The DeFi market, in general, has suffered since November 2021. The price of most cryptocurrencies has tanked since then, reaching lows of about -60%, as is the case of cryptos like bitcoin, almost down by 90%.
Throughout 2021, DeFi protocols did well for themselves, attracting many individual and corporate investors. However, in 2022, the tables have turned completely.
To put this into perspective, the Total Value Locked (TVL) in these DeFi protocols in 2021 stood at an impressive $303 billion. In 2022, that figure has dropped by staggering proportions, barely managing to hold itself around the $96 billion mark in a 68.5% drop, according to crypto data aggregation platform CryptoRank.
As if that wasn't enough, the most recent dip in this figure came only in the last 30 days, when the TVL in DeFi protocols dropped from a high of $106 billion to where it now sits at $96.
To put this into perspective, the value of Ethereum alone in these platforms accounts for $56.3 billion of the total, followed closely by Tron (TRX) with $11.9 billion and BNB with $8.6 billion.
DeFi protocols like Maker, Lido, Curve DAO (CRV), and Aave have suffered through this ordeal, having to share the remaining available TVL.
In 2021, the TVL in these protocols surged by over 1200%, with Ethereum taking the lead and taking most of the staking value entire DeFi sector (62%).
The TVL of DeFi protocols refers to the total amount of locked funds by the users of these protocols, and its rise or fall is one of the most potent indicators of the health of the crypto market.
The most prominent of these protocols is Maker DAO, leading the rest with a stake of 13.27%. Maker DAO has lost 6.46% within the last 30 days.
Lido comes right after Maker DAO in terms of stakes as the largest DeFi protocol. Lido has lost 10.38% and had a $5.97 billion cut of the total TVL (as of 24 September.)
In all, the general direction of the crypto market is unclear, making it impossible to predict when these DeFi protocols are likely to get back on track.
However, if we see a Bitcoin/Ethereum trend reversal and a greater inflow of users into the DeFi space, the TVL figure is expected to follow suit.
Disclaimer: The author's comments and recommendations are solely for educational and informative purposes. They do not represent any financial or investment advice. Always DYOR (do your own research)