Market conditions that dominated most of 2022 Regardless, decentralized finance (defi) still presents greater scaling potential than the traditional financial industry, says a new report. Total value locked has declined from its peak of $180 billion in December 2021 to just over $50 billion by the end of October 2022, but certain sectors of the defi market It remains “very optimistic”.
Declining total locked value
According to Hashkey Capital’s year-end report, decentralized finance (defi) is “many times more scalable than traditional finance. industry.” In addition to its scaling potential, the defi protocol is resilient and likely to emerge unscathed from black swan events such as the collapse of Terra Luna or the UST, the report suggests. I’m here.
However, in a report titled Defi Ecosystem Landscape Report, end-to-end digital asset financial services group Hashkey Capital Widespread market conditions contributed to the decline in total assets under management.
“TVL – Total Value Locked (DeFi’s proxy for total assets under management) –’s decline was also motivated by general market conditions. Low cryptocurrency prices (generally unfavorable macro ) means that the value of the collateral offered in Defi lending will also be lower, reducing the incentive to obtain loans against those collateral. “Cryptocurrency trading volumes are also declining,” the report said.
As the report’s data show, TVL, which peaked at $180 billion in December 2021, is now slightly below the $150 billion seen around May 2022, ending October at $150 billion. just over $50 billion. Despite this reduction in TVL, certain sectors of the defi market are still “very optimistic,” according to the report.
Defi growth slows
In terms of the extent of adoption, the report notes a slowdown in growth in 2022 (31%) compared to 2021 (545%). I admit it. Regarding this result and the number of wallets surpassing 5 million, the report states: products rather than spending resources on marketing efforts. 2022 is also the year that his UI and user experience for Defi protocols have improved a lot and we can finally say that using some Defi protocols is easier than using home banking apps .
According to the report, most of the Defi protocol support came from venture capital (VC) firms, initially with “725 crypto projects, many of which are Defi. ) he poured $14 billion into.”
As to what the next defi summer will likely trigger, the report points to the derivatives and options sector, where he is looking to invest in GMX. Major platforms like have seen “significant growth in the market.” Number of users and TVL. From $108 million he was at TVL at the beginning of 2022, GMX confirmed that this value had increased to $480 million by the end of October. Another platform whose token price fell 90% in a year, Dydx, “has made over $50 million in revenue and maintains over 1,000 weekly active users.”
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