Points of Focus

• Binance Research said DeFi TVL fell about $43.4 billion in H1 2026 as active loans dropped 38%.
• Ethereum accounted for 70% of the chain-level TVL decline, while major networks represented nearly 90%.
• DefiLlama showed TVL back near $74.9 billion on July 31, a partial recovery from June’s low.

DeFi lost roughly $43 billion in total value locked during the first half of 2026, with lending, layer-1 valuations and network revenue weakening at the same time, according to a July 30 report by Binance Research analysts Moulik Nagesh and Lim Kim Thye. 

Binance Research said the synchronized decline across these measures indicated that capital left the onchain market rather than rotating between crypto sectors.

The report’s headline summary put the TVL loss at $43.4 billion, or 38%. Its detailed DeFi section showed TVL falling from $114.4 billion on Jan. 1 to $70.1 billion on June 30, which equals a $44.3 billion drop and 38.7%. The report therefore presents two slightly different totals, a $900 million gap, although both calculations put the decline at about 38%.

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— Binance Research (@BinanceResearch) July 23, 2026

Ethereum drove most of the DeFi TVL decline

Ethereum accounted for $30.9 billion, or 70%, of the chain-level decline. Binance Research said the share reached nearly 90% when other major networks were included, while smaller chains failed to absorb enough liquidity to form a meaningful rotation.

The contraction extended beyond token prices. Active DeFi loans fell 38% during the half, indicating that the pullback reached borrowing activity as well as deposited capital. April brought the sharpest TVL deterioration and the period’s two largest exploits. TRM Labs recorded 207 hacks and $972 million in H1 losses, with the Drift Protocol and KelpDAO incidents accounting for about $577 million, or 59.4% of the total.

July DeFi TVL rebound leaves H1 decline intact

DefiLlama listed total DeFi TVL at about $74.9 billion on July 31, roughly $4.8 billion above Binance Research’s June 30 endpoint. The rebound narrowed the H1 decline, but TVL alone cannot confirm that borrowing demand or protocol usage recovered at the same pace.

The comparison carries another limitation. A 2025 Bank for International Settlements working paper found that TVL calculation methods vary across aggregators, with only 46.5% of 400 sampled protocols closely matching its verifiable measure. Token prices can also lift dollar-denominated TVL without new deposits.

Tokenized assets moved against the broader contraction. Binance Research found that distributed tokenized RWA value rose more than 50% to about $34 billion by mid-July. Even after July’s TVL rebound, DeFi remained about $39.5 billion below its Jan. 1 level.