The total value locked on this DeFi protocol is disabled by 70%

The LBR native token of the decentralized finance protocol Libra Finance has experienced significant price volatility over the past week as its major backers shed their assets.

Libra Finance, creator of the yield-generating eUSD stablecoin, aims to maintain constant $1 deposits and generate revenue from associated liquid staking tokens. In January 2023, Diffie Protocol reached a peak TVL of nearly $400 million.

LBR price reduced by 50%

SpotOnChain, a popular blockchain analytics firm, has reported that key opinion leaders (KOLs) and anonymous addresses control the network's Total Value Locked (TVL) holding a large amount of LBR tokens.

LBR's downward spiral began when these giant owners started liquidating their assets. On January 15, the protocol's top stakeholder, blurr.eth, withdrew all 34,000 ETH ($70 million), while the other major stakeholders – sifuvision.eth and czsamsunsb.eth – dropped 6,000 ETH ($13 million) and 4,000 ETH ($8 million). , respectively, today.

These actions caused the price of LBR to drop by around 14% to $0.4263 in the previous day. Last week, LBR experienced a sharp drop of around 50%.

“Influential Key Opinion Leaders (KOLs) have dropped their tokens. It is uncertain whether LBR can make a comeback,” wrote blockchain analytics firm SpotOnChain.

Meanwhile, the increased selling pressure had a negative impact on the eUSD stablecoin, which briefly deviated from the peg and fell to $0.97. While it had recovered to $1.01 as of press time, trading volume remained below $4,000 in the past 24 hours, according to CoinMarketCap data.

DeFi TVL Dips 70%

As a result of these developments, the total value of the assets locked on the Diffie protocol quickly increased by approximately 70% to $79 million from $245.85 million in the previous day, according to Defilama data.

Experts in the field have pointed out that the rapid decline is due to whales withdrawing their ETH and moving to other protocols to get better yields.

“People simply have better ways to use their ETH – that's all… Why do people withdraw their ETH again, get LRT, get a lot of EL + other points and why are they holding positions in Libra”, said crypto analyst Yoki.

Libra Finance has attributed the decline to user behavior and said the protocol and users' funds remain secure.

We are aware of the sudden crash of TVL caused by user behavior. The protocol is secure, and users' assets are not affected. Please don't panic,” said the Libra team.