The March 12th Crypto market crash has now infamously become known as Black Thursday. With the price of Bitcoin falling by 50% in 24 hours, followed swiftly by the majority of the market.
The market crash has since been attributed to a growing trend of panic selling among major investors, who liquidated a substantial segment of their crypto assets to provide liquidity.
The impact of Black Thursday's price meltdown was also visible on DeFi's markets, where the main digital asset used is Ether. Ether's price decline whipped up turmoil in the DeFi ecosystem, with many Collateral Debt Positions - worth millions of dollars as an asset class - were liquidated.
The decline in prices and liquidation spree brought the total market cap of the ecosystem to below $1 billion. A price point that was breached only a couple of months ago.
DeFi's ecosystem, which works on top of the Ethereum blockchain, consumers can leverage Ether to draw DAI stable coin as a collateralized loan.
The DeFi market has gained back the lost ground since the Black Thursday crash and the value of the token locked as collateral has again surpassed the $1 billion mark.
DeFi Market Gaining Popularity
It's believed that the DeFi ecosystem is regaining the confidence of its community with each passing day, which is evident from the spike in the number of projects in the ecosystem. According to data from DefiMarketCap, the DeFi ecosystem currently have 246 live projects.
At present, the DeFi ecosystem is largely dominated by 3 major digital assets, which constitute half of the total market cap of the DeFi universe.
These 3 consists of:
- Maker which contributes 28% of the total market cap
- 0x comprising 16% of the $1 billion+ market cap
- Synthetix Network Token totaling 11%.
Apart from contributing heavily to the DeFi ecosystem, the top 4 protocols, out of its total of 100, show quite a similar price correlation as well where these 4 protocols are the only ones whose price fluctuations exceeded 5% in the past 4 hours.
An estimation by DeFi Pulse suggests that a total of $746.8 million in total assets are locked in different protocols out of which MakerDAO contributes a whopping 50.16%. What's more surprising is that this isn't its all-time high.
MakerDao has been a major player in the DeFi market, and at one point it had over $750 million in locked Ether when the DeFi ecosystem’s market breached $1 billion for the first time.
However, the massive fall in March resulted in a significant drop, where the valuation of its locked assets fell from $500 million to $300 million in a matter of days.