New data from Chainalysis has revealed that DeFi adoption is being driven by experienced traders looking for new high value opportunities.
The company’s Global DeFi Adoption Index found that high-income countries were leading the way for grassroots DeFi adoption. The US topped the index with China and the UK also making it into the top five, all high-income countries which have established communities of crypto traders.
Commenting on the data, David Gogel, Growth Lead at dydx, a popular protocol focused on cryptocurrency derivatives, said: “Right now, DeFi is targeted towards crypto insiders. It’s people who have been in the industry for a while and have enough funds to experiment with new assets.”
Decentralized Finance is the collective term for crypto projects which offer investors decentralised alternatives to financial services traditionally offered by banks. Interest in DeFi has surged during the pandemic, with $85.78bn of value now locked into smart contracts – up 424 per cent since the start of the year.
Kim Grauer, the director of research at Chainalysis, said “DeFi has become one of the fastest-growing and most innovative sectors within the cryptocurrency economy.” She added that “developed cryptocurrency markets are already the early adopters in this space.”
The study also showed that professional investors make up for the bulk of DeFi transaction volume. Large institutional transactions of above $10m in value accounted for over 60 per cent of DeFi transactions in Q2 2021, up from ten per cent in Q3 of 2020.
The data for DeFi adoption strikes a contrast from Chainalysis’ Global Crypto Adoption Index which last week showed that grassroots interest in crypto is growing fastest in emerging economies.