Decentralized finance (DeFi) has felt the impact of the market crash that happened on Wednesday. The space which had already been struggling due to low interest had seen its total value locked (TVL) tank by more than $10 billion in a three-day period.
TVL Falls To $44 Billion
For the last couple of weeks, the DeFi TVL had been trending just above $55 billion. This was when Ethereum had staged a recovery above $1,500 and other DeFi tokens had rallied along with it. However, just when it looked like the market was beginning to settle into a growth trend, the FTX insolvency hit the crypto market.
Coming out of the weekend, the DeFi TVL was sitting at a total o $55.87 billion. Now, in the span of four days, it has fallen by more than 20% to be sitting at a 19-month low of $44.44 billion. It is down more than 9% in the last 24 hours with the majority of DeFi protocols seeing a similar decline in the same time frame.
The biggest losers during this time have been the Solana ecosystem users. The price of the digital asset had tanked more than 50% in the 4-day period and the TVL had followed suit. In the last 24 hours, Solana DeFi TVL is down by 31.69%. This puts it at a TVL of $427.98 million compared to $1 billion at the start of the week.
TVL falls 20% in 4 days | Source: DeFiLlama
As for Ethereum, its current $25 billion TVL puts it close to near two-year lows. The last time the TVL had been this low had been back in February of 2021 when ‘DeFi Summer’ was just starting. The TVL was sitting at $32 billion at the start of the week, a 22% decline in four days.
DeFi Tokens Suffer Losses
The decline in the crypto market has wreaked havoc on DeFi tokens. Some of these tokens had been holding up nicely through the bear market but with bitcoin falling to new cycle lows, it brought the entirety of the crypto market down with it.
DeFi token market cap at $36 billion | Source: Crypto Total DeFi Market Cap on TradingView.com
Tokens such as AXAX, LINK, and AAVE have all seen double-digit losses in the last seven days with declines of 24%, 15%, and 25% respectively. As mentioned above, SOL is down more than 50% in this time frame, making it one of the tokens with the most losses through the decline.
Related Reading: CZ’s Advice To Crypto Companies Point Out What Went Wrong With FTX
Nevertheless, there are others that have been able to maintain a good portion of their value. Leading the list of best performers in DeFi is Polygon with only 4% losses in the 7-day period and is now one of the 10 largest cryptocurrencies by market cap. Looping (LRC) is up 9.84% in the last 24 hours, while DAI has been able to maintain its dollar peg through all of the market uncertainty.
Featured image from CryptoSlate, chart from TradingView.com