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Much like the rest of the cryptocurrency market, XRP also went on a wild ride in August. The altcoin went through a serious crash in its value at the beginning of the month but the bulls were able to stage a v-shaped recovery, as illustrated in the chart below.
While XRP’s price is moving more or less in line with the market, the total value locked within the protocol has recently crashed massively.
Value Locked in XRPL Plummets 97%
The total value locked within a protocol is a metric that can provide various insights. The thing is, though, each blockchain is built with a different purpose, and it’s important not to rush to any conclusions based solely on TVL.
That said, data from the popular analytics platform DeFiLlama reveals that TVL in XRPL (the Ripple blockchain) saw a shocking crash on August 12th. It dropped from over $12 million to below $300K, registering a decline of roughly 97%.
There’s no clear reason why the TVL dropped, but the number hasn’t recovered since. This likely rules out a technical glitch.
Troubles for XRP’s Price?
Many have taken it to the social media platform X to question whether or not this can spell trouble for the price of XRP.
While it’s hard to provide a precise answer without clarity as to why the TVL dropped, it’s worth noting that XRP has always been intended to settle cross-border transactions rather than provide a fully-fledged network for building decentralized applications.
In fact, Ripple introduced its XLS-30 Automated Market Maker to the network only in September 2023.
It’s a blockchain that has never been popular within DeFi circles, which is where most of the leading DeFi networks, such as Ethereum and Solana, derive their TVL.
This article first appeared at CryptoPotato
