One thing we can feel sure about with Decentralized Finance (DeFi), is that it's here to stay. Decentralized exchanges (DEXs) empower users with greater control over trading, while yield farming presents opportunities for earning rewards, and NFTs introduce new ways to utilize assets as collateral — each innovation working to meet the growing demand for simpler, transparent, and customizable financial services.

By improving day-to-day financial services and unveiling fresh opportunities for investors, DeFi is positioned for substantial growth in the coming years, with Statista data suggesting that worldwide DeFi revenues will reach $37 billion by 2028. Meanwhile, the number of users is set to rise to 22 million that same year, up 193% from its peak of 7.5 million users in late 2021.

User-centric design and innovation will be the driving forces for further DeFi adoption. The crypto market has the potential to grow to a $10 trillion industry, from its current market cap. provided DeFi platforms effectively address user needs and preferences. As WalletConnect’s Founder Pedro Gomes recently said in our 2024 Crypto Consumer Report, “DeFi remains the king of crypto use cases, but bringing in a greater spectrum of users will require a broader range of sticky, feature-filled experiences.”

In that same report, we highlight survey data from 300 web3 users, breaking them down into subgroups based on how they use the technology. Roughly 11% of respondents – dubbed the “DeFi Degens” – defined themselves as users who’ve engaged with DeFi in the last three months. What does this user group foresee for the future of DeFi?

What DeFi Degens are looking for in 2024

DeFi has emerged as one of the crypto economy's most important and active sectors, so it comes as no surprise that this user group is always exploring the latest features and searching for new apps to try.

While cross-platform activity is at the core of what ‘DeFi Degens’ do, leveraging multiple protocols and networks, the active user group says they are also looking for developments in the following arenas:

• NFT interest: With 35% of DeFi Degens showing significant interest in NFTs, a fusion between DeFi and the NFT market emerges, potentially leading to innovative financial products integrating unique digital assets.
• Social connectivity: The appeal of web3 social and messaging (32%) highlights the importance of native social interaction within DeFi, driving user engagement, collaboration, and information dissemination.
• Community governance: 28% of DeFi Degens express interest in community and governance models, signaling a shift towards inclusive, community-driven governance structures within decentralized platforms.

DeFi Degens gravitate towards modular DeFi protocols as they are transforming the financial sector by introducing flexibility and innovation. Cross-chain capabilities in DeFi also enhance scalability and interoperability. They prefer seamless communication between blockchain networks with more accessibility. With that in mind, DEXs and automated market makers (AMMs) play pivotal roles in providing liquidity and facilitating efficient trading in the DeFi sector, providing unparalleled value and versatility.

What DeFi Degens are looking for in wallets

Active DeFi users aren’t reluctant to dabble with different wallets and dapps, with our data showing that nearly 58% said they possess two or more wallets, highlighting a practical approach to managing their decentralized assets.

Understanding the wallet preferences of DeFi users provides essential insights into their behaviors and priorities. Among these users, there is a clear emphasis on functionality and efficiency when it comes to choosing their wallets. Specifically, they prioritize features such as broad cryptocurrency support (39.4%), advanced security measures (36.4%), and low transaction fees (33.3%). Another concern for 24% of DeFi Degens is the lack of features in their wallets, suggesting a demand for more personalized and sophisticated functionalities.

These data points highlight the critical role that wallets play in the DeFi ecosystem and signify the importance for wallet providers to tailor their offerings to meet the specific needs of this user segment. By understanding and addressing these preferences, wallet providers can better serve active crypto users and enhance their overall experience within the DeFi space.

Securing DeFi means building user confidence

In DeFi, security is paramount, and bridging the gap between perceived confidence and actual security practices emerges as a pressing issue. The void between reported confidence in using crypto products (50.5%) and the low adoption of security features by DeFi Degens (18.2%) signals a need for better education and tools.

Despite encountering security-related setbacks, such as losses reported by 58% of DeFi users, a significant proportion express optimism about decreasing phishing attacks and hacks. This trend reflects a growing sense of trust in the evolving security landscape, potentially bolstering confidence in DeFi platforms and fostering sustained user engagement over time.

Furthermore, the demand for advanced security measures by DeFi Degens (36.4%) and incidents of lost passwords in this group (36.4%) highlights the imperative for innovative solutions to address vulnerabilities. Integrating decentralized identity solutions like decentralized identifiers (DIDs) and verifiable credentials emerges as a promising strategy to enhance authentication processes and mitigate risks associated with compromised credentials.

The DeFi Degen: Architects of web3's Future

DeFi's future looks bright, with continued expansion and innovation on the horizon. DeFi's trajectory is one of growth, offering customizable financial services and surpassing traditional banking. Initiatives like integrating DIDs can fortify security and bolster user confidence, welcoming sustained growth and accessibility in the DeFi space.

The future trajectory of DeFi hinges on both technological advancements and the ability to cater to diverse user needs through enhanced experiences. Drawing from the insights gathered from our DeFi Degen community, it's clear that this subgroup holds significant influence in shaping the trajectory of web3. Addressing their needs, challenges, and evolving perspectives is paramount.

Actively engage with these insights and help drive DeFi to new heights. Learn how to better cater to the diverse requirements of our highly engaged and dynamic community by downloading The WalletConnect Pulse today.