The Future of the DeFi Industry: Key Trends and Predictions for 2025

With the things in the DeFi ecosystem moving quickly, it is quite hard to make predictions about the long-term future of the sector. Nonetheless, we can make some educated guesses about the direction for the decentralized finance domain in the near future. By looking at historical trends, recent events in the crypto market, and the intentions of regulators, we can intuit some ideas about what to expect in 2025.

Exploring key trends in decentralized finance is relatively easy for observant individuals. Since the crypto market as a whole is largely speculative, narratives are often formed by overarching themes that one can deduce by analyzing politics and economics.

Here are some interesting trends in the world of DeFi:

• The intense use of artificial intelligence. AI in blockchain ecosystems is still something that we are waiting to achieve its full potential. However, the rapid growth of the AI agents sector in 2024 showed that there is some interest in this innovative technology. The combined TVL of the sector is significantly lower at the moment, but it is still above $65 million with several protocols offering promising products to DeFi users.
• The return of the king. Lending has been the biggest foundational block for the whole DeFi ecosystem since its inception. In 2022, liquid staking overtook it. At some point, liquid staking had over $71 billion in TVL, which is $20 billion more than all lending protocols had at the same time. In 2025, lending is gaining traction. The current combined TVL is over $40 billion, and Aave is once again the leading protocol with its $17 billion TVL.
• The rise of algorithmic stablecoins. With MakerDAO confidently moving into the RWA (real-world assets) space and Aave pushing its GHO to the mainstream audiences, many experts are predicting that the “algorithmic stablecoins vs regulated” is only getting started. GHO is used primarily across the Ethereum ecosystem, with Curve, Balancer, and Uniswap responsible for the majority of trading volume. The DAI does not require any lengthy introductions with its $5.36 billion market cap and over $110 million in daily trading volumes.

Other notable trends in the sector include:

• The increase in TVLs and the adoption rate of RWA protocols that focus on tokenizing various assets and infrastructures.
• A notable spike in institutional adoption of crypto, with many investment banks moving into the ecosystem with long-term plans.
• A strong focus on increasing the interoperability between different chains to allow investors to move capital more easily.

The latter is a hugely important topic for the whole DeFi ecosystem. Many investors coming from traditional markets often feel limited by artificial borders between chains. The existence of incompatibilities creates a situation where users have to resort to bridges that often have vulnerabilities due to the centralized nature of oracles. The implementation of long-awaited cross-chain DeFi solutions is one of the key trends in 2025.

Comparing dynamics between different types of protocols

By looking at various DeFi categories from a historical perspective, we can identify some trends that are taking shape as you are reading this article. While you don’t necessarily have to focus on these dynamics, it is important to keep them in mind when making investment decisions. Note that the following comparison is not financial advice. Do your own research!

The table above demonstrates the rapid growth of the lending sector and a respectable increase in liquid staking volumes. However, DEXes have been very consistent, which may look concerning given the increase in the number of active users across the DeFi sector.

The future of DeFi in 2025 will be defined by the performance of the larger crypto market. As hard as it is to admit for some DeFi enthusiasts, Bitcoin dominance is still the most decisive force in our industry. It shows the confidence of average investors in digital assets. The correlated decline in TVL numbers perfectly captures the dependence of the sector on the high price of the leading coin.

Technological and regulatory trends within the ecosystem

Financials paint an intriguing picture of the DeFi sector. Investors are moving toward safer capital allocation options and spending less time and resources on riskier protocols. It is a notable trend that should be taken into consideration by all potential DeFi users.

However, there are some important developments that are largely untied from TVLs, market caps, and APYs:

• The implementation of artificial intelligence across the sector. While AI is still not ready to be deployed on blockchain directly, many companies are showing that it is possible to implement smart agents to improve user experience and ease the onboarding process. The Maneki AI at Rivo is an excellent example of a digital assistant that can help users learn the platform faster, invest smarter, and stay safe while doing so. Maneki is a great example of how AI is transforming risk management in DeFi.
• Regulators across the globe are trying to bring order to the uncharted waters of the DeFi sector. One of the most important regulations is being developed and enforced in the EU zone. The Markets in Crypto-Assets Regulation is a set of new rules that will be slowly rolled out in EU countries. Currently, it is in the last development phase, with the third consultation package that introduced new investor protection measures and defined crypto-assets already published. The regulatory impact on DeFi should be positive as we need stronger consumer protection measures for the ecosystem to grow.

The rapidly changing geopolitical situation and the suffering global economy force the whole DeFi industry to adapt. New narratives are overwriting what has been the norm before. For instance, many projects that focus strongly on the environmental aspects of energy consumption of DeFi protocols involve switching gears or abandoning their original premises. The new overarching narrative is the evolution of artificial intelligence and potential applications of this new, exciting technology in the DeFi ecosystem.

The main takeaway

In 2025, the core focus of many decentralized governance models will be on strengthening their communities, reinforcing their positions, and bolstering existing user bases. It is hard to imagine that there will be bold moves from protocols that have established themselves as reliable and consistent. 

Improving user experience, investor safety, and onboarding processes will be the most important points of pressure for many projects. We should expect new DeFi security innovations and the implementation of AI assistants across the whole ecosystem.

For many investors, the most challenging part is still the process of selecting the best investment strategies. With thousands of options to choose from, many newcomers and even experienced veterans are struggling to find something worthy of their time. It is hard to find enough time and vital resources to research all promising investment options.

Rivo understands the role of education in understanding complex DeFi mechanisms and focuses on delivering an excellent user experience through its platform and the smart Maneki AI assistant. Go to the yield marketplace to browse hundreds of investment strategies picked by experts and diligently researched by dedicated specialists. You will be able to find great options that suit your preferences, risk style, and investable capital!