As of Sunday, January 30, 2022, the leading smart contract protocol tokens by market cap totaled $592
The total value of keys (TVL) of the DeFi market has fallen from $237 billion to just under $200 billion as the entire market collapsed. DApps like Aave and MakerDAO have been going through particularly tough times lately, both of which have seen dramatic drops in TVLs.
Pedro Herrera, Senior Data Analyst at DappRadar, commented on DApps as crypto continues to fall into a bear market, arguing that 80% of DApps could disappear in the DeFi space if the bear market continued.
“DeFi DApps have never experienced a crypto winter. They have experienced problems, but only as in the beginning. Perhaps 20% of the applications that make up 80% of industry value will survive. And we could see protocols that are not widely used slowly disappearing.”
The crypto market crash has had a dramatic impact on the DeFi space. When assets depreciate, loans are liquidated, affecting assets in the general market. At a time like this, investors’ desire to interact with DeFi protocols has diminished.
What will 2022 look like for DeFi?
Every sector in the crypto space is having a tough time. Not long ago, the crypto market went into a downtrend, DeFi is seeing lower numbers across multiple indices, and the division’s NFT sector was recently hacked. Still, the backers are not worried as they have survived similar situations in previous market crashes.
However, DeFi has seen tremendous development in recent years, with many calling it the future of finance. The long lull in the market will no doubt affect many projects, but the few that survived could do well.
The idea of decentralized finance is important enough for people outside the space to take notice – including regulators. If they continue to manage to survive and withstand any regulation, they could end 2022 well. This depends on their usage and new features, but the crypto community still has a lot of interest even though going through tough times.
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According to beincrypto