23. September 2023

Shift to DeFi: Crypto Funding Moves Away from CeFi After Major Collapses

• The DeFi market had a bearish past week, with most of the tokens in the top 100 trading in the red.
• Crypto funding shifted from CeFi to DeFi after major collapses.
• Digital asset investment firms poured $2.7 billion into decentralized finance projects in 2022 — up 190% from 2021.

Crypto Funding Shifts From CeFi To DeFi After Major Collapses

The majority of the DeFi tokens in the top 100 traded in the red on the weekly charts due to a downturn in the broader financial market. Despite overall crypto funding figures falling from $31.92 billion in 2021 to $18.25 billion in 2022, digital asset investment firms poured $2.7 billion into decentralized finance projects — up 190% from 2021 — potentially pointing to DeFi as the new high growth area for the crypto industry and decrease of investments towards CeFi reaching a degree of saturation.

February Saw Seven Defi Exploits

February saw seven DeFi exploits resulting in a net loss of about $21 million, while multiple exploits have already been recorded this March such as on Hedera’s mainnet and Tender.fi where a white hat hacker drained $1.59 million although he returned funds shortly afterwards.

Tornado Cash Aims To Be More Regulator Friendly

Tornado Cash developers said that a new version of its mixing tool would aim to be more regulator friendly, where law enforcement can differentiate between legal and illegal transfer of funds making it an attractive option for users concerned about privacy but who still want peace of mind when using cryptocurrencies and blockchain technologies for transactions or investments..

DeFi Market Bearish Last Week

The DeFi market was bearish last week, with most of its tokens trading in the red thanks to both federal budget plan changes and Fed rate hikes that impacted investor sentiment negatively .


All these events point out to an increasing trend towards investors moving their capital away from CeFI solutions towards more secure alternatives like DEFI solutions which are becoming increasingly popular due to their safety measures and regulation-friendly options like Tornado cash offers