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According to a report by Hashkey, the decentralized finance (DeFi) sector sank significantly in 2022, but did not lose its potential and devoted this year to improving its products.
Hashkey Capital, a blockchain investment company, has published a report on decentralized finance. In it, Hashkey claims that DeFi has more scalability potential than traditional finance. Moreover, the report says that decentralized protocols are much more resistant to events such as, for example, the collapse of Terra/Luna.
However, the market conditions prevailing in 2022 contributed to a decline in the value of total assets under management. Lower prices for cryptocurrencies, the report says, also affected the cost of collateral provided for DeFi lending. In addition, activity on decentralized exchanges (DEX) and the volume of cryptocurrency trading decreased.
According to the report, in December 2021, the total blocked value of assets (TVL) in smart contracts reached $180 billion, by May 2022 the figure fell to $150 billion, and by the end of October - to $50 billion. However, some DeFi protocols still show positive dynamics. The rate of implementation of DeFi has also slowed down: in 2021 it was about 550%, and in 2022 it was only 31%.
"In general, 2022 can be called the year in which DeFi projects devoted their time and resources to improving products, rather than advertising activities. The user interfaces of the DeFi protocols have improved significantly — many of them can now be said to be much more convenient than some banking applications," Hashkey experts write.
Formerly the Financial Crimes Enforcement Network (FinCEN) The USA announced that it intends to study how decentralized finance affects the situation with crimes in the banking sector.
