Market Potential for DeFi Larger Than Current Target

The Decentralized Finance (DeFi) market still has a seemingly large and unrealized market outside of males aged 20 – 39 which currently dominate interest in it, according to an aspect of Coingecko’s Q1 report which touched on the topic.

The Asian aggregator came up with the finding after running a survey between March 19 and 29 among members of the crypto community to gain insight on their level of awareness of DeFi services going by the promising outlook of this evolving aspect of the crypto space which has gained more ground and gotten bigger of late.

The survey finds that 89% of users who have heard of DeFi are male and majority are aged between 20-39 and 89% (619/684) of the participants have heard of DeFi at least once in the past three months. Over 90% of the users have traded cryptocurrency recently and more than half of them reports that they are familiar with DeFi.

Described by Jason Wu, CEO of DeFiner, as coming with “a true fundamental change” that “will have a big impact on people’s financial transactions,” the DeFi market has seen a huge boost recently. Reports say new trading tools and financial products built using DeFi protocols have grown rapidly over the past two years. In fact, the industry grew from having less than $700 mln assets locked by industry leaders such as MakerDao, Compound and others in December 2019 to more than $1 bln by the beginning of 2020.

The milestone of the first billionth dollar in crypto loans was generated on the seventh largest DeFi platform in locked assets, DYdX. It was supposedly driven by consecutive monthly all-time highs during February and March of more than $250 million and $400 million respectively.

The jump indicates a growing market interest in more efficient related services as seen in the case of several new projects. Dharma, a peer-to-peer (P2P) lending platform, now has a new feature which enables users to send USD to any Twitter handle regardless of whether the recipient has a Dharma account or not. All the user has to do is to deposit funds into their Dharma accounts and the USD could be sent to the recipient who also stand the chance to earn interest rates immediately upon receiving such funds.

Despite a decentralized lending protocol, bZx, was exploited twice in five days in Q1 losing about $1 mln, DeFi has also caught the attention of new interests like an early advocate of Bitcoin, Erik Voorhees. Recurring exploits through complex transactions that incorporate the use of flash loans and multiple DeFi applications and reflect the need for improved security did not deter the ShapeShift exchange founder from buying an Israeli startup Portis which has been integrated into more than 70 Defi applications to join the DeFi movement.

Though Ethereum-based DeFi’s user-side remains small, with an average number of more than 40,000 monthly user – 90% of which are using decentralized exchanges – according to Binance Research, new developments on Ethereum-based DeFi are expected to gain momentum this year owing to reasons such as more prominent cross-chain interoperability solutions.

Stablecoins and their use are also expected to grow with the rise in DeFi services, going by the survey findings. With 54% of crypto users who are familiar with DeFi willing to go completely bankless with not trusting the banking system as their main reason, stablecoins are expected to be owned more by the recent traders as these pegged currencies are used mainly as trading pairs for most exchanges.

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