A new DappRadar report rings alarm bells about the sharp decline in capital present in the decentralized finance (DeFi) subsector.
The report highlights that the Total Value Locked (TVL) in the DeFi space has witnessed a massive 70% drop in just eight months.
DeFi TVL was hovering around $250 billion at the beginning of the year, according to a data acquisition and analytics firm. DeFi’s TVL now stands at $74.21 billion, according to the report, which it notes is a “shocking decline.”
Blockchain TVL represents the total capital held within a smart contract. TVL is calculated by multiplying the amount of collateral locked in the network by the current value of the asset.
A DappRadar report points to sanctions imposed by the US government on cryptocurrency mixer Tornado Cash as a catalyst for DeFis TVL decline.
“[August]was particularly difficult for the market due to the Tornado Cash crisis, with TVL down 10.47% month-on-month, losing about $8.7 billion.”
Ethereum (ETH) stands out among its peers and remains the most popular chain, says the report.
Ethereum continues to be the most prominent chain, controlling 69% of DeFi TVLs at $51.47 billion, down 11% from last month and down 56.63% from August 2021.
This report also provides an update on the performance of other layer 1 chains with respect to TVL.
BSC (Binance Smart Chain) also saw a staggering 6.44% month-on-month and 75.67% year-on-year decline. As a result of wallet attacks, Solana TVL dropped 27% in the first four days of August, falling It continued to fall 6% for the remainder of 2020, and is now valued at $2.11 billion, a loss of about $1 billion.

Don’t miss a beat subscribe to get encrypted email alerts delivered straight to your inbox
Price action confirmation
Please follow us twitter, Facebook When telegram
Surf The Daily Hodl Mix
 

Disclaimer: Opinions expressed on The Daily Hodl are not investment advice. Investors should exercise caution before making risky investments in Bitcoin, cryptocurrencies or digital assets. Please note that your money transfers and transactions are made at your own risk and you are responsible for any losses you may incur. The Daily Hodl does not endorse the buying or selling of cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/DrHitch