Togo is the only country ranked in the top 20 on Chainalysis upcoming DeFi Adoption Index. This is an impressive performance for the West African Nation of just 8 million people after it was ranked 3rd in Africa and 9th in the world in Chainalysis 2021 Crypto Adoption Index.
Chainalysis DeFi Adoption Index is a measurement created by the blockchain research firm that ranks countries based on DeFi adoption.
Similar to its 2021 crypto adoption index, the DeFi Adoption Index is designed to highlight countries with the highest grassroots adoption by individuals rather than those sending the largest raw values of funds.
However, while the crypto adoption index ended up with emerging market nations dominating the top 20, DeFi usage is strongest in high-income countries that already had substantial cryptocurrency usage, especially amongst traders and institutional investors.
The 2021 DeFi Adoption Index list is dominated by established ecnomies such as United States, China and Russia. Togo is the only African nation among the few emerging market countries present in the top 20.
The index measures metrics based on:
On-chain cryptocurrency value received by DeFi platforms weighted by PPP per capita
Total retail value received by DeFi platforms
Individual Deposits to DeFi platforms
The index also reveals the significant influence that institutional investors now play in the DeFi space.
Here are the key stats and findings concerning the impact of institutional investments have in the sector:
The data shows large transactions make up a much bigger share of DeFi activity, suggesting DeFi is disproportionately popular for bigger investors compared to cryptocurrency as a whole
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
Countries with the historically largest institutional and professional markets are driving the most DeFi activity
Speaking on why DeFi access is limited to a select few, David Gogel, Growth Lead, dYdX, said:
“Right now, DeFi is targeted towards crypto insiders,” he said. “It’s people who have been in the industry for a while and have enough funds to experiment with new assets. In the long run as ETH gas prices fall, it’ll become accessible to more people.”
– Growth Lead, dYdX
According to Chainalysis, emerging markets are driving cryptocurrency adoption – with people turning to them out of necessity.
In contrast, despite the index being weighted to favor grassroots adoption, DeFi adoption has primarily been powered by experienced cryptocurrency traders and investors looking for new sources of alpha.