Since August last year, the total value of all assets locked into DeFi protocols has plateaued at around US$50 billion ($67 billion). This is a significant drop from the peak of US$178 billion in November 2021, according to DeFi data aggregator DeFiLlama.
In the past few years, there have been a lot of promises in the decentralised finance (DeFi) space. Many touted decentralisation as a key disruptor of the traditional finance space, offering an alternative ecosystem built on the blockchain.
The promised revolution, however, has yet to be realised. Independent Reserve Singapore CEO Lasanka Perera says the development and activity in the global DeFi space have slowed due to rising interest rates, making DeFi protocols for lending and borrowing less attractive for investors. Coupled with higher perceived risk caused by the larger crypto fallout, much capital has been taken away from the DeFi space, impacting the industry.
