Between July 21 and 25, the total stablecoin market cap increased by $4.505 billion to reach $265.22 billion, a 1.73% expansion. Over the same timeframe, total value locked (TVL) in DeFi dropped from $140.804 billion to $135.934 billion, a 3.46% drawdown.
While the rise in stablecoin supply could be interpreted as a sign of incoming capital, the simultaneous drop in DeFi TVL tells us that the new liquidity isn’t being deployed; it’s waiting.
Ethereum saw its TVL fall 2.53% in the past 24 hours despite leading a 7-day climb of over 7.5%. Its price remained relatively stable over the three days, jumping to $3,707 on July 24 and returning to $3,565 on July 25, posting a net gain of just 0.78%.
Price stability paired with a declining TVL and expanding stablecoin base indicates a shift in the market. Capital seems to be rotating out of yield-bearing DeFi positions into liquid, passive stablecoins.
The TVL to stablecoin supply ratio, an effective proxy for on-chain capital efficiency, fell from 0.535 to 0.513 over the past three days. The drop suggests that on-chain capital is growing more risk-averse. With fewer stablecoins being deployed in DeFi protocols and more sitting idle in wallets, bridges, and exchange balances, traders seem to be preparing for another bout of volatility.
This caution is clearly seen in data from DeFi Llama. Ethereum accounts for $81.094 billion of total DeFi TVL and $133.008 billion in stablecoins, yielding a TVL/stablecoin ratio of 0.61, close to the market average. However, a deeper look across other chains shows a fragmented landscape with sharp differences in capital utilization.
Ethereum anchors, Tron hoards
Tron carries $81.989 billion in stablecoins (nearly a third of the entire market), but only $5.766 billion in TVL. That ratio of 0.07, the lowest among top chains, confirms Tron’s role as a stablecoin bridge and settlement layer rather than a yield-driven ecosystem. The new $4.5 billion in stablecoins that entered circulation this…
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