Outlook for the DeFi track in 2025: Which ecology will explode?

Author: Alex O'Donnell, CoinTelegraph; Compiler: Tao Zhu, Golden Finance

Multiple industry executives have stated that decentralized finance (DeFi) will reach a turning point in 2025 as Bitcoin staking, tokenization of real- world assets (RWA), and agent AI catalyze applications.

In 2024, Bitcoin prices topped $100,000 for the first time as investors poured more than $100 billion into spot BTC exchange-traded funds (ETFs).

“Bitcoin’s all-time highs will trigger new interest in cryptocurrencies from institutions and regulators and will reinvigorate the entire cryptocurrency industry in 2025,” noted Dean Tribble, CEO of layer one network Agoric Systems.

According to DefiLlama, the total value locked (TVL) in DeFi protocols reached $130 billion in December, approaching the ecosystem’s all-time high of approximately $175 billion in 2021. Industry executives expect this upward trend to continue next year.

“By 2025, DeFi infrastructure and blue-chip protocols such as Aave, Maple, and Maker will have been operating at scale for more than four years, ” noted Jacob Phillips, co-founder and head of strategy at Bitcoin staking protocol Lombard.

“These platforms will become a reliable place for institutions and new users to use Bitcoin,” Phillips said.

Source: DefiLlama

Bitcoin Staking

Bitcoin’s emerging second-layer (L2) scaling network and DeFi protocol ecosystem are creating unprecedented opportunities for investors to earn from Bitcoin.

“Bitcoin DeFi currently accounts for 0.1% of its total asset value. This is a 300x opportunity to grow DeFi on Bitcoin,” Alexei Zamyatin, co-founder and CEO of Build on Bitcoin, noted, adding:

“We have spoken to dozens of large Bitcoin DeFi users and funds who are keen to earn income on their Bitcoin holdings.”

Bitcoin L2s like Babylon and CoreChain pay stakers a fee to secure their network by locking BTC as collateral.

Currently, Liquid Staked Tokens (LST), which represent claims against BTC, are proliferating. According to data from stakingrewards.com, as of December 19, the total value locked (TVL) of Bitcoin LST was as high as $2.5 billion.

Matt Hougan, head of research at asset management firm Bitwise, believes that Bitcoin-backed ETFs may also gain traction by 2025.

" There's a lot of demand for Bitcoin yield. Whether it will become an ETF structure in the U.S., I'm not sure, but in Europe, certainly," Hougan said.

Source: Stakingrewards.com

RWA Tokenization

Colin Butler, global head of institutional capital at Polygon, noted in August that tokenized real-world assets (RWA) — digital tokens that represent claims on anything from U.S. Treasuries to art — are a $30 billion investment globally. Trillion dollar market opportunity.

According to RWA.xyz, they have achieved about $14 billion in TVL. Tokenized U.S. Treasury securities with yields are particularly popular, with TVL exceeding $3 billion.

“Tokenizing real-world assets such as real estate and carbon credits will unlock unprecedented liquidity, while advances in payments will further simplify cross-border transfers,” noted Raj Brahmbhatt, CEO of Web3 settlement platform Zeebu.

Even the U.S. Treasury has praised tokenization’s potential to improve liquidity and reduce “operational and settlement friction.”

“In the United States, with the victory of (President-elect Donald) Trump, I am very optimistic that the United States will become the global leader in this area by the end of this year,” Brahmbhatt said.

Source: RWA.xyz

agent-based artificial intelligence

According to CoinGecko, tokens related to agent-based artificial intelligence (machines that autonomously pursue complex goals) will have a combined market capitalization of nearly $10 billion in 2024.

Analysts predict that the fusion of artificial intelligence and blockchain technology will transform Web3, creating a future where autonomous artificial intelligence builds decentralized applications and conducts transactions with human users.

JD Seraphine, CEO of AI protocol Raiinmaker, noted that agent-based AI “has proven to be core to the future of the industry.”

Seraphine said that in 2025, “artificial intelligence agents are expected to play a more important role in the decentralized community.”

Hougan said the potential areas for AI agents are nearly limitless, adding:

"It doesn't matter if you don't know exactly what's going to happen, as long as you know that what's going on is really potentially important and you want to engage with it."