The decentralized finance (DeFi) ecosystem has recently faced significant losses as the overall crypto market dipped below the $2 trillion mark. Data from Defi Llama reveals that the total value locked (TVL) in DeFi protocols dropped by 19% in the past 24 hours, plummeting from $88.8 billion to $71.8 billion. This marks the first time since Feb. 24 that the TVL in DeFi has fallen to this level.
Leading DeFi protocol, Lido Finance, experienced a 19.2% decrease in its TVL, reaching $23 billion. The native token of Lido DAO, LIDO, also took a hit, dropping by 26% and trading at $0.98 at the time of reporting. Other prominent protocols like EigenLayer, AAVE, and Maker saw declines of 18.5%, 16.7%, and 10.8% in their TVLs, respectively. AAVE’s TVL fell below $10 billion for the first time since May 2.
Furthermore, JustLend, ether.fi, and Uniswap witnessed decreases of 15.7%, 19.6%, and 17.4% in their respective TVLs. Data from Defi Llama indicates that the top 34 protocols have all seen significant drops in their TVLs over the past day.
The decline in DeFi TVL coincides with turbulence in the broader cryptocurrency market due to geopolitical concerns. The global crypto market capitalization fell by 13.4% in the last 24 hours, dipping below $2 trillion. This market-wide downturn led to over $1 billion in liquidations during the same period. Bitcoin briefly fell below $50,000 earlier today amidst the market uncertainty.
On Aug. 2, spot Bitcoin and Ethereum ETFs in the U.S. experienced significant outflows. BTC ETFs saw $237.4 million in outflows, while ETH ETFs witnessed $54.3 million leaving the market. This shift in investor sentiment is attributed to market-wide fear, uncertainty, and doubt (FUD) surrounding the current conditions.
Overall, the recent losses in DeFi protocols and the broader cryptocurrency market highlight the volatility and sensitivity of these markets to external factors. Investors and participants in the DeFi space will be closely monitoring developments to assess the potential impact on their holdings and strategies in the coming days.