Crypto users flock to real decentralized crypto protocols after FTX Collapse
Nansen • November 30, 2022
Data from Nansen, the blockchain analytics platform, shows that over the previous week, the number of users of DeFi protocols has seen double digits increases.
With $6.5 billion in total value locked (TVL), MakerDAO is DeFi's largest protocol. In the past week, the number of addresses has expanded by a third. Other top 10 protocols have also seen significant increases in user numbers, with Curve, a DEX, seeing a 63% increase and Aave, a loan protocol, recording a 70% increase.
Following the collapse of FTX, the second-largest cryptocurrency exchange in the world that was infamously centralized, operated under a black box model with no transparency, and engaged in dubious operations, it appears that cryptocurrency users are keen to take control of their digital assets. The implication is that, if people are taking ETH off exchanges, they are at least in part withdrawing the asset to their own wallets.
Outflow of exchanges
This increase in DeFi occurs after FTX transformed in a little over a week from a crypto ambassador to a bankrupt embarrassment. Although not in the ways that outsiders anticipate, the current situation may be crucial for the crypto business.
Many in traditional banking and the media see the cryptocurrency market as a monopolistic one. The blockchain idea is broken down into a variety of sectors, and DeFi, which is based on the purest form of decentralized governance, is structurally and operationally distinct from the likes of FTX, Binance, and Celsius.
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