Key Points
Finance Redefined is a weekly newsletter designed to deliver key insights into the decentralized finance (DeFi) sector.
The past week has seen significant developments, with a noticeable increase in DeFi activity.
Decentralized application (DApp) activity rose by 77% in the last quarter of 2023, and the total daily active user wallet count reached seven million.
Regulatory bodies are also taking note, with the European Commission considering the possibility of requiring DeFi protocols to secure licenses.
DeFi Sector Growth and Regulatory Scrutiny
An increase in DeFi activity has been reported by DappRadar, with a 77% quarter-over-quarter increase in DApp usage.
The total daily active user wallet count now stands at seven million, a 40% increase since February 2024.
This is the highest adoption rate since 2022, indicating a bullish trend in the DApp and Web3 sectors.
At the same time, the European Commission is evaluating the DeFi industry and may soon require protocols to obtain a license.
Under the Markets in Crypto-Assets Regulation (MiCA), the Commission must prepare a report by December 30 evaluating the DeFi market and potential regulations for the sector.
According to investment manager VanEck, Ethereum‘s layer-2 scaling networks could reach a $1 trillion market capitalization within the next six years.
These layer-2 blockchains are expected to address Ethereum’s primary challenge – its limited capacity to process, store, and compute data.
However, not all news from the sector is positive.
Analysts at SlowMist have raised concerns about a possible “soft rug pull” involving AssangeDAO, following a 100 Ether (ETH) transaction from an AssangeDAO address to a seemingly associated recipient.
Investors are advised to proceed with caution and conduct comprehensive due diligence before interacting with the organization.
Meanwhile, data shows that DeFi’s top 100 tokens had a bearish week, with most trading in the red on the weekly charts.
The total value locked in DeFi protocols remained below $100 billion.
