DeFi is about to skyrocket

DeFi is becoming more complex, much like traditional finance, in terms of its product suite. We’ve already seen this trend emerging with the adoption of products like Pendle, Ethena, EtherFi and Lombard. In 2025, DeFi usage will explode, with a wave of adoption for products such as options, swaps, and other derivatives like the interest rate swap market — the latter’s market size is at 465.9 trillion USD in TradFi.

Moreover, new institutional players are entering the crypto ecosystem, nurturing a new category: On-chain finance. Participation is no longer limited to buying blue-chip cryptocurrencies like BTC and ETH. These market participants also actively expand on-chain market depth by using tools such as lending markets and liquidity provision with RWA-backed digital assets, i.e. stablecoins. Securitize and BlackRock are great examples of companies pushing the frontier on this front.

The evolution of DeFi mirrors traditional finance's complexity, signaling a significant shift in market dynamics. As institutional players enter, the landscape will transform, paving the way for innovative products and broader adoption. Exciting times ahead!