Decentralized Finance protocol encounters a liquidity winter: leading platforms evaporate nearly half of their TVL in one month.

[Coin World] Recently, the severe fluctuations in the crypto market have put a significant stress test on DeFi protocols. The two once-prominent lending platforms, Morpho and Euler, saw their TVL evaporate by nearly half in just one month—a fall of over 47%.

This matter has to start with the $128 million hacker incident at Balancer. After the attack, the xUSD stablecoin completely collapsed, plummeting from $1.26 all the way down to $0.24. The problem is that many protocols happened to be holding large amounts of xUSD as collateral. Previously, these platforms were promoting that USDC could provide an 18% yield, but now the collateral has directly turned into a hot potato.

Looking at the entire DeFi ecosystem, the situation is similarly bleak. The total locked value has fallen by nearly double digits within 24 hours, and even top protocols like Aave and Lido have lost over 27% of deposits in the past month. Market confidence has clearly been impacted.