The DeFi economy continues to be built on Ethereum. A new report from ConsenSys highlights the extent to which the Ethereum network drives decentralized finance.
The Ethereum (ETH) network continues to be a major driving force behind decentralized finance, or DeFi, signaling the continuation of a trend that began around mid-2020, according to a new quarterly DeFi report by ConsenSys.
Toward the end of June 2021, 2.91 million unique Ethereum addresses interacted with at least one DeFi protocol, representing 65% growth from the previous quarter. “As community driven education, simple user interfaces, appealing yields and general awareness around DeFi best practices increased throughout the quarter, so too did the number of new addresses,” the report read.
ConsenSys cautioned that non-custodial wallets like MetaMask make it easier for people to create and fund multiple accounts, which means the number of addresses and users is not perfectly aligned. Nevertheless, MetaMask can be seen as another important gauge for identifying trends in DeFi. As ConsenSys noted, by June 1, the monthly active users on MetaMask surpassed 7.3 million. At the time of writing, ConsenSys counts 8.5 million monthly active MetaMask users. The report explained:
“This is in part due to the growth of DeFi applications on other Ethereum Virtual Machine compatible networks that users can access via MetaMask, like BSC and Polygon.”
MetaMask, which was launched by ConsenSys in 2016, has become one of the most popular cryptocurrency wallets for DeFi users. Its popularity has also been associated with the growing adoption of decentralized exchanges like Uniswap.
Unsurprisingly, DeFi’s growth has been accompanied by a dramatic surge in Ethereum addresses. At the time of writing, the Ethereum network had over 165 million unique addresses, up from around 131 million at the start of the year, according to data provided by Etherscan. As such, active DeFi addresses account for less than 2% of all Ethereum addresses.
Beyond active addresses, the supply of stablecoins is another important metric ConsenSys used to track the growth of DeFi:
“Stablecoin supply continued to grow at a rapid pace in Q2 2021, now representing a total issuance of nearly $65 billion USD, up more than 60% since the end of Q1 2021.”
By the end of the second quarter, Tether (USDT) accounted for 48% of Ethereum’s stablecoin market. That’s down from around 58% at the end of the first quarter, which indicates growing uses for USDT’s major competitors.
Some of the other major themes identified in the report include the broadening of decentralized exchanges, the institutional push into DeFi and the apparent growth of decentralized autonomous organizations. The report also talked about the growing importance of token governance and the need to solve DeFi scaling issues.