Chainalysis: The DeFi sector has not yet reached mass adoption

Decentralized finance (DeFi) technology is still far from mass adoption. Protocols have gained popularity in high-income countries and with the presence of professional traders and investors in the cryptocurrency market, according to Chainalysis analysts.

Most countries ranking high on our DeFi Adoption Index are ones that already had strong crypto markets and high over all tx volumes. This makes intuitive sense: Users with a prior crypto background would be more likely to embrace an innovation like DeFi. https://t.co/Sm5N6ZDg9K

— Chainalysis (@chainalysis) August 24, 2021

The analysis showed that in the second quarter of 2021, transactions above $10 million accounted for more than 60% of DeFi trading activity. By comparison, on the cryptocurrency market as a whole, this share stood at 50%.

In examining web traffic, researchers found that the strongest interest in the development of DeFi came from residents of North America. After the DeFi boom of 2020, interest intensified in Western Europe, as well as in Central and Southeast Asia.

The United States, Vietnam, Thailand, China, and the United Kingdom sit at the top of the global DeFi adoption ranking. Russia ranks 15th, and Ukraine ninth.

The dataset covered 154 countries.

The index components are weighted by purchasing power parity (PPP) per capita indicators:

• on-chain value realized by DeFi platforms;
• the same metric attributable to retail investors (<$10 000);
• the number of transactions carried out via DeFi protocols.

“Currently, DeFi is oriented toward experienced participants in the industry. They have both the experience and the means to experiment with new assets. In the long run, as gas prices fall, it will become accessible to a broader audience,”— commented David Gogel, a developer of the DeFi platform dYdX.

The expert named the United States, China, and Russia as countries that could play a decisive role in the development of the decentralized finance space.

In conclusion, analysts wondered whether the DeFi sector would achieve broader adoption in the future beyond speculation and investment.

In August, Chainalysis experts called the drive of residents of developing countries to save their savings from the devaluation of national currencies the main driver of cryptocurrency adoption.

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