Most of the digital asset investment firms have poured close to $2.7 billion into the DeFi projects in 2022, which has been an improvement of 190% from 2021.
But on the other hand, the investments into the CeFi projects have gone down the other way- as they fell by around 73% to a sum of $4.3 billion during a similar period. The meteoric rise in the funding for the DeFi project was despite the overall crypto funding figures falling from a sum of $31.92 billion in 2021 to a sum of $18.25 billion in 2022, with the market shifting from a bullish market to a bearish market. According to a 1st March report from CoinGecko- which has also already cited data from DeFiLlama, the figures also point towards Decentralized Finance as the new growth area for the crypto industry.
CeFi Funding has Taken Massive Hits While DeFi Funding Has Grown
The report further stated that the decrease in CeFi funding could also be an indicator of the sector reaching a saturating degree. The near three-fold increase in the investment of DeFi has also been a staggering 65-fold increase from 2020, at the start of the previous bull run. According to CoinGecko, the largest funding of DeFi in 2022 came from the $1 billion sale of the Luna Foundation Guard’s sale of the tokens of Luna in February 2022, which came in about three months before the collapse of the Terra Luna Classic and the Terra Classic USD in May.
In the meantime, FTX US and FTX have been the biggest recipients of the CeFi funding- and have raised close to $800 million in January- which does account for 18.6% of the total funding in 2022. The crypto exchanges, however, went down just 10 months later and ended up filing for bankruptcy.
