Analysts at CoinGecko cited frequent hacks of decentralized finance platforms as one of the factors behind the decline in the figure

DeFi market capitalization down by 74% in three months

15.07.2022 - 15:30

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2 min

What’s new? The decentralized finance (DeFi) market capitalization fell by 74,6% during the second quarter of 2022, from $142 million to $36 million. One of the reasons was the May collapse of the Terra ecosystem and its UST stablecoin, according to a report by crypto market data aggregator CoinGecko. Another factor was the rise in hacks of DeFi platforms. Analysts believe that the hacking attacks have negatively affected the value of tokens as investors have lost faith in the projects affected by the hacks.

CoinGecko’s report

What does the report say? CoinGecko’s experts noted that the DeFi industry was able to retain most of the customers using the platforms on a daily basis. Their number fell by 34,5% in the second quarter, from nearly 50 000 to around 30 000.

Analysts reported that bitcoin held 46,8% of the market. It is followed by Ethereum with a share of 16,3%. Altcoins such as BNB, DOGE, and TRON improved performance to 4,4%, 1,1%, and 0,73%, respectively. Most of the largest cryptocurrencies by capitalization suffered losses.

NFT trading volume fell by 26,2%. June 2022 recorded its lowest year-to-date figure of $830 million.

Earlier, billionaire Mark Cuban noted that the downturn in the cryptocurrency market would clear the industry of inefficient projects. He added that it is during the prevailing bearish trend that the digital asset sector expects the emergence of breakthrough applications and technologies.

According to the analytics firm PitchBook, the volume of venture capital investments in cryptocurrency companies fell by 31% in the second quarter of 2022 compared to the first quarter, from $9,85 billion to $6,76 billion.

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