The effect of Terra’s demise continues to shine a light on the fragility surrounding the decentralized finance (defi) ecosystem. Things have changed a great deal following Terra’s aftermath, 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.
Terra Implosion Hits Defi Economy The Most
At $112.29billion, the total value of defi is barely above $100 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 decentralized finance protocols.
The Terra blockchain also had a TVL of $231 billion on April 3rd, which is 13.15% off the total $231 billion at the time. Terra was the 2nd-largest TVL for defi. Today, Terra is at the 14th spot with just $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. Binance Smart Chain (BSC), which holds 7.71% or $8.62 Billion of the $112.29 Billion, is second in TVL defi.
Another significant change this week that occurred was the downfall of Curve’s defi dominance, as Makerdao is now the largest defi protocol in terms of TVL size. Makerdao leads by 9.40%, with $10.56 billion in TVL. Curve is currently holding $8.76 billion.
Curve’s current TVL is a lot different than it was on April 3, when it was $21.17 billion roughly 42 days ago. Over the past seven days, TVLs have been significantly reduced for all 28 top defi protocols. Makerdao still leads, however it is down 13.73%. Curve has also fallen 49.18% in the past week. Lido’s stock has fallen 46.37% while Aave, the defi software Aave, has declined 21.94%.
Anchor dropped from the third position in the defi applications by TVL this week to the 58th place. This is after losing 97%. Anchor today has $309.78million total value in its lending protocol.
17 protocols are at the top of TVL sizes with at least $1Billion in TVLs. There’s still $419 billion in smart contract protocol tokens today with ethereum leading the pack. Terra is now at the 18th place in smart platform token market capitalizations.
While Terra’s issues rippled across the entire crypto-economy, the carnage affected decentralized 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 regained, and the $100 billion lost is added back to the defi ecosystem. Ethereum was the best-performing defi chain, with its dominance having increased significantly since last Wednesday. Ethereum was still impacted by the fact that it lost 31.53% over the seven previous days.
How do you feel about today’s defi? What do you think about the trust that’s been lost and the $100 billion wiped away from the defi space? Please comment below to let us know your thoughts on this topic.
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