In February, Ethereum's total value locked (TVL) in the decentralized finance (DeFi) sector dropped by 27% to $97 billion, while the broader DeFi sector fell from $217 billion to $168 billion. The decline was driven by market volatility, liquidity shifts, and capital outflows. Despite the drop, Ethereum still dominates the DeFi space. Solana suffered the largest losses, with its TVL dropping by over 30% to $15.4 billion, likely due to profit-taking and liquidity migration. Berachain was one of the few winners, reaching a TVL of $5.05 billion, thanks to its proof-of-liquidity model. Other chains like BNB and TRON also saw declines in TVL. The drop in Ethereum's TVL coincided with a sharp decrease in futures open interest in key cryptocurrencies, as traders reduce long positions amid market uncertainty. The upcoming Pectra upgrade for Ethereum could provide a short-term boost to DeFi activity, but its long-term impact remains uncertain.



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