

A series of descending arrows representing decreasing values.

This section links each of the article’s facts back to its original source.

If you have any suspicions that false information is present in the article, you can use this section to investigate where it came from.

decrypt.co
– Less than $38 billion remains locked within DeFi protocols across chains, down from $178 billion at the industry’s peak in November 2021.
– Almost $21.8 billion of the remaining value is held in Ethereum protocols.
The total value locked in DeFi fell below the ~$40 billion locked shortly after the collapse of centralized exchange FTX in November 2022.
– Centralized crypto lenders like BlockFi, Genesis, and Gemini Earn also collapsed during that time.
– TVL rose to around $50 billion in April but quickly retraced below $38 billion despite relatively small declines in crypto values.
The $37.6 billion figure does not include funds locked in liquid staking protocols like Lido and Coinbase’s staking service.
– Liquid staking allows investors to stake their assets and earn yield while maintaining trading liquidity.
– Liquid staking can be more attractive than using lending protocols like Aave due to lower protocol risk and higher yield rates.
– Aave’s total value locked has fallen 21% over the past month to $4.5 billion, while Curve Finance has slid 26% to $2.3 billion.
The US Federal Reserve’s hawkish monetary policy has increased yields on short-term government debt, potentially making it more appealing to investors than stablecoin yields.

发表回复