DeFi Ecosystem Lost $156 Billion In Total Value Locked In Q2 2022

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Currently, the cryptocurrency space has lost a great deal; especially with Bitcoin posting its worst quarterly performance in 11 years. Away from the price and the allure of market valuation; which are both already very beat down, we see data provide by DeFi Llama. It reveal that the Decentralize Finance (DeFi) ecosystem lost 68.13% representing $155.79 billion; in Total Value Locked (TVL) in the second quarter of 2022.

Therein, the TVL is a measure of performance in the DeFi space. It measures the total value of cryptocurrencies that users “lock up” in various lending and staking protocols. Thereafter, It measures the commitment of cryptocurrencies locked up in a smart contract for any project; in a liquidity pool for lending or staked in a blockchain node for mining crypto that uses a proof-of-stake (PoS) consensus method. TVL used to measure the health of a cryptocurrency.

However, the decline in the space in hindsight is majorly; as a result of the collapse of the Terra blockchain; and the fall of the blockchain’s native token, LUNC and its algorithmic stablecoin USTC. Other factors contributing to the downfall are the decline in the price; and capitalization of cryptocurrency space. Which is as a result of the effect of contractionary monetary policies seen across the globe.


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