The Crypto industry has witnessed a record-shattering growth over the past couple of years. Game-changing use cases like decentralized finance (DeFi), NFT, metaverse, and web3 are defining the future of the crypto industry. Thanks to real-world adoption and increasing investment. Amid the increasing interest of venture capitalists (VCs), governments, and large institutions in the crypto space, different crypto use cases have evolved into flourishing industries. DeFi and Web3 are two of the fastest-growing industries within the crypto space. The two industries top the chart of VC investment as well as growth rate.
The Crypto industry’s total market cap grew by 187.5% in 2021 alone. From popular smart contract platform tokens like Terra to memecoins like Doge, investors grew their investment by over 1,000% in 2021. With the blockchain market set to grow to $67.4 billion by 2026, use cases like DeFi and Web3 are bound to grow exponentially.
DeFi Market Growth And Performance So Far
DeFi (decentralized finance) has emerged as a great alternative to traditional finance. It promises greater transparency and eliminates intermediaries to make the global financial system more efficient. The DeFi sector has witnessed steady growth since 2020. The value of digital assets locked in DeFi reached beyond $20 billion by 2020-end from less than $1 billion in 2019. 2021 was equally great for the DeFi ecosystem. In 2021, the value of digital assets locked reached beyond $80 billion. With a wider share of investors yet to assess the true potential of DeFi, it is just the beginning of what could be a great decade for the DeFi industry.
Global Web3.0 Adoption And Market Performance
While DeFi has been a force to reckon with in the past couple of years, web3.0 has emerged as a great competitor in terms of adoption and market growth. 2021 was the breakthrough year for Web 3.0. The Web3.0 market was valued at $5.7 billion in 2021. It is highly likely to reach beyond $35.12 billion by 2027. The entry of major players within the crypto space like Polkadot, Helium Systems, Ocean Protocol, and Terra makes the Web3.0 space very exciting for investors and early adopters. Web3.0 continues to gain popularity in different parts of the world.
Source: Maximize Market Research
DeFi vs Web3.0
VCs invested a whopping $30.5 billion in the entire 2021in the crypto industry. The market cap across DeFi protocols grew from $20 billion in 2020 to a whopping $150 billion in 2021. The total value locked in DeFi has increased by more than 8 times since 2020. As of now, more than $80 billion remains locked in various DeFi protocols. Countries like the United States, India, Vietnam, Thailand, and China continue to lead in terms of DeFi adoption globally.
On the other hand, Web3.0, the internet of the future, is among the top two crypto trends in 2022. The Web3.0 industry is projected to reach a valuation of $6,187 million in 2023, growing at a CAGR of 44.6%. The growth rate will most likely remain the same until 2030.
Web3.0 Outpaces DeFi In 2022
While DeFi was leading in terms of adoption and VC investment in 2021, Web3.0 took a giant stride to outperform DeFi in the first quarter of 2022. According to the Cointelegraph, Web3.0 accounted for 26.5% of the total deals in the first quarter, followed by DeFi with 23.2% of the deals.
2020 was the year when Web3.0 projects started getting attention. With a terrific start in Q1 2022, Web3.0 is expected to lead the crypto market’s growth.
Who Wins?
The crypto market has transformed the global economy and continues to do even now. Trends like DeFi and Web3.0 are here to solve real-world problems while adding to the market size of the crypto economy. DeFi and Web3.0 are two game-changing use cases. The first aims to transform global finance whereas the second aims to change the way people use the internet. DeFi dominated the investment trends in 2021 but Web3.0 startups have taken a giant leap in 2022. Content monetization, data security, right to choose and other key characteristics of web3.0 make it a lucrative market for institutional investors as well as big companies. Increasing investment in the Web3.0 space is a clear indication of the interest of investors. Whether Web3.0 managers to do a repeat of Q1 2021 will be interesting to see.