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28 October 2021
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This is How Defi Made Europe the World’s Biggest Crypto Economy

Arecent Chainalysis report shows that Central, Western and Northern Europe (CWNE) together received $1 trillion in crypto transactions over the past year. A whopping 25% of total crypto transactions last year saw their destination in Europe making it the world’s biggest crypto economy.

Defi
Source: Chainalysis

The Chainalysis report noted that CWNE’s crypto transactions volume grew significantly for most of the crypto assets especially Defi and it played a key role in helping it top the crypto economy. Although retail activity also spiked, institutional investment drove the majority of the transactions, of which 50%  went towards Defi.

Institutional Investors Soaring Demand For Defi Put Europe on top

Chainalysis analysis showed that crypto transactions to the CWNE region started to grow from July 2020 but exploded in a year’s time. Institutional investors drove the majority of the transactions as their investment grew from $1.4 billion in July 2020 to $46.3 billion in June 2021. These institutional transactions made for half of the total transactions in the region.

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Another interesting factor revealed that the majority of institutional transactions over the past 12-months were made towards defi platforms. Data showed that the majority of institutional funds were converted to Ethereum and wrapped Ethereum (wETH), an ERC-20 token used on Defi. The following chart shows the movement of funds into different defi protocols.

“DeFi protocols represent three to four of the top five services in most months, with Uniswap, Instadapp, and dydx making frequent appearances. Binance and Coinbase, meanwhile, remain the most popular centralized exchanges. “

Defi
Source: Chainalysis

Defi’s rising popularity is no secret which has grown into a multi-billion dollar industry within two years time. The popularity of the Defi market is quite visible from the institutional trends in Europe, and a similar trend can be seen in the US as well. The total value locked in defi protocols is currently at $173 billion and with the recent China crypto ban, many expect the number to grow further as Chinese traders flock to Defi after a ban on centralized exchanges.

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