After the cryptocurrency sector recorded a dramatic increase in the total value locked (TVL) across all decentralized finance (DeFi) platforms in 2021 thanks to attracting major capital, the tables seem to be turning in 2022.
Specifically, the TVL recorded in December 2021 stood at a whopping $303.8 billion, only to drop to $96.3 billion in September 2022 – a loss of 68.3%, according to the data published by crypto market data aggregation and analytics platform CryptoRank on September 26.
As per this data, the TVL in DeFi decreased by 10% in the last 30 days, from $106 billion where it stood a month ago, to the current $96.3 billion. Notably, the dominance of Ethereum (ETH) in the DeFi space continues, as it accounts for $56.3 billion or 58.46% of the entire DeFi TVL.
Ethereum is followed by Tron (TRX) with $11.9 billion in TVL, BNB Chain (BNB) with $8.6 billion, Avalanche (AVAX) at $3.5 billion, and Solana (SOL) with $2.3 billion. Interestingly, in May 2022, Ethereum’s TVL in DeFi shrank 35% amid bearish markets, whereas Tron’s grew by 47%.
Overturning the 2021 gains
As a reminder, the TVL in DeFi surged over 1,200% in 2021, with Ethereum taking up most of the staking value of the entire DeFi sector at 62%, a slightly higher percentage than presently, as Finbold reported back in December 2021.
The TVL represents the overall value of funds locked collectively by users into DeFi projects and is one of the essential indicators of the overall growth rate in this industry – its amount relying greatly on the underlying assets’ prices as well as the popularity of DeFi apps.
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