The decentralized finance sector has held up well amid troubles at centralized crypto companies this month. There were hardly any massive on-chain liquidations, surprises or smart contract failures across popular DeFi apps, including Aave, Compound, Maker and others, even as crypto markets shed value.
“The transparency and real-time monitoring of on-chain transactions enable everyone to see liquidations and value at risk at those levels,” Svanevik added.Svanevik highlighted that over $6 billion was repaid on Aave and Compound, both lending and borrowing platforms, which equated to a 64% reduction in their debt outstanding.
Such moves didn't cause any unforeseen contagion damage in the crypto ecosystem, a showcase of the resilience of DeFi applications that rely on smart contracts to conduct financial transactions instead of centralized third parties. Svanevik noted that the percent of holdings in stablecoins for wallets labeled as smart money by Nansen spiked to all-time highs last week – suggesting a sign of “aggressive de-risking” as well as repayment of on-chain loans.
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