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In the past month, the number of ETH locked positions in the DeFi protocol has decreased by 25%

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Ethereum 2.0 has become a "competing product" of DeFi protocols

Rhythm BlockBeats news, on November 24, the total value of tokens locked in DeFi has hit a new high, but the surge in crypto prices conceals a surprising new trend. The amount of ETH is actually falling.

Total value locked (TVL) in DeFi protocols grows to 140 since Nov 20 It reached a record high of US$14.39 billion on November 21. Rising prices of Bitcoin and Ethereum have been a source of continued growth in TVL. Since the beginning of November, the price of BTC is up 34%, and ETH is up 54%.

However, according to DeBank data, in the same time frame, more than 2 million ETH left The DeFi ecosystem, while the number of Bitcoin-anchored coins has been relatively stable.

ETH locked in DeFi reached a high of 9.25 million on October 20th. Since then, although TVL has risen by 23%, this is actually due to the increase in ETH price, and the actual locked position of ETH volume fell by more than 25%. Meanwhile, the number of BTC locked remained largely unchanged, rising to 168,500 from 164,500 on October 20.

So, why are these ETH leaving DeFi?

One of the most likely reasons is the upcoming release of Ethereum 2.0, which is a new upgrade of Ethereum that will provide interest returns for the pledged ETH, And eventually reconfigure the entire Ethereum blockchain. The start of Ethereum 2.0 needs to meet the minimum pledge requirements, and according to Rhythm this morning, more than 52,500 ETHs have been deposited in the deposit contract address of Ethereum 2.0, which meets the minimum pledge requirements. According to previous plans, Ethereum 2.0 is expected to be launched on December 1st.

The pledge requirement of Ethereum 2.0 may be an important reason for users to withdraw funds from DeFi.

DeFi users, on the other hand, will also feel more cautious as repeated hacks continue to plague many emerging markets. However, many DeFi protocols are powerless against hacker attacks and various losses, which may cool down the entire ecosystem, and the emergence of Ethereum 2.0 just gives these users who are not completely new to DeFi a new place to go for funds .