As we step into the new year, several industry executives have shared their insights on what’s in store for decentralized finance (DeFi). With Bitcoin staking, real-world asset (RWA) tokenization, and agentic artificial intelligence (AI) set to catalyze adoption, DeFi is poised to reach an inflection point in 2025.
Renewed Interest in Crypto from Institutions and Regulators
The year 2024 saw a significant milestone for Bitcoin, with its price surpassing $100,000 per coin for the first time. This development sparked renewed interest in crypto from institutions and regulators alike. As Dean Tribble, CEO of layer-1 network Agoric Systems, noted:
"Bitcoin’s all-time high will spark renewed interest in crypto from institutions and regulators alike and should reinvigorate the entire crypto sector in 2025."
Total Value Locked (TVL) in DeFi Protocols Continues to Rise
In December 2024, total value locked (TVL) in DeFi protocols reached $130 billion, nearing the ecosystem’s all-time high of around $175 billion in 2021. Industry executives expect this uptrend to continue next year.
Bitcoin Staking: A Growing Opportunity
Bitcoin staking is emerging as a significant opportunity for investors to earn a yield on their Bitcoin holdings. As Alexei Zamyatin, co-founder and CEO of Build on Bitcoin, explained:
"Bitcoin DeFi currently accounts for 0.1% of its total asset value. That’s a 300x opportunity to grow DeFi on Bitcoin."
Liquid staking tokens (LSTs) representing claims on staked BTC are proliferating, with TVL exceeding $2.5 billion as of December 19, according to stakingrewards.com. In 2025, Bitcoin staking ETFs may also gain traction, with Matt Hougan, asset manager Bitwise’s head of research, commenting:
"There’s a lot of demand for Bitcoin yield. Whether it makes it into an ETF structure in the United States, I’m not sure, but in Europe, definitely."
Real-World Asset (RWA) Tokenization: A $30-Trillion Market Opportunity
Tokenized real-world assets (RWAs), such as digital tokens representing claims on US Treasury bonds or artworks, are a $30-trillion market opportunity globally. Colin Butler, Polygon’s global head of institutional capital, noted:
"Tokenizing real-world assets like real estate and carbon credits will unlock unprecedented liquidity, while advancements in payments will further streamline cross-border transfers."
Even the US Treasury Department has lauded tokenization’s potential to improve liquidity and reduce "operational and settlement frictions." As Raj Brahmbhatt, CEO of Web3 settlement platform Zeebu, emphasized:
"In the US, with [President-elect Donald] Trump’s victory, I am aggressively bullish on the US becoming a global leader in the space by the end of the year."
Agentic AIs: Transforming Web3
In 2024, tokens linked to agentic AIs collectively bootstrapped nearly $10 billion in market capitalization. Analysts expect the fusion of AI and blockchain technology to transform Web3, creating a future where self-directed AIs build decentralized applications and transact with human users.
As J.D. Seraphine, CEO of AI protocol Raiinmaker, noted:
"Agentic AI has already proven central to the future of the industry."
In 2025, "AI agents are expected to take on a more prominent role within decentralized communities," Seraphine added.
