Decentralized finance (DeFi) has been a rapidly growing sector within the cryptocurrency industry, with the total value locked in DeFi protocols reaching approximately $117.856 billion. This metric serves as a key indicator of the amount of cryptocurrency assets being utilized within the DeFi ecosystem.

Ethereum, the leading blockchain platform for DeFi, has traditionally held a dominant position in this space. At the end of 2024, Ethereum accounted for over 56% of the total value locked in DeFi protocols. However, recent data shows that Ethereum's share has decreased to 51.24% as of May, signaling a noticeable decline in its dominance within the DeFi sector.

The shifting landscape of DeFi dominance has sparked a competitive battle among various blockchain platforms. Solana, a high-performance blockchain known for its scalability and low transaction fees, has emerged as a strong contender in the DeFi space. Solana's native cryptocurrency, SOL, has seen significant adoption within DeFi protocols, contributing to its rise as a potential challenger to Ethereum's dominance.

In addition to Solana, Bitcoin, the largest cryptocurrency by market capitalization, is also making strides in the DeFi sector. While Bitcoin is not typically associated with DeFi due to its limited smart contract capabilities compared to Ethereum, the development of layer 2 solutions and sidechains has enabled Bitcoin to participate in decentralized finance applications. This integration of Bitcoin into the DeFi ecosystem has opened up new opportunities for the cryptocurrency to be utilized in various DeFi protocols.

As the battle for DeFi dominance heats up, blockchain platforms are continuously innovating to attract users and developers to their ecosystems. Ethereum's decreasing market share in DeFi has prompted the platform to expedite its transition to Ethereum 2.0, a major upgrade that aims to improve scalability and reduce transaction fees. These enhancements are crucial for Ethereum to maintain its position as a leading DeFi platform in the face of growing competition.

Meanwhile, Solana's rapid rise in DeFi has been fueled by its high throughput and low latency, making it an attractive choice for developers looking to build scalable decentralized applications. The platform's growing ecosystem of DeFi projects and partnerships has further solidified its position in the DeFi space.

In conclusion, the dynamics of the DeFi sector are constantly evolving, with Ethereum facing increased competition from emerging blockchain platforms like Solana and even Bitcoin. As the battle for DeFi dominance intensifies, blockchain projects will need to continue innovating and improving their capabilities

Source: https://news.bitcoin.com/ethereums-defi-reign-slips-37-since-2021-a-blockchain-power-shift/