DeFi Is Becoming Less Competitive a Year After FTX’s Collapse Battered Crypto
- Many DeFi projects are struggling to generate revenue
- Liquid staking projects, DeFi lenders are more concentrated
Investors have been spooked by hacks and multiple blowups including that of FTX last November.
Photographer: Andrey Rudakov/BloombergThis article is for subscribers only.
A small number of participants are dominating the world of decentralized finance as the crypto sector, which seeks to replicate financial markets without middlemen, still hasn’t recovered from FTX’s collapse a year ago.
Most categories in DeFi — from peer-to-peer lending to decentralized exchanges — are seeing capital largely held in a few major projects, according to data compiled by crypto-risk modeling company Gauntlet. The firm used a popular measure of market concentration and competition called the Herfindahl-Hirschman Index.