In the past 24 hours, the total value locked (TVL) on the DeFi market has decreased by more than 10%. The TVL is currently $44.36 billion, last seen in March 2021. After the collapse of FTX, the 20-month low is yet another indication that the cryptocurrency market is struggling.
In terms of year-over-year and year-to-date comparisons, TVL has decreased by almost 75% from its all-time high. The DeFi market, which has long been a strong foundation in the industry, has suffered a severe setback.
With a TVL of $25.36 billion, Ethereum has decreased by 75% year to date and by the same amount from its peak. With a 14.85% market share, MakerDAO (MKR) presently leads the ETH liquid staking market, followed by Lido. BSC’s TVL currently stands at $5.13 billion and has been largely unchanged for a few months.
The founder of MakerDAO, Rune Christensen, believes that the protocol should be divided up into smaller sections, but investor a16z disagrees, hence MakerDAO is currently experiencing its problems. A16z controls a significant chunk of MKR and hence influences its governance.
As the industry declines, DeFi participants are shifting their focus to traditional finance. After recently integrating traditional financial assets into its ecosystem, MakerDAO now gets half of its revenue from conventional assets.
Bonds are outperforming cryptocurrencies at the same time that investors are more interested in TradFi. Bonds do generally outperform almost all markets, especially government-backed bonds which are of the highest ratings. During periods of Fed monetary tightening or the economy coming out of inflation, bond rates typically go up.
Although 2022 has been a crazy year for the crypto market, most enthusiasts are optimistic that the market will recover.