DeFi TVL Falls to $88B as Morpho Gains
DeFi TVL fell to about $87.8 billion on October 26, down 1.8% in 24 hours, before reaching roughly $88 billion on October 27—about 2.5% lower over the week, according to DefiLlama. Ethereum DeFi shed around $1.2 billion to about $48.4 billion. Lido’s TVL declined to approximately $22.4 billion, while Aave’s fell to about $17.4 billion from $19.1 billion at the end of September.
The outflows were uneven. Morpho added about $304 million over the week, lifting its TVL to roughly $11.4 billion, and Aave V4 grew to around $704 million, near its record high. These gains suggest some liquidity may be rotating between lending protocols rather than leaving DeFi altogether.
Trading activity also weakened: decentralised exchange volume fell more than 12% week over week to about $44 billion, while perpetual futures volume declined by roughly 8%. With Bitcoin near $80,000 and markets cautious ahead of a Federal Reserve meeting, traders may monitor ETH prices, lending flows and stablecoin liquidity. The lower DeFi TVL points to softer activity, but protocol-level gains suggest liquidity is being redistributed rather than the sector collapsing outright.
Neutral
The decline in DeFi TVL and trading volumes signals weaker onchain activity, which may weigh on short-term sentiment around ETH and the broader market. However, the figures do not establish that falling token prices caused the decline, and gains at Morpho and Aave V4 point to liquidity shifting between protocols rather than a broad exit. Bitcoin’s price and the approaching Federal Reserve meeting may also drive near-term trading more strongly than these protocol-level flows. Over the longer term, persistent outflows and lower activity could reduce demand for DeFi-related assets, while a recovery in lending flows and stablecoin liquidity could improve sentiment. On balance, the mixed signals support a neutral assessment of direct price impact.