The Global DEFI Adoption Index... Driven by Institutional Investors in Rich Countries...
You might think that DEFI is driven by relatively small, individual investors, but according to some recent research by ChainAnalysis, it is primarily driven by larger investments by institutions, mainly based in wealthier, developing countries.
Alongside the more general Crypto Adoption Index, ChainAnalysis also monitors the adoption of Defi applications globally.
The top ranking DEFI countries for 2020-2021 are as follows:
The index uses three indicators which form the basis of an overall ranking given to each country:
- On-chain cryptocurrency value received by DeFi platforms weighted by PPP per capita
- Total retail value received by DeFi platforms
- Individual deposits to DeFi platforms weighted by PPP per capita.
High to Middle Income Countries lead the way on DEFI investment
Unlike with the more general crypto adoption index, which measures crypto moving in and out of exchanges (generally), where developing countries seem to be overtaking more developed western countries, this is the opposite with DEFI.
As you can see from the map below it is clearly the wealthier countries which are more likely to move funds into and out of DEFI applications...
You can see from the chart below that over the last year, large institutional investment has grown to make up 40% of the DEFI market.
Meanwhile large retail (I guess what you might call BTC or ETH whales and the most of the rest of us) has shrunk from 15% to somewhere around 2%.
And investment is mainly led by larger institutions...
Final Thoughts....
On the one hand this is a funny kind of decentralisation, where large institutions have been piling into DEFI rather than individuals.
On the other hand I guess I should say thanks for the cash, without this money flowing in there's no way some of the insane DEFI yields we've all enjoyed over the past year would have been possible!
It will be interesting to see whether these trends continue into 2022... there's a lot more scope for growth in DEFI, but with more diversification it makes it more difficult to predict which project to invest in!
Posted Using LeoFinance Beta
