Defi Lending Sector Experiences Major Shake-Up: 71% of Total Value Locked Evaporates in 12 Months

Decentralized concern (defi) has continued to stay profoundly ingrained successful the cryptocurrency system arsenic the ecosystem provides users with a non-custodial mode to speech integer assets, lend cryptocurrencies, contented stablecoins, and ways to nett from arbitrage. In the lending assemblage of defi, a batch has changed during the past 12 months arsenic lending applications similar Terra’s Anchor Protocol spot the dust, and 71.95% of the full worth locked successful defi lending protocols evaporated.

From $37 Billion to $10 Billion: The Top Five Defi Lenders Then and Now

Last twelvemonth astir this time, decentralized concern lending protocols held $37.41 cardinal successful full worth locked (TVL), and the defi protocol Aave dominated with $12.87 billion. An archive.org snapshot from Jan. 10, 2022, shows that Aave’s $12.87 cardinal TVL was larger than the TVL the apical 5 defi lending protocols held connected Jan. 17, 2023.

Top 5 lending protocols by full worth locked connected Jan. 10, 2022.

Data shows that the apical 5 defi protocols successful mid-Jan. 2023 see Aave ($4.58 billion), Justlend ($3.02 billion), Compound ($1.85 billion), Venus ($813.63 million), and Morpho ($221.59 million). Currently, each 5 of the aforementioned defi protocols person a combined TVL of astir $10.49 billion.

Top 5 lending protocols by full worth locked connected Jan. 17, 2023.

On Jan. 10, 2022, Terra’s Anchor Protocol held astir $8.5 cardinal successful value, but present the defi protocol is successful ashes. Anchor was 1 of the main components successful the Terra ecosystem arsenic terrausd (UST) holders deposited UST for a 20% yearly percent complaint instrumentality that compounded daily.

But successful May 2022, UST depegged from its $1 parity, and Anchor holds lone astir $2 cardinal today. Compound held the third-largest TVL successful presumption of defi lending protocols with $8.09 cardinal astatine the time. On Jan. 17, 2023, Compound’s TVL has shrunk to $1.85 billion.

The second-largest defi lending protocol contiguous is Justlend with $3.03 billion. The Tron-based Justlend moved from the seventh-largest defi lending protocol TVL to the 2nd by jumping from $1.72 cardinal to the existent $3 billion. Justlend is 1 of the lone decentralized concern lending applications that saw an summation during the past 12 months.

The 4th and fifth-largest defi lenders past year, Abracadabra and Cream Finance, are nary longer successful the apical 5 standings and person been replaced by Venus and Morpho. Cream Finance is present successful the 20th position, dropping from $2.14 cardinal to the existent $42.94 million.

What bash you deliberation astir the defi lending protocol shake-up implicit the past 12 months? Let america cognize your thoughts astir this taxable successful the comments conception below.

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