What caused the decline in DeFi?

According to DappRadar, lower cryptocurrency prices and weaker user activity drove the fall.

What is total value locked?

Total value locked measures the value of assets deposited in DeFi protocols.

Which DeFi sector remained the largest?

The report said lending protocols remained the largest segment despite the market decline.

What could support a DeFi recovery?

DappRadar said stronger cryptocurrency prices and higher user activity could help the sector recover.

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Crypto downturn wipes US$43.4B from DeFi

Written by Isaac FrancisPublished Jul 31, 2026, 5:18 AM

The decentralised finance (DeFi) sector lost US$43.4 billion in total value locked during the first half of 2026.
Lower token prices and weaker investor activity reduced the value of assets held across DeFi protocols.
Analysts said the sector's recovery will depend on market conditions and renewed user activity.

The decentralised finance (DeFi) sector lost US$43.4 billion in total value locked during the first half of 2026 as lower cryptocurrency prices weighed on the market.

The decline reduced the value of assets held in DeFi protocols after a weaker first half for the broader cryptocurrency market.

According to crypto analytics firm DappRadar, lower token prices and weaker user activity were the main drivers behind the decline in total value locked.

The report said lending protocols remained the largest DeFi category despite the contraction, while liquid staking and decentralised exchanges also recorded lower values.

DeFi allows users to lend, borrow and trade cryptocurrencies without traditional financial intermediaries by using blockchain-based smart contracts.

DappRadar said future DeFi growth will depend on broader cryptocurrency market conditions and whether investor activity improves during the second half of the year.