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.
Defi TVL Plunges Over 50% Since April 3, Terra Implosion Has Biggest Impact On Defi Economy
The total value locked in defi today is just above the $100 billion mark at $112.29 billion. While TVL has slipped since nearing an all-time high on April 3, last week’s Terra chaos removed most of the TVL held in decentralized finance protocols.
In addition to commanding a $231 billion TVL 42 days ago on April 3, the Terra blockchain held $30.45 billion or 13.15% of the $231 billion aggregate at that time. Terra held the second-largest TVL in defi and today, Terra is in the 14th position with only $500.38 million.
Of Sunday’s $112.29 billion, Ethereum leads the challenged TVL with 63.63% of the challenged aggregate or $71.09 billion. The second largest TVL in challenge is tied to Binance Smart Chain (BSC) with 7.71% of the $112.29 billion or $8.62 billion held on BSC.
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 dominates by 9.40% with its $10.56 billion TVL and Curve now holds $8.76 billion.
Curve’s current TVL is significantly different from April 3, when it was $21.17 billion about 42 days ago. The top 28 defi protocols today have seen significant TVL reductions over the past seven days. While Makerdao is in the lead, it is still down 13.73% this week and Curve is also down 49.18% last week. Lido lost 46.37% and challenge app Aave lost 21.94% this week.
After being the third-largest defi application in terms of TVL a week ago, Anchor has dropped to the 58th position after losing 97.76% this week. Stats show that Anchor has $309.78 million total value locked in the lending protocol today.
17 defi protocols have at least $1 billion or more when it comes to TVL size. There is still $419 billion in smart contract protocol tokens today with Ethereum leading the pack. Terra now ranks 18th in terms of smart contract platform token market caps.
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 will likely take some time before trust is restored and the lost $100 billion is added back to the defi ecosystem. Of all the challenge chains, Ethereum has benefited the most, as dominance has increased a lot since last week. However, Ethereum still felt the impact, with the chain losing 31.53% in the last seven days.
