Ethereum’s total value locked (TVL) depletes further a few days to the highly anticipated “Merge” due to a continuous drop in the amount of liquidity poured into decentralized finance (DeFi).
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Ethereum has been the go-to blockchain for thousands of developers and millions of dApp users ever since decentralized finance was coined by a group of entrepreneurs and Ethereum developers in 2018.
An overall bearish market that followed the new milestones reached in 2021 earlier in the year has extended into the third quarter of the year. Unfortunately, Ethereum as the leader of the DeFi sector has not been spared as the chain shed 7% of its opening day value locked.
According to data from DeFiLlama, on Aug. 1, Ethereum TVL was $37.32 billion, and declined to $34.36 billion on the last day of the month.
After reaching new highs in 2021, Ethereum made several attempts to shackle off the bears in January when it reached a yearly peak of $100.99 billion.
TVL by the close of August was more than two times below this statistic. To put it simply, Ethereum has sunk by $66.6 billion in the last eight months.
Same as other smart contract chains such as Solana, TRON, Binance Smart Chain, Avalanche, and Fantom, Ethereum total value locked is primarily determined by the performance of decentralized applications housed in its ecosystem.
MakerDAO, the largest dApp on Ethereum lost 5.21% of its value locked to around $8 billion. Lido, a liquid staking protocol with more than $6 billion locked, shed 1.8% of its value. Decentralized exchanges (DEX) such as Uniswap and Curve Finance were not spared.
Despite sinking by more than $60 billion in TVL since Jan. 5, Ethereum continues to maintain its lead over other blockchains despite the number of deployments developers of dApps have made on more scalable networks.
The native asset of Ethereum, ETH has struggled in the last three months after going through several price corrections and resistance levels.
With that said, the coin crossed $2,000 for the first time since the last days of May. It eventually reached a monthly high of $2,022.79 on Aug. 14. After fighting off a steep decline in its price, ETH reached a monthly low of $1,427.73 on Aug. 29. Throughout Aug., Ether decreased by 7% from $1,681.45 on Aug. 1 to $1,553.68 on Aug. 31.