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Decentralized finance (defi) has remained deeply entrenched in the cryptocurrency economy, as the ecosystem offers users a non-custodial way to trade digital assets, lend cryptocurrencies, issue coins stable and take advantage of arbitrage. In the challenge lending industry, a lot has changed in the past 12 months as lending apps like Terra’s Anchor Protocol have bitten the dust, and 71.95% of the total value locked in Challenge loan protocols have evaporated.

From $37 Billion to $10 Billion: The Top Five Challenge Lenders Then and Now

Around this time last year, decentralized financial lending protocols held $37.41 billion in total value locked (TVL), and the defi Aave protocol dominated with $12.87 billion. An archive.org snap January 10, 2022, shows that Aave’s $12.87 billion TVL was greater than the TVL of the top five challenge loan protocols held on January 17, 2023.

Top five loan protocols by total value locked on January 10, 2022.

Data shows the top five defi protocols in mid-January. 2023 include Aave ($4.58 billion), Justlend ($3.02 billion), Compound ($1.85 billion), Venus ($813.63 million) and Morpho ($221.59 million ). Currently, the five aforementioned defi protocols have a combined TVL of approximately $10.49 billion.

Top five loan protocols by total value locked on January 17, 2023.

On January 10, 2022, the Terra Anchor Protocol held a value of approximately $8.5 billion, but now the Defi Protocol is in ashes. Anchor was one of main components in the Terra ecosystem, as terrausd (UST) holders have deposited UST for a 20% annual percentage rate of return compounded daily.

But in May 2022, UST pulled out of its $1 peg and Anchor today only holds around $2 million. Compound held the third largest TVL in terms of challenge loan protocols with $8.09 billion at the time. On January 17, 2023, Compound’s TVL fell to $1.85 billion.

The second largest challenge loan protocol today is Justlend with $3.03 billion. The Tron-based Justlend has grown from the seventh largest TVL challenge loan protocol to the second largest from $1.72 billion to the current $3 billion. Justlend is one of the only decentralized finance lending apps that has seen an increase in the last 12 months.

Last year’s fourth and fifth largest challenge lenders, Abracadabra and Cream Finance, dropped out of the top five in the rankings and were replaced by Venus and Morpho. Cream Finance now ranks 20th, dropping from $2.14 billion to the current $42.94 million.

Keywords in this story

Aave, Abracadabra, anchor protocol, Arbitration, ashes, Change, Compound, cream finance, Cryptocurrencies, Cryptocurrency, decentralized finance, Challenge, challenge loan, depigmented, Digital assets, drop, Economy, evaporated, Swap, increase, just lend, lend, ready, loan applications, challenge loan, Morpho, Non guardian, Parity, Profit, Protocols, Sector, Stable Coins, Earth, total value locked, tron, TVL, locked value, Venus

What do you think of the upheaval in the challenge loan protocol over the past 12 months? Let us know your thoughts on this in the comments section below.

Jamie Redman

Jamie Redman is the news manager for Bitcoin.com News and a fintech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He is passionate about Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written over 6,000 articles for Bitcoin.com News about disruptive protocols emerging today.




Image credits: Shutterstock, Pixabay, Wiki Commons

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