Data from DefiLlama shows a sharp decline in total value locked (TVL) across the decentralized finance sector, dropping by 50% to approximately $85.65 billion from a peak of $171 billion.
This significant contraction reflects reduced user activity and liquidity across DeFi protocols, amid ongoing market volatility and declining investor risk appetite.
The drop also aligns with a broader reassessment of digital assets, as capital shifts toward more stable or lower-risk instruments in an uncertain global economic environment.
Analysts suggest that while declining TVL may weigh on short-term growth, it could ultimately strengthen the sector by filtering out weaker projects and reinforcing more resilient protocols.