Top 5 Decentralized Finance Trends to Expect in 2025: Analyst Insights

While the start of 2024 seemed like a difficult year for decentralized finance (DeFi) development, a bull summer and growing industry interest reignited momentum, attracting new users and investments while driving innovation in protocols and use cases.

According to a BitGet report, DeFi’s total value locked (TVL) has seen a massive recovery in 2024, primarily driven by Layer-2 (L2) applications such as Ethereum (ETH) and Solana (SOL).

As of November 25, 2024, DeFi’s TVL surpasses $118 billion, DefiLlama shows, having not yet reached previous 2021 highs but seemingly on the path.

As Bitcoin (BTC) continues to hit all-time highs following Donald Trump’s win in the 2024 US Presidential election, the general sentiment for the state of the DeFi market might continue to grow as we enter the new year.

We spoke to experts to find out which DeFi trends will emerge in 2025.

Table of Contents Table of Contents

1. Key Takeaways
2. The Blend of Traditional & Decentralized Finance
3. What Is the Future of DeFi in  2025?
4. US Election Results & Future of DeFi
5. FAQs
6. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. The Blend of Traditional & Decentralized Finance
3. What Is the Future of DeFi in  2025?
Show Full Guide
4. US Election Results & Future of DeFi
5. FAQs
6. References

The Blend of Traditional & Decentralized Finance

An emerging trend that has come out of 2024 is the blend of traditional and decentralized finance, Nick Cowan, the group CEO of Valereum (VLRM), a real-world asset marketplace, told Techopedia.

Cowan added that DeFi TVL’s continued growth is driven by enhanced security measures, improved scalability, and interoperability between blockchain networks. This, combined with the surge in institutional adoption, paints a pretty bullish picture for decentralized finance as we move into 2025.

Anndy Lian, an inter-governmental blockchain advisor, also attributed the current state of the DeFi market to technological advancements such as L2 solutions that address scalability issues and reduce transaction costs and times.

Lian told Techopedia:

“Emerging trends include the integration of real-world assets and non-fungible tokens (NFTs) into DeFi platforms, expanding the scope of financial services offered. Multi-chain interoperability is also gaining traction, allowing seamless asset transfers across different blockchains, which enhances the efficiency and security of DeFi applications.”

A number of experts echo BitGet’s findings, noting that Ethereum is possibly the number one protocol leading the way to broader DeFi adoption.

Alexei Zamyatin, the co-founder of BOB, a hybrid L2 powered by Bitcoin and Ethereum, added:

“DeFi has traditionally been dominated by Ethereum, contributing to its colossal share of nearly 55% of the total value locked within crypto. This is due to the ability to build and deploy smart contracts natively on the chain, as well as the network’s ability to efficiently handle complex computations.”

Zamyatin further explained that while Bitcoin is the original and most well-known blockchain, its inability to deploy smart contracts put it at a disadvantage in the DeFi race.

However, this is also changing with more projects emerging that aim to bring smart contract functionality to Bitcoin, such as BitcoinOS, which was the first project to verify zero-knowledge proof (ZKP) on BTC.

What Is the Future of DeFi in  2025?

Over the last year, DeFi’s growth has undergone significant changes. A number of new decentralized finance trends are starting to show up in the industry, stemming from the intersection of AI and DeFi products, the innovation of cross-chain solutions, and privacy. What makes DeFi unique in 2025?

1. The Intersection of AI & DeFi

With artificial intelligence (AI) continuing to proudly advance its way into the crypto industry and blockchains working on implementing new advancements that will improve their operations, new DeFi projects are becoming more efficient, accessible, and appealing to broader audiences.

Some experts say that the impact of AI on DeFi will continue to be present and develop quickly into the new year with more crossover interest from traditional Web2 companies entering the Web3 space.

Friederike Ernst, the co-founder of Gnosis and Gnosis Pay, highlighted that the company is excited about AI’s potential to drive greater adoption of decentralized applications (dApps) by addressing the “ease of use” challenge and enabling a whole new class of non-human users in the form of AI agents.

The total market capitalization for AI and big data tokens has already grown by 84% since the start of the year, and with more DeFi applications looking to integrate AI into their already existing ecosystems, the space could only continue to flourish.

2. Interoperability & Cross-Chain Solutions

Another significant trend that started to emerge at the end of 2024 and is expected to move into 2025 is interoperability and cross-chain solutions.

These technologies aim to bridge the fragmented world of blockchain networks, making it easier for users to access and move assets across different platforms without being constrained by the limitations of individual chains.

Lian highlighted that the industry has seen a “strong push” toward interoperability, with projects like Polkadot and Cosmos facilitating cross-chain communication.

“This has allowed assets and data to move seamlessly across different blockchains, enhancing the functionality and reach of DeFi applications.”

3. Privacy DeFi & ZKPs

The conversation of privacy continues to evolve into the DeFi strategies of 2025, with experts noting that privacy-focused DeFi solutions will become more prominent as concerns over data privacy grow.

Valereum’s Cowan added that “enhanced privacy and scalability through ZKPs will redefine the way users interact with DeFi.”

4. Real-World Utility, Asset Tokenization & New Era of NFTs

The NFT space is also expected to grow in 2025 as real-world asset tokenization becomes more prevalent in the DeFi market.

Valereum’s Cowan highlighted that the project has already seen adoption from the real-world asset tokenization space in El Salvador, and the NFT space could see more “practical and scalable use cases like asset-backed NFTs.”

5. New Emerging Cryptocurrencies

The end of 2024 has also brought forth a boom in stablecoins and meme coins, with both industries seemingly flourishing. Some experts are positive that the two token types will continue to move DeFi strategies as we enter the new year.

Andreas Brekken, the founder of SideShift.ai, a platform offering direct-to-wallet trading, explained that a big part of DeFi adoption in 2024 came from meme coins traded on Solana.

“DeFi in 2025 will revolve around meme coins. Users will borrow and lend meme coins, trade meme coin perpetuals, and other exotic meme coin derivatives. This will blow up spectacularly.”

Lian added that stablecoins, which have been on the rise in recent months, could become more integrated into the financial system.

“Regulatory developments could lead to more robust frameworks, enhancing their stability and trustworthiness. Innovations in algorithmic stablecoins might continue, but with increased scrutiny and regulation to prevent issues like those seen with TerraUSD.”

US Election Results & Future of DeFi

Without a doubt, this year’s US Presidential election race has been the most crypto-focused to date, with both parties vying for more open crypto regulation and adoption. However, Donald Trump’s win has seemingly pushed the DeFi sector forward, with BTC standing at $90,000 levels and a generally more positive outlook.

Eran Barak, the CEO of Midnight, a data protection blockchain platform pioneering the use of zero-knowledge technology, told Techopedia:

“The US election result will likely change the regulatory landscape, driving more clarity and crypto-friendly legislation, in turn propelling more businesses to adopt the technology.”

“In 2025, we’ll also see an influx in capital inflow,” he said. “With banks being allowed to hold up to 2% of capital in crypto starting January 1, 2025, more financial institutions and enterprises will seek to diversify their treasuries with digital assets, resulting in significant growth of capital in the blockchain and DeFi market.”

Lian added that a Trump administration could promote a shift towards a more open-minded regulatory approach, thus creating a more favorable environment for DeFi. Priorities would be correcting informational asymmetries and addressing fraud rather than strict enforcement of technical violations, such as registration failures.

“This shift could encourage greater adoption of DeFi technologies by reducing regulatory uncertainties and fostering innovation. Additionally, the potential for new legislation, particularly around stablecoins, could further integrate DeFi into the mainstream financial system, promoting wider adoption.”

The Bottom Line

The DeFi landscape in 2024 has experienced a remarkable resurgence, driven by technological innovations such as L2 solutions, AI integration, and cross-chain interoperability.

As the DeFi ecosystem becomes more scalable, secure, and efficient, trends like the blending of traditional and decentralized finance, the rise of real-world asset tokenization, and the growing role of privacy-focused solutions could continue to shape the market in 2025.

With increasing institutional adoption and a favorable regulatory environment—especially following the 2024 US Presidential election—DeFi is poised for significant growth.

As blockchain networks become more interconnected and user-friendly, the stage is set for DeFi to move closer to mainstream financial adoption, bringing new opportunities for both retail and institutional investors.

FAQs