DeFi
DeFi TVL loses $10 billion in April! What is happening?
Sun May 5, 2024 ▪ 3 min reading ▪ by Eddy S.
The sky darkened for the DeFi ecosystem in April. According to data from DefiLlama, Total Value Locked (TVL) fell by $10 billion, a drop of 7% in just one month. A hard blow for the crypto sector, which closed the month of April with $138.6 billion in blocked liquidity. Behind these worrying global figures, certain blockchains have particularly suffered.
Avalanche and Solana are bleeding dry in the crypto ecosystem
In detail, few DeFi projects managed to hold up in April. Indeed, among the ten most significant blockchains according to TVLAvalanche and Solana went through a real ordeal.
For Avalanche, the decline was severe, with a massive exodus of 31.5% of funds committed to its blockchain! A shock for this otherwise promising crypto ecosystem, which is now struggling to bounce back.
Solana is not much better off, having hemorrhaged almost 30% of its DeFi liquidity last month. A worrying underperformance which raises the question of the resilience capabilities of this highly publicized crypto project.
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Ethereum holds up, Bitcoin and some L2 progress
While the overall crypto trend was rather gloomy in April, some pockets of resistance nevertheless emerged. Leading the pack, Ethereum managed to maintain its status as the dominant DeFi blockchain despite a 14.2% drop in its TVL. Proof of its solidity, the leading network still captures nearly 69% of the sector’s liquidity.
Another glimmer of hope is that Bitcoin and several Ethereum Layer 2 (L2) projects have gained traction among crypto investors. Driven by renewed ambitions for Bitcoin, the queen of crypto saw its TVL jump 39% to exceed the billion-dollar mark.
At the same time, L2 blockchains like BASE (+18.4%), BLAST (+4.4%) or Arbitrum confirm their upward trend. Cryptographic ecosystems increasingly favored by developers wishing to benefit from low-cost and high-performance environments.
Ultimately, this TVL setback in April could provide a much-needed boost for the entire industry. decentralized finance industry. A major challenge, certainly, but also an opportunity to restore order, to clean up the crypto market, and to start again on even more solid foundations.
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Eddy S.
The world is evolving and adaptation is the best weapon to survive in this undulating universe. Basically a crypto community manager, I am interested in everything directly or indirectly related to blockchain and its derivatives. In order to share my experience and raise awareness of a field that fascinates me, there is nothing better than writing articles that are informative and relaxed at the same time.
DISCLAIMER
The views, thoughts and opinions expressed in this article belong solely to the author and should not be considered investment advice. Do your own research before making any investment decisions.