DeFi TVL down 30% year over year, but liquid staking and Tron-based projects are bucking the trend

Stop scaring users with bad KYC flows

The total value of assets pledged (TVL) in decentralized finance (DeFi) projects fell 30% year-on-year to hit its lowest point this year at $36.95 billion, according to data from DeFillama.

While DeFi projects had a strong start to the year, reaching more than $52 billion in April, the sector has experienced six months of consistent underperformance, taking it to its current low.

DeFi Projects TVL. (Source: DeFillama)

Liquid staking projects are thriving

In the ever-evolving landscape of the DeFi sector, liquid staking projects have emerged as a beacon of resilience, in contrast to the broader decline seen in other DeFi categories.

Liquid staking projectsLiquid staking projects
Inflow of liquid staking projects (Source: DeFillama)

Despite prevailing bearish sentiment, liquid stake projects have thrived, returning nearly 300% from their 2022 low to nearly $20 billion in TVL, according to DeFillama data. According to the latest figures, TVL is now worth $17.67 billion.

Lido is the dominant player in this niche, holding more than 50% of the market share, surpassing major competitors such as Binance, Coinbase and Kraken, according to information from Nansen data shared with CryptoSlate.

Projects based on Tron TVL rise

The Tron network also saw significant growth in its DeFi projects, with their contribution to total TVL reaching an all-time high of 18.23% from 6.5% recorded earlier in the year.

TVL across the chain. (Source: DeFillama)

Chain worker Patrick Scott is attributed Tron has raised TVL in the development of the first Real Asset (RWA) on the network, stUSDT. According to DeFillama datathe project’s TVL is approaching $2 billion in just four months since its launch.

However, CryptoSlate reported that the project has come under scrutiny, mainly due to its governance and transparency, while some of its purported partners, such as Tether (USDT), have refused any cooperation.

Meanwhile, Ethereum remains the main platform for DeFi projects and applications, controlling more than 50% of the market. Other networks like Binance Smart Chain, Polygon, Arbitrum and others also host many projects.

DeFi projects lost 2.5 million monthly users.

As TVL has flattened, DeFi projects have faced another challenge: a decline of about 2.5 million monthly active users over the course of the year, Altindex reported, citing a Dune Analytics dashboard from rchen8. According to the report, the decline began in May and has maintained a downward trend.

Monthly DeFi UsersMonthly DeFi Users
Source: Dune Analytics

In May, the DeFi sector had over 3.8 million monthly users, but by October, that number had dropped to around 1.15 million, compared to the 2.7 million users reported the previous October. Overall, monthly unique users are down 66% from the all-time high of 7.51 million recorded in November 2021.

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