According to research published by Kraken, the prominent crypto exchange, Defi tokens were the worst hit in April. According to the study, meme coins like Dogecoin (DOGE) and Shiba Inu (SHIB) did quite well in April, whereas decentralized finance (DeFi) tokens like Aave (AAVE) and Thorchain (RUNE) suffered significant losses.
While Bitcoin (BTC) suffered losses up to 17%, the Defi space was hit with losses up to 34% on average. Yearly, DeFi tokens have been the greatest losers, with average drawdowns of nearly 71%.
Thorchain (RUNE) was the biggest loser with losses up to -51%. Solana (SOL), Avalanche (AVAX), and Near Protocol (NEAR) have all dropped by at least -34% in the last month. SushiSwap saw a 29% drop in income, whereas those on DeFi exchange Balancer fell as much as 66%.
Source: Kraken
DeFi projects also reported a decline in revenue, which was likely caused by falling token prices and waning investor interest.
Additionally, the total value locked (TVL) for Defi markets has also dropped over 18% since the beginning of the year. Almost all significant DeFi initiatives and platforms have had TVL losses. As of May 2, the Defi market TVL had dropped from $236 billion at the end of 2021 to $199 billion.
Although the exact reason for Defi markets plunging is unclear, one possibility could be the number of exploits.
Defi hacks have resulted in exploits of nearly USD 1.2 billion. March witnessed what is described as the largest crypto hack of all time where Axie Infinity’s Ronin bridge was exploited for nearly $600 million worth of Ethereum (ETH) and USDC. In February the Solana Wormhole bridge was exploited for $326 million.
April was particularly full of attacks. CertiK, a security-focused ranking platform, recorded 31 major incidents, averaging one attack per day.