Following the latest flash crash that offset the recent price run in the digital currency ecosystem, the decentralized finance (DeFi) ecosystem has picked up a recovery that is evident in its Total Value Locked (TVL). According to data from DeFiPulse, the current TVL for all of its listed DeFi protocols was pegged at $86.9 billion at the time of writing. The core growth metric for the DeFi ecosystem has seen very sharp fluctuations since the beginning of the week.
Riding on the news of Bitcoin adoption as a legal tender by El Salvador, the DeFi market soared in response, attaining a new All-Time High (ATH) of $98.266 billion. Unable to sustain this uptrend as the flash crash loomed, the TVL dropped sharply to $76.27 billion on September 8. As seen on the chart above, sharp valuation moves were recorded at $88.561 billion on September 10, down to $82.191 billion earlier today.
DeFi market investors are quite cautious to commit their funds atop an erratic market. The back and forth in protocol’s valuation is a reflection of this caution, and at the time of writing, the TVL has parred off some of the losses it picked up earlier today and is currently pegged at $87.222 billion.
More of Bitcoin and Less of Ethereum
Despite the increased dependence on Ethereum, the current outlook in the DeFi market showcases a growing lockup of Bitcoin in smart contracts compared to those of Ethereum. From the ATH of 203.346k BTC, locked up on September 7, Bitcoin slumped to a low of 187.501k in Sept and has grown back to 202.251k today.
From the high in Sept to those recorded today, DeFi markets come off with a negligible drop in the amount of Bitcoin fueling DeFi-backed earnings.
The situation was different with Ethereum as the number of the digital currency locked up at the moment (7.303 million) remains way below the 7.769 million recorded back on Sept 7.
As the DeFi market seeks to sustain its ongoing recovery, Bitcoin, which attained its 700,000th block height today seems to be contributing more than Ethereum, whose asset is also going into Ethereum 2.0 deposit contract.
Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
