Ethereum’s role at the centre of decentralised finance appears to be strengthening, even as total DeFi capital pulls back from recent highs.

Data from DeFiLlama shows that total value locked [TVL] on Ethereum remains structurally elevated compared with prior cycles, despite recent volatility. 

At the same time, broader ecosystem data from Sentora indicates that overall DeFi TVL has retraced from multi-year peaks. This points to consolidation rather than a broad-based exit from the sector.

Together, the two datasets suggest that capital is becoming more selective, concentrating around core infrastructure rather than dispersing across the wider DeFi landscape.

Ethereum TVL signals structural resilience

The Ethereum TVL chart highlights a familiar pattern of boom, contraction, and recovery since 2020. However, unlike previous cycles, the post-2022 drawdown did not reset activity to prior lows. 

Instead, Ethereum’s TVL has established a significantly higher base, with renewed expansion expected through 2024 and into 2025, before the latest pullback. As of this writing, the Ethereum TVL stands at approximately $68.6 billion.

Source: DefiLlama

This matters because Ethereum hosts the bulk of DeFi’s critical primitives, including stablecoins, lending markets, liquid staking, and restaking protocols. Even as speculative activity cools, these layers continue to anchor capital on the network.

The persistence of Ethereum TVL suggests that usage is increasingly driven by infrastructure demand rather than short-term yield chasing.

Capital appears willing to remain deployed through periods of market uncertainty, provided it sits in systems perceived as robust and liquid.

Total DeFi TVL reflects consolidation, not retreat

In contrast, Sentora’s snapshot of total DeFi TVL across all chains shows a more visible retracement. After climbing to multi-year highs earlier this year, total TVL has pulled back to roughly $182 billion.

Source: Sentora

Crucially, the composition of that TVL has shifted. Aave, Lido, EigenLayer-linked protocols, and major liquid staking platforms dominate the rankings, while smaller or experimental protocols capture a shrinking share of capital.

This divergence between Ethereum TVL stability and broader DeFi contraction suggests that investors are not abandoning decentralised finance outright.

Instead, they are concentrating exposure in protocols and networks viewed as essential rather than optional.

Institutional rails shape the next phase

Forward-looking commentary from SharpLink’s Joseph Chalom provides additional context for this shift. 

Chalom argues that stablecoin adoption, tokenised real-world assets [RWAs], and institutional participation are laying the groundwork for the next stage of crypto growth, with Ethereum emerging as the primary settlement layer.

According to this view, stablecoins act as an institutional on-ramp, allowing firms to build crypto-native systems before expanding into tokenised funds, money markets, and onchain credit. 

That progression lowers the activation energy for broader adoption, favouring networks with proven security and deep liquidity.

If stablecoin and RWA growth accelerate as projected, Ethereum’s existing dominance in these areas positions it to capture a disproportionate share of future DeFi flows. Chalom predicts that the Ethereum TVL will 10x in 2026.

What the data is really saying

Taken together, the charts do not point to a DeFi downturn so much as a recalibration. Total DeFi TVL is no longer expanding indiscriminately. However, Ethereum’s TVL suggests that the network continues to function as the sector’s financial backbone.

Capital is still onchain, but it is becoming more disciplined, favouring infrastructure over experimentation.

That dynamic may produce fewer explosive rallies in headline TVL, but it also implies a more durable foundation for long-term growth.

Final Thoughts

• Ethereum’s TVL resilience suggests DeFi capital is consolidating around core infrastructure rather than exiting the market.
• The gap between Ethereum and total DeFi TVL reflects maturation, with selective deployment replacing broad speculative expansion.