Solana’s total value locked (TVL) has experienced a significant decline recently, marking a troubling trend in the decentralized finance (DeFi) sector. This downturn has raised concerns among investors and analysts alike.

The TVL has dropped by $5 billion, or 40%, within just one month, representing the worst monthly performance since the FTX collapse. It decreased from a high of $12.1 billion on January 24 to a current level of $7.4 billion. This decline is indicative of a broader withdrawal of liquidity from various DeFi projects, with major protocols such as Raydium, Jupiter DEX, and Jito liquid staking reporting substantial losses in locked funds.

Additionally, the market capitalization of Solana has suffered greatly, falling nearly 70% from $25 billion in December 2024 to around $8.3 billion today. Many Solana-based meme tokens have also seen declines of 80-90% from their all-time highs. Furthermore, daily trading volume on decentralized exchanges has plummeted, decreasing from $22.1 billion on January 19 to just $1.6 billion, reflecting a notable downturn in investor sentiment and activity within the ecosystem.

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