DeFi remains popular amid explosion in crypto usage: a16z report

The decentralized finance ecosystem continues to grow despite recent challenges as overall crypto usage hits record levels, venture capital firm Andreessen Horowitz (a16z) said in a new report.

In its “State of Crypto” report published on Oct. 16, a16z noted that the crypto industry has witnessed a major spike in activity over the past year. The growth trajectory for the industry is “reminiscent of early internet adoption.”

For instance, September 2024 saw 220 million addresses interact with protocols across the blockchain ecosystem—more than triple the figures recorded in late 2023. About 100 million of these active addresses were on Solana (SOL), a blockchain network that has registered a massive spike in activity.

As well as Solana, other networks to see a significant increase in active addresses are Near Protocol (NEAR), Coinbase’s layer-2 network Base, Tron (TRX) and Bitcoin (BTC).

Stablecoin and crypto regulation

The report also highlighted several growth metrics and key issues surrounding the crypto industry since a16z’s first State of Crypto report in 2023.

One major takeaway is that crypto has become a significant political issue amid the U.S. election. However, the United States lags behind the European Union and the United Kingdom in public engagement regarding crypto regulation.

The market has also seen considerable developments around stablecoins, including their regulation and usage. Notably, stablecoins have grown to become one of the top 20 holders of U.S. Treasury securities, with a Coinbase report showing marked growth in Q3, 2024. Major players include Tether’s USDT and Circle’s USDC.

Additionally, infrastructure improvements and the increasing intersection of blockchain technology and artificial intelligence have further bolstered the industry’s growth.