DeFi Sector Update: Searching for Hope

Key Insights

• The average DeFi protocol lost ~60% in market capitalization in the last 90 days.
• DEX usage suffered less of a drawdown compared to other DeFi sector volumes. Within the DEX sector, Uniswap continued to absorb volume from its smaller competitors.
• 1inch’s integration of Synthetix’s atomic swaps generated a significant increase in the synthetic sector’s revenue and efficiency.

Since we first outlined the DeFi Sector Map just three months ago, DeFi has been caught in the crossfire of both crypto-specific chaos and macroeconomic turbulence. Terra collapsed, the unwind of Three Arrows Capital triggered billions of dollars of forced selling, and rising interest rates sucked liquidity away from higher-risk assets like crypto. As a result, the average DeFi protocol experienced a ~60% decline in market cap during the last 90 days.