TVL in DeFi projects has dropped by $22 billion in the past week, erasing significant gains recorded in September and October. According to data shared today by market analyst Crypto Patel, the week experienced double-digit TVL declines across major chains as panic grips investors amid heightened market volatility. The drop in TVL is mainly driven by the broader macroeconomic concerns as reflected in the downturn in the larger crypto market. BTC and ETH, which currently stand at $102,042 and $3,429, have been down 7.9% and 11.9% over the past week, respectively, indicating significant sell-offs in multiple crypto assets.
DeFi Meltdown: Liquidity Drains, Confidence Cracks
This week saw double-digit TVL drops across leading chains as market volatility hit hard:#Ethereum: -14%#Solana: -12%#BNBChain: -12%
Total DeFi liquidity continues to shrink as capital rotates out, signaling cautious… pic.twitter.com/Aqs4EpgDuz
— Crypto Patel (@CryptoPatel) November 9, 2025
DeFi TVL Drops to Current Low of $131.10 Billion
As reported in the latest DeFiLlama metrics, DeFi TVL climbed to $166.446 billion on October 10, 2025, the highest level since June 20, 2022. The catalyst behind the wider DeFi ecosystem’s growth (noted in the last three months) was increased activity in borrowing, lending, and DEX trading. Regulatory clarity from US lawmakers and positive macroeconomic trends experienced mid this year triggered renewed investor enthusiasm in the DeFi market.
The U.S. House of Representatives passed three bills in mid-July, including the CLARITY Act, the Anti-CBDC Surveillance State Act, and the stablecoin Genius Act. Subsequently, President Trump signed the GENIUS Act into law on July 18.
The DeFi landscape became on fire from July 20 to October as TVL grew by more than 54.44%, reaching a high of $166.44 billion on October 10, according to DeFiLlama data. This surge reflected heightened investor interest, fresh liquidity, and increased user demand across trading, lending, and tokenized assets.
However, the DeFi TVL started declining since October 10, triggered by the escalation of the US-China trade tariff war. Both TradFI and DeFi markets have been affected by renewed macroeconomic volatilities, including geopolitical instabilities and trade policies, causing bearish sentiment among investors. The price falls in prominent crypto assets like BTC, ETH, SOL, and BNB have further triggered the drop in DeFi’s TVL.
Ethereum, Solana, and BNB
As reported by the analyst, Ethereum, the largest chain by TVL, led the decline, erasing $10.39 billion over the past week. This brings its total TVL to $74.20 billion currently. Solana saw a 12% weekly fall, making its TVL currently stand at $9.969 billion. BNB also recorded a drop in TVL over the week, down 12% to $7.688 billion TVL currently.
As the top three projects for DeFi utilities, Ethereum, Solana, and BNB are typically considered as major indicators of broader DeFi activity.
