Despite DeFi Market Dropping 74.6% In Q2, Users Still Hope
While on-chain activity slowed down, the DeFi industry has managed to retain most of its daily active users.
DeFi’s market capitalization fell 74.6%
Despite the decentralized finance market suffering a 74.6% market cap decline in Q2, user activity has remained relatively resilient, says CoinGecko.
In a report published by the crypto data aggregator on Wednesday, CoinGecko reported that the overall DeFi market cap fell from $142 million to $36 million over the second quarter, due mainly to the collapse of Terra and its stablecoin TerraUSD Classic (USTC) in May.
CoinGecko also noted a rise in the decentralized finance exploits in the quarter contributed to the fall, including Inverse Finance and Rari, which suffered hacks of $1.2 million and $11 million, respectively:
“These attacks have negatively impacted token prices as investors lose faith in these hacked protocols.”
However, CoinGecko also noted that while on-chain activity slowed down, the this industry has managed to retain most of its daily active users.
It noted that the number of daily active users in DeFi decreased only 34.5% from 50,000 to 30,000 in Q2, added there were also multiple instances that caused a spike in DeFi activity.
The first spike was observed in May following Terra’s collapse, leading to users moving to Curve Finance and Uniswap on mass to sell their falling Terra (LUNA) and USTC.
Similarly, another spike in DeFi user activity took place in June, according to CoinGecko, when crypto lending platform Celsius enforced withdrawal restrictions citing financial difficulties. Celsius filed for bankruptcy on Wednesday:
“In both events where centralized entities have failed, users have flocked to enjoy DeFi’s permissionless nature.”
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews