Countries whose inhabitants have higher incomes showed higher adoption. More than 60% of DeFi operations exceeded $ 10 million in the second quarter.
According to an investigation carried out by the blockchain analytics company Chainalysis, Argentina and Brazil are the Latin American countries with the highest use of protocols for decentralized finance (DeFi). The two South American countries got ranked 16 and 17 respectively in the world rankings led by the United States of America, Vietnam, and Thailand.
According to Chainalysis, the purpose of this “DeFi Adoption Index” is to know which areas have the highest adoption of these protocols per person. Unlike other statistics prepared previously, the total of funds transferred by the nation was not a central factor for the elaboration of this ranking.
The index gave each country a score of 0 to 1 based on several factors, such as the value of operations and individual deposits compared to purchasing power. In addition to the United States of America, Vietnam, and Thailand, China, the United Kingdom, India, the Netherlands, Canada, Ukraine, and Poland appeared among the top 10, in that order.
Beyond Argentina and Brazil, there is no other Latin American country among the top 20 on the final list. The River Plate nation reached a score of 0.34, while Brazil marked 0.32.
The Chainalysis text highlights that cryptocurrency adoption ranks are generally higher in emerging markets. DeFi adoption has gained strength in higher-income countries with cryptocurrency use.
Especially regarding traders and institutional investors, a situation like this could indicate that the adoption of cryptocurrencies at the lowest economic levels could be due to the need to protect against inflation or the possibility of sending remittances more conveniently, adds the study.
More Details on DeFi Presented by Chainalysis
Decentralized finance is a set of financial services applications based on smart contracts. It is one of the most relevant events of cryptocurrencies in the last 18 months”, according to the study by Chainalysis.
In this area, the research indicates that the countries best positioned in the index appear to be the nations with the highest volumes of transferred cryptocurrencies, both currently and historically.
The data provided by the company highlights that, from April 2019 to June 2020, the vast majority of the web traffic of the DeFi protocols came from North America. On the other hand, Western Europe added a considerable percentage in September 2019.
Since June 2020, more traffic has become visible from outer regions, such as South and Central Asia. Despite including China, East Asian DeFi did not gather enough traffic as other centralized cryptocurrency services.
On the other hand, the data designate that large transactions predominate in Defi, which may indicate that they are “disproportionately popular with large investors.” Operations of more than $ 10 million represented more than 60% of DeFi transactions in the second quarter of 2021. Instead, these amounts constituted less than 50% of cryptocurrency operations in that same period.
The methodology Used by Chainalysis
Regarding the data evaluation method to build the DeFi adoption index, Chainalysis explained that three components helped with the metric. The first was on-chain cryptocurrency funds received by DeFi platforms compared to PPP per capita (average income per capita). This reference serves as a tool to measure the total DeFi activity considering the purchasing power of the inhabitants of an entire nation.
By: Jenson Nuñez
