At the end of April, Terra (LUNA) had more than $25 billion in total value locked (TVL), the second-largest decentralized finance (DeFi) ecosystem behind Ethereum.
However, following the collapse of the Terraform Labs ecosystem in May, DeFi blockchains were severely affected by the ensuing crypto bear market, which followed as the downtrend escalated owing to the direct impact of cryptocurrency prices.
In particular, Ethereum’s (ETH) total value locked in DeFi shrank by 35% in May to $73 billion amid the bearish market sentiment around Terra’s crash, according to data from a DappRadar report shared with Finbold on June 8.
Tron’s DeFi TVL grew 47%. Source: DappRadar
However, Tron (TRX) distinguished itself as the only blockchain to report positive results by increasing its TVL by 47% month over month (MoM) in May to $6 billion.
Indeed, Ethereum, Binance Coin (BNB), Polygon, and Solana (SOL) all saw losses ranging from 27% to 38% as a direct result of the price declines. Meanwhile, Avalanche, Cronos, Fantom, and Near experienced losses of 30% or more in TVL.
Which Defi Dapp will take Terra’s mantle
The next several months will be crucial for determining the trajectory of this important blockchain sector. It is still unknown which blockchain ecosystem will succeed Terra in displacing Ethereum’s position as the runner-up.
Given that the decentralized, open-source blockchain-based operating system TRON has added almost $2 billion to its market cap in the last three months, many will be looking at this asset as a potential suiter as it continues to grow its number of accounts beyond 100 million.
Since the Terra collapse, the value of BTC and ETH has decreased by 25% and 40%, respectively. Similarly, the total value of the industry’s TVL has been reduced by 45% since the end of April and is roughly around $117 billion at the time of publication.
While the recent sentiment around Ethereum has not been great recently, with market dominance around Ethereum recently hitting its lowest since October 2021 while ETH transactions also dropped to an 18-month low opening the door for speculators to suggest its TVL could see more losses in June .