# ShapeShift DAO - A Study on LMI/UMI countries
Author: thesmith, international marketing manager

## Summary

International Marketing expands its activities and identifies 4 LMI/UMI countries that will be developed in 2024 through promotions, campaigns and community. India and Eastern Asia (China mainland, Hong Kong, Taiwan and Singapore - all of them shares common language), Argentina and Vietnam were elected after a deep geoeconomic study that aggregates global metrics through researches taking into account data on volume of transactions and crypto inflow in target countries.

## Global Crypto Adoption Scenario

Last 2023 [Chainalysis research](https://www.chainalysis.com/blog/2023-global-crypto-adoption-index/) about crypto adoption index can clarify some international crypto trends and also identify LMI/UMI markets. 40% of the world’s population live in LMI countries. These countries represent an emerging power in crypto markets since the population GNI (gross national income - per capta) is growing while the internal economy thrives. The research presents a variety of analyzed data such as Centralized/P2P and Retail service value received ranking but also the DeFi value received ranking, and this should be the main object of study. For DeFi sub-index, there's a ranking of countries by their DeFi transaction volume, and weight the rankings to favor countries with lower PPP per capita. [Check the criteria behind](https://www.chainalysis.com/blog/2023-global-crypto-adoption-index/#methodology). People in India, Thailand, Nigeria, Vietnam are putting their wealth into crypto nowadays and also being [endorsed by broader media](https://cointelegraph.com/news/india-tops-chainalysis-2023-global-crypto-adoption-index), thus motivating ShapeShift DAO pioneering spirit to be there.


The full scenario is shown below and our bets for 2024 are in green. These countries are under International marketing team spot/evaluation and are known to be impacted by Referral campaigns, which suggests a new approach from the team. There's a room of possibilities for community engagement and new marketing experiments. Referral campaigns means a new set of KPI's aiming measurable metrics. Growth hacking is also welcome.


[According to Chainalysis](https://www.chainalysis.com/blog/eastern-asia-cryptocurrency-adoption/) CSAO countries are leading DeFi global adoption because it's largest unbanked population in addition to recent regulatory movements against offshores. The scenario might sound chaotic around India after recent compliance enforcements but at same time Hong Kong (with quite [crypto-friendly policies](https://cointelegraph.com/news/not-like-china-hong-kong-reportedly-wants-to-legalize-crypto-trading)) keeps carrying out the Eastern Asia instutional and professional volumes even before a big fall in 2020 Q3, it's still the biggest pro value among other regions.

| Value by type of service (Jul 2022- Jul 2023) | Transactions Volume |
| -------- | -------- |
|  | 

Bitcoin adoption also grew in Nigeria, the volume of crypto transactions grew 9% year-over-year to $56.7 billion between July 2022 and June 2023. Maybe pushed by it's neighboor MENA, which now occupy a competitive position among other heavily populated regions. Sub-Saharan Africa and MENA countries are still under constant development and some of them with failed economies, since the abscence of effective crypto policy is real and DeFi makes sense.


## India

### Demographics
Population: 1.4 billion
Capital: New Delhi
Financial center: Mumbai
Currency: India Rupee (INR)
GDP per capita: US$ 2,210 (LMI)

India is the [5th largest economy](https://www.forbesindia.com/article/explainers/top-10-largest-economies-in-the-world/86159/1) in the world, economy recorded a growth of 6.1% in the fourth quarter of the fiscal year 2022-23. This performance contributed to an annual growth rate of 7.2%.

| Indicator | Historical GDP growth rate |
| -------- | -------- |
|  |  | Text |

Source: [Worldbank](https://data.worldbank.org/country/india), [Forbes India](https://www.forbesindia.com/article/explainers/gdp-india/85337/1)

### Crypto Scenario

It is estimated that 97.5 million people, 7.1% of India’s total population, currently own cryptocurrency. The India cryptocurrency market is estimated to cross US$ 250 million by 2023 and is expected to grow at a significant CAGR of over 9.2% over the forecast period of 2023-2028.

Source: [Triple-A ](https://triple-a.io/crypto-ownership-data/)/ [Rationalsat](https://rationalstat.com/india-cryptocurrency-market/)

Since 2022, Indian exchanges have shifted their focus towards regulatory compliance. In December, 2023, [regulators announced](https://pib.gov.in/PressReleasePage.aspx?PRID=1991372) a block on URLs of 9 centralized exchanges. New compliance enforcements might cause slight turbulence in the Indian market, which has around 115 million crypto investors. They may move towards homegrown cryptocurrency exchange platforms. Despite so many things happening at the same time, Indian crypto market and [Venture Capital entities](https://www.bain.com/insights/india-venture-capital-report-2023/) remains optimistic for 2024. Big players like [CoinDCX](https://coindcx.com/) have touched DeFi lands introducing [Okto](https://okto.tech/), a non-custodial wallet. It slogan says "*Empower yourself with DeFi*".


India remains a top crypto market in CSAO region reaching an expressive transaction volume estimated in $268.9 billion according to [Chainalysis](https://www.chainalysis.com/blog/central-southern-asia-cryptocurrency-adoption/).


[Blockworks highlights](https://blockworks.co/news/chainalysis-global-adoption-index-india-lmi) DeFi became more prevalent in CSAO region, being resposible for about 56% of transaction volume between July 2022 and June 2023. Nearly 70% of that volume came in transfers valued at $1 million or more - signaling greater institutional adoption.

### Ecosystem

There are 953 Blockchain in Financial Services startups in India which include major regional players like [CoinDCX](https://coindcx.com/), [WazirX](https://wazirx.com/), [CoinSwitch](https://coinswitch.co/), [Polygon](https://polygon.technology/). India also has some DeFi names such as [InstaDapp](https://instadapp.io/)(a multi/cross chain dApp), tanX (Previously Brine.fi - a multichain DEX) and [Polynomial](https://www.polynomial.fi/) (DeFi Derivatives).

The full list can be checked [here](https://tracxn.com/d/explore/blockchain-in-financial-services-startups-in-india/__RaWEWQGswGy0BjCoE4i4pXwnHxjnwRwm42Zpug4d-os/companies).


## Eastern Asia

### Demographics

China population: 1.4 billion
Taiwan population: 23 million
Hong Kong Population: 7.4 million
Singapore Population: 6 million
China's GDP per capita: US$ 12,540 (UMI)
Taiwan's GDP per capita: US$ 32,340 (HI)
Hong Kong's GDP per capita: US$ 51,170 (HI)
Singapore's GDP per capita: US$ 91,739 (HI)
Currencies: Hong Kong Dollar (HKD), Renminbi (CNY), New Taiwan Dollar (TWD), Singapore Dollar (SGD)
Common Language Spoken: There's a variety of Chinese (Simplified and Traditional), it's official language in China, Taiwan, Hong Kong and Singapore. 16% of global population (1.3bi) speaks Chinese. Hong Kong and Macau shares Cantonese variant.

| Combined GDP's | Selection |
| -------- | -------- |
|  |  |

Source: [IMF data](https://www.imf.org/external/datamapper/NGDPDPC@WEO/HKG/CHN/TWN)

### Crypto Scenario

Estimated market size in Asia: 260 million people
Eastern Asia market size per crypto owners:

- over 245k, 3.27% of Hong Kong’s total population, currently own cryptocurrency
- over 78 million people, 5.5% of China’s (Mainland) total population, currently own cryptocurrency
- over 550k, 2.31% of Taiwan's total population, currently own cryptocurrency
- over 830k, 13.98% of Singapore's total population, currently own cryptocurrency

Source: [Triple-A](https://triple-a.io/crypto-ownership-data/)

Revenue in the Cryptocurrencies market is projected to reach US$142.6m in 2023. Revenue is expected to show an annual growth rate (CAGR 2023-2028) of 12.29% resulting in a projected total amount of US$254.6m by 2028.

Hong Kong received estimated $64.0 billion in crypto received between July 2022 and June 2023, which makes it a real expressive market. China received $86.4 billion during the same time period. **Hong Kong having a population 0.5% the size of mainland China’s**.


Hong Kong also has a highly active OTC market and significant share of transaction volume coming in large institutional transactions (>$10mi). Hong Kong's instutional participation really matters in Eastern Asia financial markets, it's refugee for instutional investors and fintechs since China anti-crypto enforcements banned crypto practices.


In Oct 4th (2023), the crypto-focused venture capital firm CMCC Global has raised $100 million for a new fund to back startups in Asia's blockchain sector, according to [Cointelegraph](https://cointelegraph.com/news/crypto-vc-hong-kong-100-m-fund-asian-blockchain-startups).

### Ecosystem

Eastern Asia owns a lot of CeFi and large Venture Capital firms, some crypto companies are well known inside our industry: CoinEx (owned by [ViaBTC](https://www.viabtc.com/) group - one of the largest BTC mining pool), [Animoca Brands](https://www.animocabrands.com/) (has several subsidiaries, including [The Sandbox](https://www.sandbox.game)). On the DeFi side [MOBOX](https://www.mobox.io), a gaming metaverse that combines automated optimized DeFi yield farming and gaming NFTs. [Clearpool](https://clearpool.finance/) is based in Singapore and it's a decentralized capital markets protocol wherein whitelisted institutions can borrow uncollateralized liquidity from a decentralized network of lenders. [Wombat Exchange](https://www.wombat.exchange/) is a multi-chain stableswap is another interesting Hong Kong based project.


Source: [MetaEra Media](https://twitter.com/MetaEra_Media)

## Argentina and Brazil
### Demographics
Argentina Population: 42 million
Brazil Population: 203 million
Capitals: Buenos Aires (Argentina), Brasilia (Brazil)
Currencies: Argentine Peso (ARS), Brazilian Real (BRL)
Argentina's GDP per capita: US$ 13,390 (UMI)
Brazil's GDP per capita: US$ 11,030 (UMI)

| Combined GDP's | Selection |
| -------- | -------- |
|  |  |

Source: [IMF data](https://www.imf.org/external/datamapper/NGDPDPC@WEO/ARG/BRA)

Argentina is experiencing a turbulent moment in its economy with rampant inflation leaving the population unbanked and opting to use Dollars instead of the Argentine Peso. Brazilian inflation is properly adjusted with its GDP showing signs of a regulated economy since mid 90's.

| Argentina's GDP x Inflation | Brazil's GDP x Inflation |
| -------- | -------- |
|  |  |

### Crypto Scenario

Recent political events have made the Latin American economic scenario unstable, everything indicates that this region is experiencing a right-wing wave. The recent president of Argentina, [Javier Milei](https://twitter.com/JMilei), is a bitcoiner and signals liberalism and Austrian school as main topics on his economic agenda. [Diana Mondino](https://x.com/DianaMondino/status/1737878455637733690?s=20), the minister of foreign affairs, international trade and worship of Argentina, has claimed that a decree legalizing the use of certain currencies in contracts and for payments would apply to Bitcoin. Argentina faces a bankrupt economy and this encourages the population to adopt crypto.


Brazil leads crypto institutional adoption in Latin America, it's largest bank [Itaú recentely launched Bitcoin trading](https://cointelegraph.com/news/brazil-itau-unibanco-bitcoin-trading) after Nu Holdings - a Brazil-based fintech company and owner of the crypto-friendly Nubank [backed by Berkshire Hathaway](https://cointelegraph.com/news/warren-buffett-crypto-nu-stock-apple-amazon-2023-bitcoin) - announced crypto services to over 1.35 million users. Brazil's Central Bank has commissioned a commercial banking giant to build a DeFi solution for its prototype central bank digital currency (CBDC) and called the project a “DeFi liquidity pool,” and described it as a “platform that enables custody, currency exchange, and alternative investments via blockchain technology and smart contracts.”Meanwhile, across the border in Argentina, a city says that it will accept tax payments made using USD-pegged stablecoins – while the capital Buenos Aires also wants to get in on the action.


It is true that both countries are also more inclined to use CEX than DEX, however, socioeconomic development in both is growing as the world turns its eyes to Latin American workforce, which today exports technology and developers. A lift needs to be made in order to educate people self-custody, it's all about education in the 3rd. world. Weak regulations favor centralized entities operating in these countries


As observed previously, Argentines prefer Dollar to their own currency and the graph below can explain the desire to dollarize their economy - in all social strata. Stablecoin adoption in Argentina is wider than in Brazil. Meanwhile, Brazilians display a higher demand for Bitcoin and especially altcoins, which are more typically used for long-term investment and speculation.


Argentinian peso lost it's value day-by-day as crypto purchasing trended up, then really spiked in mid-April, around the time Argentina’s inflation crossed 100%.


### Ecosystem

Besides crypto fintechs like [Mercado Bitcoin](https://www.mercadobitcoin.com.br/) (a Brazilian unicorn), and [Ripio](https://www.ripio.com) (a large financial blockchain payments company in Argentina), both countries shares a thriving DeFi ecosystem. Promising projects like [Picnic](https://twitter.com/usePicnic) and [Pods Finance](https://twitter.com/PodsFinance) (Brazilian DeFi protocols) leads DeFi adoption alongside with [POAP](https://poap.xyz), native from Argentina.


## Vietnam (Ongoing research)

### Demographics
Population: 102.8 million
Capital: Hanoi
Currency: Vietnamese dong (VND)
GDP per capita: US$ 4,187 (reaching UMI)

GDP showed exponential growth in 2022 with 8% and adjusted in 2023 to 6%. Vietnamese economy expects slow in 2024 as [exports falls](https://www.reuters.com/world/asia-pacific/vietnam-2023-economic-growth-slows-505-2023-12-29/) heading to 5%.

| %GDP | %GDP growth (2022) |
| -------- | -------- |
|  | 

Source: [IMF](https://www.imf.org/external/datamapper/profile/VNM), [Worldbank](https://data.worldbank.org/?locations=VN)

### Crypto Scenario
The Vietnamese venture capital firm [Kyros Ventures published a report](https://blog.kyros.ventures/wp-content/uploads/2023/08/Kyros-Ventures-Crypto-Market-Report-H1-2023-ENG.pdf) (first half of 2023) on the actual Vietnam cryptocurrency market counting with crypto adoption trends demographics data. It seems the Vietnam audience is "locked" in CEXes making the proportion of participants that expects a fully decentralized crypto market relatively low.

Desire level of cryptocurrency governance:
Source: Kyros

However, recent FUDs surrounding CEX exchanges have led to the shift in user sentiment, prompting a tendency to migrate towards DEX platforms. It's notable that GameFi still leads crypto adoption but DEXes may find valuable ground.

DEX Trends:

| DeFi participation rate | DEX usage > CEX usage? |
| -------- | -------- |
|  |  |

Source: Kyros

Also, [Kyros identified](https://cointelegraph.com/news/76-percent-of-vietnamese-crypto-holders-invest-based-on-referrals) that 76% of Vietnamese crypto holders invest based on referrals, they admitted being “influenced by recommendations or referrals” regarding crypto investing. According to [Cointelegraph](https://cointelegraph.com/news/vietnam-s-crypto-adoption-factors-driving-growth-in-southeast-asia), there are no crypto taxes or regulations plus a huge unbanked population in Vietnam so the DeFi narrative might fit and fill this void since the population has limited access to standard financial services.

### Ecosystem

Source: Kyros

## Glossary

GDP - Gross domestic product
GNI - Gross national Income
LMI - Lower middle income country
UMI - Upper middle income country
IMF - International Monetary Fund
CSAO - Central & Southern Asia Crypto
MENA - Middle East and North Africa
LatAm - Latin America
CAGR - Compound annual growth rate
DeFi - Decentralized Finance
DEX - Decentralized Exchange
CEX - Centralized Exchanged