Retail actors alone do not dominate the decentralized finance (DeFi) system any longer, institutional investors are also delving into the market according to Chainalysis’ Q2 report.
Institutional investors played a big influence in De adoption in Q2 2021, according to blockchain research firm Chainalysis.
Chainalysis noted in its soon-to-be-released “Global DeFi Adoption Index” report:
“Large institutional transactions, meaning those above $10 million in USD, accounted for over 60% of DeFi transactions in Q2 2021, compared to under 50% for all cryptocurrency transactions.”
Indeed, in recent years, DeFi has become a major lure for big-money players, with banks and financial institutions beginning to invest in the crypto market.
The development is likely due to a shift in focus from supplying Bitcoin-related investment products to large-cap investors wishing to participate in the rapidly growing DeFi market.
The Chainalysis preview report also revealed a growing divide between DeFi and the broader crypto ecosystem in terms of adoption metrics.
Institutional actors in large economies are apparently driving DeFi activity while emerging regions continue to demonstrate higher adoption of classic crypto assets like Bitcoin (BTC).
Meanwhile, regulators are increasingly focused on the DeFi market, with the Securities and Exchange Commission of the United States recently launching an investigation into Uniswap, the ecosystem’s largest decentralized exchange.
Stricter DeFi market monitoring measures have been a prominent debate point among authorities in major economies. Chairman Gary Gensler of the Securities and Exchange Agency (SEC) highlighted DeFi as one of seven crypto-related regulatory challenges for the commission back in August.
Gensler has already argued against DeFi protocols’ decentralized character, claiming that many platforms are “very centralized” and will require government authorization.
The DeFi market’s recent price drops have tempered the market’s ascent since July, with the market’s nominal total value locked dipping below $100 billion.
