Terra Collapse Continues to Plague Defi — Value Locked in Cross-Chain Bridges Down 20% This Month

Terra

Following the aftermath of the Terra blockchain fiasco, decentralized finance (defi) continues to feel the impact of the project’s fallout. During the last four days the total value locked (TVL) in defi has dropped 2.61% in value, and cross-chain bridges have lost roughly 20.3% during the last 30 days.

Value locked in Cross Chain Bridge Tech slips 20% below last month

Over $100 billion in USD value has recently been removed from the Total Value Locked (TVL) in defi and the TVL stats continue to drop. Four days ago, the TVL in challenge was around $112.29 billion and today the TVL is down 2.61% to $109.35 billion. In addition to the challenged TVL on a dozen blockchains, cross-chain bridge TVLs have slipped a lot over the past month.

30-day metrics from Dune Analytics indicates that the TVL across cross-chain bridges is down 20.3%. Today, there’s $16.49 billion total value locked across 16 different cross-chain bridges. In addition to the cross-chain bridge TVL the number of ethereum bridge unique daily depositors has also dropped.

As of Thursday, May 19, 2022, Polygon has the largest TVL among the 16 cross-chain bridges monitored on Dune Analytics. Polygon today has $5.15 billion. The $5.15 billion on Polygon Bridges represents 31.23% of the entire TVL of the $16.49 billion inter-channel bridge.

Polygon is followed by Avalanche ($3.55B), Arbitrum ($3.2B), Fantom’s Anyswap ($1.87B), Near Rainbow ($1.86B), Optimism ($585M), Harmony ($229M), Moonriver ($154M), and Xdai ($122M).

Today, the main crypto asset mined on cross-chain bridges is the stablecoin usd (USDC). The stablecoin has $5.1 billion locked and is followed by WETH or ETH with $4.57 billion locked. Tether (USDT) is the third largest at $1.9 billion today and other notable cryptos mined on cross-chain bridges include WBTC, DAI, and MATIC.

The losses across defi stem from two different factors. One, the Terra blockchain fallout removed more than $40 billion from the defi ecosystem in a very short period of time. The remaining billions have left defi in various ways including using cross-chain bridges because defi users have been rattled by the Terra catastrophe.

Billionaire investor and crypto promoter Mike Novogratz posted a blog post yesterday covering Terra’s recent blockchain fiasco and he said that “the collapse has shaken confidence in crypto and challenged it”.

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