DeFi TVL Plunges 49% Since October 2025, Undershooting Post-FTX Lows

The decentralized finance ecosystem has shed roughly half its total value locked since October 2025. A 49% decline in TVL represents one of the sharpest contractions on record, rivaling the post-FTX collapse.

DeFi TVL peaked between $171.9B and $237B in late 2025. By May 2026, that figure dropped to roughly $38B, below the $43B trough after the FTX implosion in 2022.

Ethereum's price fell from nearly $4,800 to around $1,600 over the same period. The chain's share of DeFi TVL slipped from 63.5% early last year to 54% in May 2026, though it still holds about $45.4B in locked value.

Liquid staking protocols and tokenized real-world assets have emerged as popular categories, shifting away from experimental lending markets toward products wrapping familiar assets.

Three forces converged to create this drawdown: token price declines, compressed yields, and repeated security breaches eroding trust.

TVL remains a flawed metric, double-counting deposits and fluctuating with prices. But dropping below post-FTX lows signals a fundamental reassessment of where on-chain capital should reside.