DeFi Activity Plummets to Yearly Low
This past Sunday, the DeFi market experienced a significant downturn, with trading volumes falling to their lowest level in seven months, recording only $1.12 billion according to DefiLlama data.
DeFi Market Struggles
The total value locked (TVL) in DeFi dropped from $45.3 billion at the beginning of July to $42.9 billion. This decline is attributed to recent price volatility in major tokens like ETH and BTC, alongside numerous incidents of exploits and scams.
ETH saw its price fall from $1,920 to $1,850, while BTC struggled to break the $31,500 resistance level.
Notable Exploits
In mid-July, Conic Finance lost 1,700 ETH due to an exploit, leading to a 65% drop in its TVL, now standing at $42 million. Similarly, zkSync’s largest lending protocol, EraLend, faced a similar attack, resulting in a loss of $3.4 million.
TVL declines were also observed in Curve Finance, Blur, and MakerDAO, with each platform losing over 15% of their value. Other platforms like Ankr, NFT BendDAO, and Arbitrum Chronos also experienced significant declines.
The DEX to CEX trading volume ratio fell back to its previous levels after peaking at 22% in May.
Regulatory Pressure
Additionally, the DeFi trading market is under pressure due to regulatory scrutiny from the U.S. Senate, raising concerns about whether users will continue to participate in this market through the end of the year.
Positive Developments
Despite the bearish market sentiment, some platforms like EigenLayer have secured new funding after launching their restaking protocol. Meanwhile, TVL in Lybra Finance and Marinade Finance on Solana has grown significantly, increasing by 73% and 45%, respectively.
