Decentralized Finance Market [2021-2031] - Growth and Analysis
The Decentralized Finance market is expected to register a CAGR of 32.6% in 2023–2031. Integration with traditional finance and focus on security and audit are likely to remain key Decentralized Finance market trends.
Decentralized Finance Market Analysis
Decentralized finance, or DeFi, is an emerging digital ecosystem that enables people to transfer, buy, and exchange financial assets without relying on banks, brokerages, or exchanges. DeFi avoids the regular channels for doing financial transactions. DeFi's emergence might be pretty significant. It not only foreshadows a new type of financial technology, but it also promises an entirely new financial horizon.
Decentralized Finance Market Overview
The finance industry is undergoing fundamental transformation, most of which is being driven by new forms of financial technology (FinTech). Blockchain is perhaps one of FinTech's most breakthrough fields. Blockchain-based technologies such as cryptocurrencies and DeFi are enabling whole new financial products and services, potentially reducing reliance on legacy gatekeepers and traditional finance industry stakeholders. Decentralized finance (DeFi) has had a dramatic effect on finance today, as outlined below. The widespread adoption of DeFi technology has resulted in a new paradigm of financial goods and services that use blockchain and tokenized digital assets.
REGIONAL FRAMEWORK
Decentralized Finance Market Drivers and Opportunities
Decentralized Exchange Platforms to Favor Market
A decentralized exchange (DEX) is a peer-to-peer marketplace for cryptocurrency buyers and sellers. In contrast to centralized exchanges (CEXs), decentralized platforms are non-custodial, which means that a user retains custody of their private keys when dealing on a DEX platform. In the absence of a central authority, DEXs use smart contracts that execute themselves under predetermined conditions and record each transaction on the blockchain. Uniswap, Sushiswap, 1inch, and PancakeSwap are examples of popular DEX protocols.
Non-fungible tokens – An Opportunity in Decentralized Finance
Non-fungible tokens (NFTs) are immutable, verifiable cryptographic assets that can represent anything from trading cards to artwork to VIP passes. Recently, NFTs have increased their market share and are soon becoming one of DeFi's largest markets. Blockchain platforms such as Axie Infinity, The Sandbox, and Illivium use in-game play-to-earn systems to reward gamers with various sorts of NFTs. Leading NFT marketplaces, such as Nifty Gateway, have established themselves as the preferred platforms for purchasing and trading NFT cryptoart.
Decentralized Finance Market Report Segmentation Analysis
Key segments that contributed to the derivation of the Decentralized Finance market analysis are component and application.
- Based on the component, the Decentralized Finance market is divided into blockchain technology, decentralized applications, and smart contracts. The blockchain technology segment held a larger market share in 2023.
- By application, the market is segmented into compliance and identity, assets tokenization, payments, marketplaces and liquidity, Decentralized exchanges, data and analytics, stablecoins, prediction industry, and others.
Decentralized Finance Market Share Analysis by Geography
The geographic scope of the Decentralized Finance Market report is mainly divided into five regions: North America, Asia Pacific, Europe, Middle East & Africa, and South America/South & Central America.
North America has dominated the Decentralized Finance market. North America is one of the worlsd’s largest crypto market. It is one of the very early adopter of DeFi. The United States, the region's largest market, topped Chainalysis' DeFi Adoption Index, which tracks "grassroots adoption" of DeFi. Between July 2020 and June 2021, North American addresses received $750 billion in cryptocurrency, or 18.4% of global transactions. Central, Northern, and Western Europe received $1 trillion during that time span, accounting for 25% of worldwide volume, according to Chainalysis' "2021 Geography of Cryptocurrency Report".
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MARKET PLAYERS
Have a question?
Naveen
Naveen will walk you through a 15-minute call to present the report’s content and answer all queries if you have any.
Speak to Analyst
- Sample PDF showcases the content structure and the nature of the information with qualitative and quantitative analysis.
- Request discounts available for Start-Ups & Universities
Decentralized Finance Market Drivers and Opportunities
Decentralized Exchange Platforms to Favor Market
A decentralized exchange (DEX) is a peer-to-peer marketplace for cryptocurrency buyers and sellers. In contrast to centralized exchanges (CEXs), decentralized platforms are non-custodial, which means that a user retains custody of their private keys when dealing on a DEX platform. In the absence of a central authority, DEXs use smart contracts that execute themselves under predetermined conditions and record each transaction on the blockchain. Uniswap, Sushiswap, 1inch, and PancakeSwap are examples of popular DEX protocols.
Non-fungible tokens – An Opportunity in Decentralized Finance
Non-fungible tokens (NFTs) are immutable, verifiable cryptographic assets that can represent anything from trading cards to artwork to VIP passes. Recently, NFTs have increased their market share and are soon becoming one of DeFi's largest markets. Blockchain platforms such as Axie Infinity, The Sandbox, and Illivium use in-game play-to-earn systems to reward gamers with various sorts of NFTs. Leading NFT marketplaces, such as Nifty Gateway, have established themselves as the preferred platforms for purchasing and trading NFT cryptoart.
Decentralized Finance Market Report Segmentation Analysis
Key segments that contributed to the derivation of the Decentralized Finance market analysis are component and application.
- Based on the component, the Decentralized Finance market is divided into blockchain technology, decentralized applications, and smart contracts. The blockchain technology segment held a larger market share in 2023.
- By application, the market is segmented into compliance and identity, assets tokenization, payments, marketplaces and liquidity, Decentralized exchanges, data and analytics, stablecoins, prediction industry, and others.
Decentralized Finance Market Share Analysis by Geography
The geographic scope of the Decentralized Finance Market report is mainly divided into five regions: North America, Asia Pacific, Europe, Middle East & Africa, and South America/South & Central America.
North America has dominated the Decentralized Finance market. North America is one of the worlsd’s largest crypto market. It is one of the very early adopter of DeFi. The United States, the region's largest market, topped Chainalysis' DeFi Adoption Index, which tracks "grassroots adoption" of DeFi. Between July 2020 and June 2021, North American addresses received $750 billion in cryptocurrency, or 18.4% of global transactions. Central, Northern, and Western Europe received $1 trillion during that time span, accounting for 25% of worldwide volume, according to Chainalysis' "2021 Geography of Cryptocurrency Report".
MARKET PLAYERS
DECENTRALIZED FINANCE Market Report Scope
Decentralized Finance Market News and Recent Developments
The Decentralized Finance market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. The following is a list of developments in the market for Decentralized Finance and strategies:
- Coinbase stated that it now offers decentralized finance (defi) services to consumers in over 70 countries. The development follows the company's statement last week that it had purchased BRD wallet and Unbound Security. According to Coinbase, qualifying customers in these countries can now earn yield on Makerdao's defi stablecoin, DAI. (Source: Coinbase, Press Release, 2021)
Decentralized Finance Market Report Coverage and Deliverables
The “Decentralized Finance Market Size and Forecast (2021–2031)” report provides a detailed analysis of the market covering below areas:
- Market size and forecast at global, regional, and country levels for all the key market segments covered under the scope
- Market dynamics such as drivers, restraints, and key opportunities
- Key future trends
- Detailed PEST/Porter’s Five Forces and SWOT analysis
- Global and regional market analysis covering key market trends, major players, regulations, and recent market developments
- Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments
- Detailed company profiles
- Sample PDF showcases the content structure and the nature of the information with qualitative and quantitative analysis.
- Request discounts available for Start-Ups & Universities
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
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to segments covered.
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
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to country scope.
Frequently Asked Questions
The global Decentralized Finance market is expected to grow at a CAGR of 32.6% during the forecast period 2023 - 2031.
Elimination of intermediaries and decentralized exchange platforms are the major factors that propel the global Decentralized finance market growth.
Integration with traditional finance and focus on security and audit are anticipated to bring new Decentralized finance market trends in the coming years.
The key players holding majority shares in the global Decentralized Finance market are Compound, Uniswap, Suffescom Solutions, and Ethereum
In terms of revenue, the blockchain technology segment held the major market share in 2023.
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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