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Total value locked in DeFi dropped by 66%, but multiple metrics reflect steady growth

Cryptocurrency Aug 09, 2022 05:40PM ET
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Total value locked in DeFi dropped by 66%, but multiple metrics reflect steady growth

The aggregate total value locked (TVL) in the crypto market measures the amount of funds deposited in smart contracts and this figure declined from $160 billion in mid-April to the current $70 billion, which is the lowest level since March 2021. While this 66% contraction is worrying, a great deal of data suggests that the decentralized finance (DeFi) sector is resilient.

The issue with using TVL as a broad metric is the lack of detail that is not shown. For example, the number of DeFi transactions, growth of layer-2 scaling solutions and venture capital inflows in the ecosystem are not reflected in the metric.

Optimism network TVL, USD million. Source: Defi Llama
Leading DeFi applications by 30-day active addresses. Source: DappRadar

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Total value locked in DeFi dropped by 66%, but multiple metrics reflect steady growth
 

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