• The total value locked in Ethereum DeFi has decreased by 76%, from $95 billion at the start of 2021 to $23 billion.
• Ethereum DeFi’s dominance of the total DeFi TVL across all blockchains has increased by 2% this summer.
• Arcane Research’s year-end report has highlighted the impact of the bear market on Ethereum DeFi.
The bear market has had a significant impact on Ethereum’s decentralized finance (DeFi) sector, as the total value locked in the sector has declined sharply over the course of the year. According to Arcane Research’s year-end report, the total value locked in Ethereum DeFi has decreased by a staggering 76%, from a high of $95 billion at the start of 2021 to just $23 billion.
The „total value locked“ (TVL) is a metric used to measure the amount of capital that is currently deposited by users in DeFi protocols. This steep drop in the TVL metric highlights the negative impact of the bear market on Ethereum DeFi, as investors have been withdrawing their capital from the sector.
Despite this significant drop in the TVL metric, the dominance of Ethereum DeFi (the percentage share of the total DeFi TVL across all blockchains) has actually increased by more than 2% this summer. This indicates that Ethereum DeFi still remains the most popular DeFi platform, despite the bear market.
As the crypto market continues to be bearish, it is likely that the value locked in Ethereum DeFi will remain low. However, with the increasing popularity of Ethereum DeFi, the sector could be poised for a comeback in the future. It remains to be seen whether the TVL metric in Ethereum DeFi can recover from the sharp losses it has suffered this year.