39% of the respondents that involve 150 portfolio companies see DeFi as the most bullish crypto development of 2020, as per the DCG Founders survey “State of Crypto 2020.”
The sector has seen immense growth in 2020 and continues to hit new highs; just today, a new record was set of $12.5 billion TVL.
The founders surveyed said notwithstanding the price of DeFi tokens, which have been tanking hard until very recently, “the protocol development and business growth of 2020 bodes well for the industry’s future.”
DeFi is followed by “BTC resilience” and “Stablecoin surge,” which makes sense given that the market cap of fiat-backed crypto has shot up past $12 billion this year.
“The growing demand for stablecoins in Latin America, and Argentina specifically, is due to the fact that buying dollars as a form of savings is a regular monthly habit for middle-class Argentinians, due to cyclical devaluations and loss of trust and credibility in the Argentinian peso,” said Sebastian Serrano, CEO of Ripio, an Argentinian digital asset exchange, and payments company.
Still, respondents were split on whether Ethereum, which is the center of it, will remain the dominant transaction-based blockchain. 51% still believe the second largest network will find scalability faster than new blockchains develop a community.
Adoption Drivers & Greatest Risks
Other findings of the survey revealed “global recession” (24%), “inflation” (19%), and “hunt for yield” (18%) as the main macro crypto adoption drivers. However, the smart money adoption won’t be bringing new highs for BTC price in the next 6-12 months as per the majority.
Only 20% think during this period, BTC will surpass $20,000.
Meanwhile, nearly six in ten respondents expect industry consolidation, resulting from big players buying smaller ones to limit competition to accelerate, particularly in the exchange and wallets & custody spaces.
However, the industry’s greatest risk remains the same; compliance and regulation as per 51% of the respondents.
“It’s really important that we start to see some consistency and coordination across regions,” said Simone Maini, CEO of Elliptic, a blockchain forensics, and analysis company, “there are still plenty of opportunities for regulatory arbitrage at the moment, where businesses are trying to operate in jurisdictions with looser regulations.”
Other factors that impede sustainable growth involve theft/hacks/scams (22%), investment crunch (12%), and technical obstacles (8%).
Overall, in 2020, four in five rated their company’s performance against expectations as “outperformed” or “neutral” while having COVID/remote work, third party delays, and fundraising as the main business challenge.