1.2. Current Market
Despite significant fluctuations in the overall cryptocurrency market capitalization over recent years, blockchain CeFi and DeFi protocols have continued to grow at an impressive rate.
As the more mature and established of the two, CeFi has flourished with an influx of institutional investors entering the cryptocurrency space. As an example, Coinbase, the largest blockchain CeFi platform, hit the milestone of its first 2 million users in 2014. As of April 2022, Coinbase has over 89 million registered users with a trading volume of over $US335 billion every quarter.
DeFi, although younger than its centralized counterpart, has grown near exponentially in recent years with the total value locked (overall value of assets deposited in transactions) rising from US$600 million in late 2019 to an all-time high of US$276 billion in December 2021.
Given the significant growth in DeFi, it is important to consider the possibility of a market bubble pop in future. Some market commentators have speculated that the high prevalence of scams, fraud and hacks in DeFi may stimulate a groundswell of negative sentiment towards it, eventually resulting in consumers seeking out safer ways to invest in cryptocurrency, such as CeDeFi. Of note, in 2021 there was an estimated US$10 billion of investors’ funds lost from DeFi contracts due to malicious actors.
As CeDeFi is so new it is not yet possible to ascertain its true market value, however if we compare it to the size of CeFi and DeFi, we can safely say it is somewhere in the billions to trillions of dollars.
Moonfarm has already started to penetrate this market, making it one of the earliest projects to take advantage of it and gain a strong foothold.
Chart 01.Blockfi, Celsius, Nexo’s user growth in 2019 and 2020.
Chart 02. Blockfi, Celsius, Nexo’s total asset value growth in 2019 and 2020.