A Friday report from the Ethereum Metrics website, Dune Analytics, showed that the Decentralized Finance (DeFi) ecosystem now has more than 1 million unique Ethereum addresses participating in the various protocols. a more than tenfold increase compared to the 91,000 addresses on December 6, 2019.
While the growth is undeniable, Some experts warn that this milestone should not be interpreted as a sign of widespread acceptance. In order for DeFi to achieve long-awaited mass adoption, many of the drivers of the emerging ecosystem may need to rethink their communication and contact strategies.
The Dune Analytics report, compiled Adding the total number of addresses that have ever used popular DeFi protocols like Uniswap, Compound and Aave, He noted that his calculations interpret “users” as “unique addresses,” which means the millionth address mark may not be as bullish as it seems at first glance.
ONE MILLION DEFI USERS https://t.co/H11HBUIrOe pic.twitter.com/daqRpBGfbF
– Richard Chen (@ richardchen39) 4th December 2020
One million DeFi users
Many DeFi users often use multiple addresses to protect their privacy while transacting on the public Ethereum network. and the combination of “addresses” with “users” can lead analysts to dubious numbers.
Brian Flynn, Co-founder of Rabbit hole, a startup that creates incentives for participation in DeFi, suggests that the actual number of participants is much lower.
“The reality is that the number of unique users is only 10-15% of that. That’s the real metric that matters.” Flynn told Cointelegraph.
“From speculator to participant”
In order to, How is DeFi really going to reach 1 million users and more? Flynn explained that The first step in attracting more unique users will be a “speculative killer app” similar to the CeFi trading platform Robinhood. that saw a remarkable voter turnout boom during the COVID-19 quarantines.
In the long term, however, you should find ways to motivate users to participate in governance and the elements that shape the DeFi infrastructure layer it will lead to lasting success.
“Many users know how to exchange tokens on Uniswap or in an aggregator, but they don’t understand how these protocols work under the hood.” said. “For example, of all the companies that traded on Uniswap, only a small fraction has ever provided liquidity. Of those that have delivered assets to Compound to earn interest, only a small fraction has loaned them out.”
“We need users who go further and move from speculators to participants in an open economy. This is how we encourage real adoption.”
With this aim, Flynn announced that Rabbithole has planned “multiple” campaigns with major DeFi platforms. Create incentives for greater user participation in the protocol in exchange for governance tokens.
“This change is not going to happen overnight, but the most important thing we can do is educate with real involvement in these networks,” added.
“Another user profile”
Encouraging users to become more active players in the DeFi landscape is a promising step towards mass adoption. But another can attract different types of users overall.
Patrick Rawson, According to Co-Founder of Curve Labs Blockchain Experimentation and DAO Engineering Team The current user experience in DeFi is tailored to a very specific demographic group.
“People who use these mechanisms tend to be men, they tend to be young, they tend to be profitable […]They tend to be technically smart, “Rawson said. “That user profile will ask for anything that makes them more profitable.”
If DeFi really wants to “bank the unbanked” and reach the “last mile” of users, it may need to consider new outreach strategies. Rawson argues, those that allow users to search for the results they want.
“Let’s look at another user profile for a second. Senior, is from sub-Saharan Africa, female, has a family, is not technically smart. Will this user want profit at the expense of everything else? No, she’s probably more interested In the environment that surrounds her, she cares about her family being healthy and healthy. […] He wants a DeFi that benefits his local community, not a DeFi that optimizes profits at all costs. “
Rawson says that in order to achieve that changeDeFi needs to adapt to “localized institutional structures that reflect local values”. One example he offered is Sarafu credit, an experiment by “Common currency” in Kenya, who had previously worked with Bancor.
Flynn agrees that focusing on profits above all else could be a restrictive way of preaching the DeFi gospel. The way current ecosystem participants talk about DeFi with their friends and family will also play an important role in building the future:
“We need to stop focusing on price and more on how cryptocurrency networks and decentralization are a new way of building organizations.”