Ethereum Locked in DeFi Rises, While Flash Loan Holes Are Being Plugged

Source: iStock/NKTN

Due to a recent crypto market crash, Ethereum (ETH) locked in DeFi (decentralized finance) is on the rise, while industry players are fixing the flash loan manipulation problem and MakerDAO raises the governance delay.

In early February, total value locked (TVL) in DeFi surpassed USD 1 billion. It fell back and now, a month later, stands at USD 920.5 million, according to DeFi Pulse. It has been dropping to this value since March 7, when the TLV recorded was USD 1.032 billion

ETH locked in DeFi has been rising in that same period. After an 8% drop between February 10 and February 22, there was a gradual rise, followed by a 4.7% jump, from c. ETH 2.8 million on March 7 to more than ETH 3 million today, before moving below this threshold again.

Ethereum Locked in DeFi Rises, While Flash Loan Holes Are Being Plugged 102
Source: Defi Pulse

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Ethereum Locked in DeFi Rises, While Flash Loan Holes Are Being Plugged 103
Source: Defi Pulse

“ETH price going down: people need to put more ETH in as collateral, collateral counts for less TVL in USD,” Martin Köppelmann, CEO and Co-Founder of a prediction market platform built as a decentralized application (dapp), Gnosis, told Cryptonews.com.

Meanwhile, Mariano Conti, Head of Smart Contracts at the Maker Foundation, added that “at least from the Maker side, it’s normal when ETH drops in price for people to either lock up more ETH in their vaults or pay off their debt, because when the price drops they’re closer to liquidation,” he said, adding: “Still with the price drop TVL can still be down.”

The market itself has turned green today. However, ETH is the worst performer among the top 10 coins by market capitalization. At pixel time (14:00 UTC), it trades at c. USD 203 and is up 0.5% in a day, while other top coins surged 2%-4% and tezos (XTZ) rallied 11%.

Hurrying to plug the holes

Ethereum seems to be discovering many new things in this young industry, including its own vulnerabilities.

Watch the latest reports by Block TV.

We’ve lately seen instances of flash loan exploits whereby, as explained, a proficient trader exploit a weakness in this…

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