The 2022 DeFi Ecosystem Landscape Report by HashKey Capital

2022 will be remembered as a difficult year for the digital asset industry, but despite the market downturn and crypto price falls, DeFi (decentralised finance) has seen continued user growth and institutional adoption, as many industry professionals remain hopeful that DeFi can considerably outperform many asset classes in 2023.

The Research Team at HashKey Capital recently published its annual DeFi Ecosystem Landscape Report, digging into the current state of the industry. Here are some of the paper's notable findings and key takeaways:

• In H1 2022 alone, VCs have invested over US$14 billion into 725 crypto projects (many of those in DeFi).

• Besides VC money, the sector has attracted a significant number of new users too, with user growth averaging 44% quarter-over-quarter in 2022. User wallets have exceeded 5 million in Q3.

• DeFi's market cap has surpassed many hundred-year-old financial establishments, such as Santander Bank.

• Ethereum has remained the dominant chain in DeFi, responsible for 58% of all DeFi activities, while on DEX-land, Uniswap Labs has maintained its market dominance (~60% of weekly DEX volume).

• 2022 was also the year of bridging DeFi and TradFi; DeFi lending among mainstream financial service institutions, in particular, continued to grow throughout 2022. For example, Société Générale and Huntingdon Valley Bank respectively applied for and received loans from MakerDAO, and J.P. Morgan completed a pilot transaction on Aave using the Polygon public chain.

• The sector has also been increasingly bullish about uncollateralised lending towards the latter end of the year, as its TVL (total value locked) grew from US$26 million in July to US$76 million in October.

• Despite the bear market, the options and derivatives market seem to be thriving. Platforms like GMX and dYdX have been gaining strong popularity, as other derivatives and futures platforms have been grabbing the attention of crypto traders.