- DeFi adoption has grown in multiple folds this year
- Centralized Finance issues with regulations and security driving the adoption growth
Decentralized Finance (DeFi) has witnessed a massive surge in its usage and adoption this year. Different DeFi protocols have played a major role in the different innovations that have totally changed the way blockchain networks work.
While it is no longer news that DeFi applications and protocols are built on Ethereum; the second most popular crypto asset has been able to break into Bitcoin’s on-chain transfers. This is because the network has attracted investors who hitherto focused on Bitcoin to look at its different features.
Due to this reason, DeFi adoption has grown to an all time high in this year.
In previous years, Bitcoin miners were confident of earning through the transaction fees generated from the platform. However, this appears bleak recently due to the increased difficulty in earning block rewards.
The current DeFi adoption has initiated a massive shift away from centralized finance systems. Users have embraced decentralized platforms and this can be seen in the improved trading volume. The trading volume as of last year was 1% but presently, it has grown to 10%.
And MetaMask also saw its user base increase to over one million.
Despite teething issues, DeFi adoption has grown
Despite issues like expensive gas fees, network congestion and other issues, DeFi adoption has grown in this year.
This is because of the constant issues users tend to face with CeFi. Users face challenges of regulations and different security challenges.
Accordingly, around March this year, transactions in centralized exchanges dropped while there was an increase in newly registered Ether wallets.
To put it in simple terms, Eth has shifted how crypto exchanges work. Many of them are looking to embrace different DeFi products as users now store and trade their assets in custody