Venture capital firm Andreessen Horowitz (a16z) says in a new report that the decentralized finance ecosystem continues to grow despite recent challenges as overall cryptocurrency usage reaches record levels. mentioned in.
In its “State of Cryptocurrency” report released on October 16, a16z noted that the crypto industry has witnessed a significant surge in activity over the past year. The industry's growth trajectory is “reminiscent of early internet adoption.”
For example, in September 2024, 220 million addresses interacted with protocols across the blockchain ecosystem. This is more than three times the number recorded in late 2023. Approximately 100 million of these active addresses were on Solana (SOL), a blockchain network that saw a massive spike. Active.
Similar to Solana, other networks that have seen significant increases in active addresses include Near Protocol (NEAR), Coinbase's layer 2 network Base, Tron (TRX), and Bitcoin (BTC).
Regulation of stablecoins and cryptocurrencies
This report also highlighted several growth indicators and major issues surrounding the crypto industry since a16z's first State of Crypto report in 2023.
One important point is that cryptocurrencies have become an important political issue in the midst of the US election. However, the United States lags behind the European Union and the United Kingdom in public engagement on crypto regulation.
The market is also seeing major developments centered around stablecoins, such as the regulation and usage of stablecoins. Notably, the stablecoin has grown to be among the top 20 holders of US Treasury securities, with Coinbase reporting showing significant growth in Q3 2024. Major players include Tether’s USDT and Circle’s USDC.
Moreover, infrastructure improvements and increasing convergence of blockchain technology and artificial intelligence further fueled the industry's growth.
DeFi continues to grow
DeFi is one of the areas of cryptocurrency that has seen the most usage across daily active addresses over the past year.
“Since the emergence of DeFi in the summer of 2020, decentralized exchanges (DEXs) have grown to account for 10% of crypto spot trading activity. “was carried out,” the report states.
DeFi protocols across the ecosystem currently account for over $169 billion in total locked up value. Major platforms include Lido, Aave, Uniswap, EigenLayer, WBTC, and ether.fi. These decentralized platforms continue to attract users as traditional financial institutions such as U.S. banks face ongoing challenges.
According to a16z, the top blockchains in terms of builder activity or interest include Ethereum (ETH), Solana, and Bitcoin.
Ethereum still attracts the most developer activity, accounting for 20.8% of builders, but Solana has seen significant growth in this space, increasing from 5.1% in 2023 to 11.2% in 2024 .
Base also saw a notable increase in developer activity, rising from 7.8% to 10.7% year over year. Marking a surge in DeFi-related activity, builder interest in Bitcoin increased from 2.6% to 4.2%.
