DeFi Statistics 2022: Market, Usage & Revenues

 

Decentralized Finance is taking the world by storm. The days when we needed an intermediary, such as banks, to process any kind of payment are now long gone.

DeFi offers a unique opportunity to take a different direction from the one we’ve been following for years.

It’s not just about trading on crypto exchanges - it’s about a wide variety of applications that have a determined purpose and impact on our daily lives.

Clearly, DeFi is still really new - it didn’t explode until just five or six years ago.

But now, DeFi is becoming the king of the Internet realm.

In today’s statistics article on our site, we are going to provide you with the research we performed about the following topics:

• DeFi statistics in 2022 everyone must know;
• Understanding DeFi, its goals and objectives;
• What to expect about Decentralized Finance in the future.

Key DeFi Stats

Before deep-diving into the Decentralized Finance world, it’s imperative to access some useful statistics that serve as appetizers for all the data we are about to present to you:

• According to The Block, cumulative revenue on DeFi protocols surpasses $4.5 billion as of March 2022;
• 2021 was the year where cryptocurrencies and DeFi spaces experienced an unprecedented growth across all markets in all forms and shapes;
• More and more companies are betting on blockchain technology as a firm solution and alternative to the standard finance functionality that we have experienced during the past years;
• DeFi can be applied to many different sectors: prediction markets, insurance, lending resources, tools, and more. It’s not limited just to trading strategies on a crypto chain;
• Although the decentralized nature of DeFi prevents us from having access to in-detail records of users, the estimations show that millions of users all over the world (more than 80 million) are already participating in DeFi projects.

What Is DeFi?

DeFi, which simply means Decentralized Finance, is an emerging technology that aims at removing centralized parties from financial transactions, such as banks and brokerages.

As a consequence, all operations on DeFi services take place in distributed ledgers such as the one used by cryptocurrencies, such as Bitcoin.

Peer-to-peer protocols and financial networks ensure the efficiency of transactions by leaving aside intermediary platforms that used to have control over services and operations in any industry.

Many people who decide to invest in a DeFi protocol do so primarily thanks to the many advantages and resources offered by DeFi apps and platforms.

Advantages on the DeFi Industry

In order to understand the Internet “Boom” around DeFi, we must see the value offered by this new emerging concept:

• Your money and assets aren’t held by custodians, such as banks, anymore - they are stored on decentralized crypto wallets that work with Bitcoin, Ethereum Blockchain, and other chains;
• The fees charged by financial institutions are eliminated from transactions. Nevertheless, using DeFi services is not free, but fees are often way cheaper;
• Transaction time is faster than ever - forget about waiting days for a fiat transfer to process;
• Decentralized finance does not require lengthy verification processes on your account - anyone can have access to the market without needing to provide personal documents.

DeFi Growth & Popularity

Just a couple of years ago, DeFi wasn’t what it is today.

Of course, trading in the crypto space has been a thing for years now, but the market size of Decentralized Finance seems to have no room.

According to DeFi Pulse, the total value locked by DeFi platforms has exponentially grown since 2020.

Back in 2018, the data shows that DeFi wasn’t getting the attention that it’s indeed receiving as of today:

But, besides the total value locked by DeFi platforms, the enormous impact that blockchain technology has had in our modern world will be more than obvious in the next 2 years.

An analysis performed by the IDC and quoted by Yahoo! Finances says that the overall spending in decentralized networks has grown from $1.7 billion in 2019 to $6.6 billion in 2021.

Likewise, it’s expected for this industry to reach a global spending of $19 billion as soon as 2024, meaning that the access to DeFi services will be more standardized in transactions and platforms that haven’t taken this technology into account just yet.

Total Number of Cryptocurrencies in 2022

Fiat money isn’t a thing in DeFi platforms. Each investment is performed in the form of cryptocurrencies, which users can have access to if they create a wallet to perform any kind of payment.

According to Statista, there were only about 2,400 cryptocurrencies back in 2020, and this number almost doubled to 4,050 cryptocurrencies in January 2021.

Nevertheless, as of March 2022, there are well over 16,000 cryptocurrencies around.

This proves that the market size of DeFi has exponentially grown during all 2021, and it’s expected to continue growing in 2022 and beyond.

Notable Decentralized Finance Platforms

In the Defi Pulse platform ( DeFi Pulse), you can find a list where they analyze different projects and data related to any investment performed on the DeFi Ecosystem.

If we analyze decentralized applications and platforms from a total balance acquired perspective, then this is our top 5:

1. Oasis App: with a market cap of $2.02 billion as of March 2022, the Oasis App acts like the best entry point to the Maker Protocol, which helps newcomers to create and easily deploy their capital in a trusted DeFi portfolio;
2. Curve: Curve is defined as an exchange liquidity pool on the Ethereum Blockchain. Being a liquidity pool, it allows users to earn lending interest in coins, as well ad providing decentralized exchanges features dedicated exclusively for stable coins;
3. WBTC: Have you heard of Wrapped Ethereum on the Ethereum Blockchain? WBTC is the first ERC-20 token backed 1:1 with Bitcoin. It has a total locked value of $11.42 billion, according to DeFi Pulse, and it’s used to provide liquidity to the Ethereum Network through DEXes and DApps.
4. Aave: Aave is defined as an open-source, non-custodial protocol where users can become liquidity providers and others can access lending and insurance services from liquidity pools. As of March 2022, it was a locked nominal value of over $10 billion;
5. UniSwap: The UniSwap ecosystem is a decentralized exchange where you can swap tokens on the Ethereum Network. Decentralized exchanges can be accessed through non-custodial, software wallets, such as Trust Wallet and MetaMask. You don’t need to create an account nor complete KYC processes - having access to this market is as easy as it gets.

DeFi Users

DeFi would be nothing without users. The whole point of DeFi financial products it’s to give the user base complete control over their money and assets.

DeFi protocols back up and prioritizes the user above everything by giving the power of decision inside all financial instruments.

According to Statista, there are currently 86.8 million users with crypto wallets all over the world.

Nonetheless, some sources say that crypto users are currently more than 300 million worldwide, and this number can reach 1 billion in December 2022.

Since most wallets support Bitcoin, this analysis has been performed taking Bitcoin wallets into account.

Managing a DeFi portfolio can only be done through a wallet account, which is why users must search for a wallet that suits their needs efficiently.

Then again, due to the decentralized nature of DeFi, it is not possible to determine the exact number of users that have already taken part in DeFi protocols across all different platforms.

Crypto Digital Assets Owner by Country

What’s more, an analysis performed by Triple A shows crypto ownership across different countries, showing active users who have somehow contributed to increasing the market size around the DeFi concept:

1. There are more than 100 million crypto owners in India;
2. In the second place, the statistics show well over 27 million people own crypto in the USA;
3. Russia is in third place, with over 17 million crypto holders;
4. Countries like Nigeria, Brazil, and Pakistan complete the list with from 10 to 13 million users each.

It’s difficult to make statistics assumptions for Asian countries due to government laws against crypto, as it happens in China.

Likewise, Triple A research shows that overall, 79% of crypto owners are male and just 21% are female.

On the same page, this seems to be a market that interests people under 34 (58%) more than other age groups.

DeFi Revenue

TheBlockCrypto.com has created in-detail graphics that show the total revenue value of different DeFi spaces in 2022:

1. For starters, if we take protocols such as UniSwap, PancakeSwap, and Trader Joe, the average daily revenue is $8.8 million as of March 2022;
2. This information can be extrapolated in order to estimate a monthly market revenue of $96 million in March 2022, but it can go as high as $511 million as it happened in November 2021;
3. The cumulative value revenue, based primarily on CryptoFees information, is more than $4 billion in March 2022 - astonishing!

DeFi Funding

The potential that DeFi platforms have is now being acknowledged by investors all over the world.

As a consequence, DeFi projects are receiving fundings valued at millions of dollars.

Among the most relevant ones, we have:

• Treehouse, a DeFi Analytics Firm, raised 18 million in a seed funding round in March 2022;
• Thetanuts Finance, a platform that aims at offering DeFi trading, lending, and insurance services with minimized risks, raised 18 million seed funding to fuel its growth in February 2022;
• Element Finance, a DeFi fixed-rate protocol, raised 32 million in late 2021;
• Pillow, a new DeFi investment platform, received a 3 million funding in order to provide better security and safety measures to their newly created platform.

DeFi Job Market

One of the best things about DeFi is the immense job market being created around this industry.

As we can see on DeFi.jobs, new crypto careers are emerging among projects that need specialized professionals to continue growing.

Among the main DeFi market careers and jobs, we have the following:

• DeFi Developers;
• Blockchain Engineers;
• DeFi Business Developer Managers;
• DeFi Marketers;
• DeFi Product Manager;
• DeFi Strategist and Operations Manager;
• And more.

DeFi Opportunities and Risks

There are two sides to every story, and we must take a look at the other side of the coin as well.

Of course, DeFi projects clearly seem like a big opportunity that brings value to a sector with unlimited growth projection, but this isn’t always the case.

The Global Association of Risk Professionals is quite aware of the dangers and risks associated with some DeFi projects.

First and foremost, not all projects are aimed at a newcomer audience.

As a consequence, performing your own research is imperative in most DeFi platforms out there.

Investing without having the required knowledge might lead to catastrophic economic results in the short and long term.

This creates the need for standardization to take over DeFi projects sooner than later.

Otherwise, the complexity and lack of intuitiveness might result in general “gatekeeping.”

Decentralized Finance Sector in 2022 and Beyond

It is not a secret to anyone that the infrastructure and regulation behind the DeFi Space are (and will continue to be) a debatable topic in the years to come.

DeFi is just getting started - we are barely experiencing the tip of the iceberg.

According to Cointelegraph, DeFi can grow up to 100 times more in just 5 years - jaw-dropping, isn’t it?

There’s still a long way to go, but as long as the massive standardization of blockchain technology continues, the future of DeFi has a lot to deliver.

Worry not - GroFollowing will always be here, providing you with the latest DeFi and crypto content!

FAQ

What Are Smart Contracts in the DeFi Space?

A Smart Contract is a public and accessible program that runs mainly on Ethereum, and it automatically executes a previously set transaction based on blockchain protocols.

You can learn more about Smart Contracts at Ethereum.org.

Is Investing in DeFi Risk-Free?

No. No investment is risk-free, much less DeFi investments that take place in decentralized environments.

That’s why it’s so important to perform deep research before you create an account on a DeFi platform and decide, for example, to Stake Cake on PancakeSwap.

About the author

Steve

Steve specializes in cryptocurrency and finance. As a born researcher, he won’t leave any stone unturned when it comes to topics he covers.

Oliver

Oliver is GrowFollowing founder and covers topics ranging from fintech to Internet.