Market Action: Terra a Bright Spot in Worst Slump Since October Peak

The DeFi markets are mired in the worst weekly slump since October highs.

By: Samuel Haig Loading...

Market Action: Terra a Bright Spot in Worst Slump Since October Peak

The crypto market is still in the doldrums.

That’s the upshot of the last seven days. The combined capitalization of the DeFi sector slid to its lowest level since all-time highs in early October.

Since the Nov. 12 peak, DeFi assets have lost almost a quarter of their value, dropping to $135B, according to CoinGecko.

There is one exception to the trend: Terra. Even though it declined 14.3% in the last seven days, its token LUNA is the top DeFi asset with a capitalization of $22.2B, or 16.5% of the DeFi sector’s market cap, in early morning trading New York time. And it’s overtaken mighty Solana. Terra ranks third with nearly $12.4B in TVL. Terra’s top projects by TVL are Anchor with nearly $6B, Lido with 3.90B, and Terraswap with 1.06B.

Solana sits at fourth with $11.5B in TVL, led by Raydium with $1.60B, Serum with $1.31B, and Marinade Finance with $1.28B. A margin of just 4% now separates Solana and Avalanche, with Avalanche ranking fifth with $11.1B. Avalanche’s leading protocols are Aave with $2.88B, Trader Joe with $1.90B, and Benqi with $1.52B.

Double-Digit Growth in GameFi

After recently posting meteoric gains followed by a violent pull-back, volatility in the GameFi and Play-to-Earn segments has calmed, with the sector posting respective weekly losses of 5.7% and 6.4%.

Despite the decline, three GameFi assets posted double-digit growth for the week: Gods Unchained (GODS) was up 47.3%, Bluezelle (BLZ) gained 16.2%, and Gala (GALA) bounced up 13.1%.

TVL Trends

The total value locked (TVL) of the DeFi sector slid roughly 1% to sit at $246.3B, according to DeFi Llama. The past week also saw DeFi’s TVL sink to its lowest level since late October, slipping to almost $243.7B on Dec. 11.

The top three DeFi protocols by cross-chain TVL have not moved this week, with Curve taking the top slot with $21.4B, followed by MakerDAO with $18.1B, and Convex Finance with $16%.

Ethereum is the top network by DeFi TVL with $163.3B, or two-thirds of the sector’s total, with Curve, MakerDAO, and Convex topping its rankings.

While Binance Smart Chain (BSC) has held in second-place $16.2B, the ecosystem’s TVL suffered a sudden flash crash early in the week that saw BSC’s total value locked briefly fall to roughly $11.1B. PancakeSwap is BSC’s top protocol with a $5.37B TVL, followed by Venus with $2.16B, and Tranchess with $1.13B.

Tron is the sixth-largest network with a DeFi TVL of almost $5.8B, followed by Polygon with 4.8B, and Fantom with $4.51B.

Chainlink (LINK) ranks as the No. 2 non-stablecoin asset with a market cap of $8.92B or a DeFi dominance of 6.6%, followed by Uniswap (UNI) with $6.98B or 5.2%.

Layer 2 Action

The growth of Ethereum’s layer-2 ecosystem stagnated this week, with leading network Arbitrum’s TVL slightly increasing to $1.91B from $1.86B. L2Beat ranks dYdX second with $976M, followed by Optimism with $300M.

While L2Beat notes that Optimism’s overall TVL of $419M is almost half that of rival Boba Network’s $769M, DeFi Llama estimates that Boba’s DeFi TVL has fallen to $188B from $530M in two weeks.

Burn Rate

Ethereum’s burn rate has continued to fall in recent weeks, currently sitting at 51,262 ETH in seven days at a rate of 5.09 ETH per minute. By contrast, Ethereum’s weekly burn rate was roughly 8 ETH per minute as of Nov. 22.

ETH transfers were the single-largest source of burnt Ether, destroying 5,036.6 ETH this past week. Unsiwap v2 ranked second with 4,222.5 ETH, followed by OpenSea with 4,105.5 ETH, and Tether with 2,461 ETH.