Report: DeFi's awareness and hype levels are much higher than users' actual participation rates
Original title: 2020 Global DeFi User Survey Report
Source: ARPA & have spent
0x33
In July 2020, the ARPA team sent DeFi questionnaire for blockchain practitioners, blockchain users, cryptocurrency holders, cutting-edge technology enthusiasts and other blockchainrelated users in the ARPA community. The questions in the survey related to the use of wallets and DApp, the involvement of mobile mining and the pain points of using DApp at home and abroad. The Chinese version of the questionnaire collected more than 300 valid answers. The English version received more than 400 valid responses.
2020 was the year decentralized finance (DeFi) became a hot topic. It has many applications, including decentralized exchanges, lending platforms, stabilisation COINS, etc., and hundreds of DeFi projects have emerged in the markets around these application areas.
A liquidity mine run by Compound pushed its asset lock-up to a new high, and COMP's valuation soared, kicking off the DeFi frenzy across the sector. Since then, new DeFi concepts have emerged, including a lending platform, a decentralized trading platform, a decentralized autonomous organization (DAO), a stabilization coin, and a prediction machine. DeFi has become one of the fastest growing areas of encryption.
Among DeFi's many businesses, three stand out: stabilisation currency, decentralised trading platform and lending. DeFi's lending business is growing particularly fast.
Questionnaire background
The majority of respondents (about 70%) are power users who have been in the encryption market for two years or more, 23% have been aware of the encryption market for one to two years, and 7% of respondents are new users who have been exposed to the encryption industry for less than a year. The user survey covered different regions, age groups, occupations and genders. Therefore, respondents are representative of user demographics. In this report, ARPA analyzes the results of the survey, which will be used to understand and explore blockchain-related users' awareness of DeFi, potential needs and usage preferences. Thus, helping ARPA better design DeFi products to meet user needs and ultimately promote the DeFi industry.
The profile
1. Most of the respondents in this survey are senior encryption users, so the conclusions of this report cannot fully represent the behavior of inexperienced users. Given the number of effective addresses for Compound, Uniswap, and Curve, we estimate that DeFi currently has approximately 10,000 users, compared to approximately 5 million encrypted users worldwide, a user penetration rate of only 1%.
2. Surveys show that DeFi's awareness and hype levels are much higher than users' actual participation rates. The single most important reason for user participation is to get an incentive from a liquid mine, or to earn a substantial interest income. To attract users to DeFi products, the total annualized return must exceed 15%.
3. Liquidity mining is an innovative and effective mechanism to attract seed users by subsidizing the financial return on borrowing.
4. Although decentralised wallets are popular among power users in China and around the world, they are mainly used to transfer money and save money. Users of various Dapps accounted for only a third of all respondents. DeFi requires proficiency with the wallet, which requires a high level of user experience and a period of learning for the user.
5. Some respondents felt insecure when using DeFi products driven by smart contracts. Intelligent contract interaction is slow and user experience is poor, which will lead to user loss. Smart contracts typically cost $10- $20, well above the $2 expected for the average user. This creates a situation in which only major players can participate. The Ethereum network urgently needs to be upgraded to meet the needs of ordinary users.
6. At present, DeFi focuses mainly on ERC-20 tokens and has relatively low asset richness. In particular, the lack of a secure BTC guarantee, better user experience, and low Gas cost support. The emergence of WBTC and RenBTC now promises to open up new markets. & have spent & have spent
Specific data
1) Decentralized wallet usage status
DeFi awareness and participation in the status quo
& have spent
Survey data shows that users around the world are generally more aware of the DeFi concept and more invested in the product. As many as 97% of the respondents have heard of the concept of DeFi, and 78% have purchased tokens associated with DeFi.
In contrast, the percentage of Chinese respondents who have heard of or bought DeFi related tokens is slightly lower than global users; 86% and 58%, respectively.
Among respondents, 75 percent of global users and 25 percent of Chinese users used what used to be centralized deposit or loan functions. Compared with global users, Chinese users have a lower awareness and acceptance of DeFi and DeFi products, leaving more room for improvement.
3) DeFi user demand and learning curve
This report asks users in China and around the world about their expectations of using DeFi products. Survey data show that both Chinese and global users are sensitive to Gas charges for DeFi products.Generally expected Gas charges are no more than $2 (76% in China, 65% globally).
In terms of expected return on deposits, more than half (75 per cent) of global users and 74 per cent of Chinese users said annualized returns would need to exceed 15 per cent to be attractive enough to use DeFi products.
About two-thirds (60 per cent) of global respondents said they were involved in liquid mining. By contrast, the proportion of Chinese users engaged in mobile mining is much lower, at 22 per cent. It is worth noting that survey data shows that the majority of users have invested between $10,000 and $50,000 in DeFi deposits or liquidity mines.
Chinese users are more likely to take the time to learn DeFi products from their willingness to learn to use them. 40% of Chinese users expect to spend no more than 1 hour learning DeFi's new products. The figure was about 56 per cent of global respondents. About 12% of Chinese users and 2% of global users don't want to spend time learning how to use DeFi at all.
4) Reasons for using and not using DeFi products
& have spent
According to survey data, 74% of respondents globally use DeFi products.
This is a multiple choice question and respondents can choose to use/not use it for a variety of reasons. The biggest driver was liquidity, with other factors including attractive interest rates (29%), no NEED for KYC(27%), convenience (21%) and safety (18%). Users around the world are reluctant to use Dapp due to its unattractive interest rate (58%), poor user experience (20%), security concerns, not knowing how to access Dapp or not having a wallet (17%).
Global users
25% of Chinese users have used DeFi products; The main reasons they use DeFi are liquidity mining (58%), convenience (52%), significant interest rate (42%), no need for KYC(34%), safety (33%). The main obstacles for Chinese users were security concerns (52%), slow deposit and loan speed (25%), not knowing how to access dApp, not having a wallet (25%) and poor user experience (21%).
Chinese users
The conclusion is clear,If the project side wants to make the DeFi product more attractive, it must increase interest rates and security.
& have spent
A vision for open finance
& have spent
From a macro perspective, blockchain is a paradigm shift of traditional finance. Blockchain is decentralised in nature, so it will have two characteristics for the foreseeable future: first, encryption is speculative in nature; Second, it is a financial upgrade. From the perspective of DeFi, the bigger market in the future is central bank digital currency (CBDC). The emergence of official cryptocurrencies will bring more and more asset chains. At that point, DeFi will become mainstream and enter the public consciousness.
& have spent
In the next year or two, DeFi's overall target market will be bigger than the blockchain it builds. The stable currency on which DeFi relies will have a higher market value than Bitcoin because it can continue to increase the dollar value of assets along the chain.
& have spent
From the Internet to the mobile Internet, from WeChat and Instagram to TikTok, the phenomenon proves this point. The blockchain, a decentralised clearing system, was destined to change finance from the moment it was born. DeFi will one day emerge from the coteries of encrypted users as a pioneer of open finance. As a pioneer, Bitcoin created a medium for decentralized transactions. Lending, an ancient financial instrument, will become the cornerstone of open finance with the help of DeFi. As can be seen from the rise of stability currency such as USDT, USDC and DAI in the past two years, the market value of stability currency will be the basic liquidity of open finance, and it will also provide capital supply for DeFi.
& have spent
Finally, the state-dominated digital assets CBDC and Libra will promote DeFi and open finance. At that point, cross-border mortgages will be backed by highly liquid assets, commodities and bonds, not just cryptocurrencies such as ETH. Its suppliers of capital would then be digital currencies issued by countries. Trading,The combination of settlement, lending and financial derivatives will form a splendid ecology of open financeEnvironment, a whole new market.
Welcome to join the official BlockBeats community:
Telegram Subscription Group: https://t.me/theblockbeats
Telegram Discussion Group: https://t.me/BlockBeats_App
Official Twitter Account: https://twitter.com/BlockBeatsAsia
Related Articles
