Why the rising interest in UNI, Chainlink, AAVE doesn’t tell the whole story

Decentralized Finance (DeFi) is often referred to as the future of digital financial transactions. Now, that is only possible when people are not only willing to accept it, but are also technologically capable of adopting it. So, will only technologically developed countries really adopt DeFi? And more importantly, which country will lead this “global DeFi rally?”

DeFi adoption around the world 

As it turns out, more and more people have been willing to adopt DeFi over the years. They are not limited to developed countries either as names like Vietnam and Thailand rank second and third, respectively, on the Global Adoption Index for DeFi.

Ranking of countries based on DeFi adoption | Source: Chainalysis

As can be seen from the attached chart, based on data from multiple DeFi metrics, every country was assigned a figure between 0 and 1. While the USA leads this adoption, developing countries are equally enthusiastic about DeFi adoption. 

Multiple DeFi startups in Vietnam have been raising funds to develop platforms. In Thailand too, centralized banks such as the Siam Commercial Bank, as well as Kbank, have been making efforts to adopt DeFi.

But, who is actually driving the bus?

Institutions. Ever since the crypto-craze began in 2020, various entities have changed their position on the same. Initially, DeFi was led by industry professionals. Since 2020’s fourth quarter, however, they have changed hands with institutions. In less than a year, institutions’ contribution to the DeFi space has grown from 7% to 65%.

While it was expected that retail traders will grow into this space too, quite the opposite has happened. In fact, retail figures have gone down significantly. Even so, this has benefitted multiple DeFi tokens and their price actions considerably.

Distribution of maximum Defi activity Entity-wise | Source: Chainalysis

Consider this – Leading DeFi tokens such as AAVE, Uniswap, and Chainlink rallied over the last month.

While AAVE rose from $222 to $398, its investors registered more than 82% in profits. Similarly, Uniswap also went up by 94%, touching $28 on the charts. However, it was Chainlink that rose by over 105% as it hit the $28-level as well.

LINK rallied by 105% | Source: TradingView – AMBCrypto

DeFi is beginning to see greater adoption these days, with the same going beyond its technological shackles. This will remain the case going forward, especially as investors continue to earn profits along the way.