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.
Based on the metric, the most competition exists between decentralized finance exchanges, with the top four venues holding about 54% of …
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