The Top DeFi Trends to Watch for in 2025

Last year, I made bold predictions for 2024: that permissioned DeFi would roar into life, and modularity-focused projects like EigenLayer and Celestia would redefine the DeFi landscape. However, 2024 fell short of those expectations. Despite billions in deposits, EigenLayer hasn’t seen substantial adoption of its validation services, while Celestia faced limited demand for its offerings. Similarly, developments in hooks and Uniswap v4—seen as stepping stones to permissioned DeFi—are still ongoing.

As 2024 ends, here are my predictions for DeFi trends in 2025:

1. TradFi Dives into DeFi

In 2024, Wall Street took cautious steps into DeFi. BlackRock launched its BUIDL fund on Ethereum in March and later expanded it to five blockchains. State Street partnered with Taurus for tokenization, and Deutsche Bank announced plans to build its Ethereum layer 2 to tackle regulatory issues.

Experts believe these initial moves signal a larger shift. Paul Frambot, CEO of Morpho, predicts that traditional institutions will transition on-chain faster than expected in 2025. Similarly, Sygnum Bank’s Fatmire Bekiri sees growing demand from financial players for riskier on-chain products. A pro-crypto regulatory shift under a potential Trump administration could accelerate this momentum by clarifying compliance concerns, paving the way for institutional adoption.

2. Protocols Move to Their Own Blockchains

2024 saw major DeFi protocols exploring independent blockchains, typically Ethereum layer 2s. Uniswap announced Unichain, while Aave considered launching its Aave Network. Dedicated blockchains provide control over costs, reduce MEV risks, and eliminate resource competition with other protocols.

Daniel Wang, co-founder of Taiko Labs, anticipates further fragmentation of Ethereum-based ecosystems in 2025. This fragmentation will likely emphasize the need for robust interoperability between the growing number of layer 2 blockchains.

3. DeFi and Fintech Unite

Fintech could finally bridge the gap between DeFi and mainstream users. Firms like Robinhood and Revolut have expanded crypto services, hinting at readiness to integrate DeFi for higher yields.

Thomas Mattimore, CEO of ABC Labs, predicts that 2025 will usher in the adoption of the “DeFi mullet,” where fintech apps abstract DeFi’s complexity to deliver user-friendly financial products. Such partnerships could unlock significant growth, but DeFi protocols must prepare for the influx of fintech-driven investors.

BitGalactic Perspective

At BitGalactic, we view 2025 as a transformative year for DeFi. The fusion of traditional finance, fintech, and DeFi is inevitable, but scalability and interoperability will define success. Institutions and fintech companies could bring a flood of new capital, but only protocols with robust infrastructure and governance will thrive. As the regulatory environment evolves, a strategic balance between compliance and innovation will be crucial. Stay tuned to BitGalactic for insights into navigating this pivotal year in DeFi’s evolution.