The attack and woes of popular decentralized finance (DeFi) protocol Curve Finance have far-ranging negative implications, affecting more blockchains in the Web3.0 ecosystem. Ethereum is a leading victim of this hack as the Layer 1 network has seen a major plunge of about 8% in its total value locked (TVL) in the few days since the Curve attack went mainstream.
As data from IntoTheBlock (ITB) shows, the TVL slipped from $43.82 billion on Sunday, July 30, to the $40.2 billion it is currently pegged at at this time.
Total Value Locked (TVL) in #Ethereum DeFi has fallen by almost 8% since Sunday. The decline, likely triggered by the uncertainty following the #Curve attack, represents a sharp decrease. To put this in context, the decrease amounts to $3.55B, with Curve's TVL on ETH comprising… pic.twitter.com/lZXWwvBfWQ— IntoTheBlock (@intotheblock) August 1, 2023
Curve, prior to its exploit, was ranked as one of the top Ethereum-based stablecoin exchanges. Curve Finance occupies a pivotal niche on Ethereum and helps to drive robust liquidity, one that now appears to be significantly threatened by the hack. The 8% slump in TVL can be attributed to Curve, seeing as the protocol is one of the dominant trading venues on the Ethereum blockchain.
Per the dollar valuation, the TVL decrease on Ethereum is pegged at around $3.55 billion as the TVL of Curve slipped to new lows on the protocol.
Major setback for Ethereum?
While the exploit of Curve Finance is a major setback for the DeFi protocol community, it is not a major challenge for Ethereum in itself.
Ethereum is branded as one of the most vibrant smart contracts in terms of the decentralized applications resident on it, and whatever happens to Curve, other protocols will be able to fill in the gap in no time. As a frontline proof-of-stake (PoS) blockchain, Ethereum is constantly pushing for ecosystem expansion, a trend that is notably being spearheaded by the tons of Layer 2 networks surrounding it.
The confluence of all of these protocols are bound to help boost the liquidity of Ethereum and help return its TVL to prior levels.