The European decentralized finance (DeFi) fundraising market has blossomed this year while across the pond lawmakers are looking to crack down on the industry.
Research by Dove Metrics has delved into the European DeFi scene revealing that things are still looking healthy despite the market pullback and increased regulatory pressure.
A July 27 report noted that 56 European DeFi teams have raised $282 million in funds, representing around 20% of the global total in DeFi fundraising. It added that the Stasis Euro-backed stablecoin, EURS, has also gained momentum this year with a doubling of supply over the past two months to 88.6 million today (worth approximately $105 million).
“Now, Europe is attempting to position itself as a crypto hub, led by success stories like Argent, Aave, Centrifuge, and Nexus Mutual.”
Investments flowing into DeFi startups
Citing examples from European crypto and blockchain startups, the research revealed that the U.K. is leading the charge for fundraising with 45% of the European total in the first half of the year.
Noteworthy funding rounds so far this year include synthetic trading platform Beyond Finance which raised $7.5 million in March. London-based DeFi platform Gro closed a $7.1 million seed round led by venture capital giants Galaxy Digital and Framework Ventures in late March.
As reported by BeInCrypto, Element Finance raised $4.4 million in April with the aim of bringing fixed-rate liquidity to DeFi. Liquity raised $6 million in Series A funding to offer alternative decentralized borrowing mechanisms. Its native LQTY token surged 900% when the protocol launched to mainnet in April.
The report added that infrastructure such as liquidity layers and real-world assets bridges represented 58% of the total European funding received. Lending and borrowing and trading-related ventures came in second and third, with 12% and 9.7% respectively.
Four countries accounted for more than 75% of the total number of DeFi European funds — the United Kingdom, Germany, France, and Switzerland.
Meanwhile, in the US
The regulatory screws are tightening in the U.S. with DeFi and stablecoins coming high on the agenda for financial lawmakers. U.S. senators such as Elizabeth Warren are frothing at the mouth with their demands to crack down on the industry.
At a July 27 hearing of the Senate Banking Committee, the Democrat senator continued to lambaste digital assets proclaiming “as the crypto market grows, so do the risks to our financial stability and our economy.”
She added that leaving the U.S. financial system at the whim of giant bankers would be better than a “shadowy, faceless group of super-coders and miners.”
Meanwhile, Treasury Secretary Janet Yellen has attended a closed-door meeting with financial lawmakers on Tuesday to discuss Tether’s reserves among other things.
Europe has not been lacking regulatory pressure, however, with the proposal of a law that would make crypto transactions transparent and traceable on July 20.