- DeFi ecosystem experiences a $57 billion TVL drop.
- Lido, EigenLayer, Ethena affected.
- Ethereum price falls impacting DeFi tokens.
The decentralized finance (DeFi) sector saw its Total Value Locked (TVL) plunge by over 30%, equating to a $57 billion decrease from October to December 2025, impacting major protocols.
Asset price depreciation, not user withdrawals, caused the TVL drop, signaling resilience despite significant digital asset devaluation in protocols like Lido, EigenLayer, and Ethena.
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Lede
DeFi TVL Drops by Over 30% Amid Price Deprecation
DeFi ecosystem sees a $57 billion decline in Total Value Locked, major protocols affected.
Nut Graph
The DeFi ecosystem witnessed a $57 billion decline in its Total Value Locked (TVL) from October to December 2025. This drop translates to over a 30% reduction in value, primarily due to asset price declines.
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Key Impact on Leading Protocols
Leading protocols like Lido, EigenLayer, and Ethena have experienced TVL decreases exceeding 20%. On-chain data suggests that value decline results from price depreciation rather than capital outflows.
Cryptocurrency Market and Ethereum
The immediate effect of this decline has been seen in the cryptocurrency market, particularly with the reduction in Ethereum’s (ETH) value, affecting its dominant position in DeFi. This situation has influenced major governance tokens. Financial repercussions include falling values for Ethereum and DeFi tokens by around 38–50%. However, institutional involvement holds steady as regulatory clarity in major regions grows, presenting a mixed impact.
Institutional Confidence
Despite the price challenges, institutional players like BlackRock and JPMorgan continue their involvement, suggesting confidence in DeFi’s long-term potential. The resilience of the ecosystem mirrors past cycles and cleansings. Historically, DeFi has rebounded after significant downturns with renewed investor interest.
Vitalik Buterin, Co-founder, Ethereum, emphasized historical perspectives on TVL, stating: “The TVL figures shouldn’t be viewed solely through the lens of dollar-value changes due to the inherent volatility of token prices. The fundamentals of DeFi projects remain structurally strong despite variations in TVL.” – source
The current downturn is less intense than past crashes, with anticipated progressive recovery as previous patterns suggest resilience and ongoing market evolution.
External Links
For more information on market dynamics during the downturn, visit this article on Phemex.
