Trust in DeFi Rattled After $100 Billion Left the Economy

The demise of Terra continues to highlight the fragility of the decentralized finance (defi), ecosystem. After Terra’s demise, things have changed dramatically. The total value locked (TVL), in defi, plummeted to $112.29 billion. This is a 51.38% decrease in just 42 days.

Defi TVL Drops More Than 50% since April 3, Terra Implosion Has the Most Impact on Defi Economy

Today’s total value in defi is just over $100 billion at $112.29 trillion. The TVL has been falling since April 3rd, when it almost reached an all-time high of $112.29 billion. Last week’s Terra chaos wiped out most of the TVL that was held in decentralized finance protocol.

The Terra blockchain also had a $231 trillion TVL on April 3rd, which was 13.15% of the total $231 billion at the time. Terra was the second-largest TVL for defi, and Terra is currently in the 14th spot with just $500.38 million.

Total value locked (TVL), in decentralized finance (defi), on May 15, 2022.

Ethereum leads the TVL in Defi with 63.63% or $71.09 Billion of Sunday’s $112.29Billion. Binance Smart Chain (BSC), which holds 7.71% or $8.62 Billion of the $112.29 Billion, is the second largest TVL in defi.

A significant change that took place this week was Curve’s defi dominance. Makerdao now holds the largest TVL, making it the largest defi protocol. Makerdao is now the dominant defi protocol with its $10.56 trillion TVL, while Curve holds $8.76 billion.

Curve’s TVL today is quite different from what it was 42 days ago, when it was $21.17 trillion. Today’s top 28 defi protocol have experienced significant TVL decreases over the past seven days. Makerdao is still leading, but it is down 13.73% and Curve is down 49.18%. Lido has dropped 46.37%, while Aave, the defi app, has lost 21.94%.

Anchor, which was the third-largest TVL defi application a week earlier, has fallen to the 58th spot after losing 97.76%. Anchor currently has $309.78million in total value locked into the lending protocol, according to statistics.

17 defi protocol have at least $1Billion or more in TVL size. Today, there are still $419 billion worth of smart contract protocol tokens with ethereum at the top. Terra currently holds the 18th spot in terms of smart platform token market capitalizations.

Terra’s problems reverberated throughout the crypto-economy. However, decentralized finance was most affected by the chaos. Trust was shaken to the core. However, defi was taken out of existence in less than one week.

It will likely take some time before trust can be regained and the $100 billion that was lost to defi is returned to the ecosystem. Ethereum has benefited the most out of all defi chains. Its dominance has grown a lot since last week. Despite this, Ethereum still felt the effects, with the chain losing 31.53% in the last seven days.