Despite the decentralized finance (DeFi) market suffering a 74.6% market cap decline in Q2, user activity has remained relatively resilientstates CoinGecko.
In a report published by cryptocurrency data aggregator on Wednesday, CoinGecko reported that DeFi’s overall market cap fell from $142 million to $36 million during Q2, primarily due to the collapse of Terra and its stablecoin TerraUSD Classic (USTC) in May.
CoinGecko also noted that a rise in DeFi exploits in the quarter contributed to the drop, including Inverse Finance and Rari, which suffered $1.2 million and $11 million hacksrespectively:
“These attacks have negatively impacted token prices as investors lose faith in these hacked protocols.”
However, CoinGecko also noted that, although on-chain activity slowed down, the DeFi sector has managed to retain most of its daily active users.
He pointed out that the number of daily active users in DeFi decreased by only 34.5%, from 50,000 to 30,000 in the second quarteradding that there were also multiple instances that caused a spike in DeFi activity.
The first spike was seen in May following the crash of Terra, prompting users to move to Curve Finance and Uniswap en masse. to sell their falling Terra (LUNA) and USTC.
In the same way, Another spike in DeFi user activity took place in June, according to CoinGecko, when crypto lending platform Celsius enforced withdrawal restrictions citing financial difficulties.. Celsius filed for bankruptcy on Wednesday:
“In both events where centralized entities have failed, users have flocked to enjoy nature without DeFi permissions.”
NFT trading volume declines
The report also found that non-fungible token (NFT) trade volume fell 26.2% from its peak in June 2021 to $7.6 billion in the quarter, primarily led by a decline in trade volume of NFTs offered on the Ethereum network.
June 2022 also saw the lowest trading volume in the last 12 months; NFT trading volume reached $830 millioncoinciding with the collapse of the minimum price of NFTs.
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