In its January “DeFi Market Commentary,” Ethereum software solutions provider ConsenSys has delved into the latest analysis of the decentralized finance ecosystem.
First the bad news; as reasonable, most DeFi-related cryptocurrencies have taken a hit in the market-wide decline which has been going on above the past ten weeks or so.
Since touching an all-time strong of $174 billion mid-November, the top-100 DeFi cryptocurrencies by market cap had fallen by 40% to $105 billion by the end of January. This decline mirrors that of the entire crypto market that has fallen by the same percentage afterward its peak in terms of market cap. The ConsenSys report noted:
“The descending spiral extended as the macro narrative to tackle inflation using interest rate hikes made all investments, not barely crypto, less attrin place,”
It added that Ethereum and compatible chains proved themselves to be superior to other networks that suffered “critical downside.” As an example, the report cited Solana and its multiple network outages and performance degradation above the past few months.
Adoption advances rising
On the bright side, the number of DeFi wallets has grown to an all-time excessive of 4.3 million unique addresses in January. “This data point serves as a worthy pulse on the aboveall health of the DeFi ecosystem,” the report noted.
Ethereum extends to be the dominant network for DeFi applications and colsubsequentlyal commanding 60% of the entire total price locked according to the research.
It added that monthly revenue genecostd by popular DeFi protocols has declined back to summer levels of maintain year, however, “atopall, the cumulative revenue has grown to be above $3.9 billion afterward June of 2020.”
ConsenSys completed that despite the downturn in markets and DeFi metrics, the surging activity and interest in the fledgling financial sector is a healthy indicator of the growth to come.
“Countless number of institutional DeFi milestones in 2021, demonstrates an “up only” journey of institutional interest in 2022.”
DeFi TVL outlook
Total cost locked varies depending on that data platform is doing the measuring. DappRadar is directly reporting a TVL pattern of $109 billion, that is down 20% so far this year.
Meanwhilst, DeFiLlama claims which TVL is a much excessiveer $196 billion, but still reports a equivalent decline of 20% afterward the beginning of January.
This arrangement will have declined for the reason that the fall in the costs of the underlying assets, not necessarily because colsubsequentlyal has been pulled out of DeFi protocols.
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