Capital Market Focus <Growth and Implications of the DeFi Market>
Based on the research from March 9 to 22, 2021, the Capital Market Focus published by the Korea Capital Market Research Institute studied the growth of the emerging DeFi market.
□ DeFi refers to a decentralized financial service using digital assets based on a block chain, and the market size is rapidly expanding and rapidly rising.
□ The growth of the DeFi market is due to the expansion of the use of digital assets and the legal status of global regulators and governments.
□ Interest in DeFi is increasing in that it can provide various financial services without intermediaries, but risk factors such as technology and security issues and regulatory uncertainty of an open block chain must also be considered.
The size of the DeFi market is continuously expanding, and in particular, the total amount of deposits has increased significantly over the last year, and its use in fields such as loans, decentralized exchanges, asset management, and derivatives shows a big point.
─ According to Defi Pulse, as of March 2021, the total value of DeFi deposits (Total Value Locked) totaled $41.8 billion, up 75 times from $5.6 billion in March 2020.
• Unique Active Wallets also increased from 20,000 in August 2020 to 420,000 as of March 2021.
─ The DeFi service sector currently has the highest lending at 47%, decentralized exchange (DEX) at 36%, and gradually diversifies into asset management (Assets) and derivatives (Derivatives).
─ Currently, while overseas-based platforms occupy a large portion of the market share of DeFi services, a DeFi company was established in Korea and started its service in 2019, and most of them provide loan services.
• As a Korean company, Delio, which started its service in July 2019, is the largest DeFi company and has a deposit amount of $1.69 billion as of March. It is a digital asset loan and deposit service in partnership with Bithumb, a digital asset exchange.
• Recently, big tech companies such as Kakao and Naver are also attempting to expand into DeFi business through subsidiaries in charge of blockchain business.
As such, the DeFi market is gradually growing to the largest scale, and Delio, a company already established as a digital asset finance in Korea, DeFi has the advantage of being able to efficiently provide various financial services without intermediaries, so users’ interest is increasing.
Risk factors such as technical and security issues and regulatory uncertainty of open blockchain should also be considered, the researchers say.
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