The ongoing crypto market slump continues to drive prices lower. Additionally, it dramatically impacts the DeFi industry, as its Total Value locked will head below $50 billion again. It appears there is little to no excitement in this industry whatsoever, and it may not necessarily come back anytime soon either.
DeFi TVL Drops Quickly
Until about a month ago, everything seemed peachy in the world of cryptocurrency assets. All markets noted healthy growth, and many assets re-recorded new all-time highs. That momentum came to an abrupt halt and has yet to recover from it today. As prices keep going lower, more and more people may be inclined to move their liquidity elsewhere.
Judging by the current Total Value Locked across Ethereum DeFi problems, there is no actual departure to speak of yet. Although some projects lost over 10% in TVL in 24 hours, that is not entirely abnormal even when the market is bullish. For most projects, the current TVL decline is equal to the price momentum of popular assets, as they all lose between 2% and 5%. As such, the TVL of most problems goes down by similar values, which is entirely normal.
However, seeing the value locked in Ethereum DeFi head toward $50 billion and a bit lower can be problematic. Although this level has been reached a few times in recent months, it is still an unusual turn of events. In Mid-May, the DeFi TVl peaked at over $85 billion. About a month later, nearly half of that is gone, and it may not come back anytime soon. That is the volatile nature of cryptocurrencies.
Whether platforms like DiversiFi, CVI, PerlinX, and WePiggy can recover from daily losses between 15% and 41.49% is different. That is more than just an adjustment to current asset prices, as it confirms people are willingly pulling liquidity out. Again, that is not entirely unusual with smaller platforms, as none of these projects managed over $18 million in assets today. Surviving in this cutthroat industry is a very steep challenge.
Some Platforms Note TVL Growth
In a competitive industry, one project’s loss can be another venture’s gain. That situation is no different in decentralized finance, as several concepts have a higher TVL than 24 hours ago. For most, the difference is negligible, but there are some “outliers” to take note of. Seeing a change of 0.12% up to 2.93% will not impress too many people, especially where smaller platforms are concerned.
One outlier is Flexa, a payments solution built on the Ethereum blockchain. Its TVL has risen to $2.21 billion thanks to a 15.16% increase in total value locked. It is a surprising gain under the current market circumstances, although it is intriguing to see some platforms perform better than others. Other platforms doing well include 88mph and Olympus, two ventures focusing on lending and asset management specifically. Although not the most notable projects, these increases remain rather intriguing.
The most significant change in TVL comes courtesy of Nsure Network. It notes a 37851% increase in TVL, bringing its total to $4.5 million. It seems unlikely such substantial gains will repeat themselves, but it is good to see up-and-coming DeFi projects make a splash during these bearish periods. Remaining relevant is a very different ordeal, though, as this industry is incredibly competitive.