HashKey Capital Releases Upbeat DeFi Report as Crypto Winter Weakens Case for CeFi

HashKey Capital has released its 2022 Annual DeFi Ecosystem Report, analyzing the current state of the decentralized finance industry.

The report by the leading Asian cryptocurrency fund concluded that despite the cryptocurrency winter, the digital asset market remains thriving and full of potential.

“While the broader cryptocurrency sector has been depressed throughout 2022, there is good reason to be optimistic about the future of a still nascent DeFi sector that continues to attract a staggering amount of venture capital,” said HashKey, pointing over $14 billion invested in a total of 725 crypto projects in the first half of 2022 alone.

In addition to VC money, the DeFi sector has also attracted a significant number of new users, with user growth averaging 44% quarter-over-quarter in 2022. Wallets surpassed 5 million users in Q3 2022.

Compared to traditional finance, DeFi’s market capitalization is now larger than that of Santander Bank and poised to approach that of many other tier-1 banks, the report found, highlighting that around 25% of the fastest 400 companies growth in the Fintech sector today are actually crypto/blockchain focused companies.

DeFi emerges when centralized systems have failed this year

Jupiter Zheng, Research Director of HashKey Capital, commented: “Many centralized financial systems have failed this year, the market has realized that DeFi, which is entirely chain-based and highly transparent, could be the answer to the market dilemma. innovation of non-compliant financials.”

DeFi is dominated by Ethereum, which hosts 58% of all assets, with the top six segments of the market being DEX, Lending, Asset Management, CDP, Derivatives, Insurance and Staking, generating a total of $8.2B of commissions.

There have been some encouraging signs for institutional exploration in DeFi as well, with Huntingdon Valley Bank, a Pennsylvania Chartered Bank, gaining lending approval in MakerDAO with an initial debt ceiling of $100 million and a target of 12 million. months of $1 billion.

Societe Generale has also applied for a $30 million loan from MakerDAO and is currently under evaluation. Elsewhere, JP Morgan recently completed a pilot transaction on the Aave protocol and ING has been exploring the use of Aave loans, according to the report.

Other promising signs for DeFi include the emergence of new segments this year, including the area of ​​unsecured lending to TradFi institutions.

HashKey Capital is an asset manager with over $1 billion in client assets operating in Hong Kong and Singapore and investing exclusively in blockchain technology and digital assets. The firm has strong connections in Japan and the US and since 2015 has invested in over 200 projects from public chains, protocols, DeFi, CeFi, Web3 infrastructure, NFT to Metaverse.

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