A long ‘crypto winter’ of falling prices could end up killing off 80% of DeFi apps,


  • DappRadar sees 80% of DeFi apps vanishing if the crypto bear run lasts, according to a Bloomberg report.
  • Plunging crypto has seen liquidations and usage drop in DeFi apps, Bloomberg reported Tuesday.
  • The crypto rout has seen bitcoin fall 50% from highs and wiped over $1 trillion dollars from the market.

Four out of five DeFi apps could disappear if the crypto rout lasts for a year, says DappRadar, according to a Bloomberg report Tuesday.

“As far as crypto winter, DeFi dapps have never gone through it,” Pedro Herrera, senior data analyst at tracker DappRadar, was quoted as saying by Bloomberg.

“They have experienced crashes, but this feels like a prolonged one. Probably 20% of the apps that hold 80% of the industry value will survive,” he said.

Cryptocurrencies have come under intense pressure so far in January, with bitcoin tumbling to six-month lows. Meanwhile, some of 2021’s altcoin stars — such as solana, cardano and polygon — have fallen even more sharply this month, losing almost 40% in value. 

Decentralized finance, or DeFi, has a taken a drastic hit from the crypto market’s ongoing bear run. 

Almost $300 million assets were liquidated in DeFi protocols in the last week, according to industry data tracker Dune Analytics, as reported by Bloomberg.

A report by Bitcoin.com found the value locked in DeFi has fallen by over 20% since January 4, although it is still 10 times higher than this time last year.

There are almost 150 active DeFi-related decentralized apps, or dapps. They currently hold $30 billion less than at the start of 2021, according to DappRadar.   

Usage of DeFi dapps is decreasing, with active user wallets interacting with the major apps falling 20-30% in the last two weeks, it said.

 Ethereum-based DeFi apps such as Aave, Compound and MakerDAO processed a record $200 million of liquidations on Friday, data from Dune Analytics shared by Delphi Digital shows, according to CoinDesk

DeFi apps aim to recreate traditional financial systems with cryptocurrency. Most run on the ethereum blockchain. Falling ether prices triggered the mass liquidation in DeFi apps. Ethereum’s native ether token, the world’s second largest by market value after bitcoin, is down 32% year to date.

Read More: A long ‘crypto winter’ of falling prices could end up killing off 80% of DeFi apps,

Notify of
Inline Feedbacks
View all comments