On the one hand, DeFi projects had countless hacks and one of the most disastrous collapses in tech/internet history with Terra. Combined with macro conditions, these factors caused the DeFi market to decline significantly, even more than other blockchain sectors, last year.
On the other hand, you can’t have GameFi without DeFi, and NFT marketplaces are increasingly integrating DeFi elements like staking and tokenization.
In the year’s second half, NFTs and GameFi overtook DeFi in public and investor interest. However, DeFi is far from dead. Even though the vast majority of DeFi projects ceased to be active (as this list will show), several protocols and categories performed well, indicating that—weathering the storm so far—they are likely to survive the bear market and thrive in the future.
In the spirit of DYOR, we’ve collected the most important stats about DeFi from 2022, so you can look into the industry. By looking back on the year, you can make smarter investments and analyses in the future.
9 Stats about the DeFi Market
- The total TVL in DeFi decreased from $267B at the beginning of January to $53B by the end of the year.
The crypto DeFi sector had a rough year, whose downturn kicked off with Fed rate hikes, exacerbated by the collapse of Terra and continued hacks, collapses, and macro conditions.
Reference: DeFi TVL
- The total number of DeFi protocols increased from 1,080 in January to a peak of 1596 in September, then remained nearly stagnant.
Note that not all of these protocols are active. As seen in Stat 9, less than 100 are currently active.
Reference: Monthly Total Number of DeFi Protocols
- The biggest collapse in DeFi history happened from May 4 to May 14 with the collapse of Terra
The Terra network was a Layer 1 blockchain known for its high yields and algorithmic stablecoin, UST.
Reference: Terra Dashboard
- DEXs remained the largest type to DeFi protocol with 34% of total TVL, while lending protocols increased from 18% to 20%
This is unsurprisingly, given that DEXs play a critical part in DeFi infrastructure. In the future, lending protocols will have a more difficult time considering the consequences of over-leveraging in 2022.
Reference: TVL Distribution on Different Category (2021) and TVL Distribution on Different Category (Click to Explore More)
- The market cap of DeFi tokens reached its peak on April 3 at $243B, 4% below its ATH ($253B) from the previous year on Dec. 26
This stat has the market cap of DeFi tokens as the sum of tokens issued by DeFi protocols. It does not include L1 and L2 tokens commonly used for DeFi, like Ethereum and Solana.
Reference: DeFi Token Market Cap vs BTC Market Cap
- As of Dec. 31, the market cap of DeFi tokens was $40.52B
By comparison, the market cap of BTC on this date was $318.41B
Reference: DeFi Token Market Cap vs BTC Market Cap
- From the end of November to the beginning of December, BTC had its biggest price decorrelation from the S&P 500 in recent history, reaching -0.83
The stock market correlation index is measured from a 1 to -1 scale, with 1 indicating the two sets of prices are always moving in the same direction and -1 that they’re never moving in the same direction.
Reference: 2022: BTC & S&P 500 Price Correlation Analysis
- The Fear & Greed index reached its yearly low on June 6, at 6 (extreme fear)
By comparison, it reached the 8-10 range in the immediate aftermath of the Terra Luna collapse and remained above 10 after the FTX collapse.
Reference: 2022 Token Price VS F&G
- The number of active DeFi projects declined 33% year-on-year
An active project is defined by Footprint Analytics’ average daily active users in the past five days is greater than 100.
Reference: Active Projects by Chain
6 Stats about Chains for DeFi
- All 10 of the biggest chains for DeFi TVL ended the year with fewer active DeFi protocols than they started with
Active projects make up a tiny portion of total protocols, with most failing to have any TVL.
Reference: Active Projects by Chain
- BNB consistently had the most active projects throughout the year, fluctuating between 24 to 49, and the most active users, 150K to 550K
With the benefit of having both the world’s largest CEX, Binance, and the BNB Smart Chain, Binance can offer competitive ecosystem incentives and grants.
Reference: Active Projects by Chain
- As of the end of the year, Polygon has the 2nd highest number of active protocols, 12, while Ethereum has 8
Polygon is an EVM L2 solution with a strong performance in 2022 across several sectors of the blockchain industry, especially DeFi and gaming.
Reference: Active Projects by Chain
- Ethereum has the 2nd highest number of total protocols, at 129
The Ethereum network made DeFi possible and was the first mover in the industry. However, it’s congestion, and high gas fees have severely limited possibilities for developers.
Reference: Active Projects by Chain
- At its peak on April 6, Terra had a TVL $103.9B
This metric made it the 2nd biggest chain, surpassing BNB in December. Note that by TVL, Ethereum consistently had the highest
Reference: TVL by Chain (Except Ethereum)
- Ethereum had the highest TVL throughout the year, rising from $106.7B to $972.8B, then falling back down to $171.2B
Reference: TVL by Chain
- Terra excluded, Solana had the most significant percentage drop in TVL from ATH, sliding 96% from $16B to $600M
Solana had several highly promising GameFi and DeFi projects at the start of the year and looked like it could be a contender for overtaking Ethereum. However, these failed to be sustainable.
Reference: TVL by Chain
5 Stats about DeFi Protocols
- UNI had the highest market cap out of all DeFi protocol tokens
UNI is the governance token of Uniswap, the world’s largest and most popular DEX. It is based on Ethereum.
Reference: Top 5 Protocol Token Market Cap
- The only DeFi protocol token that increased YoY was Lido’s IDO, going from $247M to $896M
Lido allows users to optimize returns on their staked assets by tokenizing their deposits.
Reference: Top 5 Protocol Token Market Cap
- DEX protocols make up 26% of total DeFi TVL
Reference: Proportion of DEX TVL
- Curve is the largest protocol by TVL as of Dec. 31 with $3.6B
Curve is one of the original DeFi protocols built to generate yield on stablecoins.
Reference: Proportion of DEX TVL
- USDT, also known as Tether, remained the largest stablecoin by market cap and had a $66.2B on Dec. 31.
Tether is an asset-backed stablecoin that’s seen its share of controversy in 2022. However, despite USDC reaching $10B in TVL in the summer, USDT has expanded its lead since then.
Reference: Top 5 Stablecoins by Market Cap
4 Stats about DeFi Investment
- The largest funding round of the year was a $400M Lithosphere Network seed round in May led by Gem Capital.
According to its website, Lithosphere “is a next-generation network for cross-chain decentralized applications powered by AI and Deep Learning.”
Reference: DeFi Fundraising Stats
- The enormous Lithosphere round helped make January the largest month by the amount of investment, with $643M
Reference: DeFi Fundraising Stats
- January had the most rounds of 2022, with 69
Reference: DeFi Investment Amount in 2022
- DeFi was the second most popular type of project by funding round in both 2021 and 2022, but while DeFi accounted for 23% of a total round in 2021, it accounted for 18% in 2022
Reference: Investment Funding Breakdown in 2021 & 2022 This piece is contributed by Footprint Analytics community by Daniel, Jan 2023. Data source: Stats about the DeFi Industry from 2022
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