The Bitcoin price continues to struggle despite the recent recovery, but the real losses are being recorded elsewhere. The decentralized finance (DeFi) sector was the main focus of the 2021-2022 bull market, with the emergence of new coins. However, the bullishness surrounding the entire sector has been eroded over the years, and the effects are being felt till today, with liquidity rapidly moving out of DeFi protocols and leaving ‘ghost’ chains in their wake.
On-chain researcher @waleswoosh on X (formerly Twitter) pointed out a concerning trend with the DeFi activity as seen over the last few weeks. The charts shared showed that from top to bottom, money was moving out of DeFi protocols at an unprecedented rate.
This data is backed up by DeFiLlama, with the website showing that both large and small networks alike were suffering in this regard. According to the website, Ethereum, the leading protocol, has seen its Total Value Locked (TVL) decline by around 13.54%, and even this is modest compared to the volume recorded on other protocols.
In the same time period, Solana has seen a 15.15% change, and these percentages actually translate into billions of dollars in TV being lost. Protocols such as Hyperliquid and Near also suffered higher loss rates at 15.71% and 25.68%, respectively.
Interestingly, Bitcoin saw its TV jump around 73.60% during this time, and Iron saw a 23.42% increase. This trend highlights the move away from decentralized finance towards more ‘sustainable’ investment options at this time.
One major factor that has triggered the exodus from these DeFi protocols looks to be the endless hacks that have plagued the sector. The most recent hack of KelpDao saw the attacker(s) make away with almost $300 million in loot, leaving investors in a very bad spot.
Earning yield on locked funds, which was one of the major pulls of the DeFi sector, has quickly become a ‘joke’ among investors, with yield rates falling and the risks rising. Many have highlighted the low reward-to-risk ratio as the possibility of losing all of the invested funds grows higher by the day.
The TVL of the entire DeFi sector looks to be in free fall, with a 7% decline in the last 24 hours at the time of this report. It is currently sitting slightly above $122 billion, which is a long way from the $229 billion that was recorded in October of 2025.
Featured image from Dall.E, chart from TradingView.com
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