Chainalysis has revealed that Eastern Europe, particularly Ukraine and Russia, is experiencing a surge in DeFi activity. Despite facing geopolitical challenges and sanctions, these countries have become key players in the global crypto economy, ranking 6th and 7th, respectively, in this year’s Global Crypto Adoption Index.
According to Chainalysis’ latest report, Russia’s crypto adoption has seen a significant rise, climbing six spots compared to last year. This growth is particularly notable given the ongoing war and intensifying sanctions. Meanwhile, Eastern Europe as a whole has witnessed substantial crypto inflows, with Russia and Ukraine receiving $182.44 billion and $106.1 billion, respectively.
DeFi Growth in Ukraine and Russia
Decentralized exchanges (DEXes) across Eastern Europe have experienced a significant uptick in crypto inflows, led by Ukraine and Russia. Regionwide, DEX platforms received approximately $149 billion in crypto, with Ukraine’s DEX inflows increasing by over 160% to $34.9 billion and Russia’s by over 173%, reaching $58.4 billion. DeFi lending services in Moldova, Hungary, and Czechia also saw substantial growth, receiving $11.29 billion in digital assets.
Analyzing transaction sizes in Ukraine and Russia, Chainalysis found two key trends. Ukraine witnessed a massive 361.49% increase in large institutional transactions, indicating that institutional investors are driving much of its DeFi activity. Russia, along with Belarus, Poland, and Slovakia, also experienced notable growth in DeFi through large institutional transfers.
However, Ukraine also saw a significant uptick in both large and small retail transactions, suggesting grassroots adoption. This is likely due to investors using crypto for everyday spending as the country navigates geopolitical challenges and inflation recovery.
Sanctions Fuel Growth in Russia’s No-KYC Crypto Platforms.
Homegrown crypto services in Russia have gained popularity, attracting inflows from both domestic and international sources.
Chainalysis found that while web traffic to centralized exchanges has remained relatively stable, Russian-language no-KYC exchanges experienced a surge in activity last year, likely driven by sanctions on Russian banks. These platforms have provided a convenient way for Russians to convert fiat into cryptocurrency.