Decentralized Finance Faces Decline in Locked Assets and User Activity

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Decentralized Finance Faces Decline in Locked Assets and User Activity

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The decentralized finance (DeFi) sector has experienced a significant decline in the total value of locked assets (TVL) over the past year, dropping to its lowest point of $36.95 billion. Despite starting the year strong at over $52 billion, the sector has faced six months of consistent underperformance. However, amidst this decline, liquid staking projects have emerged as a resilient beacon within the DeFi landscape. These projects have seen a remarkable growth of almost 300% from their lowest point in 2022, reaching nearly $20 billion in TVL. Lido is the leading player in this niche, holding over 50% of the market share. The Tron network has also experienced significant growth in its DeFi projects, with its TVL contribution reaching an all-time high of 18.23%. This growth is largely attributed to the introduction of Real-World Assets like stUSDT on the network. Despite these advancements, Ethereum remains the dominant platform for DeFi projects, hosting more than 50% of the market. However, the DeFi sector has faced additional challenges, including a decrease of approximately 2.5 million active monthly users throughout the year, marking a decline of 66% from the all-time high recorded in November 2021.