Trading DeFi: Strategies and Tips for Maximizing Your Returns in 2025

Creating an efficient DeFi strategy can be quite difficult even for people with enough experience to teach in universities. Often, it comes down to time management and we, unfortunately, cannot spare much even when it comes to life-changing money. Let’s talk about some of the approaches a crypto investor can use in 2025 to achieve success.

Some of the best DeFi trading strategies revolve around seamlessly transitioning between CeFi and DeFi. Despite the growing TVL numbers and improving usability, DEXes still lag behind many centralized exchanges in terms of service, user experience, consumer protection, and many other aspects. In terms of raw numbers, CEXes accounted for a trading volume of over $1 trillion in December 2024 dwarfing DEXes with just $285 billion.

However, the increasing combined TVL and the growing number of active users suggest that the balance may still be disrupted with more people trading on decentralized platforms. We want to give you several interesting ideas on how to achieve token swap optimization, work with different protocols, and create a balanced portfolio focused on digital assets.

Note that the information is provided strictly for educational purposes and should not be considered financial advice. We encourage all our readers to do their due diligence.

Some popular blockchain trading techniques

The decentralized finance ecosystem has a lot to offer when it comes to trading. The category of DEXes alone contains over 1540 different protocols across over 120 chains. When bridges, AMMs, and derivatives are taken into account, the number goes up to over 2,000. It is a staggering diversity that often overwhelms newcomers.

While some people believe that picking a good trading platform is easy, one must consider a variety of factors:

• Target chains. Each network has its own trading platforms. Moving funds across the DeFi ecosystem is often difficult and requires many intermediate steps. Instead, you should choose an ecosystem within which you plan to conduct most operations. For instance, Base is one of the newest blockchains and its flagship DEX Aerodrome offers a variety of pairs and operates 328 pools with an average APY of over 104%.
• Target digital assets. The vast majority of DEXes work with stablecoins like USDC or USDT. However, they may also allow users to trade many tokens issued by other protocols. The chain selection defines which assets will be readily available. For example, if you are interested in ETH trading, it is a good idea to focus your attention on layer-1 and layer-2 protocols of the Ethereum ecosystem. On the other hand, some tokens like TON may seem lucrative, and moving to DeDust is a better idea for some investors.
• Wallet compatibility. Whether you want to focus on liquidity pool strategies or prefer trading directly, you will need a wallet that can interact with chosen networks. MetaMask is a go-to option for many Ethereum users but there are other options like Trust Wallet, WalletConnect, or Rivo. The latter is a nice option if you are interested in using advanced strategies created and curated by industry experts while maintaining full control over holdings.

Other factors, such as security, interoperability, or onboarding, should be considered too. However, the confines of this particular guide prevent us from exploring them deeper.

Crypto investment optimization in trading

Selecting a good approach to retail trading in the DeFi ecosystem in 2025 is not an easy task considering the variety of options that can be explored by a typical crypto enthusiast. However, we have some suggestions that may be exactly what you are looking for:

• Automated market makers are great for people who want to make money on tiny price discrepancies. Several protocols like Cetus AMM with a massive TLV of over $197 million or PancakeSwap AMM with a TVL of $480 million generate sizeable returns and can be used by all proactive DeFi investors. The latter operates 274 pools with an average APY of 40% and great pools like the WETH-USDT one with a 15.92% base APY and up to 5.23% in CAKE rewards.
• Crypto arbitrage is still a viable system for many crypto enthusiasts who are willing to track prices across different platforms and markets. Triangular arbitrage is one of the best approaches due to the slower price consolidation speed and the variety of options across many DEXes to trade three assets simultaneously. You can also automate this strategy by employing applications like HummingBot which can also automate many market-making systems when used on CEXes or DEXes.
• Focusing on yield farming methods. You don’t have to trade assets directly when working in the decentralized finance ecosystem. DEXes are always seeking liquidity and reward investors who are willing to provide it. In some cases, returns can be quite lucrative. For instance, Aerodrome on Base has several excellent pools that generate far more than you would by swapping assets directly. For example, the USDC-AERO pool offers a 43% reward APY which is not even the best option for investors who are not afraid to take on some risk.
• Derivatives trading is another interesting option for many capital holders who want to keep several long positions and regularly hedge them with perpetual futures and other derivatives since it is one of the best risk mitigation techniques in the DeFi sector. One of the best protocols in this category is Jupiter Perpetual Exchange on Solana with a solid $1.9 billion TVL and a massive daily perps volume eclipsing $2.8 billion in January 2025. GMX, HyperLiquid, and Synthetix are also good choices.

DeFi investors must always keep in mind that they can automate many operations and increase efficiency and processing speeds by removing redundant actions and the necessity to interact with a clunky user interface.

Some of the most advanced trading algorithms are designed specifically for the DeFi sector. Automated market-making strategies and arbitrage robots can be successfully deployed to consistently generate profits. On the other hand, you can simply work with platforms like Rivo and invest in various DeFi strategies. We strongly recommend using all potent instruments to improve your chances of achieving optimal profitability.

Hunting for reliable decentralized finance returns in 2025

Some of the finest strategies and approaches to DeFi trading can be easily accessed by all participants of the DeFi ecosystem.However, you must remember about many risks associated with capital allocation to this sector. For starters, users remain in full control over their finances with self-custody being one of the biggest selling points of decentralization in finance. Additionally, onboarding processes can be brutal to newcomers who do not have experience with dapps.

It is crucial to focus on effective digital asset portfolio management by using highly specialized tools like DeFi trackers (DeFiLlama, De.Fi, CoinGecko, etc.) and reliable wallets with lots of useful features (Rivo, Trust Wallet, MetaMask, and others).