NEW DELHI: DeFi or decentralized finance represents one of the fastest growing and most innovative sectors of the cryptocurrency economy, and India ranks sixth in terms of DeFi adoption, according to DeFi Global Adoption Index 2021 by blockchain data platform Chainalysis.
The United States had the highest adoption of DeFi, followed by Vietnam, Thailand, China and the United Kingdom.
DeFi refers to a class of decentralized cryptocurrency platforms that can operate on their own without the support of a central company, group, or individual.
DeFi platforms are built on blockchains enriched with smart contracts – primarily the Ethereum network – and can perform specific financial functions determined by the code underlying smart contracts. Popular types of DeFi protocols include decentralized exchanges and lending platforms.
“India’s dominance in adopting Defi indicates that crypto investments in India are widespread and deeply rooted in the country’s economy. I think it would be wise to say that in India most of the businesses and the crypto community are behind the adoption of Defi. There is an urgent need to bring Defi to the masses to transform the Indian financial system and prepare it for the future. When the Indian masses start adopting Defi adoption, we will see India at the top of the Defi adoption index, ”said Shivam Thakral, CEO of BuyUcoin.
According to data from Chainalysis, while grassroots cryptocurrency adoption is typically highest in emerging markets, DeFi adoption is highest in high-income countries that already had significant usage. of cryptocurrency, especially among traders and institutional investors.
The DeFi Adoption Index is made up of three parameters: the value of on-chain cryptocurrency received by DeFi platforms weighted by PPP by capital; total retail value received by DeFi platforms; and individual deposits on DeFi platforms.
The data also showed that large transactions represent a much larger share of DeFi business, suggesting that DeFi is disproportionately popular with large investors compared to cryptocurrency as a whole. Large institutional transactions, those over $ 10 million, accounted for more than 60% of DeFi transactions in the second quarter of 2021, compared to less than 50% for all cryptocurrency transactions, according to Chainalysis.
Previously, another report from Chainalysis had shown that India ranked second in the world in terms of crypto adoption behind Vietnam, but ahead of countries like the US, UK and China.
Additionally, the report suggests that global crypto adoption has jumped over 880%, with P2P platforms driving the use of cryptocurrency in emerging markets.
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