- DeFi’s total value locked has dropped over 30% since its December 2022 peak, signaling fading user confidence.
- Security breaches and global uncertainty continue to drive users away from DeFi protocols and platforms.
DeFi’s been taking a hit lately. After reaching a high of $137 billion back in December 2022, the total value locked (TVL) has dropped by over 30%, falling to around $95.78 billion, according to DefiLlama. That kind of dip has definitely raised some eyebrows in the sector.
Security Breaches Shake DeFi Confidence
On the other hand, throughout March 2025, DeFi was hit by a series of hacks that had investors worried. The total loss reached $22 million. This is certainly not a minor inconvenience. In the real world, imagine a bank account that can suddenly be hacked by anyone, without any guarantee from any institution.
Well, that’s roughly the situation in many DeFi protocols today. It’s no wonder that analysts are starting to highlight the need for improved security systems to keep users willing to trust their funds to decentralized platforms.
The problems don’t stop there. The major hack on the Bybit crypto exchange also added to the confusion. Many users panicked and chose to withdraw their funds from the DeFi ecosystem. When combined with global economic uncertainty that makes investors tend to play it safe, this condition further accelerates the decline in TVL figures.
Ethereum Stumbles While Berachain Rises
Ethereum, which has been the backbone of DeFi, has also not escaped the pressure. The TVL value on this network fell 37%, leaving around $96 billion. Such a large drop is enough to make investors wonder, “Is it still worth staying in DeFi now?”
However, not all projects have the same fate. Berachain, which was just launched, actually made a surprise appearance. It managed to collect $5.17 billion in TVL, making it the only blockchain among the top 10 to record growth during the period. It’s like seeing a new shop in the middle of a quiet market, but it is flooded with visitors because it offers something different.
Real World Asset (RWA) Opens New Hope
In the middle of an unfriendly situation, the Real World Asset (RWA) sector is actually showing positive signals. According to CNF, the TVL value for RWA in the DeFi ecosystem has exceeded $10 billion. In fact, four major protocols have each managed to lock in more than $1 billion in funds.
Interestingly, this growth is not merely due to trends, but is driven by two important things: increasing institutional interest and improvements in blockchain scalability.
If analogized, RWA is like real property brought into the digital world. Big investors who usually play in traditional markets are starting to shift their attention there because they see the potential for more predictable growth and stability.
Has the Hype Outpaced the Reality?
Although the current conditions feel tough, not all hopes are lost. A number of industry players believe that with improved security systems, broader adoption strategies, and better public education, DeFi can still become an attractive financial alternative.
However, like riding a roller coaster, those who jump into DeFi need to be prepared to face the ups and downs of emotions—and balances—in a very short time.
