The bear market that took down both cryptocurrencies and NFTs is currently on its way to its next target. Looks like the DeFi segment is next in line for a bloodbath. DeFi’s Total Value Locked has fallen dramatically since early April, with high-profile events ravaging the entire Web3 space.

The TVL on DeFi fell below $110 billion for the first time since July 2021. The DeFi space is down about 60% since its recent peak in early April when the TVL tipped $230 billion. Now there are several reasons that probably explain the recent performance of the DeFi space.

In May alone, Terra’s crash sparked major turbulence in the crypto industry, wiping out more than $40 billion. During the crash, the prices of major cryptos hit their local bottom for the year 2022. Bitcoin [BTC] dropped to $26,500 while Ethereum [ETH] fell to $1,600 during the market sell-off.

The S&P 500 briefly fell more than 20% to confirm bear market trends that are putting more pressure on risky assets. After this confirmation, BTC took another plunge and psycho the “Extreme Fear” zone on the Fear & Greed Index.

The Ethereum network, while blessed with the largest TVL numbers, has fallen more than 70% since January to $70 billion at the time of writing. Solana is also down more than 50%. It hovered around $8 billion in April, before falling to $4 billion after the Terra crash.

Source: The Block/DeFiLlama

The most interesting case is that of the Terra blockchain itself. It currently ranks 29th with a total value of $129 million. It was once the second largest in DeFi before the de-pegging debacle. Terra projects had a total of $31 billion saved in DeFi, which has since been wiped out.

Source: DeFiLlama

The ghost town of DeFi has good news

TRON recently gained momentum in the DeFi space after a short climb to 3rd spot in terms of TVL. However, Avalanche has bounced back up the charts, taking TRON to 4th place.

TRON is the only network in the top 10 that has seen positive growth in the past 30 days. The network has been strengthened by the addition of the JustLend project. Released via a tweet on May 16, the new project is currently over 40% with $1.8 billion worth of TVL on the TRON network.

This post What you need to know about DeFi’s meltdown after Terra’s episode

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