Blockchain and cryptocurrency analysis firm Chainalysis released its report on the ‘Global DeFi Adoption Index’ on the 24th. Every year the firm publishes its yearly crypto adoption Index, however this year, it has also included DeFi adoption to its list of index reports.
The ranking released by the firm analyzed 154 countries around the world on the basis of three metrics to highlight countries with the highest DeFi adoption by individuals. It was revealed that while cryptocurrency adoption was seen most in emerging countries, DeFi adoption was more prevalent in high-income countries.
Overall, three metrics were analyzed by the company to conclude their research. The analysts then calculated the geometric mean of metrics of each country and normalized the value on a scale of 0 to 1. A country’s ranking depended on how much its calculated value was closer to 1.
The three components used were: total retail value received by DeFi platforms, individual deposits to DeFi platforms, and on-chain crypto value received by DeFi platforms weighted by PPP per capita
The top countries in terms of DeFi Adoption were the US at the first position and subsequently, the ranking descended to Vietnam, Thailand, China, and the UK.
The researchers noted that the countries with higher ranking were mostly middle to high-income countries or countries with already-developed cryptocurrency markets.
It was likely due to the tendency of having a well-developed professional and institutional investor market since those countries have seen high raw volumes of cryptocurrency value move in markets.
The majority of the web traffic to DeFi protocols was seen by North American countries from April 2019 to June 2020, with western Europe adding in substantial growth from September 2019.
The report also revealed a breakdown of what kind of users are using DeFi by analyzing the share of transaction volume by transaction size for DeFi protocols compared to the cryptocurrency transactions.
The study observed that large transactions account for a large proportion of all transactions in DeFi, indicating that the proportion of large institutional investors in DeFi is extremely high. It noted:
“Large institutional transactions, meaning those above $10 million in USD, accounted for over 60% of DeFi transactions in Q2 2021, compared to under 50% for all cryptocurrency transactions. Professional, large retail, and small retail-sized transactions also accounted for a bigger percentage of all cryptocurrency activity compared to DeFi activity in that same time period.”