What is Next for Decentralized Finance (DeFi) in 2025?
Although many cryptocurrencies, including Bitcoin, have reversed from their all-time highs in December, their prices are still far above where they were at the start of the year. This has led to renewed investor interest, with many analysts believing that a continued uptrend in 2025 could fuel interest in Decentralized Finance (DeFi).
The DeFi space has recorded a Total Value Locked (TVL) of $125 billion this year, according to DefiLlama data. Agoric Systems CEO Dean Tribble expects innovations like agentic artificial intelligence, Bitcoin staking, and real-world asset tokenization to catalyze adoption in 2025, thus enabling DeFi’s TVL to cross above the all-time high of $175 million set in 2021.
Let’s dive deeper into each catalyst.
Bitcoin Staking
Like Ethereum, Bitcoin now supports layer-2 scaling solutions that host several DeFi protocols, which allow crypto users to earn annual yield by staking Bitcoin. As of December 25, the Bitcoin DeFi sector accounts for only 0.1% of the entire TVL. Build on Bitcoin co-founder Alexei Zamyatin says this sector could grow 300x in 2025, arguing that there are thousands of Bitcoin holders willing to stake their coins to earn passively.
Moreover, he claims that increased institutional demand for Bitcoin yield could lead to the introduction of Bitcoin staking ETFs in 2025. However, Zamyatin says it may take some time for such ETFs to be launched in the US market but they are likely to go live in the European market before the end of next year.
Real-World Asset (RWA) Tokenization
A tokenized RWA is a digital token that represents claims on anything. It could be artworks, US Treasury bonds, or even real estate. The RWA tokenization sector boosts a TVL of $14 billion. Zeebu CEO Raj Brahmbhatt says this space could see massive growth in 2025 under Donald Trump’s government, considering the incoming US President has previously praised tokenization’s potential to boost liquidity and minimize settlement frictions.
Agentic AIs
Tokens tied to crypto projects powered by artificial intelligence have risen in value this year, with their total market cap crossing the $10 billion mark. AI protocol Rainmaker CEO J.D. Seraphine says these projects will likely play a key role in transforming the Web3 space in 2025, subsequently attracting investors to their native tokens.
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