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DeFi Ecosystems Crash as Solana and Ethereum TVL Figures Drop to Yearly Lows

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Solana, like Ethereum and several other DeFi ecosystems, has seen the worst of crypto markets over the past two weeks as tokens plunged and others were absorbed into valueless prices.

Solana reaches its lowest level in over eight months

Towards the end of last week, the total value locked on the Solana chain fell to an eight-month low of $4.05 billion. This (May 13) was the first time it slipped below $4.50 billion since September last year, DeFi Llama data showed. While this figure has since slightly grown to $4.42 billion, it is still far off the TVL at the start of the year.

The Solana ecosystem has shed almost half of its TVL since the start of April and over 33.50% over the last 30 days. The slump is even more evident on a YTD timeframe. The current TVL figure is approximately 60% lower than the $11.22 billion TVL at the start of the year.

Solana TVL chart

Over the last seven days, Solana’s TVL has declined by 11.49%, with nearly all of its 65 protocols seeing red in their one-week changes. Nonetheless, Solana still ranks fourth in TVL with a 3.95% market share, behind Ethereum, BSC, and Avalanche networks. Its most dominant protocol Solend is slightly recovering, up 5.52% on the day. Only third-ranked Marinade Finance has posted a bigger positive change of 5.33% during this period.

To learn more about Solana, visit our Investing in Solana guide.

Ethereum TVL is plunging, but DeFi market share is rising

The largest DeFi ecosystem equally went into freefall as the markets crumbled last week. Ethereum TVL tanked to the lowest figure recorded this year on May 15, finding a bottom at $70.81 billion as per DeFi Llama. From a $160 million all-time high in total value locked (TVL) late last year, the Ethereum ecosystem is currently more than 50% down following the recent market capitulation.

The TVL, at the time of writing, sits at $71.81 billion – down 22.17% in the last seven days. Over the last 30 days, this dip grows to 38.55%, and relative to the start of the year, the leading DeFi ecosystem has dumped 51%. These losses are sector-wide, as other DeFi networks have suffered too. For context, the total value locked on Avalanche, Polygon and Fantom has shrunk 50.29%, 30.46% and 68.05%, respectively, in the last 30-days.

Interestingly, despite losing this much in TVL, Ethereum has shown more resilience during this bearish cycle. Its market share dominance has increased during the recent crypto market downturn, which means that Ethereum competitors haven’t been as withstanding to the plunging markets.

Ethereum’s DeFi market share stood at 55.69% on May 8, the first day of market-wide losses due to UST depegging. This figure rose as the crypto sector saw steep declines, reaching 63.72% on May 15. It is worth noting that Ethereum lost about $32.873 billion in TVL (translating to 31.70%) during this period.

To learn more about Ethereum visit our Investing in Ethereum guide.

Cardashift for impactful projects

Tweeting to his 226k large Twitter following on May 12, Crypto Capital Venture founder Dan Gambardello labeled Cardano the “most sound, secure and scalable blockchain.”

Gambardello, also a host of the Crypto Capital Venture YouTube channel, lauded the role of Cardashift, the newly launched launchpad intended to fund innovation via raising funds, developments, and accelerating startups. The community-run launchpad, which runs on the CLAP token, is seen as one such initiative that indicates the measure of Cardano’s potential.

Cardashift adds to the many developments around the Cardano ecosystem. Its model allows community members to support impactful projects via investment opportunities. CLAP token holders gain rewardable voting rights in the process of project selection, in addition to the right to track the progress of the projects. Community investors are also allowed to stake tokens to support specific projects.

To learn more about Cardano visit our Investing in Cardano guide.

Sam is a financial content specialist with a keen interest in the blockchain space. He has worked with several firms and media outlets in the Finance and Cybersecurity fields.

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