Terra TVL Hit a Low in 2022; The Crash Exceeded $14 Billion

Due to the overall bearish market, Terra’s total value lock-in (TVL) fell sharply in the second week of May, which made some chain stores see less investor interest in DeFi. Following Ethereum, Terra became the second blockchain with the largest number of TVL in March and April.

Terra’s total value lock-in has lost 78% since the first day of 2022. On January 1, Terra’s TVL was about $18.4 billion, and by May 11, 2022, this figure fell to about $4.02 billion. It supports the deployment of millions of people, and brings a stable set of algorithms to Terra’s ecosystem. As one of the leading cross chain protocols in the field of encrypted finance, it maintains a growing ecosystem, including more than 100 projects across Web3 and DeFi space.

Why Does Terra(TVL) Decline?

Many people believe that Terra TVL collapsed this week because dapps in its ecosystem sank to a new low.

For example, anchor, a decentralized lending platform, fell by more than 80% last month, while Lido, a gambling platform, also reduced TVL by more than 98% in the same period.  Automatic DEX protocols astroport and terraswap lost more than 90% and 80% of their total locking value, respectively.

Other factors leading to the sharp decline in the total value of lock-in include but are not limited to mirror, pylon protocol, Mars protocol, risk harbor, spectrum protocol, aperture finance, Stader, loop finance and prism protocol.

After plummeting more than $14 billion due to the above dapps, Terra also lost its ranking with binance smart chain, avalanche, Solana and Tron. That said, despite the weakening of TVL, Terra still accounts for the vast majority of value locking, surpassing polygon fantom, waves, near and Cronos.

Luna Price Response

Luna opened in 2022 at a trading price of $85.51. The currency reached a year high of $119.18 on April 5. As of press time, the turnover rate was $1.06.
Overall, this is equivalent to a 98% loss in Luna’s price since 2022. On Thursday, Terra chain announced that it had resumed operation after two hours of block production suspension.