Aug 23, 2023

Data compiled by DefiLlama shows that the amount of money stashed in decentralized finance protocols has dwindled to the lowest level since February 2021.

Video transcript

The TV L, the total value locked in D I hitting all time lows south of $38 billion. Yeah, it's just uh again, speaks to the Dhi doldrums, the DFI stagnation as maker do founder Ru Christensen put it recently uh that D I is seeing even as the underlying asset that uh that undergirds a lot of the D I activity has increased in price, right? So you would maybe expect to see a commensurate growth in TV L. But we're not seeing that we're seeing people um D with a different lens interestingly relative to the high interest rate environment. I think that we're seeing now in the traditional financial system. Will I gotta put you on the spot? Uh D number is not looking so great according to this chart, what are you, what are your thoughts on why that might be? Yeah, I was talking to Ad I founder, I think I even brought up on the show a few months ago and he just talked about how D I is in a secular downtrend where there's not a lot of interest in D I right now. There's not a lot of reasons for using at the moment. Like there's not a lot of hot tokens out there, there's not a ton of utility. Like we have a lot of the same tools from 2020. And people who like using those tools, maybe people who need loans because they have big whale bags. That's about it. Like you're not gonna bring in a lot of new users. I was also like interviewing vital the other day talking about D I and he just stated that he thought all of this was oversaturated, right? Like this whole market is oversaturated. And I I think there's a case uh point there, right, where like a lot of people came in, they built DFI applications in 2020. It was the hot new thing, but then it's all open source and people just started copying pasting, making their own versions of it before you knew it. We had a lot of different variants of uni we had a lot of different learning protocols. We had a lot of different protocols out there and you could choose so many. And that leads to one issues like we saw with curve token or we're seeing a Binance smart chain actually right now. But also it just leads to less interest in using these protocols because there's so many issues from them. It's just, there's, there's too much out there and so people kind of walk away from it. Uh I think what we're looking at right now is maybe like the bottom of the D I market where there's going to be a lot of scrappy players are left people who can actually build interesting things and hopefully we see a rebound from there that like breeds innovation window through to you. I actually want to disagree with vital on all the different competitors we have. I think that it's good to have a lot of different competitors in the market because it shows who's going to come out on top. If you don't have a lot of competition, you're gonna have a monopoly, which is what we see with our television, with our cable, um with our banks, with internet cell phones, et cetera. You have just a couple set companies that are just doing the bare minimum and there's no real innovation, there's nothing being brought to the customers. That's very exciting. So I am all for competition between entrepreneurs and a non corporate capital market, capitalistic market. I just want to shout out the producers for taking us on a, a 10 out of 10 journey. Today, we started with the failure of the centralized points in this ecosystem. Then we went to like D I hacks from North Korean hackers. Then we were on to risk management and now we can see why funds aren't flying into deep. There's a lot to figure out. We went on a journey today. Good job producers.

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