• DeFi users increased by 31% quarter on quarter in 2022, with total users projected to exceed 5.5 million by the end of Q4.
• The DeFi sector has seen a drop in Total Value Locked (TVL), but projects are still improving and building their products during the crypto winter.
• HashKey Capital’s report highlights that DeFi is carving out its own blue ocean market with innovative services capturing demand from traditional finance.

DeFi Stats Show Quarter on Quarter Increase

The latest report on DeFi growth by HashKey Capital reveals that users across the sector increased by 31% quarter on quarter in 2022, although this pales compared with the 525% spike seen in 2021. Latest estimates for total DeFi users suggest the number will surpass 5.5 million in Q4, 2022.

Total Value Locked Dropping But Projects Improving

A drop in total value locked (TVL) – it is now below $40 billion as per Defi Llama – doesn’t tell the whole story of decentralised finance in the past one year. Projects have used the crypto winter to build and improve their products, attracting more users despite market prices plummeting and overall DeFi index shrinking by 76%.

DeFi Carving Out Its Own Blue Ocean Market

HashKey Capital analysts highlighted that not only is DeFi eating into traditional finance, or Tradfi market, but it’s also curving its own new market – what is referred to as a “blue ocean market” – which is being driven by innovative services capturing demand from both sectors.

Surpassing 5 Million Users in Third Quarter

Overall, user wallets across DeFi segments such as decentralised exchanges (DEXs), lending, collateralized debt positions (CDPs), bridges, staking and yield, surpassed 5 million in the third quarter of 2022. It is estimated that DeFi users will number more than 5.5 million by the end of Q4 2022, with a growth projection of 8%.

Conclusion: Crypto Winter Doesn’t Deter Growth of Decentralised Finance

Despite an overall decline in user growth amid crypto winter this year compared to last year’s bull run, decentralised finance continues to attract more users through strong products and services across different segments such as DEXs and lending protocols etc., with user numbers expected to reach over 5.5 million at year-end 2022.

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