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A million down, a billion to go: How does DeFi reach mass adoption?

A report on Friday from Ethereum metrics website Dune Analytics showed that the decentralized finance (DeFi) ecosystem now counts over 1 million unique Ethereum addresses as participants — an over tenfold increase from the 91,000 addresses on Dec. 6, 2019.

But while the growth has been undeniable, some experts caution not to interpret the milestone as a sign of widespread adoption. In fact, in order for DeFi to truly break mainstream, many of the emerging vertical’s proponents may have to rethink their communication and outreach strategies.

The Dune Analytics report, compiled by aggregating the total number of addresses which have ever utilized popular DeFi protocols such as Uniswap, Compound, and Aave, noted that their calculations interpret “users” as “unique addresses,” meaning that the millionth address mark might not be as bullish as it seems at first blush.

Many DeFi users commonly deploy multiple addresses in order to protect their privacy while transacting on Ethereum’s public network, and conflating “addresses” with “users” may lead analysts to some dubious figures.

Brian Flynn, the co-founder of a startup that helps to incentivize participation in DeFi, Rabbithole, suggests that the actual number of participants is far 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.

‘Speculators to participants’
So how will DeFi truly reach a million users and beyond? Flynn explained that the first step in attracting a larger number of unique users will be a “killer application focused around speculation” similar to CeFi trading platform Robinhood, which enjoyed a remarkable boom in participation during the Covid lockdowns.

Over the long term, however, finding ways to incentivize users to participate in governance and infrastructure-layer elements of DeFi is what will lead to sustainable success.

A million down, a billion to go: How does DeFi reach mass adoption?, CoinTelegraph, Dec 7

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