1. BITBILIHome
  2. Article

Defi TVL plummets as Ethereum staking grow significantly

• 220 views

TL;DR Breakdown

  • The TVL on Defi has been confined to plummet significantly as Ethereum staking grows.
  • Liquid staking continues to gain traction in the market.

Description

The cryptocurrency landscape has witnessed a series of setbacks involving centralized crypto exchanges and services in the past year. Surprisingly, these challenges have not deterred consistent outflows from decentralized finance (DeFi), as indicated by recent data. DeFiLlama, a prominent analytics platform for DeFi protocols, reports a notable decline in the total value locked (TVL) within … Read more

The cryptocurrency landscape has witnessed a series of setbacks involving centralized crypto exchanges and services in the past year. Surprisingly, these challenges have not deterred consistent outflows from decentralized finance (DeFi), as indicated by recent data. DeFiLlama, a prominent analytics platform for DeFi protocols, reports a notable decline in the total value locked (TVL) within DeFi protocols across various blockchain networks.

Defi TVL sheds $140 billion since 2021 high

At its peak in November 2021, the industry boasted a TVL of approximately $178 billion. However, this figure has dwindled significantly, currently resting at less than $38 billion. Impressively, out of this remaining sum, nearly $21.8 billion is tied up within Ethereum-based protocols. Even the aftermath of the collapse of centralized exchange FTX in November 2022, which led to a two-year low in locked assets within DeFi protocols, did not significantly impact the outflows.

This period also witnessed the downfall of centralized crypto lenders such as BlockFi, Genesis, and Gemini Earn, as they succumbed to the surrounding contagion. Despite a resurgence in the TVL to approximately $50 billion in April, driven by market recovery, this metric experienced a swift regression to below $38 billion. Strikingly, this decline in TVL occurred despite relatively minor fluctuations in the underlying values of cryptocurrencies during the same time frame.

It is worth noting that the aforementioned $37.6 billion TVL figure does not encompass funds secured in liquid staking protocols like Lido. Since the collapse of FTX, Lido’s TVL has more than doubled, ascending from $6 billion to an impressive $13.95 billion. These types of protocols deposit funds into other platforms, making them exempt from the mentioned TVL calculation. Another noteworthy player, Coinbase’s staking service, unveiled in September 2022, has accumulated an additional $2.1 billion worth of Ethereum (ETH).

Liquid staking continues to gain traction in the market

Services collectively account for an additional $20.2 billion in assets. Liquid staking is gaining traction as it offers investors the opportunity to stake their assets and earn yield while retaining trading liquidity through pegged assets issued by the staking provider, like cbETH and stETH. This approach presents an attractive alternative for investors compared to lending protocols such as Aave. The latter necessitates users to lock their tokens, potentially exposing them to unwanted protocol risks.

Presently, Aave offers yield rates of 1.63% for ETH and 2.43% for USDC. In contrast, Coinbase’s staking service presents a more lucrative option, boasting a 3.65% ETH staking rate and a 4.5% USDC rate. Despite the resilience of DeFi, certain platforms within the ecosystem have witnessed recent declines in TVL. Aave’s total value locked has contracted by 21% in the past month, now standing at $4.5 billion. Similarly, Curve Finance has experienced a 26% reduction, settling at $2.3 billion. Outside the realm of DeFi, the hawkish monetary policy of the United States Federal Reserve has led to an increase in yields on short-term government debt.

This phenomenon may attract investors who find these yields more appealing than those offered by stablecoins. The DeFi sector’s ability to maintain consistent outflows despite challenges in centralized exchanges and other crypto services underscores its resilience and enduring appeal. As the DeFi landscape evolves, it’s clear that investors are seeking innovative solutions like liquid staking to maximize their returns while minimizing risk exposure.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

文章来源于互联网:Defi TVL plummets as Ethereum staking grow significantly

Disclaimers:

1. You are solely responsible for your investment decisions and this info is not liable for any losses you may incur.

2. The copyright of this article belongs to the writer, it represents the writer's opinions only, not represents the site's ones. Not financial advice.

Previous 2023年8月27日 05:32
Next 2023年8月27日 06:37

Related articles

  • BTC ETFs aside –  6 firms file SEC applications for Ether futures ETFs

    TL;DR Breakdown Bitcoin ETFs have birthed a new trend as Volatility Shares, Bitwise, VanEck, Roundhill, ProShares, and Grayscale file applications with the SEC for Ether ETFs. According to reports, the first ether futures ETF could go live on Oct. 12, 2023, if the SEC does not deny the application. Grayscale has 2 ETF applications, and its Ether ETF, if approved, will be traded on the Chicago Mercantile Exchange. Description According to reports, there are currently six Ethereum Futures ETFs awaiting approval from the SEC. Several weeks after the bitcoin spot ETF craze, these entities have filed applications with the U.S. Securities and Exchange Commission (SEC) for ether (ETH) futures-based exchange-traded funds (ETFs). How will this pan out? The race for Ether features begins The … Read more According to reports, there are currently six Ethereum Futures ETFs awaiting approval from the SEC. Several weeks after the bitcoin spot ETF craze, these entities have filed applications with the U.S. Securities and Exchange Commission (SEC) for ether (ETH) futures-based exchange-traded funds (ETFs). How will this pan out? The race for Ether features…

    Article 2023年8月3日

  • Minor crypto players are stealing Binance’s shine

    TL;DR Breakdown Binance’s market share is declining. Smaller exchanges like Huobi Global and KuCoin are gaining ground. Regulatory troubles are affecting Binance’s dominance. Many traders prioritize anonymity over compliance. Description Binance, once the unchallenged titan of the cryptocurrency exchange world, has seen its throne start to wobble. In recent times, less prominent players in the game have found cracks in the armor and are swiftly making moves to steal the limelight. While regulatory troubles plague Binance, these underdogs have capitalized on the situation, capturing significant … Read more Binance, once the unchallenged titan of the cryptocurrency exchange world, has seen its throne start to wobble. In recent times, less prominent players in the game have found cracks in the armor and are swiftly making moves to steal the limelight. While regulatory troubles plague Binance, these underdogs have capitalized on the situation, capturing significant market share and upending the established hierarchy. The Rise of the Underestimated Two exchanges, in particular, Huobi Global and KuCoin, operating out of the Seychelles, are leading this surprising insurgence. These platforms, previously classified as higher risk,…

    Article 2023年8月17日

  • NVIDIA COMPUTEX 2023. keynote: Everything you need to know

    TL;DR Breakdown NVIDIA CEO Jensen Huang unveils groundbreaking technologies at COMPUTEX 2023, focusing on accelerated computing and generative AI. Key announcements include the Grace Hopper computer bringing generative AI to data centers, the Spectrum-4 switch for enhanced ethernet capabilities, and advancements in gaming and virtual reality. NVIDIA’s innovations are set to transform industries with sustainable computing, driving energy efficiency and pushing the boundaries of AI-driven technologies. Jensen Huang, CEO of NVIDIA, took the stage at COMPUTEX 2023, captivating the audience with a highly anticipated keynote speech introducing a series of groundbreaking technologies to reshape the computing landscape. With a focus on accelerated computing and generative AI, Huang showcased NVIDIA’s latest innovations, demonstrating the company’s immense potential across various industries. AI’s transformative impact: From medical research to gaming In his keynote, Huang emphasized the transformative role of artificial intelligence (AI) across numerous fields, including medical research, virtual reality, and video games. NVIDIA’s integration of AI has revolutionized rendering and graphics capabilities, enabling unprecedented visual experiences that were once unimaginable. Notably, Huang announced the launch of the Grace Hopper computer, a powerful…

    Article 2023年6月5日

  • SEC’s last chance to salvage reputation after many embarrassments

    TL;DR Breakdown The SEC is at a pivotal moment after numerous setbacks in the crypto arena. Michael Anderson predicts a strategic communication shift from the SEC, signaling their control over the crypto industry. Wall Street joins in the criticism, with many seeing the SEC’s actions as power grabs. Description The clock is ticking on the US Securities and Exchange Commission (SEC) to regain its tarnished image after consecutive missteps in the cryptocurrency sphere. The embattled agency now stands at a precipice, where its actions could spell redemption or deepen its quagmire. But amidst the rubble of criticism, there might just be a lifeline for … Read more The clock is ticking on the US Securities and Exchange Commission (SEC) to regain its tarnished image after consecutive missteps in the cryptocurrency sphere. The embattled agency now stands at a precipice, where its actions could spell redemption or deepen its quagmire. But amidst the rubble of criticism, there might just be a lifeline for the regulatory giant. Strategy Pivot in the Making Michael Anderson, of Framework Ventures, has forecasted a seismic shift…

    Article 2023年9月5日

  • Europe’s neglected key to economic security

    TL;DR Breakdown Europe needs to boost domestic demand to ensure economic security, following examples set by the US and China. The European Commission’s new economic security strategy focuses on enhancing competitiveness and deepening the single market. Resolving Europe’s economic risks requires both political and corporate consensus. Description Economic robustness is the lifeline that ensures both individual and corporate freedom, and the same principle extends to nations. Europe, known for its economic resilience, is realizing the necessity of bolstering its financial strength to ensure self-determination. Europe’s new economic security strategy The European Commission has taken a step forward, proposing a new economic security … Read more Economic robustness is the lifeline that ensures both individual and corporate freedom, and the same principle extends to nations. Europe, known for its economic resilience, is realizing the necessity of bolstering its financial strength to ensure self-determination. Europe’s new economic security strategy The European Commission has taken a step forward, proposing a new economic security strategy that places the enhancement of competitiveness and the deepening of the single market as its foremost priority. This strategy…

    Article 2023年7月5日
TOP