Ethereum DEX TVL Plunges 88% From 2021 Peak: Token Terminal

The total value locked (TVL) in Ethereum-based decentralized exchanges (DEX) has plummeted 88% from its peak, according to new data from Token Terminal.

At its height in November 2021, DEX TVL on Ethereum reached $44 billion, but now hovers at around $5 billion. Meanwhile, the total TVL of the Ethereum Layer 1 (L1) ecosystem has surpassed its previous cycle high to exceed $200 billion. This total TVL is calculated as an aggregate of stablecoins, lending and real-world assets (RWA), liquid staking, and DEX.

Interestingly, stablecoins account for approximately 65%, or $130 billion, of that figure, Token Terminal data shows. Stablecoin TVL on Ethereum previously peaked at $122 billion in February 2022.

The steep drop in DEX TVL on Ethereum points to bigger changes happening in the decentralized finance (DeFi) world. DEXs used to account for the major part of a network’s TVL, but now less money is flowing into them.

Token Terminal notes that liquidity is increasingly moving to more cost-efficient blockchains, while many DEXs have also become more capital efficient, especially since the advent of concentrated liquidity with Uniswap V3.

Still, despite the decrease in DEX TVL, the overall Ethereum ecosystem remains sturdy, especially as stablecoins continue to drive cryptocurrency adoption.

In May, stablecoin market capitalization reached a new all-time high, growing 3% from April to $242 billion. This marks the twentieth consecutive month of growth.