July 25, 2024
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Chainalysis reveals How DeFi Whales Created the Biggest Crypto Economy in the World

Blockchain Technology

The Current spike of institutional investment in the decentralized finance (DeFi) space is creating the world’s largest cryptocurrency economy. Also, This is confirmed in a report by Blockchain data platform Chainalysis.

Furthermore, the firm explains how the rise of the digital economy in Central, Northern, and Western Europe (CNWE) is in connection with crypto whales pouring funds into DeFi starting in July of last year.

“CNWE’s transaction volume grew significantly across virtually all cryptocurrencies and service types, but especially on DeFi protocols…”
“…An influx of institutional investment, signaled by large transactions, drove most of the growth, though retail activity also increased…”

“…Large institutional cryptocurrency transaction value grew from $1.4 billion in July 2020 to…”
“…$46.3 billion in June 2021, at which point it made up more than half of all CNWE activity.”

DeFi Platform’s Data

More so, Chainalysis expresses that bigger part of all institutional-sized crypto transfers over the last year ends up going to DeFi platforms.

“The data shows that over the last 12 months, the majority of large institutional-sized transfers went to DeFi platforms…”
“…Given that, it’s not surprising that the majority of those large institutional transfers were made in Ethereum (ETH)…”
“…and wrapped Ethereum (wETH), an ERC-20 token of equivalent value to Ethereum commonly used in DeFi protocols.”

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Notably, In CNWE region, the United Kingdom, France, Germany, and the Netherlands leads by volume.

Furthermore, Chainalysis goes on to show further details regarding crypto usage among the different classes of digital assets.

“Stablecoin usage is consistently between 25% and 30% of all transaction volume for most countries…”
“…Altcoin usage is similarly consistent at 8% to 11% for most regions.”

” However, we see more variance in the breakdown between Bitcoin and Ethereum or wETH…”
“Combined, Ethereum and wETH are the most popular cryptocurrency in nearly every country.”

Conclusively, CNWE processes over $1 trillion of digital assets in the last year, amounting to 25% of activity worldwide.