How the Number of DeFi Users Has Evolved over Time
Introduction:
The number of DeFi users is still growing, but their influx has slowed down. Together we will look at several DeFi protocols; for example, we will compare the user bases of Uniswap and Sushi or AAVE and Compound.
Article:
DeFi is the field dedicated to decentralized finance. People can come and use financial services without obstacles imposed by third parties. In this article, we will examine several trends showing how people are starting to use the field more and more.
Total number of DeFi users over time:
User = unique wallet address. Since a real user can have multiple addresses, this chart overestimates the number of real users. I am guessing that the number of real users will be one third smaller, which would amount to approximately 5.25 million DeFi users.
The field can be divided into several categories, and we will look at a few of them below. Each of the attached graphs shows the number of users/addresses over the past years.
1) Exchanges – about 90% of all DeFi users use UniSwap. Another well-known exchange, Sushi swap, has only 12.5% of the users of Uniswap.
2) Moneylenders – I was surprised by the difference between the number of AAVE and Compound users. We can glean interesting information from the following graphs. It looks like AAVE is growing about twice as fast as Compound, but Compound has nearly three times as many users. However, AAVE holds a clear advantage in invested capital. It manages USD 4 billion, while Compound has just over USD 2 billion.
3) Crypto anonymization (Tornado Cash) – of all DeFi users, almost 100 thousand unique addresses decided to use the cryptocurrency anonymization dApp. You can see how the growth has slowed recently. The reason is that the authorities have shut down the front end of this protocol. However, several community front ends are now being created, and the dApp function remains online.
4) Derivatives from Syntetix – this is a higher-class DeFi, and that’s why this dApp has so few users. However, the trend is growing. In short, it deals with the creation of synthetic tokens such as bitcoin on the Ethereum blockchain. All you have to do is lock the bitcoin into the dApp to back the synthetically created token. The same can be done with fiat currencies like USD, EUR, etc.
5) Nexus Mutual’s dApp Insurance – a reportedly undervalued crypto industry. After the developers discovered this project, there was a rapid increase in users, and it has been growing ever since. When the boom happens again and everyone wants to create new projects, I predict that the users’ number will increase again.
This field is more for companies developing protocols, where there isa risk, for example, of an error in the code resulting in loss of money.
Sources: dune.com, www.defipulse.com
analyst opinion
We are in a bear market, where new projects are not growing as quickly, established projects are collapsing, and good ones are still developing at the same pace. DeFi has taken a break from its previous growth rate, but there are still new people discovering and learning about the field.
I like to compare this field to the Internet, as it is the easiest example of the network effect that we have all experienced. And just as the dot-com bubble didn’t destroy the internet, neither will DeFi succumb to another bear market.
Marcus Jr.
Introduction:
The number of DeFi users is still growing, but their influx has slowed down. Together we will look at several DeFi protocols; for example, we will compare the user bases of Uniswap and Sushi or AAVE and Compound.
Article:
DeFi is the field dedicated to decentralized finance. People can come and use financial services without obstacles imposed by third parties. In this article, we will examine several trends showing how people are starting to use the field more and more.
Total number of DeFi users over time:
User = unique wallet address. Since a real user can have multiple addresses, this chart overestimates the number of real users. I am guessing that the number of real users will be one third smaller, which would amount to approximately 5.25 million DeFi users.
The field can be divided into several categories, and we will look at a few of them below. Each of the attached graphs shows the number of users/addresses over the past years.
1) Exchanges – about 90% of all DeFi users use UniSwap. Another well-known exchange, Sushi swap, has only 12.5% of the users of Uniswap.
2) Moneylenders – I was surprised by the difference between the number of AAVE and Compound users. We can glean interesting information from the following graphs. It looks like AAVE is growing about twice as fast as Compound, but Compound has nearly three times as many users. However, AAVE holds a clear advantage in invested capital. It manages USD 4 billion, while Compound has just over USD 2 billion.
3) Crypto anonymization (Tornado Cash) – of all DeFi users, almost 100 thousand unique addresses decided to use the cryptocurrency anonymization dApp. You can see how the growth has slowed recently. The reason is that the authorities have shut down the front end of this protocol. However, several community front ends are now being created, and the dApp function remains online.
4) Derivatives from Syntetix – this is a higher-class DeFi, and that’s why this dApp has so few users. However, the trend is growing. In short, it deals with the creation of synthetic tokens such as bitcoin on the Ethereum blockchain. All you have to do is lock the bitcoin into the dApp to back the synthetically created token. The same can be done with fiat currencies like USD, EUR, etc.
5) Nexus Mutual’s dApp Insurance – a reportedly undervalued crypto industry. After the developers discovered this project, there was a rapid increase in users, and it has been growing ever since. When the boom happens again and everyone wants to create new projects, I predict that the users’ number will increase again.
This field is more for companies developing protocols, where there isa risk, for example, of an error in the code resulting in loss of money.
Sources: dune.com, www.defipulse.com
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