Institutional investors dominated the DeFi scene in Q2: Chainalysis report

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The DeFi market appears to no longer be the domain of retail players alone, as the footprint of institutional investments in the crypto market segment continues to reach greater levels.

According to blockchain intelligence firm Chainalysis, institutional investors played a major role in the adoption of decentralized finance (DeFi) in the second quarter of 2021.

In its soon to be released Global DeFi Adoption Index report, Chainalysis said:

Large institutional transactions, that is, those over $ 10 million in USD, accounted for over 60% of DeFi transactions in the second quarter of 2021, compared to less than 50% for all cryptocurrency transactions. “

Indeed, DeFi has become a major draw for big players in recent times, with banks and financial institutions starting to commit funds to the crypto market segment.

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The trend likely means diversifying interests by offering Bitcoin-related investment products to large-cap investors looking to tap into the growing DeFi scene.

The Chainalysis preview report also showed a growing dichotomy in adoption measures for DeFi and the broader crypto market. As emerging markets continue to show greater adoption of legacy crypto assets like Bitcoin (BTC), DeFi activity would be driven by institutional players in large economies.

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Related: DeFi Literacy: Universities Adopt Decentralized Financial Education

Meanwhile, regulators are increasingly focusing on the DeFi market, with the United States Securities and Exchange Commission (SEC) recently launching an investigation into Uniswap, the ecosystem’s largest decentralized exchange.

Stricter monitoring protocols targeted at the DeFi market have been a major topic of discussion for regulators in major economies. In August, SEC Chairman Gary Gensler identified DeFi as one of the seven crypto-related policy issues for the Commission.

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Gensler also objected to the decentralized nature of DeFi protocols, saying that many platforms are “highly centralized” and will require licensing from authorities.

The surge in the DeFi market since July has been somewhat punctuated by recent price cuts, with the locked-in total face value of the market slipping below the $ 100 billion mark.