Dogecoin, a meme-based cryptocurrency, is experiencing a significant drop in its decentralized finance (DeFi) total value locked (TVL), reaching a new low of $2.79 million. This decline is attributed to a combination of market panic and a lack of confidence in meme-driven assets. The recent sell-off in the global market, referred to as “Black Monday,” has had a negative impact on Dogecoin and raised doubts about the sustainability of meme-based DeFi projects.
The decrease in Dogecoin’s TVL represents a sharp unraveling of its DeFi presence, with a drop of over 70% from its peak of over $10 million in late 2024. This decline has been accelerating since mid-February, coinciding with a broader market capitulation. The once-celebrated token as a gateway for retail adoption is now experiencing a retreat from on-chain engagement, signaling potential trouble for its ecosystem.
Global market jitters, triggered by President Trump’s announcement of new tariffs on “Liberation Day,” have also negatively impacted Dogecoin and other meme-based cryptocurrencies. The fear of a recession caused by these trade levies has led to a lack of clear economic plans, causing risk sentiment to evaporate quickly. This has further exacerbated the doubts surrounding meme-driven assets like Dogecoin, leading to capital flight and questioning their durability.
The decline in Dogecoin’s DeFi ecosystem is reflective of a broader trend among meme-based cryptocurrencies, as other top memecoins are also experiencing a shrinking DeFi presence. What was once seen as playful experimentation is now facing a harsh reality check as capital retreats and enthusiasm wanes. The future of meme-based protocols is uncertain as they struggle to withstand macroeconomic stress and maintain relevance in the DeFi landscape.
As Dogecoin and other meme-based assets continue to face challenges, the meme DeFi sector is on the brink of potential collapse. The sector’s moment of popularity may have been fleeting, and it remains to be seen whether these assets can survive the current market turmoil. With each liquidation and decline in TVL, meme-based DeFi projects are fighting to stay relevant in a rapidly changing landscape.
