Although the 2022 crypto winter has been especially cold in decentralized finance (DeFi) land, DeFi’s relevance within crypto has remained stable. Despite rough market conditions, the DeFi industry has quietly kept building and innovating, and gaining new users.
According to data presented by Bitcoin Casinos, the number of DeFi users jumped by 35% year-over-year and hit over 6.7 million in January.
Over 1.8M New Users in a Year
Decentralized finance is defined as any product or service offered by the Web3 world that helps users perform financial activities such as payments, investing, lending, borrowing, trading, and staking.
However, unlike traditional financial services, DeFi eliminates the fees banks and other financial companies charge for using their services, allowing users to hold money in a secure digital wallet and transfer funds in minutes.
According to Dune Analytics data, which analyzed the number of unique addresses involved in buying or selling specific projects associated with DeFi, there were less than 110,000 DeFi users just three years ago. Over the next twelve months, this figure surged by 1,100% and hit over 1.3 million worldwide.
Statistics show between 2021 and 2022, the number of users grew by another 281% and hit 4.96 million in January 2022. The number has continued rising, with more than 1.8 million new users joining the DeFi space since then.
Also, statistics show the number of unique DeFi users has increased by 420% over two years, rising from 1.3 million to 6.77 million as of last week.
Total DeFi Market Cap Still Down by 60% YoY
While the number of DeFi users significantly increased in the last year, the total DeFi market cap, measured by the amount of cryptocurrency locked, is still deep below levels seen in 2021 and the first months of 2022.
According to Trading View data, the DeFi market cap stood at $113.4bn in January last year. After rising to $166.4bn three months later, this figure slumped to $51.8bn in May and continued falling by the end of the year. Statistics show that in December, the amount of cryptocurrency locked in the DeFi market hit a 2022 low of $29.9bn. Although this figure increased by 50% month-over-month to $44.8bn in January, this still represents a massive 60% year-over-year drop.