The DeFi market capitalization decreased slightly from $150 billion to $141 billion at the end of the first quarter of 2022, according to a report by CoinGecko. These levels were last seen in mid-October last year, before the ramp-up in Q4 2021. “This is a stark contrast to the previous quarter, which saw an increase of 29 % to $150 billion by the end of 2021,” the report said.
Data from the report showed that some of the biggest winners in the DeFi segment were multi-chain bridges and decentralized perpetuals, while rebase tokens such as the Olympus DAO and its various forks “appear to have lost much of their old glory”.
For Q1 CY 2022, DeFi’s multi-chain total value locked (TVL) globally decreased by 9% to $177 billion, and Ethereum’s TVL share fell to 54% from 61% in December 2021. While Binance Smart Chain (BSC) is still the dominant ethereum virtual machine (EVM) network, the Avalanche token has also increased in value due to the release of subnets and the Avalanche Summit. Other EVM chains also maintained their market share.
Cryptocurrency tokens such as Terra continued their momentum in 2022 as their share of overall TVL rose to 10%, while Solana saw declines. The report states that DeFichain’s TVL has crossed the $1 billion mark, especially as DeFi for bitcoin has started to gain traction.
Information from the report showed that decentralized exchanges, oracles, and lending platforms continued to dominate DeFi. While each sector saw a 17% decline in market capitalization in Q1 2022, they accounted for over 80% of the total DeFi market capitalization. Even though yield aggregators gained in 2021, they faced a decline in their market capitalization of 25% or $1.2 billion for the first quarter of CY 2022.
Protocols such as derivatives and asset management saw their market capitalization increase, with the latter doubling their market capitalization compared to the previous quarter, although their market share remains low. Decentralized tokens including GMX and Tenset were among the biggest gainers.
(With information from CoinGecko report, 2022)