On Monday, a heavy cryptocurrency sell-off in the markets caused significant ripples for projects and entities alike. On popular decentralized finance, or DeFi, lending protocol Aave, utilization rates have fallen across nearly all stablecoin borrowings. Most notably, borrowings for Binance USD (BUSD) now stand at a mere 30% compared to a high of 80% back in May. 

Utilization rate is the ratio of borrowed funds to deposited funds. Since borrowers are required to post digital asset collateral before taking out a loan on Aave, users are likely withdrawing en mass in light of today’s sell-off to prevent liquidation. Data from DeFi Llama indicates that Aave’s total value locked has fallen from $33.51 billion last October to $8.11 billion.

According to CryptoRank Platform, TVL in overall DeFi protocols have fallen by 55% since the end of April, driven in part by capital flight and a decrease in the value of digital assets. Currently, there is $115.7 billion worth of funds remaining, with $72 billion of them located on the Ethereum (ETH) blockchain. It represents a fraction of the $303.9 billion in peak TVL witnessed in November 2021. 

Over the weekend, cryptocurrency exchange Crypto.com announced that it was laying off 260, or 5% of its corporate workforce, citing difficult market conditions. Just last month, the company also stated that it was significantly cutting back rewards for its popular crypto-backed debit card. Annual cash-back APYs for spending have reportedly been scaled back from 2% to 8% to just 0% to 2% for cardholders with unstaked assets. 

Monday morning, in an emotional message posted by founders, BlockFi also announced that it was laying off 20% of its 850-strong staff. The firm cites the need to achieve profitability goals for the long haul in making the decision. Similarly, cryptocurrency exchange Coinbase has decided to extend a hiring freeze and rescinded job offers to hundreds of new hires. Though Brian Armstrong, its CEO, has said that “funds are safe” amidst bankruptcy protection fears surrounding the exchange. Other major crypto firms are reportedly cutting 10% of their staff amidst the ongoing bear market.