Summary of DeFi Growth in 2022

• User numbers for the DeFi sector increased by 31% quarter-on-quarter in 2022, despite the year-long crypto winter.
• Total value locked (TVL) is now below $40 billion as per DeFiLlama.
• Projects have used the crypto winter to build and improve their products, attracting more users and increasing user wallets across DeFi segments to more than 5 million people by Q3, 2022.

DeFi Sees 31% Jump in Users Despite Crypto Winter

The decentralized finance (DeFi) sector continues to attract more users with strong products and services across segments such as decentralised exchanges, lending protocols and staking. In 2021, user numbers skyrocketed 545% as cryptocurrencies boomed on the back of a staggering bull run. While DeFi statistics for 2022 show a decline in user growth amid the year-long crypto winter, the sector still witnessed a 31% increase in users quarter on quarter according to HashKey Capital’s latest report on DeFi growth.

Total Value Locked (TVL) Below $40 Billion

HashKey Capital analysts highlighted that not only is DeFi eating into traditional finance markets but it’s also curving its own new market – what they refer to as a „blue ocean market“. As of Q3 2020, total value locked (TVL) was below $40 billion as reported by DefiLlama while overall user wallets across various protocols had surpassed 5 million. It is estimated that this number will grow even further passing 5.5 million by Q4 2022 with an 8% projected growth rate during that time period.

Projects Use Crypto Winter To Build & Improve Products

A look at market prices shows that most assets in the space have plummeted in value and the DeFi index has shrunk by 76%, compared with a 65% decline for Ethereum. However, projects have used this time of uncertainty to build and improve their products which ultimately attracted more users and increased demand for decentralized finance solutions.

Conclusion

Overall, despite the crypto winter taking its toll on many assets within decentralised finance sectors such as TVL values shrinking substantially compared to last year’s highs; user numbers are still growing steadily with projections suggesting over 5 million wallets within this space before the end of 2022.