DeFi users have grown massively this year despite the crypto market downturn. The total number of blockchain wallets that have interacted with DeFi protocols surpassed the five million mark for the first time, a new report by HashKey Capital reveals.
Further, the emerging niche saw its user growth increase by an average of 44% each quarter in 2022. This increase is notable as it coincides with the same period during which the total value locked (TVL) across DeFi protocols dropped from over $175 billion at its peak to approximately $40 billion at the time of writing. With the five million user wallet milestone breached in the third quarter of the year, per the report, the DeFi sector saw an increase in the number of new users despite the market downturn.
Decentralized Finance (DeFi) came into the limelight in the summer of 2020. Although pioneered by the Ethereum developer ecosystem, many prefer to trace DeFi’s origin to Bitcoin as it is the first decentralized monetary system. DeFi grew to a total of $15 billion in its total value locked in 2020 and has remained in the public spotlight since then.
The Hashkey Capital report notes that increased venture capital investments were one of the primary drivers of DeFi growth. VCs invested over $14 billion in cryptocurrency startups this year, with a significant portion of those flowing to DeFi projects.
DeFi Protocols Show Resilience
The crypto market has struggled lately, buoyed by the collapse of several centralized platforms, including Celsius, BlockFi, Hodlnaut, and FTX. Amid the collapse, however, the DeFi sector remains relatively unscathed, largely because of these protocols’ transparent and code-enforced nature.
The recent fallout of centralized lenders evidently bodes well for the DeFi ecosystem. The resilience of leading DeFi protocols through the recent market collapse may have helped the industry gain the trust of more investors. This connotes the huge potential of the ecosystem to grow exponentially in the coming years.
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