DeFi TVL falls, NFT Market underperforms in November: DappRadar

The FTX meltdown may have set the stage for an unprecedented shift in user activity from centralized finance (CeFi) to decentralized finance (DeFi), but the overall value locked in the services provided by the latter has taken a serious hit.

A new report from Dapp Radar suggested that the non-fungible token (NFT) market has not been spared from the downtrend either.

DeFi and NFT Winter

Generally considered a potential antidote to the collapse, the total value locked across DeFi platforms has been severely impacted. Data from Dapp Radar shows that TVL decreased by 22% to $65.01 billion. The numbers saw their first big drop on November 9, when Binance left FTX high and dry after a botched acquisition deal, plunging 11% from $73.89 billion to $65.7 billion that day.

Solana was the biggest loser due to FTX’s involvement in the ecosystem and concentration of holdings. TVL fell 71% to reach $366 million. While Ethereum continues to be the most popular chain, TVK fell 24% in November to $32.1 billion.

The least affected protocols were – BNB Chain and Arbitrum – with only a 3% and 5% reduction in TVL, recording $7.95 billion and $1.43 billion respectively for the month.

The NFT market was also in a similar state. Trading volume fell 17.47% from October, reaching $546 million, falling to the lowest amount recorded this year. Sales figures also took a hit, falling by 22.24% month-on-month.

NFT trading volume on Ethereum hit its lowest level since last June, reaching $277 million. Following is Solana, whose volume, interestingly enough, increased by 42%, rising above a whopping $95 million. The hyped y00ts collection fueled the growth. However, the Layer 1 blockchain saw sales numbers drop by 33% this month, as a total of 852,780 NFTs were sold on marketplaces.

BNB Chain was one of the few blockchains to record a mild increase of 6% with a trading volume of $3.9 million in an otherwise dull market. Polygon, on the other hand, saw a 42% decrease in the same month, reaching $6.34 million in trading volume.

Bright side?

Despite the spread of the infection, several market players are still safe. While talking to The crypto potatoHolger Arians, CEO of payments on/off ramp Banxa, said:

“We are seeing an unprecedented shift in user activity from CeFi to DeFi. While centralized exchanges have historically had superior user experiences, many crypto users have been shaken by the FTX fallout and are flocking to move funds to decentralized platforms like GMX.”

The practitioner also revealed that across Banxa’s ecosystem of partners, a sustained increase in DeFi-related activity was recorded. More specifically, stablecoins held in ZenGo wallets have exploded 4X and the number of ETH received transactions was 8x higher than baseline calculations. According to management, this trend could potentially signal the start of a long-term trend towards decentralized platforms as “crypto users learn – or re-learn – the principle of self-storage.”