![image.png](https://files.peakd.com/file/peakd-hive/badbitch/23uQow9rSYNa4XLGsE7HQfpwsPMVsb2SknrU2QJNEncGfmJTZCiAqAB8wzX6qA8o1wqcQ.png)

Sure, this [report](https://bitcoinist.com/defi-tvl-down-80/) majorly talks about the total value locked(TVL) in decentralized finance protocols, but the theory is generally wrong. 

This is what I've discussed a bit before in the past, you see, a lot of people do not understand what DeFi is, the mention of the words "Decentralized Finance" just weirdly sends a message of  "Uniswap" or "Pancakeswap" to their brain, but you can't really blame them, the success of these protocols have earned them this publicity and title, but that doesn't change the fact that they shouldn't be called DeFi. 

If anything, the mentioned protocols are both exchanges, they are AMM exchanges designed to facilitate decentralized and autonomous trades, eliminate the need to asset custody and all other shit that comes with centralized exchanges. 

Now what people view as DeFi here is the fact that these protocols or platforms offer yields for liquidity provided to them. This function automatically translates to DeFi and so much more has of course been built on this, but all things ultimately boil down to liquidity and exchangers, the value flowing to participants mostly comes from printed inflation tokens and transaction fees accumulated from trades occurring on these exchangers. 

But is that really what DeFi is? Of course not. 

DeFi is a finance concept, here's where we replace custodial money management to non-custodial money management, so in a real sense, we eliminate the banking system, we eliminate KYC, we enjoy anonymity, we enjoy flexibility, control and security, this all ultimately began with bitcoin. 

>Back in 2021, the decentralized finance (DeFi) space experienced explosive growth which led to a rapid rise in total value locked (TVL). The TVL would continue to grow into 2022 and maintain a decent level even through the initial bear market triggered by the Terra collapse. However, the glory days are long over now and the DeFi TVL is barely holding up, to say the least. 

>January 2022 was arguably one of the best months for the DeFi TVL when the metric rose to its highest level. At this point, there was over $212 billion worth of tokens locked across various decentralized finance protocols. 

>Fast forward to 2023 and the DeFi space has had a hard time keeping up. The further decline in TVL has brought it to one-year lows with the metric now sitting at $43.45 billion, translating to an 80% drop from its all-time high. This figure is also in line with the general bearish theme of the year with the highest the TVL has been in 2023 being $64 billion. - [Bitcoinist](https://bitcoinist.com/defi-tvl-down-80/). 

So how true is this? 

The first flaw in this report is believing that DeFi started in 2021, DeFi started with bitcoin and has since grown into a trillion dollar ecosystem despite most cryptocurrencies being a centralized piece of code actively printing self devaluing currencies and assets. 

That said, if we understand that decentralized finance isn't about DEX volumes or protocols offering insane yields to lure investors to the inevitable - doom, then what then could we say about DeFi TVL? 

If anything this number is growing, because as more and more people get involved with crypto, a lot of value is being moved out of the public markets intentionally and this numbers cannot be accounted for and that's the whole idea of decentralized finance but at the same time, a lot of value is also being unfortunately lost. 

Did you know that bitcoins worth over $50 billion at current market prices are [potentially](https://www.cryptovantage.com/news/ask-cryptovantage-how-much-bitcoin-has-been-lost-forever/#:~:text=According%20to%20estimates%20from%20Glassnode,circulating%20supply%20of%20the%20cryptocurrency.) "locked away" forever due to being lost because of one thing or the other or as we commonly say "lost in a boating accident". 

So the idea that DeFi TVL is falling isn't quite true, this number is only on the rise. And will keep being so and the interesting part is that we will never actually be able to give any accurate account of how much of the decentralized finance value is actually locked away because you know, its DeFi we're talking about, despite dealing with public ledgers, addresses don't carry a "I'm lost, find me" tags. 

DeFi is a concept, it is bigger than DEXs and yields protocols under them. 


Posted Using [LeoFinance Alpha](https://leofinance.io/@badbitch/defi-is-reportedly-down-80-from-2022-highs-but-this-is-false-statistics-from-people-who-dont-understand-what-defi-is)