Value of assets locked in DeFi has fallen by 75% over the year

The DeFi market is suffering big losses. The total value of crypto assets blocked in DeFi protocols (TVL) has sharply decreased and reached 20-month lows. The fall is due to a large-scale sell-off in the cryptocurrency market after the collapse of the FTX exchange.

TVL is unlikely to stay at the lows for a long time, since the DeFi segment is considered relatively stable. Decentralized financing is one of the most innovative and promising ways to use technology. It attracts the attention of investors and large companies. However, some ecosystems have been hit harder than others. Among them are Ethereum, Binance Smart Chain.

Ethereum, BSC and Others under Attack

TVL in the Ethereum network is $25.36 billion, which is 75% less than a year earlier, when the indicator approached historical highs. MakerDAO dominates among the protocols here. It accounts for 14.85% of all blocked funds. It is followed by Lido, an ETH liquid staking solution. TVL in the BSC network is $5.13 billion, and this figure has hardly changed for several months in a row.

TRON is among the exceptions. Over the past day, TVL has grown by almost 8% and reached $4.57 billion. Compared to other blockchains, this figure is not so far from the historical maximum recorded at $7 billion.

In the third quarter, the number of USDD holders in TRON increased by 480%, and TVL grew by 71%. This happened before the FTX incident, but in general TRON has not suffered so much yet. According to DappRadar, DeFi wallets also showed significant growth in October: the number of active wallets this month exceeded 500,000.

TradFi now looks more attractive than DeFi

Users of DeFi services are looking towards traditional financing – TradFi. Against the background of a large-scale market decline, it looks more reliable and stable. MakerDAO protocol, which recently introduced traditional financing assets into its ecosystem, now receives half of its income from them.

However, MakerDAO has internal disagreements: the investor of the a16z project does not agree with the opinion of the founder Rune Christensen that the protocol should be divided into smaller units. A16z owns a significant part of MKR and, therefore, can influence management decisions.