The sector of decentralized financing (DeFi) The first real challenge loomed during last week’s market sell-off that removed more than $ 1 trillion from global cryptocurrency market cap as traders frantically rushed to keep stablecoins safe as prices fell.
Despite the rapid decline in token prices, the fledgling DeFi sector held its own as the decentralized exchanges reported $ 11.7 billion in trading volume on May 19. Uniswap (UNI) led with a volume of USD 5.7 billion, followed by SushiSwap (SUSHI) with a 24-hour trading volume of USD 2.8 billion.
According to the latest report, DeFi Uncovered, from Glassnode, premium DeFi tokens, including UNI, SUSHI, Manufacturer (MKR), Aave (AAVE) Y. Connection (COMP), have largely reflected the decline of the ether (ETH) in the last two weeks, “Shows a relatively high beta for ETH, but does not exceed the decline from the all-time high by more than 15% of the ETH decline.”
New users are increasing despite the decrease in TVL
The drop in prices associated with the elimination of user liquidity and the rotation in stable currencies, This resulted in a 42% drop in the total value of smart contracts, which also closely followed the fall in the price of Ether.
The TVL is inextricably linked to the underlying value of the token stored. With Ether being one of the main blocked tokens on DeFi platforms, the decrease in TVL has less to do with users’ removal of funds and is mainly related to the drop in prices.
During last week’s recession The percentage of Ethereum offer blocked in smart contracts remained above 23%, while the supply on the exchanges “rose from 11.13% to 11.75%”.
Despite falling prices, new users continue to join the DeFi ecosystem and The total number of unique 30-day traders on the major DEXs surpassed 1 million for the first time since last week’s sell-off.
Uniswap is the undisputed market leader with 815,000 unique users between April 24th and May 23rd. while 1 inch (1 inch) took second place with 78,200 users and Sushiswap took third place with 10,900 users.
Stable currencies keep their parity
Much of DeFi’s strength during the liquidation is due to the healthy stable coin market and the ability of major currencies such as US $ USD Coin (USDC), Tether (USDT) and Dai (DAI) maintain parity with the dollar “For most of the breakdown, Volume Weighted Average Prices (VWAP) stayed at $ 1.00 for most of the time.”
DAI’s performance was rated “particularly positive for DeFi”. according to Glassnode, since the circulating supply could be adjusted according to the guarantee requirements and the protocol stability. The report also found that the reclaimed warranties and DAI were withdrawn from the offer when the warrantee holders requested refunds.
“This behavior allows guarantees to stay healthy, settlements to stay healthy, and DAI to maintain parity.”
The only stable currency that struggled to maintain parity was TerraUSD (UST), which lost parity on May 18 when the value of its LUNA collateral fell below the value of the stablecoin it secured,This resulted in “unhealthy behavior in its Loan Market Anchor (ANC),” resulting in an above-average number of settlements on the protocol’s native lending platform.
Overall, stablecoins performed their intended function and held fast throughout the ecosystem, with the volume of stablecoin transfers in the chain reaching a record $ 52 billion in the heyday of the sell-off.
The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph. Every investment and trade movement carries a risk. You must do your own research when making a decision.