Are you looking for the latest DeFi Statistics in 2023?
I and my team spent over 30 hours combing the internet to find the best picks that tell the current trends and predict the future of DeFi.
Here’s to an eye-opener for you.
What is DeFI?
DeFi is short for Decentralized Finance. It is a new system of financial technology whose foundation is somewhat based on the one used by cryptocurrency.
For instance, it makes use of the secure highly distributed ledgers used in the world of cryptocurrency.
The DeFi system makes financial instruments available without any form of reliance whatsoever on intermediaries like banks and exchanges.
With DeFi platforms, people can lend or borrow money from others, speculate on price movements, buy and sell cryptocurrencies, get insurance against different types of risks, and get interests over funds saved just like in the regular savings accounts.
DeFi Growth Stats
Bitcoin was launched in 2008, and since then, major trends have been emerging in the blockchain industry. This has shifted the course of the whole blockchain ecosystem as well as the entire financial economy.
Decentralized Finance is one such trend that emerged from the rise of Bitcoin.
The exponential growth that was noticed in the DeFi market shows that digital currencies and other decentralized finance platforms are a very likely alternative to traditional systems of finance in the coming years.
As DeFi grows, it keeps creating a foundational layer for blockchain-based financial services that require no permission within our emerging digital economy.
DeFi Experienced Exponential Growth in 2020 Due to Comp
The exponential growth of DeFi began in the summer of 2020. This growth of DeFi is all thanks to Compound.
This was because, in May 2020, Compound launched its COMP governance. This enabled users to earn COMP as a method of exchange for liquidity on their platform.
Compound is a lending protocol based on Ethremium and is as autonomous as it can be. It allows users to borrow or lend digital assets.
DeFi Market Size Decreased by Over 25 Billion USD Within One Week in May 2021
When measured by the amount of cryptocurrency that was locked, the DeFi market size decreased by well over 25 billion United States Dollars within one week in May 2021.
Perhaps, this reduction was caused by the great increase in the price of about 100 different cryptocurrencies which led to the reduction in the number of investors. An increase in transaction fees of Ethremium could also be considered a factor.
DeFi Growth is Attributed to 3 Factors
The growth of DeFi can as well be attributed to the various advantages which DeFi has over traditional finance. These include:
When finance is centralized, numerous intermediaries are involved every time an individual makes payments.
These intermediaries include the issuing bank, the acquiring bank, the payment gateway, among others. This long chain of intermediaries makes the cost of each transaction.
However, using DeFi, the transaction can be carried out with the use of blockchains.
The whole process of transaction processing and settlement is broadcast on the network.
This completely and effectively eliminates the need for intermediaries and reduces the cost of transaction processing unlike in traditional finance.
Yield seeking (Lending, Borrowing)
Using DeFi, it is very easy to get cryptocurrency loans without the traditional finance system.
It involves the peer-to-peer transfer of credit from the borrower to the lender.
This decentralized system is practiced through smart contracts. MakerDAO, Aave and Compound are the three top lending-borrowing protocols on DeFi, and over 4 billion US dollars loans have been issued on Compound alone.
Trading (Exchanges and Liquidity)
In the general finance market, a great deal of capital is required for one to be an independent market-maker.
As a result, the power is in the hands of a few large institutions that can afford the startup capital.
With DeFi, however, a level playground will be provided for all and sundry to become liquidity providers to a trading pool and earn yield through Uniswap or other automated market-maker protocols.
Between May 2021 and June 2021, the Estimated Cryptocurrency Cap of Various Cryptocurrencies Reduced Drastically
Between May 2021 and June 2021, the estimated cryptocurrency cap of various cryptocurrencies reduced drastically because, during this period, digital coins were a less likely investment tool.
This may be attributed to China’s effort to stem the mining and the expansion of cryptocurrencies within China.
Bitcoin price has been erratic, and unfortunately, the prices of other cryptocurrencies often follow the trend set by Bitcoin.
While the price fluctuation often attracts people who intend to buy when prices are low and sell when prices are high, it is for this same reason that only a few firms accept cryptocurrency as a system of payment.
Ethereum (ETH) Statistics
18 Million US Dollars Worth of Ethereum was Sold Between July 22 and September 2, 2014
The first time Ethereum gained awareness was in early 2014. This was because Buterin brought the concept of blockchain to the public eye during a Bitcoin conference held in Miami.
Consequently, over 18 million US dollars worth of Etremium was sold between July 22 and September 2, 2014. The sale of Ethereum was done in Bitcoin.
Below are some Ethremium Statistics:
NVT Ratio – The Market Cap Against the Number of Transactions on the Blockchain of Ethereum (ETH) From January 1, 2020, to January 9, 2022
Ethereum market sentiment was bullish in April and May 2021. The Network Value to Transactions or NVT ratio compares the number of transactions of a particular coin in a day to the market cap of the coin in question.
This is somewhat comparable to the coin P/E ratio. When the NVT ratio is low, it implies that the volume of the cryptocurrency is growing faster than the market cap of the coin (Bullish or Optimistic), and a high ratio means it is bearish or negative.
Average daily gas price of Ethereum from august 2015 to February 2, 2022
The network fees Ethereum paid to miners anytime transactions were initiated on the blockchain was tripled between October 2020 and March 2021.
The transaction fees(gas/Gwei) were low until 2020.
The increase was because Ethereum was coping with increasing amounts and more complex transactions. This increase led to the increase of Ethereum gas prices for all users, especially NFT transactions across various segments.
Number of Ethereum Transactions per Day on the Blockchain from August 2015 to January 9, 2022
Ethereum was processed more than one million times per day in early 2021. This figure has stayed relatively stable in recent years. When compared to other cryptocurrencies, this transaction volume was significantly bigger.
Mining Profitability of Ethereum per Day from July 2015 to February 23, 2022
Between 2020 and early 2021, Ethereum mining made more money, and profits sometimes doubled within a single month.
While mining cryptocurrencies, a computer tries to solve complicated logic puzzles to verify transactions in the blockchain.
After completion of the process, the miner receives cryptocurrency as a block reward.
Whether a miner can make a profit will then depend on various costs or whether the hardware used is efficient or not.
Market Capitalization of Ethereum (ETH) from August 2013 to February 28, 2022
The Ethereum market cap grew to over 250 billion united states dollars in April 2020.
That was the first time Ethereum achieved that. In August of the same year, however, the market capitalization was only half that amount.
At that time, compared to the market cap of bitcoin, Ethereum was not as popular.
Ethereum ETH/USD Price History up Until March 4, 2022
In November 2021, the Ethereum (ETH) price in US dollars reached over 4,800 U.S. dollars.
Like Bitcoin, the price of Ethereum increased in 2021, 2021 but the reason for the increase in price was different from that of bitcoin.
For Ethereum, the increase was because a piece of art was sold as the world’s most expensive NFT at 38,000ETH, an equivalent of 69.3/dollars.
The growth of Bitcoin and the however was catalyzed by the IPao of Us’ biggest crypto trader, Voinbase.
The growth of ETH was majorly fueled by new developments that led to excitement among cryptocurrency traders. For instance, the Berlin update of April 2021 meant to create a system of reduced ETH gas prices.
The Unisawap V3 of May 2022 was also expected to help in optimizing ETH trading.
Bitcoin (BTC) Statistics
BITCOIN had increasingly gathered interest since it was introduced into the market in 2009 by Satoshi Nakamoto whose identity/ identities remain unknown today.
In 2020, the global search of BITCOIN was a lot higher than searches for Ethremium, and Google Trends even stated that interest in BITCOIN was particularly high in non-Western countries.
Bitcoin Trading Volume on Online Exchanges in Various Countries Worldwide in 2020
In 2020, interest in Bitcoin and other cryptocurrencies was noticed to be higher in Latin America and Africa.
This was a lot more interesting than in the world’s most developed economies. This conclusion was reached after the analysis of the volume of Bitcoin trading against domestic currencies.
Additionally, a study calculated based on domestic currencies–assuming transactions in pounds were by UK residents and transactions in USD were made by US residents– proved this point.
Based on this study, in 2020, about 420 million USD were used to buy Bitcoin on an exchange as compared to the 400million USD worth of Nigerian naira.
Number of Bitcoins in Circulation Worldwide from October 2009 to January 9, 2022
The figures for the number of Bitcoin in circulation have been increasing since it started circulating in late 2009.
Nonetheless, the total number of Bitcoins in circulation has not been drastically influenced by any increase or reduction in price between 2017 and 2020.
Biggest Cryptocurrencies in the World Based on 24H Volume on January 10, 2022
In 2020 and 2021, Bitcoin became twice as popular as it used to be. The popularity surge was a result of the growing price levels.
However, Bitcoin was not the most traded cryptocurrency in online exchanges. Based on the analysis of the 24-hour trading volume of various cryptocurrencies, the much lesser-known Tether took the position of most traded cryptocurrency – ahead of Bitcoin.
This outcome was somewhat different from the market cap league table. These two virtual coins nevertheless were the only ones that reached 100billluon USD, with Ethereum following with about a 50billion USD.
Daily transactions of Ethereum however tend to be a lot higher than that of Bitcoin.
Bitcoin Market Dominance – its Market Cap Relative to the Market Cap of all Other Cryptocurrencies in the World – from April 2013 Up Until FEBRUARY 21, 2022
After a long decline, in October 2021, the dominance Bitcoin has in the market increased after a long decline.
This occurred following the news that the United States Securities and Exchange Commission would decide on a Bitcoin ETF. This dominance ratio is one of the oldest and often investigated metrics.
The metrics is obtained by measuring the market cap relative of a coin relative to the entire cryptocurrency market. The metrics will then show just how strong
Bitcoin is when compared to all other cryptocurrencies (altcoins). In early 2021, Bitcoin had more than 50% of the entire market share.
However, it declined in the summer of 2021. This was because DeFi and NFT applications catalyzed an increase in the market cap of altcoins.
Bitcoin (BTC) Price per Day from October 2013 TO March 4, 2022
In 2021, the price of BTC was at an all-time high. Values were over 65,000 USD in February, April, and November, 2021.
The rise in February was as a result of events surrounding Tesla and the April rise was as a result of events surrounding Coinbase. In February, Tesla announced that it acquired 1.5 billion USD worth of Bitcoin. This statement fueled public interest.
However, in April, the mass interest was corrected when there was speculation on government regulations.
An electricity blackout in Xinjiang, China also reduced the amount of Bitcoin being mined, causing some investors to withdraw.
This blackout affected BTC mining because the highest BTC mining in the world is done in China.
The November 2021 hike in the price of BTC was as a result of the launch of the Bitcoin ETF in the US.
Trending DeFi Projects in 2023
DeFi is one of the fastest-growing parts of blockchain. It has over 221 billion US dollars in total value locked.
DeFi, unlike traditional finance, requires little capital and allows all and sundry to participate.
It is loved by individual investors and institutions because it is decentralized and open to everyone.
Successful DeFi projects like Compound,PancakeSwap, Aave,Uniswap, SushiSwap,MakerDAO, among others were witnessed between 2020 and 2021.
It should not come as a surprise then that in 2022, more massive DeFi projects that will overcome the shortcomings of previous projects will be witnessed.
Even though only a little part of DeFi 2.0 has happened, the impact has been felt. Below are the best 5 upcoming projects of 2022:
In 2021, Terra, like many other cryptocurrencies grew by almost 13,000 percent. However, its price has fallen in 2022.
Terra, often called the next generation of money, is a DeFi ecosystem that is underpinned by stablecoins.
The idea behind it is the creation of a completely digital system of finance that is based on stablecoins.
In Korea, Terra’s Chai payment platform is widely accepted by many merchants. Its saving platform is also becoming popular.
The value of a stablecoin is pegged to a commodity that is independent of cryptocurrency or even an actual fiat currency. Terra is an algorithmic stablecoin, and unlike stablecoins backed by fiat currencies, it uses smart contracts to issue coins. This is done using the Luna token.
Aave, just like Terra, is decentralized. It is a lending platform. On Aave, people can lend, borrow, and earn interest. Cryptocurrency can be deposited for interest, and become part of the lending pool.
This works by making deposited cryptocurrencies available to borrowers. The interest paid by borrowers is then given to those same people who deposit.
Interest gotten from Aave is usually high because there are no middlemen. Aave is top of DeFi list of lenders in total value that is locked on the platform.
To fully understand this DeFi project, an understanding of Oracles and Smart contracts is needed.
A smart contract Is a piece of code that is set to be automatically executed if a certain thing occurs. For example, if a building is insured against a fire outbreak, the smart contract would automatically pay out in the event of a fire outbreak.
An Oracle on the other hand works together with a smart contract. This is because data used by the smart contract is collected by Oracle.
The Oracle is what lets the Smart Contract know when it should be triggered.
CLOVER FINANCE (CLV)
The three above are popular cryptocurrencies. However, if one needs a small altcoin that has potential for growth, Clover is a nice alternative.
The building block of Clover is the creation of a cryptocurrency that works across various cryptocurrency platforms.
For instance, there are various alternatives to Ethereum. As a result, it becomes essential for them to communicate with each other. This is where Clover comes in.
Its blockchain can support applications and assets from other top networks (eg. Ethereum, Solana (SOL), and Binance Smart Chain).
I hope you found these stats insightful. You might also want to check out the best DeFi courses. Also check out DeFi Pro review and BlockGeeks Review.
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