DeFi is relatively young compared to the general crypto market and even younger compared to traditional finance. Moreover, it had only grown significantly in the last two to three years, when the DeFi market size exceeded its $1 billion milestone.
So let’s look at it in context and see how big it is compared to crypto in general and what DeFi markets dominate global stats.
What Is the DeFi Market Size?
DeFi’s market size is best measured when looking at the total value locked (TVL) in all DeFi protocols. As of November 23, 2022, decentralized finance was worth $54.5 billion.
(DeFiLlama)
Statistics About the Size of the DeFi Market
DeFi’s market size peaked on December 2, 2021 at $181.3 billion.
Total value locked is the parameter closest to market size when it comes to decentralized finance. It started snowballing in 2021, from $15 billion in early January to $124 billion in mid-May. The DeFi market enjoyed relative stability until May 2022, when the collapse of the stablecoin Terra drastically reduced the size of the DeFi market.
(DeFiLlama)
Defi’s share of the total crypto market was 4.3% as of November 23, 2022.
Although talks about DeFi threatening traditional finance have been popular for a while, the size of DeFi is tiny even compared to the cryptocurrency market size overall. DeFi’s dominance (percentage of the overall crypto market) managed to exceed 6% in 2022, but it dropped in May and hasn’t changed much since.
(CoinGecko)
In Q3 2022, DeFi’s market cap was 70% down compared to the beginning of the year.
DeFi is closely tied to the value of ETH, which fell together with the general crypto market this year. However, even though the Merge revived Ethereum in Q3 2022, and the market cap of DeFi increased by 25.6% compared to Q2, the DeFi market cap was still 70% lower compared to early 2022.
(CoinGecko)
The DeFi TVL in the Ethereum blockchain was $23.7 billion as of November 23, 2022.
Although other blockchains like BSC, Tron, and Polygon play an essential role, the backbone of DeFi is Ethereum. The DeFi TVL in Ethereum is more than four times lower than what it was in the same period in 2021, when the total DeFi value locked in Ethereum was over $100 billion.
(Statista, DeFiLlama)
At 37%, DeFi’s share of the total crypto transaction volume is the highest in North America.
When it comes to the share of total crypto transaction volume, North America dominates the global market with 37%. DeFi statistics show North America has a remarkably high DeFi activity, which is not surprising given that some of the largest swaps are located in the US.
(Chainalysis)
India is the biggest DeFi market when it comes to the value of transactions.
In India, DeFi is used for sending remittances and enabling recipients to access them more quickly and at a lower cost compared to traditional financial institutions. Moreover, ETH is a highly popular cryptocurrency in India, accounting for about 40% of the entire crypto transaction value.
(Chainalysis)
Conclusion
The DeFi market size fluctuates in response to the overall crypto market and the general economic situation. It has varied from $1 billion in 2020 to $15 billion at the start of 2021, peaking at over $180 billion in November 2021, only to fall again in 2022. However, the takeaway is that the market is very young—but it has nevertheless found its use in the world’s developing and developed economies alike.
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