The world of digital finance has seen a major shift in investing in recent years, with decentralized finance (DeFi) emerging as a clear winner in 2022. According to a report by CoinGecko, investment in DeFi projects has skyrocketed by a staggering 190% in 2022, with digital asset investment firms investing $2.7 billion in this sector alone. By contrast, investments in centralized finance (CeFi) projects plummeted 73% over the same period, with just $4.3 billion invested.

This trend is particularly striking given that overall crypto funding figures fell from $31.92 billion in 2021 to $18.25 billion in 2022, as the market turned from bullish to bearish. Despite this downturn, investment in DeFi saw a nearly three-fold increase, which could point to it as the new high-growth area for the crypto industry. The report also suggests that the decline in funding to CeFi could be an indicator that the sector has reached a degree of saturation.

According to the CoinGecko report, the largest DeFi funding in 2022 came from the Luna Foundation Guard (LFG) sale of $1 billion of LUNA tokens in February. This was followed by native Ethereum decentralized exchange (DEX) Uniswap, which raised $164 million, and Ethereum staking protocol Lido Finance, which raised $94 million.

Meanwhile, FTX and FTX US were the largest recipients of CeFi funds, having raised $800 million in January 2022, representing 18.6% of CeFi funds in that year alone. However, both crypto exchanges later collapsed, filing for bankruptcy just 10 months later.

The report also noted that blockchain infrastructure and blockchain technology companies raised $2.8 billion and $2.7 billion, respectively, making them other significant investment areas. This trend has been going strong for the past five years, according to CoinGecko.

Henrik Andersson, chief investment officer of Australia-based asset fund manager Apollo Crypto, says his company is currently focusing on four specific sectors within cryptocurrencies. The first is “NFTfi”, a combination of DeFi and NFT that includes NFT projects that use DeFi to implement various trading strategies for passive income or long or short trade NFT projects, among other things.

In general, the increase in investment in DeFi is a clear indication of the rapidly changing landscape of digital finance. As the market continues to evolve, it will be interesting to see how DeFi and CeFi continue to compete and evolve, and what other trends and innovations emerge in this exciting and ever-changing industry.