The landscape in the decentralized financial space continues to take on new shapes as the market progresses. A new report indicates that Ethereum’s DeFi dominance is being shaved off by other blockchains.

Multi-chain trend emerges in DeFi

Citing data from Defillama, Galaxy Digital’s market intelligence arm, Galaxy Digital Research noted that Ethereum’s Total Value Locked in DeFi has hit an all-time low. Ethereum’s share of DeFi TVL has fallen below 55% in recent weeks.

Currently, Ethereum’s DeFi TVL stands at $108 billion and accounts for 55.53% of the DeFi market value. The trend points to the DeFi market entering a multi-chain future where investors have multiple protocols to choose from. Galaxy Digital Research noted in a previous study that:

Despite the sheer size of Ethereum’s DeFi TVL, we’ve seen its market share decline over the past 6 months, which is clear evidence that the multi-chain world is not only existing, but expanding.

Total Value Locked is an indicator that evaluates the adoption scale of a DeFi project by calculating the total USD value of all assets locked in its smart contracts.

The major blockchain networks currently crossing the Ethereum network are Terra, BSC, Avalanche, and Fantom. Terra currently has a TVL with which it has a market share of 11.10%. The blockchain has risen rapidly in the DeFi ranks and has recently surpassed BSC.

BSC, for its part, accounts for 5.91% of the DeFi market’s TVL. Avalanche and Fantom account for 5.51% and 3.70% respectively.

It is remarkable that the ecosystem looks much different than six months ago. As of October 2021, the top five DeFi chains were Ethereum (66.46%), BSC (9.80%), Solana (5.70%), Terra (4.99%) and Polygon (2.48%).

What the Future Holds for Ethereum’s DeFi

While all the alleged “Ethereum killers” on Ethereum seem to be winning, it may not stay that way for long. One factor that has driven investors to other chains is bottlenecks caused by high transaction costs and low throughput.

Ethereum has plans to scale up massively after its planned upgrade, ETH 2.0. The next phase of its scaling plan, the merger, is predicted to take place in the second quarter of 2022. When the full scaling roadmap is in place, Ethereum hopes to curb the growth of its competitors.

However, other chains already seem to have most of the capabilities that Ethereum hopes to gain when it upgrades to a proof-of-stake blockchain. This was the main reason why they are gaining market share. In the meantime, the price of Ethereum (ETH) is moving towards $2,7000 as the Ether bulls tighten.


The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication is not responsible for your personal financial loss.

About the author

Olivia’s interests span the entire cryptocurrency and NFT and DeFi industry. She remains as fascinated with cryptocurrencies today as she was in 2017 when she first started reading about them. She is actively looking for the latest Crypto related stories. When she’s not writing, she tends to her pet Chihuahua or prepares vegan recipes. Reach me at [email¬†protected]

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