LUNA Loses Half its Value in 24 Hours as DeFi Tokens Crater

DeFi assets are taking a beating.

The combined capitalization of DeFi tokens has fallen below $100B for the first time since last August as cryptocurrencies crater.

Terra in Disarray

Terra’s LUNA token has been the hardest hit. After rallying to all-time highs of $115 just five weeks ago, LUNA is currently changing hands for just $33, a 71% plunge, according to data from CoinGecko

The long-anticipated depegging of Terra’s leading stablecoin, UST, accelerated LUNA’s losses yesterday.

The LUNA/UST trade. Source: CoinGecko.

UST fell as much as 40% against the dollar as UST hodlers capitulated in response to LUNA’s capitalization dipping below that of UST. The stablecoin previously sought to maintain its peg by allowing holders to sell or purchase $1 worth of LUNA in exchange for 1 UST, incentivizing arbitrageurs to step in and stabilize price action. But with users unable to redeem the token for $1 worth LUNA amid the depegging, UST’s price quickly dived. 

Terra’s top dApp, Anchor Protocol, has suffered even heavier losses and ranks as the biggest loser among the DeFi sector’s top 100 assets. ANC crashed 47% in the last 24 hours to last change hands for $0.82.

Mirror, another leading Terra-based protocol, is also down 24% over the past day.

The total value locked (TVL) in the Terra network is down more than 50% in three days amid the chaos. Now $13B is locked across the network, a dramatic fall from its all-time high of more than $31B in early April.

Terra network TVL. Source: DeFi Llama

Bearish momentum has also gripped the broader DeFi markets.

Leading liquid staking protocol, Lido, is the third greatest loser among the top 100 DeFi tokens. It has lost a quarter of its value in the past day, while Lido’s TVL has also cratered by 19%.

Avalanche Tumbling

Top Avalanche-based protocols are hurting, too. The network’s leading decentralized exchange, Trader Joe, is down 24% in as many hours. Abracadabra’s SPELL token has followed suit, pulling back 23.6% itself in a single day.

DeFi blue-chips have also posted losses as the broader markets fell. Major DeFi money market Aave is down 14.5% today, while Chainlink dipped 13.6%, Compound shed 13%, and Uniswap fell 11%. Excluding stablecoins, no DeFi assets among the top 100 have posted a 24-hour gain. 

Bitcoin and Ethereum fell by roughly 10% over the past day.

DeFi TVL down, Ethereum L2s emerge as least scathed

The combined DeFi TVL is at a ninth-month low with just $157.5B locked, according to DeFiLlama. Similarly, the TVL of the Ethereum network has crashed below $100B for the first time since August. 

Combined DeFi TVL. Source: DeFi Llama.

Ethereum’s Layer 2 networks have fared the strongest among DeFi chains. While nearly all of the broader sector’s top networks have shed more than 9% in the last 24 hours, top L2s Optimism and Arbitrum are down less than 6% over the same period.

DYdX, a leverage trading DEX hosted on its own L2, has bucked the trend by posting TVL growth since yesterday. It is currently bumping against its previous all-time high of just over $1B.

dYdX TVL. Source: L2 Beat