Decentralized finance (DeFi) has been one of the hardest-hit sectors since Bitcoin (BTC) price corrected from its all-time high in early May and this can be seen by the decline in the total value locked (TVL) on all protocols.
According to data from DeFi Llama, the total value locked in decentralized finance platforms dropped from $154 billion and currently sits at $108.7 billion.
While the roughly 30% decline in TVL over the past two months looks bad, the year-over-year growth from $2.02 billion to $110 billion represents an increase of 5,500% for the sector as a whole.
Decentralized exchange volume reaches new highs
One of the best metrics to help gauge the sentiment within the DeFi ecosystem is the volume traded on decentralized exchanges.
According to data from Messari, the quarterly DEX volume at the end of Q2 2021 was $404.9 billion, the highest value on record.
This represented an 11,751% increase from Q2 of 2020, demonstrating the significant amount of growth seen in DeFi over the past year. It was also an increase of 83% when compared to Q1 of 2021 which is a testament to the amount of growth seen in Q2 despite the market downturn.
DEX volumes were cut in half from $203.5 billion in May to $95.1 billion in June, a figure which still registered as the third-highest monthly volume on record.
After a brief challenge to its dominance from PancakeSwap (CAKE) in April, Uniswap (UNI) is back on top as the dominant DEX which accounts for more than 40% of all DEX volume.
Layer-two protocols become more dominant
While Polygon has already established itself as one of the go-to layer-two solutions for the Ethereum community, there are several…