The amount in DeFi that was locked has seen a significant drop. However, this is nothing surprising since we saw a drop in the overall market cap.
In this video I discuss how, with the drop in major currencies, it only makes sense that TVL went with it. In fact, the ratio isnt that far out of order.
Here is a link to the article mentioned in the video:
▶️ 3Speak
With the merge upcoming, this isn't that surprising. Good information to be aware of
That is another good point. Nobody knows how the smart contracts will fare.
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Everything went swimmingly on the testnets, but there weren't billions of dollars in assets to be maliciously targeted there, either.
I have a bad feeling about this change. That's all - The Fed
Yeah, any PoS chain is vulnerable to a 51% attack. Hang on!
What @mirroredspork says 👆
It's not a surprise as a lot of people just look at the fiat values of their portfolio. They will probably come back when the bull market is in for the gains. At least Defi is still sticking around so it shows that crypto is still alive and well.
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DeFi by name but most of these are companies that have centralized tokens.
I've actually never seen a DEFI project that wasn't 100% controlled by the dev team.
Not even sure if that exists yet.
Unless you count Hive as a DEFI network... which it kind of is because of the upvotes and yield farming bandwidth... but doesn't yet have the AMM pools and the LP yield allocations.
It’s just ironic to me it’s called DeFi but most projects are centralized. I know there are some long term winners no doubt but many of these projects are based on claims that will not work long run.
The concepts are fully decentralized.
The current implementations are not.
It's just a matter of time before the market gets it shit together.
I never thought these words would come outta my mouth 😂 I totally agree with The Fed!
Just isn’t true whatsoever. It depends on the project. To claim the overall space is decentralized isn’t factually true. Most of these things run on ETC chain which is 100% centralized which was proved after the dow situation. There are arguments to defend criticism but claiming there aren’t massive centralization issues with at least a good number of these things is laughable and not a serious statement. You are smart you know this.
TVL as a metric that we should take seriously never made sense to me.
Who cares?
Locking liquidity of other networks is pointless 99% of the time.
And then, like you said, when you price it in a USD unit-of-account it just reflects the lower price.
To read about the drop of DeFi is not surprising, all tokens and crypto currency's are going through the same thing.
I beliefs for a change in few days to come.
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DeFi getting hit far worse though. Personally I believe it’s because many of the projects are centralized and weak. It’s made me focus more on bitcoin again and has me seeing the space as 95% failures.
What do you think about the rug pulls in DeFi? How can we combat that problem of losing money in stranger made DeFi?
We can’t the way most of these tokens work. Gotta be picky and choose wisely. Most of these projects won’t be here long term while some definitely will. I just see a lot of people making excuses for the space and giving bad advice. I don’t say in this thread but just in general excuses everywhere when we know many (even if we disagree at least some 100% won’t) won’t be here in 5 years.
then Cryptocurrencies in general and their respective downward market capitalization does affect a large part of the economy a lot
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Well, I agree that most cryptocurrencies and even stocks are down but I think defi is experiencing so much for the fact that defi is so new.
I have made up my mind that I will leave defi for a while but the fall is not really surprising
Cryptocurrency in general is experiencing a paradigm shift and dropping in all that is called crypto currency and by extension the economy of the world is having same experience. So it's no big news hearing the decrease in all areas.
Summary:
In this video, the speaker discusses a recent article from Daily HODL about a significant decrease in the Total Value Locked (TVL) in decentralized finance (DeFi) projects on Ethereum and other chains. He explains how the TVL has dropped from 250 billion at the beginning of the year to 74.2 billion now, attributing this decline to the general downturn in cryptocurrency prices. The speaker emphasizes that market sentiment plays a crucial role in people exiting liquidity pools and cashing out their investments. He mentions factors like fear, market regulation, and the overall bear market conditions affecting the cryptocurrency space. Despite the current challenges, he remains optimistic about the future and expects a bullish market to emerge, leading to an increase in TVL as well.
Detailed Article:
The speaker opens the video by referencing an article from Daily HODL discussing the alarming decrease in DeFi Total Value Locked (TVL) on Ethereum and other chains. The TVL has plummeted from 250 billion at the start of the year to 74.2 billion, a substantial drop that reflects the overall downtrend in the cryptocurrency market. He speculates that market caps of various coins and tokens, including Bitcoin and Ethereum, have contributed to this decline in TVL. The speaker points out that even without a significant decrease in the number of tokens, the TVL can drop significantly due to various factors like people exiting liquidity pools and cashing out their investments amidst market uncertainties.
Moreover, he mentions the impact of market sentiment on people's decisions, highlighting how fear, frustration, and discouragement lead to selling off assets during bear markets. The speaker discusses how external factors like the tornado cash situation with the US Treasury and regulatory threats from authorities like Senator Elizabeth Warren exacerbate the existing market concerns. Despite the challenges, he reassures viewers that market fluctuations are not uncommon and that cryptocurrency is not on the verge of dying due to the bearish conditions.
The speaker offers a comparison with traditional financial markets, mentioning how equity markets also experience downturns and how fear is a powerful emotion driving market behavior. He provides insights into investor behaviors during bear markets, distinguishing between traders who sell at the first sign of a downturn, long-term holders who weather the storm, and retail investors who panic sell. He emphasizes that bear markets are cyclical phases characterized by fear, lasting longer than desired and leading to significant market corrections.
In conclusion, the speaker expresses optimism about a potential bullish market in the future, speculating that the second quarter of the next year might see a turnaround. He anticipates that a bullish market would lead to an increase in TVL as investors regain confidence and reinvest in decentralized finance projects. Despite the current challenges and market uncertainties, he encourages viewers to stay resilient and maintain a long-term perspective in navigating the volatile cryptocurrency landscape.
Notice: This is an AI-generated summary based on a transcript of the video. The summarization of the videos in this channel was requested/approved by the channel owner.