Report: DeFi Market Plummets in Q2, But Users Don't Give Up Hope
Although the decentralized finance (DeFi) market suffered a 74.6% drop in market capitalization in the second quarter, user activity has remained relatively resilient, CoinGecko said.
In a report published on July 13, crypto data aggregator CoinGecko said that in the second quarter, the total market value of DeFi fell from $142 million to $36 million, mainly due to Terra and its stablecoin TerraUSD (UST). Crash of the month.
CoinGecko also pointed to an increase in decentralized finance breaches this quarter, including the $1.2 million and $11 million hacks of Inverse Finance and Rari, respectively.
“These attacks negatively impacted token prices as investors lost confidence in these hacked protocols.”
However, CoinGecko also noted that while on-chain activity has slowed, the DeFi industry has managed to retain most of its daily active users.
The report pointed out that the number of daily active users of DeFi decreased from 50,000 to 30,000 in the second quarter, a decrease of only 34.5%. The report also noted that there have also been multiple instances of a spike in DeFi activity.
The first peak occurred after the crash of Terra in May, causing users to turn to Curve Finance and Uniswap in large numbers to sell the falling LUNA and UST they held.
Likewise, another spike in DeFi user activity occurred in June, when crypto lending platform Celsius imposed withdrawal limits due to financial difficulties, according to data from CoinGecko. On July 13, Celsius filed for bankruptcy.
“Amidst the failure of these two centralized entities, users have flocked to DeFi, enjoying its permissionless nature.”
NFT trading volume drops
The report also found that the trading volume of non-fungible tokens (NFT) fell by 26.2%, from the peak in June 2021 to $7.6 billion in the quarter, mainly driven by the trading volume of NFT on the Ethereum network. caused by the decline.
In addition, the transaction volume in June 2022 was the lowest in 12 months, and the NFT transaction volume reached 830 million US dollars. At the same time, the floor price of NFT plummeted.