Decentralized finance with fire and blood: 25 billion dollars flew away in 2 days

Blow for DeFi – The ecosystem of decentralized finance (DeFi) has experienced significant growth since the end of 2019. However, it is plagued by market fluctuations and has just recorded a heavy fall.

25 billion dollars of cryptocurrencies in gaseous state

As you know, the cryptocurrency market has recorded a significant drop over the weekend. So the Bitcoin has lost 15% of its value since Saturday May 7, going from $36,000 to a local minimum of $30,200 at the dawn of May 10.

Over the same period, the entire market recorded a similar decline with a 15% drop in total market capitalization.

Obviously, the decentralized finance market has not been left behind. Indeed, this one saw the total value locked within its protocols melt from $25 billion May 7-10. In practice, this has gone from 147 to 122 billion dollars.

Evolution of DeFi TVL since 2019 – Source: DefiLlama.

Thus, DeFi reached its lowest point of the year, recording a down 29% from its peak in December 2021valued at $252 billion.

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Decentralized finance protocols overdue

Of course, every protocol in decentralized finance has been impacted by this drop. So the giants curve, Uniswap and Aave have recorded a drop ranging from 12 to 16% of their TVL over the last seven days.

A red market on the top 10 DeFi protocols
A red market on the top 10 DeFi protocols – Source: DefiLlama.

The main loser of this decline turns out to be the protocol anchor. Indeed, this one is at the heart of the turmoil after his stablecoin UST moved away from the dollar. In total, the Anchor protocol suffered from a 56% drop in TVL in the last 7 days.

A carnage for the protocol, which could well become a systemic problem for DeFi, if the UST were not to find its standard with the dollar.

For its part, MakerDAO is one of the main protocols that has best held up to this drop. Indeed, despite an 8% drop over the last seven days, it has recorded a 4% recovery over the last 24 hours, probably coming from funds withdrawn from Anchor.

For its part, Ether also registered a significant drop. Indeed, the asset has found below the $2,300 marka level not seen since July 2021.

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