HashKey’s Latest Report Highlights A DeFi Sector That’s Poised For Institutional Adoption And Rapid Acceleration

December 23, 2022

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Singapore — News Direct — HashKey Capital

hash key capitalOne of the largest and most prominent crypto funds from Asia has published its annual DeFi Ecosystem Landscape Report for 2022. This report delves into the state of the decentralized finance industry and shows that despite the crypto winter, the market is still thriving and full of potential.

While the crypto industry as a whole has been sluggish through 2022, there is good reason to be optimistic about the future of the nascent DeFi industry, which continues to attract a staggering amount of venture capital. A HashKey report reveals that in the first half of 2022 alone, VCs have invested over $14 billion in a total of 725 crypto projects, including numerous DeFi protocols.

VC money wasn’t the only one flooding DeFi last year. Because the sector has attracted a significant number of new users. His DeFi user growth in 2022 averaged 44% quarter-on-quarter, a very promising adoption curve, suggesting the sector still has a chance to achieve exponential growth. increase. DeFi also achieved an impressive milestone when in the third quarter of 2022 he surpassed 5 million user wallets.

HashKey’s report draws a number of comparisons between DeFi and the traditional financial world, or TradFi. It points out that it is accumulating locked sums of similar magnitude. At its peak, his TVL in DeFi would have ranked him the 20th largest bank in the US. Overall, DeFi’s market cap now exceeds that of Banco Santander and is poised to approach the market cap of many other Tier 1 banks. The report also highlights that around 25% of the 400 fastest growing companies in Fintech today are actually crypto/blockchain-focused businesses.

Taking a closer look at the DeFi market, few would be surprised to find that Ethereum remains the most dominant blockchain in the space, hosting 58% of all activity. The report also highlights the ability of DeFi protocols to sustain themselves, with the top six segments of the market (DEX, Lending, Asset Management, CDP, Derivatives, Insurance and Staking) generating a combined $8.2 billion in fees. is also mentioned.

Pennsylvania chartered bank Huntingdon Valley Bank also looks promising for DeFi institutional investor scrutiny as it secures loan approval at MakerDAO with initial $100 million debt ceiling and $1 billion 12-month target signs can be seen. Société Générale has also applied for a $30 million loan from MakerDAO, which is currently being evaluated. Elsewhere, JP Morgan recently completed a pilot transaction for the Aave protocol, and ING is considering using his Aave loan, reports found.

As interest from TradFi to DeFi grows, the industry benefits from the launch of new products such as Compound Treasury, a tool that allows institutions to access the Compound DeFi protocol in an authorized manner, with KYC checks and clear regulations. may receive Framework.

Other promising signs for DeFi include the emergence of new segments this year, including in the area of unsecured loans to TradFi institutions. The third quarter of 2022 is very bullish for the sector, with TVL rising from $26 million in July to $76 million in October, according to a HashKey Capital report. Unsecured virtual institutional loans are an area of great potential, promising to unlock liquidity for real-world assets. HashKey is also bullish on the emerging market of NFT lending. The report notes that there were 81 different NFT collections with a minimum price of over 5 ETH (around $7,500) as of the end of November, all of which could be used as collateral for DeFi lending. In fact, the report found that his top six NFT collections on Ethereum represented his over 1.4 million ETH collateral. This is equivalent to over $2 billion in fiat currency.

Overall, HashKey’s report takes a very positive look at the DeFi industry overall. It advocates the emergence of a new financial paradigm based on the principles of cooperation, composability, open source code, and open and transparent networks. Adoption by institutions is widely expected to accelerate this increase over the next year, as DeFi infrastructure evolves to accommodate more organizations operating under regulatory compliance requirements.

It’s too early to tell if 2023 will be the year of Summer 2.0 for DeFi. This is because many market participants are waiting for a more favorable macroeconomic environment before engaging in more volatile assets. But if the global economy shows signs of recovery next year, DeFi looks poised to significantly outperform most other asset classes.

“Many centralized financial systems have failed this year,” said Jupiter Zheng, research director at HashKey Capital. I realized that it could be the answer to the dilemma of .

Download HashKey Capital’s DeFi Ecosystem Landscape Report Here.

About Hashkey Capital

hash key capital is an asset management firm that invests exclusively in blockchain technology and digital assets, managing over US$1 billion of client assets since its inception. As one of the world’s largest crypto his funds, known in the region as an early corporate investor in Ethereum, its mission is to bridge crypto to the mainstream while connecting Web2 and Web3. HashKey Capital operates in Hong Kong and Singapore, has strong ties in Japan and the US, and has over 200 projects since 2015, ranging from public chains, protocols, DeFi, CeFi, Web3 infrastructure, NFTs to Metaverse. have invested in