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The total value locked (TVL) in decentralized finance (DeFi) plunged 66.9% in the second quarter of this year amid market turmoil, according to data from DefiLlama.
See related article: Sinking TRON takes DeFi TVL to US$63B, lowest since April 2021
Fast facts
- The DeFi space recorded US$220 billion in TVL at the beginning of the second quarter, but the TVL sank to US$72.87 billion at the end of June, the data showed.
- The TVL stood at US$85.29 billion on Monday morning HKT.
- The DeFi market capitalization also suffered a hefty drop in the second quarter, decreasing from US$142 million to US$36 million in the three-month period, CoinGecko said in a report earlier this month.
- “The second quarter of the year definitely was full of drama,” Justin d’Anethan, institutional sales director at Amber Group, told Forkast, adding that investors were fearful about token prices, needing to cover margin calls or just wanting to free up cash, and “you get a dramatically lower crypto market cap, lower prices, lower TVLs.”
- “Ironically, I think the chaos that we’ve seen last month highlighted the validity of the DeFi space, instead of undermining it,” d’Anethan said. “While centralized entities suffered, pretty much all the dApps and protocols worked as intended, remained operational, and didn’t need bailouts.”
- Major cryptocurrencies and traditional markets have been battling concerns over rising inflation, a possible recession, uncertainty caused by the war in Ukraine and a growing list of crypto firms lining up for bankruptcy.
See related article: Bitcoin bounces back after US reports worst inflation in 41 years