• Crypto investment firms invested $2.7 billion in DeFi projects in 2022, a 190% increase from 2021.
• Funding for CeFi projects decreased 73% to $4.3 billion over the same time period.
• The largest recipients of DeFi funding included Luna Foundation Guard’s LUNA tokens and Uniswap, while FTX and FTX US were the largest recipients of CeFi funding.
Staggering Rise in DeFi Funding
Crypto investment firms poured $2.7 billion into decentralized finance (DeFi) projects in 2022, up 190% from 2021, while investments into centralized finance (CeFi) projects went the other way — falling 73% to $4.3 billion over the same timeframe. Despite overall crypto funding figures falling from $31.92 billion in 2021 to $18.25 billion in 2022 as the market shifted from bull to bear, this near three-fold increase in DeFi investment was still a staggering 65-fold increase from 2020, at the start of the last bull run.
Largest Recipients of DeFi Funding
The largest DeFi funding in 2022 came from Luna Foundation Guard’s (LFG) $1 billion sale of LUNA tokens in February 2022; Ethereum-native decentralized exchange (DEX) Uniswap and Ethereum staking protocol Lido Finance raised $164 million and $94 million respectively; FTX and FTX US were the largest recipients of CeFi funding, having raised $800 million or 18.6% of CeFI funding that year alone before collapsing 10 months later and filing for bankruptcy.
Others Areas of Investment
CoinGecko’s report also highlighted blockchain infrastructure ($2.8B) and blockchain technology companies ($2.7B) as areas with strong persistent investments over the past five years; additionally Henrik Andersson, Chief Investment Officer at Australia-based asset fund manager Apollo Crypto has identified four specific sectors within crypto that his firm is looking at closely – NFTfi (combination of DeFI & NFTs), on-chain derivative platforms, decentralized stablecoins & Ethereum L2s as potential investment opportunities for 2021 onwards..
Shift From CeFI To DEFI
These figures potentially point to a shift away from CeFI towards more high growth areas such as DEFI which offer greater returns as well as increased flexibility with respect to trading options & investments strategies compared to traditional financial services making them more attractive to investors worldwide despite their higher risk profile than regular financial products being offered by banks & other financial institutions .
Conclusion
Overall this data points towards an increasing trend amongst investors who are shifting away from traditional centralized finance products towards more innovative & higher return generating decentralized financing solutions which are available through various platforms built upon blockchain technology like Ethereum , Tezos etc ..