When it comes to terminology, the blockchain and crypto space has indeed set a precedent. Every week, there appears to be a new word circling the industry. From early new definitions such as FOMO (Fear of Missing Out) through to the current yield farming and liquidity mining crazes.
From the perspective of this DappRadar writer, these are words I hear around the office in daily activities, when reading articles in the media and when discussing industry trends with my colleagues.
Undoubtedly, at least in our world, decentralized finance or DeFi as it is shortened to has been at the forefront of every topic and discussion for the majority of 2020.
But, recently we felt a need to ask our audience which is mostly comprised of retail users a few questions. We wanted to gauge their involvement with the movement.
The results were quite surprising at first. Later, we theorized that people perhaps just didn’t understand the terminology being used in the media but that they do in fact utilize decentralized finance or DeFi products.
The survey
We asked two very simple questions with multiple choice answers to our Twitter audience over the last two weeks:
- With so much hype surrounding DeFi recently, we wanted to take a moment to gauge how the DappRadar community is getting involved.
- Have you ever used/interacted with Uniswap?
The survey was designed to see if people were first of all aware of DeFi and were involved and secondly to see if they interacted with a DeFi protocol – namely Uniswap.
The idea being that if a large number indicated they didn’t know what DeFi was but then a similarly large percentage indicated they had interacted with a DeFi protocol in Uniswap then it would provide the impetus to investigate further.
Data limitations
First, it’s important to discuss the limitations of this data. Whilst the sample size is small compared to that of the total DappRadar Twitter audience – this is not an issue and something very common in market research.
A bigger issue is that the questions were not asked at the same time so therefore the responses collected across the two questions can be made up of different members of the community.
Furthermore, the use of Google trends to analyze search traffic is only giving us a snapshot of the data that excludes one of the largest participants in the movement – China.
Still, the findings point to a misunderstanding around the terminology used.
The results
Of the 71 respondents to the first question, the results are as follows.
Surprisingly, 62% of the respondents stated that they either didn’t know what DeFi was or that they were curious and still learning. The data shows that just 38% of the respondents had tried it or were going all-in on decentralized finance.
The most surprising figure here we feel is that of an audience comprised mostly of people involved in the blockchain and crypto space to some degree. 34% have no idea what DeFi is. The term FOMO feels more relevant than ever.
Of the 111 respondents to the second question, the results were as follows.
Almost 66% of respondents said they had interacted with or used Uniswap. Uniswap is an AMM, (more terminology) AMM means automated money market, and most certainly Uniswap is considered to be one of the key components to the growing DeFi ecosystem.
What does this mean?
The results appear contradictory. How can a similar % of respondents state that they don’t know what DeFi is or that they are curious and learning as those who have interacted with what we know is an important component in the DeFi sector?
Look at the trends
To further dig into the terminology a Google trends search provided us with the most common search terms around the two terms DeFi and decentralized finance in the western world.
A glance at the geographical spread of those searching for DeFi related content is quite surprising but it becomes more obvious once we look at the related queries.
3 of the top 5 breakout queries are completely unrelated to decentralized finance. In fact, they look to be related to the popular game Fortnite and the Marvel action hero Deadpool. A closer look at the results reveals even more confusion. For example, the word ‘defi’ means ‘challenge’ in the french language.
Overall it appears search traffic data for the DeFi term is skewed and faces competition from other sources globally.
The geographical spread when looking at the term Decentralized Finance looks far more in tune with what we already know to be the global hot spots for blockchain and crypto activity. Most of the search traffic is coming out of the United States, the United Kingdom, Western Europe, India, and the Philippines.
Is it possible that whilst those of us inside the industry call it DeFi everybody else is calling it and searching for decentralized finance?
The blue line represents an interest in the search term DeFi over the last 12 months whilst the red line represents an interest in the search term Decentralized Finance. The difference is noticeable but again would appear contradictory to what we previously observed.
It is possible that the majority of the observed interest in the term DeFi actually mostly pertains to interest in something else entirely. When looking through the full list of related queries for DeFi this would seem a logical conclusion to make.
Whilst those searching for the term decentralized finance know what they are looking for and despite being a much smaller audience, they appear dedicated.
In summary
Despite the clear and present hype surrounding decentralized finance and DeFi, it would appear that we as writers and educators may need to readjust the terminology we use to explain and draw attention to it.
Whilst many inside the space and those with a more traditional finance background understand the terms used. The long term objective in the industry is to entice retail users into the system. Are we speaking to them correctly? It would appear not.
The results from our limited survey suggest that the DappRadar audience are not fully aware of the term DeFi, what it means, and what it’s all about. BUT, a large percentage indicates that they are interacting with DeFi services.
This tells us that there is an education gap around the specific terminology being used in the ecosystem right now.
We can also conclude that to make assumptions at this early stage in the lifecycle of blockchain about what people do and do not understand would be very dangerous.
Don’t be a part of the 62%
For those reading this article that wants to know more about decentralized finance, the benefits it can offer, and how to get started. Check out our regular education articles and guides.
