The collapse of the Terra blockchain was a cultural reset for the blockchain and web3 world…
It was also a financial reset. Not only did Terra fall from the #2 chain ranked by Total Value Locked (to #33), but the rest of the market was thrown around in the fallout.
Total Value Locked (TVL) is a measure of the total amount of value sitting on a chain in various protocols and dapps. TVL is by no means a replacement for market capitalization, which measures the total appraised value of the chain. Nor is it a replacement for any other fundamental metrics. However, it offers fuller insights into the “usefulness” and use of various products (blockchains, protocols, etc.)
As a result, it also offers some clues of where the money is moving.
And moving it is… Ethereum is still sitting high-and-mighty in its first place position by TVL. However, with a massive haircut to its TVL number: only $60 billion is stewing in Ethereum’s protocols and apps. It’s trailed by Binance Smart Chain ($8.51 billion), Avalanche ($4.96 billion), Tron ($4.28 billion), and Solana ($3.11 billion).
In total, the amount of TVL being tracked by DeFi Llama fell to a 2022 low this week: it sat at $98 billion.
The world of dapps has also been rearranged by the Terra tumble. Its ideological competitor, MakerDAO, is now the largest dapp by TVL. MakerDAO issues the $DAI stablecoin, which is backed by dozens of crypto assets. For years, MakerDAO was the crypto world’s largest dapp and DeFi app … so this is an unexpected and ironic surprise. (We covered its sudden resurgence in the bottom story of our May 13 Litepaper, which was about Terra and TerraUSD’s final stand.)
However, not far behind MakerDAO’s $9.54 billion TVL is Curve — and it has a small advantage as a monster-sized DEX. Sure, its TVL has fallen by nearly half in recent days, but not all that long ago it was King of the DeFi apps. We’ll be watching this story.
Behind them was Aave, a lending and borrowing protocol, at $8.27 billion; Hex, a controversial “high-yield Blockchain Certificate of Deposit” product which some people have called a “ponzi” or scam, at $6.47 billion; and Uniswap, the king of all DEXes, at $5.84 billion.
The majority of apps and chains saw their TVL fall on the week and month. However, two stood out:
🪐 Arrakis Finance saw its TVL rise +45.2% this month and +53% week over week. The platform took off on Ethereum earlier this week. Its TVL nearly doubled in one day on DeFi Llama, which could be a reporting error, but it’s more likely that it’s seeing more inflows because of its influence on Uniswap pools.
📈 The Tron blockchain saw a +3% increase in its TVL on the month, which has to do with the launch of its USDD stablecoin (see the story below.)