With a broad-based caution being exercised by investors regarding risk assets, there have been a massive outflow of funds from Decentralized Finance (DeFi) protocols as many investors anticipate calm to re-engulf the ecosystem.
The DeFi world is not spared from the current onslaught in the cryptocurrency space, which has fueled the combined market cap by dropping to $1.25 trillion after an 8.86% drop over the past 24 hours at the time of writing.
Where DeFi Currently Stands
Per data from DeFiLlama, the ecosystem’s Total Value Locked (TVL) has dropped to $113.15 billion atop a 26.16% slump over the past 24 hours. The events ongoing in the Terra ecosystem have largely affected investors’ confidence in relation to the network’s most celebrated project, Anchor Protocol.
In reality, the dominance of Curve has been subsumed by MakerDAO (MKR) whose TVL now stands at $10.03 billion, down 23.52% over the past week. Curve Finance ranks as the next big DeFi protocol at a $9.52 billion TVL as a prominent lending protocol. Aave is still maintaining its third position atop a TVL of $8.32 billion.
Anchor Protocol dropped from $17.05 billion as of May 5 to $1.21 billion at the time of writing. While the DeFi ecosystem measures how far the crypto world is serving the most ambitious revolt against traditional finance, investors backing the revolution often see inconsistencies owing to the inherent volatility.
The plunge of the DeFi protocols is not the first that will be recorded, and it is evidence of the interwoven volatility and correlation amongst protocols. With the $200 billion benchmarks the height to target, time will tell whether the resilience that DeFi proponents are professing will help in regaining the TVL in the long run.