Avalanche TVL Hits 2022 Low; Sinks More than $6 Billion

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In Brief
  • Avalanche has seen a crash in total value locked in May.

  • Avalanche continues to recover from waning investor interest in the market.

  • The blockchain has a TVL of approximately $4.77 billion.

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Avalanche total value locked (TVL) declined to new high lows in the third week of May due to the bearish trend of the market causing a decline in TVL on all blockchains. 

According to Be[In]Crypto Research, Avalanche has shed 59% in total value locked since the beginning of the year. On Jan 1, Avalanche had a TVL of around $11.7 billion, and this declined to approximately $4.77 billion on May 18.

Source: Avalanche TVL Chart by DeFiLlama

Avalanche is an open, programmable smart contracts platform that facilitates the building of fast, low-cost, Solidity-compatible decentralized applications (dApps). Crypto projects employing the possibilities of Avalanche to build applications include Chainlink, Securitize, Injective Protocol, The Graph, Polyient Games, Trust Token, and Copper.

Aside from being an integral force in DeFiAvalanche is one of the biggest NFT blockchains by sales volume. 

Why the crash in TVL? 

Avalanche TVL plunged to a 2022 low this week due to several decentralized applications in its ecosystem also tumbling.

Automated market maker (AMM) Platypus Finance, for example, has dipped by more than 45% in the last month, while open-source liquidity protocol Aave has also fallen by more than 83% within the same period. 

Decentralized trading platform Trader Joe and exchange liquidity pool Curve have lost more than 60% and 70%, respectively, of their total values locked. 

Other dApps that have contributed to the drop in total value locked include Yeti Finance, Benqi, Vector Finance, Wonderland, Yield Yak, and Benqi Staked Avax.

Source: Avalanche dApps Rankings by DeFiLlama

Despite crashing by $6.93 billion due to the aforementioned dApps, Avalanche still commands a higher TVL than TRON, Solana, Polygon, Cronos, Fantom, Waves, and Terra.

Source: All Chains Ranking by DeFiLlama

With that said, TVL is still behind Binance Smart Chain and Ethereum

AVAX price reaction 

AVAX opened the year with a trading price of $109.38. The coin reached a yearly high of $117.32 on Jan 2 and was exchanging hands for $30.92, as of writing. 

Overall, this equates to a 71% loss in the price of AVAX since the start of the year. 

Source: AVAX/USD Chart by TradingView

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As a writer, researcher, and analyst of centralized and decentralized financial instruments (stocks, commodities, metals, and cryptocurrencies), he started experimenting with financial asset trading in 2011. He ventured into full-time long term investing of cryptocurrencies in 2016.

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