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High-income countries, which have significant cryptocurrency usage, have the strongest Decentralised Finance, or DeFi, adoption, according to the Global DeFi Adoption Index 2021 report. DeFi means a set of decentralised cryptocurrency platforms that run autonomously and do not need the support of a central company or group. DeFi Index is designed to highlight grassroots adoption by individuals.
DeFi adoption has been powered by experienced cryptocurrency traders and investors looking for new sources of alpha in innovative new platforms…,” the report said. Alpha means the return on investment beyond a benchmark.
US tops
The US is at the top of the DeFi adoption index. Vietnam, Thailand, China and the UK also figure in the top.
India has been ranked at the 6th position.
“Large-scale traders, ranging between individuals operating at a professional level to crypto-focused hedge funds, have presented themselves as DeFi’s leading adopters to date,” said David Gogel, Growth Lead at DeFi protocol dydx.
Adoption of DeFi protocols, however, remains at an early stage relative to the wider crypto industry, the report said.
It said that while DeFi adoption has risen over the past 18 months in both emerging and developed markets, most of that growth has occurred in countries and regions with higher incomes and more professional investors and traders.
DeFi has gained significantly over the past year as the total value of crypto assets in this part of corner of the market rose from roughly $5 billion to $159.52 billion, according to data tracker DeFi Llama.
According to Kimberly Grauer, director of research at Chainalysis, the majority of DeFi use cases are “more sophisticated” applications that have posed challenges for retail investors to embrace.