DeFi remains popular amid explosion in crypto usage: a16z report

The decentralized finance ecosystem continues to grow despite recent challenges, with overall crypto usage reaching record levels, venture capital firm Andreessen Horowitz (a16z) said in a new report.

In its “State of Crypto” report published on October 16, a16z noted that the crypto industry has witnessed a huge increase in activity over the past year. The industry’s growth trajectory is “reminiscent of the early adoption of the internet.”

For example, in September 2024, 220 million addresses were seen interacting with protocols in the blockchain ecosystem; this was more than three times the figures recorded in late 2023. Approximately 100 million of these active addresses were located on Solana (SOL), a blockchain network that has seen massive growth. in operation.

Other networks seeing a significant increase in active addresses include Solana, as well as Near Protocol (NEAR), Coinbase’s layer-2 network Base, Tron (TRX), and Bitcoin (BTC).

Stablecoin and crypto regulation

The report also highlighted various growth metrics and key issues surrounding the crypto industry since a16z’s first State of Crypto report in 2023.

An important takeaway is that cryptocurrency has become a major political issue during the US elections. But the United States lags behind the European Union and the United Kingdom in public engagement on crypto regulation.

The market has also seen significant developments, including the regulation and use of stablecoins. Stablecoins, in particular, have become one of the top 20 holders of US Treasuries, with the Coinbase report showing significant growth in Q3 2024. Major players include Tether’s USDT and Circle’s USDC.

Additionally, infrastructure improvements and the increasing intersection of blockchain technology and artificial intelligence have further supported the growth of the industry.

DeFi continues to grow

DeFi was one of the crypto areas with the most usage in daily active addresses last year.

“Since the arrival of DeFi in the summer of 2020, decentralized exchanges, or DEXs, have grown to account for 10% of spot crypto trading activity, all of which occurred on centralized exchanges just four years ago,” the reports said.

DeFi protocols across the ecosystem now have a total value locked of over $169 billion. Top platforms include Lido, Aave, Uniswap, EigenLayer, WBTC and ether.fi. These decentralized platforms continue to attract users as traditional financial institutions such as US banks face ongoing challenges.

According to a16z, the top blockchains in terms of developer activity or interest include Ethereum (ETH), Solana, and Bitcoin.

While Ethereum still attracts the most developer activity with a 20.8% builder rate, Solana has seen significant growth in this sector, rising from 5.1% in 2023 to 11.2% in 2024.

Base also saw a significant jump in developer activity, rising from 7.8% to 10.7% year-on-year. Noting an increase in DeFi-related activity, Bitcoin saw an increase in interest from builders from 2.6% to 4.2%.