Over the past week the total value locked in DeFi fell from 120 billion dollars to 105 billion dollars. This is a drop of 12 percent but it is smaller than the declines seen in the broader crypto market. The main reason for this decrease is falling asset prices rather than users pulling their money out of DeFi platforms.
Ether or ETH the second largest cryptocurrency has continued to see more being used in DeFi. Around 1.6 million ETH was added in the past week alone. The total amount of ether deployed across the DeFi market has grown from 22.6 million at the start of the year to 25.3 million now. This shows that people who are looking to earn yields through DeFi are still confident and willing to put their funds into these platforms even when prices are falling.
Another important sign of stability is that onchain liquidation risk remains low. Only 53 million dollars in positions are near danger levels. This is a big improvement from past cycles when large parts of the market were at risk of sudden liquidations. For example last year when the market fell there were huge liquidations that almost triggered hundreds of millions of dollars in losses. Now the market is better collateralized and more secure. Positions in platforms that offer algorithmic interest rates are only at risk if ETH falls much lower than current prices. The largest danger zone is still far below current levels so the chance of a major liquidation event is minimal.
The current situation shows that the DeFi sector has matured. In previous market cycles DeFi was often the first part of the crypto market to face major losses. For example in 2022 the collapse of the Terra ecosystem caused huge losses for many investors and led to a wide drop in total value locked across DeFi. This time the market is more stable. Yields are steady inflows are quietly increasing and the sector is better prepared to handle volatility.
Even though the prices of major cryptocurrencies like BTC ETH XRP and SOL have reached multi year lows traders are still using DeFi to earn yields. This suggests that the market has grown more sophisticated and participants are making decisions based on long term potential rather than short term price swings. Institutional interest and better risk management have helped DeFi become a more reliable part of the crypto ecosystem.
Overall the recent week shows that DeFi can withstand broader market weakness. People are still deploying ether and using protocols to earn yields liquidations are limited and the market has learned from past mistakes. This resilience indicates that DeFi is becoming a mature sector where users and institutions can participate with more confidence even in uncertain market conditions.