Market carnage wiped out traders, but one cryptocurrency held up despite millions pouring in

How DeFi 'Caused a Confrontation' in the Market Arena as Traders Invested Millions in Panic

The DeFi sector has shown its resilience this week as inflows and volumes have increased significantly.

Oliver Knight | Edited by Danny Nelson Updated April 9, 2025, 2:33 PM Published April 9, 2025, 10:54 AM

Key facts:

• Despite the market decline, Aave reached an all-time high in deposits, amounting to 11 million ETH.
• Decentralized exchange volumes also increased this week.
• The increased activity indicates that DeFi is entering a maturing phase as traders look to minimize risk and find delta-neutral returns.

The tariff-driven market crash has caused a rapid sell-off in crypto assets this week, with BTC trading below $80,000 and ETH falling to a two-year low of $1,432. The decentralized finance (DeFi) sector has not been spared from the chaos, with total value locked (TVL) falling to its lowest since November at $95 billion.

But there is also good news for DeFi.

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Amid falling asset prices, DeFi has shown its resilience, showing moderate outflows and key usage metrics remaining significantly above the price of ETH, the asset that primarily powers the Ethereum DeFi ecosystem.

TVL on Aave, the largest DeFi protocol, increased in ETH this week as deposits reached an all-time high of 11.02 million ($17.32 billion). Deposits have been growing steadily since the beginning of the year, when they were 3 million ETH.

This shows that while the recent bull market has focused on meme coin hype, the real use cases for DeFi still have significant value. In previous cycles, DeFi suffered from the dominance of centralized exchanges and a lack of liquidity, but capital is now flowing in as traders adopt delta-neutral strategies, which is helping to increase liquidity and the long-term health of DeFi.

As the market approaches a bearish phase, DeFi could well be one of the key aspects that helps keep cryptocurrency afloat.

Aave wasn’t the only protocol to see an influx of funds this week. Sky’s TVL (formerly MakerDAO) increased from 1.85 million ETH to 4.63 million ETH. Lending protocol Spark also saw a boost in deposits.

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