The FTX meltdown may have laid the groundwork for an unprecedented shift in user activity from centralized finance (CeFi) to decentralized finance (DeFi), but the total value locked in the services provided by the latter has taken a serious hit.
A new report by Dapp Radar suggested that the non-fungible token (NFT) market has not been spared by the downtrend either.
DeFi, and NFT Winter
Typically considered a potential antidote to the collapse, the total value locked across DeFi platforms has been severely affected. Data from Dapp Radar reveals TVL decreased by 22% to $65.01 billion. The figures saw the first major slump on November 9, when Binance left FTX high and dry after a botched acquisition deal, plummeting by 11% from $73.89 billion to $65.7 billion on that day.
Solana was the biggest loser owing to FTX’s involvement in the ecosystem and the concentration of ownership stake. Its TVL dropped by 71%, reaching $366 million. While Ethereum continues to remain the most popular chain, its TVK decreased by 24% in November to $32.1 billion.
The least affected protocols were – BNB Chain and Arbitrum – with just a 3% and 5% decrease in TVL, recording $7.95 billion and $1.43 billion for the month, respectively.
The NFT market was also in a similar state. Trading volume slumped 17.47% from October, reaching $546 million, falling to the lowest amount registered this year. The sales count took a hit as well, decreasing by 22.24% month-over-month.
NFT trading volume on Ethereum hit its lowest level since June last year, reaching $277 million. Trailing behind is Solana, whose volume, interestingly, increased by 42%, soaring beyond a whopping $95 million. Fueling the growth was the hyped y00ts collection. The layer one blockchain, however, saw sales count decline by 33% this month as a total of 852,780 NFTs were sold on marketplaces.
BNB Chain was one of the few blockchains that noted a mild increase of 6% with a trading volume of $3.9 million in an otherwise dull market. Polygon, on the other hand, saw a reduction of 42% in the same month reaching $6.34 million in trade volume.
Bright Side?
Despite the contagion spreading, several market players remain confident. While speaking with CryptoPotato, Holger Arians, CEO of payments on/off-ramp Banxa, said:
“We are seeing an unprecedented shift in user activity from CeFi to DeFi. While centralized exchanges historically have had superior user experiences, many crypto users have been shaken by the FTX fallout and are flocking to move funds to decentralized platforms like GMX.”
The exec also revealed that across Banxa’s ecosystem of partners, a sustained surge in DeFi-related activity was noted. More specifically, stablecoins held in ZenGo wallets have exploded 4X and the number of ETH received transactions was 8 times higher than baseline metrics. According to the exec, this trend could potentially signal the start of a long-term trend toward decentralized platforms as “crypto users learn – or re-learn – the principle of self-custody.”
The post DeFi TVL Drops, NFT Market Performs Poorly in November: DappRadar appeared first on CryptoPotato.
