The decentralized finance market keeps setting records in terms of blocked funds, but this does not lead to a significant increase in the number of its participants.
The number of funds blocked in DeFi services has grown almost tenfold – to $ 93.13 billion over the past year. The tokens of these projects have become one of the most profitable assets on the market, some of which bring investors multiple income.
However, many market participants believe that there is more to DeFi than just high ROI. In their opinion, decentralized services are able to compete with the traditional financial sector, reaching about 2 billion people. In particular, those who do not have access to traditional banking services.
The main argument of DeFi supporters is that with DeFi and smart contracts, financial transactions are much faster and cost much less than traditional banks. In their opinion, already now, almost anyone who has a smartphone can create their own digital wallet, invest or apply for loans using DeFi services. However, the picture looks different.
DeFi services have relatively few users. According to Dune Analytics, the total number of unique addresses in DeFi at the end of July was only 3 million.
These are representatives of a certain group of people. Cryptocurrency exchange Gemini found out that the average age of American crypto investors is 38 years, and their annual income is about $ 110 thousand. Moreover, 74% of them turned out to be men. Similar data was provided by the eToro trading platform: only 15% of its users are women. And usually they are institutional.
Another study by Chainalysis shows that over 60% of DeFi transactions were over $ 10 million in transactions from large institutional investors. According to experts of the analytical company, this suggests that at this stage of development, the decentralized finance market is more of an insider club than a mass segment.
DeFi is primarily about experimentation and innovation. But at the same time it is also a philosophy. For example, the largest number of users of Infinity Axies, a play-to-earn blockchain game, are the poor in the Philippines. For many of them, this game has become the main way to feed themselves and their families during the pandemic.
The problem is not only that we are talking about low-income people or people without documents, without whom it is impossible to start using banking services. For example, in Latin America, many do not legally have any property rights. For this reason, they cannot get a loan secured by real estate in a traditional bank and are forced to use alternative financial services. And for them, DeFi is just one option.
The homogeneity of participants in the DeFi market is largely due to the fact that it is still in its early stages of development. Over time, it can become more diversified, and the total number of its users can grow significantly.
The main barrier for users is not the complexity of the technology, but financial literacy and knowledge of information security. Otherwise, DeFi really opens up opportunities for everyone, regardless of gender, age, race, or income.