Ethereum total amount fell 27% to $97 billion in February. This is because the broader distributed finance division fell from $217 billion to $168 billion amid liquidity spills.
The total locked amount of decentralized finance fell nearly 23% in February, down from $217 billion to $168 billion, according to Dappradar analyst Sara Gherghelas.
In a recent research report, Gherghelas noted that Ethereum (ETH), which owns nearly 60% of Defi’s liquidity, fell 27% to $97 billion in February, with TVL falling 27% to $97 billion. The decline was primarily due to the low fluidity of liquid staking protocols, analysts noted. But despite its decline, Ethereum’s domination in this field was “unchallenged” according to Gherghelas.
Top Network TVL | Source: Dappradar
Solana (SOL) suffered its biggest loss in February as TVL fell by more than 30%, falling over $15.4 billion. The decline came after a strong January and is likely driven by “returns and liquidity migration to a more stable defi environment,” Dappradar analysts said. In addition, activity has also slowed down on major Solana-based platforms such as Crypto Exchange Jupiter and Raydium.
Data shows that while most major chains faced challenges, Bellachine (Bella) was one of the few winners, reaching a $5.05 billion TVL.
“The rise in the chain is driven by its empirical model of demonstration, which has attracted users by gaining favorable liquid staking and farming incentives. As users seek higher returns despite the wider market decline, Bellachin has established itself as a key player in the evolving defi landscape.”
Sarah Gaszcheras
You might like it too: Ethereum’s Pectra Upgrade on Sepolia encounters problems
The BNB chain (BNB) saw a decline of 11% with the help of Stablecoin trading. Meanwhile, Tron (TRX) TVL fell 29%. This is probably due to weak demand for Tether (USDT) trading. Aptos (APT) was also one of the rare winners, increasing TVL by 6% to $1.83 billion.
The decline in TVL on Ethereum was due to a sharp decline in open interest in futures in major cryptocurrencies as well. As reported by Crypto.News, traders are beginning to reduce long positions, with open interest in the future declining amid concerns over the trade war and the Fed’s tough stance. Matrixport analysts believe many traders are waiting for a more clear signal before they can re-enter the market.
Future Pectra upgrades aimed at improving network functionality and pricing efficiency may provide a short-term boost, but it is unclear whether these upgrades are sufficient to reverse the decline in Defi activity.
read more: Crypto.com joins CF benchmarks to boost Bitcoin and Ethereum indexes
