Wide-ranging negative effects are caused by the assault and problems of the well-known decentralised finance (DeFi) protocol Curve Finance, which affects additional blockchains in the Web3.0 ecosystem. Due to a significant decline in the Layer 1 network’s total value locked (TVL) of around 8% in the few days following the public release of the Curve attack, Ethereum is one of the primary victims of this breach.
The TVL dropped from $43.82 billion on Sunday, July 30, to the $40.2 billion it is presently estimated to be worth, according to statistics from IntoTheBlock (ITB).
Before it was exploited, Curve was one of the best exchanges for Ethereum-based stablecoins. Curve Finance plays a crucial role on Ethereum and contributes to strong liquidity, which is currently seriously endangered by the attack. The 8% decline in TVL may be ascribed to Curve, as the protocol is a prominent Ethereum blockchain trading arena.
As the TVL of Curve dropped to all-time lows on the protocol, the TVL decline on Ethereum is estimated to be roughly $3.55 billion based on the dollar valuation.
Major setback for Ethereum?
Although the Curve Finance vulnerability is a significant blow to the DeFi protocol community, Ethereum is not particularly challenged by it on its own.
Regarding the decentralised apps that run on Ethereum, it is regarded as one of the liveliest smart contracts; in the event that Curve goes down, other protocols will quickly step in to take its place. Ethereum is a leading proof-of-stake (PoS) blockchain that is always striving to grow its ecosystem. Notably, the numerous Layer 2 networks that surround it are driving this trend.
The combination of all these protocols will undoubtedly increase Ethereum’s liquidity and help it reach previous TVL levels.
