NFTs showing signs of an early recovery

It has been a rocky start for cryptocurrencies in 2022, and NFTs have also suffered, simply because they are crypto connected. According to Messari, the Top 10 DeFi crypto assets have been down between 10% and 50% since the start of the year. However, that situation appears to be reversing.

Funds have begun to flow back into the DeFi ecosystem following a month of declines, as data shows institutional and retail funds returning to crypto markets. According to data from DeFi Llama the total value locked (TVL) in all DeFi platforms climbed to $211.1 billion on 11th February, up from a low of $185.14 billion on 31st January.

TVL losers

Looking at this data more closely, it shows which individual protocols that contribute the most to the TVL had the biggest drawdowns over the last 30 days. These included stablecoin-focused protocols like Curve (CRV) and Convex Finance (CVX). They suffered “from the collateral damage of popular rebase projects like OlympusDAO (OHM) and Wonderland (TIME) imploding,” according to Cointelegraph. It also points out that any projects associated with Curve had experienced significant outflows, such as Yearn.Finance which had a 28.57% decline in TVL, whilst Abracadabra.money saw its TVL fall by 46.3% due to a controversy around the development team.

An opportunity for FXS

Other protocols experienced this period as an opportunity. For example, the decentralized stablecoin protocol Frax (FXS) has benefited from the stablecoin shakeup, with TVL increasing 35.81% over the past 30 days.

Activity on DeFi apps increases

But aside from the TVL value, activity across DeFi applications continues to increase year over year. The volume of transactions on decentralized exchanges (DEX) over the past three months can be ranked as representing the highest recorded historical volumes. Uniswap (UNI) remains the dominant DEX with 77.9% of the volume transacted, followed by 7.8% for Curve and 5.6% for SushiSwap (SUSHI).

The number of DeFi users grows 300%

And what about the total number of DeFi users? According to data from Dune Analytics this number is steadily increasing. Its data shows that as of 10th February, there were 4,363,238 unique addresses that interacted with a DeFi application. This shows a year-on-year increase of more than 300%, up from 1,369,368 wallets registered on 10th February, 2021.