Chainalysis: DeFi Whales Have Created World’s Biggest Crypto Economy
According to Chainalysis, a blockchain data firm a rising number of institutional investment in the decentralized finance (DeFi), has created the world’s largest cryptocurrency economy.
Chainalysis writes in a recent report that the digital economy in Central, Northern, and Western Europe (CNWE) has grown massively, referring to crypto whales investing into DeFi space since July 2020.
“CNWE’s transaction volume grew significantly across virtually all cryptocurrencies and service types, but especially on DeFi protocols. An influx of institutional investment, signaled by large transactions, drove most of the growth, though retail activity also increased.
Large institutional cryptocurrency transaction value grew from $1.4 billion in July 2020 to $46.3 billion in June 2021, at which point it made up more than half of all CNWE activity.”
The research and data firm points out that majority of all institutional-sized crypto transfers over the last year ended up going to DeFi platforms.
“The data shows that over the last 12 months, the majority of large institutional-sized transfers went to DeFi platforms. Given that, it’s not surprising that the majority of those large institutional transfers were made in Ethereum (ETH) and wrapped Ethereum (wETH), an ERC-20 token of equivalent value to Ethereum commonly used in DeFi protocols.”
The report also looks into crypto usage among the different classes of digital assets, such as stablecoins.
“Stablecoin usage is consistently between 25% and 30% of all transaction volume for most countries. Altcoin usage is similarly consistent at 8% to 11% for most regions.
However, we see more variance in the breakdown between Bitcoin and Ethereum or wETH. Combined, Ethereum and wETH are the most popular cryptocurrency in nearly every country.”
$1 trillion of digital assets in last year alone ended up in CNWE region, the amount represents 25% of activity worldwide.
