Decentralized Finance Activity Hit Hard As Crypto Markets Tumble

Crypto lending may not be down and out, but it's certainly on the ropes.

Crypto lending may not be down and out, but it's certainly on the ropes.

Crypto lenders have boomed over the past two years, attracting tens of billions of dollars in bitcoin, ether and other coins which they in turn lent out or invested, often in decentralized finance (DeFi) projects with sky-high returns.

But as crypto markets tumble, DeFi activity is being hit particularly hard, robbing lenders of their most lucrative returns and threatening to squeeze the whole sector - reaching far beyond Celsius Network, which grabbed the headlines last week when it froze withdrawals and transfers.

The total value locked (TVL) on ethereum, a metric that attempts to track the value of tokens deposited in a variety of DeFi protocols, has declined by $124 billion or 60% over the last six weeks, according to data provider Glassnode.