• The total value locked (TVL) in Ethereum DeFi has declined by 76% over the course of the year 2022.
• The Ethereum DeFi TVL was more than $95 billion at the start of the year, but has now decreased to just $23 billion.
• Despite this, the dominance of Ethereum DeFi (the percentage share of the total DeFi TVL across all blockchains) has observed an increase of 2% this summer.
The bear market has had a significant impact on the Ethereum decentralized finance (DeFi) sector, leading to a drastic drop in the total value locked in the sector. According to the year-end report from Arcane Research, the total value locked (TVL) in Ethereum DeFi has declined by 76% since the start of this year, dropping from more than $95 billion to just $23 billion.
The TVL is a metric that measures the total amount of capital that has currently been deposited by users in DeFi protocols. This sharp decline in the TVL is indicative of a bear market that has hit Ethereum DeFi hard, and it’s clear that capital has been exiting the sector as the bear market has grown deeper, much like in the rest of the crypto market.
Despite this, the dominance of Ethereum DeFi (the percentage share of the total DeFi TVL across all blockchains) has actually observed an increase of 2% this summer. This is indicative of the fact that, despite the bear market, Ethereum DeFi is still the largest and most prominent sector in the decentralized finance space.
The Ethereum DeFi sector has seen a huge amount of growth over the past year, with many new projects launching, and the sector has become increasingly popular among investors. However, it appears that the bear market has had a detrimental effect on the sector, leading to a significant drop in the TVL.
It remains to be seen whether Ethereum DeFi will be able to recover from this drop, or if it will continue to suffer in the bear market. It is clear, however, that the sector has been drastically affected by the bear market, and it will be interesting to see how the sector develops in the coming months and years.