The recent crypto market slump has hurt not only retail investor sentiment but also the decentralized finance space.
According to popular resource and aggregator DeFi Lama, the total value locked across various chains has dropped to the levels last seen in June 2021.
- Bitcoin, for one, has fallen deeper into “extreme fear” territory as it hit its lowest level in more than two years on the BTC Fear & Greed Index this week.
- DeFi markets were also not untouched by widespread negative sentiment.
- Data compiled by DeFi Lama showed that TVL fell to $140 billion on May 21, a drop of more than 50% from the beginning of the year.
- Market leader, Ethereum, which accommodates the majority of the locked price, also fell hard. It slashed half of its value in January from $187 billion to $92 billion.
- Avalanche noted a similar trend as TVL currently trades $6.49 billion across all DeFi protocols on its blockchain from a high of $13.7 billion recorded in December last year.
- Solana’s infrastructure faced intense criticism for its multiple outages. The mitigation measures announced by the developers have yet to help the Layer 1 blockchain protocol’s TVL recover from annual lows, which are close to $4.5 billion.
- In addition to the contagion effect, it is also important to note that the DeFi sector has become a breeding ground for fraudulent activities this year.
- Web3 and blockchain security firm, CertiK recently revealed That more than $1.6 billion in crypto was stolen from DeFi users, which is more than the total amount stolen in 2020 and 2021 combined.
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