As we enter the year's end, it can only mean one thing: prediction season is upon us. This is when industry experts analyze upcoming trends and forecast the innovations shaping the following year.
However, these forecasts are not mere speculation. Those at the forefront of the web3 space have a strong sense of the upcoming game-changing developments, as they are actively building them.
While there are no certainties regarding what 2025 will bring, we can consider some high-probability trends that will likely materialize.
Omnichain DeFi Becomes the Standard
In 2025, omnichain decentralized finance (DeFi), where liquidity is sourced across multiple blockchains and centralized platforms, is expected to gain widespread adoption. This model addresses one of the primary challenges blockchain networks face: liquidity fragmentation.
By enabling access to concentrated liquidity from various sources on demand, omnichain DeFi enhances capital efficiency and opens up new opportunities for arbitrage and yield farming across different blockchains. It allows users to tap into nearly unlimited liquidity from centralized exchanges (CEXs), delivered on-chain while avoiding the risks associated with custodial services. This results in a superior user trading experience, combining deep liquidity and better pricing options.
Institutional Adoption of DeFi Accelerates
While some institutions have started engaging in decentralized finance (DeFi) activities this year, their participation has been relatively limited, with most of their exposure restricted to crypto-related ETFs. However, this landscape is poised for significant change in the coming year. The infrastructure necessary to support large-scale institutional adoption has steadily developed throughout 2024.
Enhanced on-chain tools now offer solutions for compliance, wallet management, sub-accounts, and reporting, enabling institutions to engage with decentralized protocols confidently. These advancements assure institutions of the security and reliability of the underlying technology while addressing their legal and financial obligations. Additionally, tokenized real-world assets (RWAs), already a multi-billion-dollar sector, are expected to see significant institutional investment, especially with the improved liquidity provided by omnichain innovations.
The Rise of DeFi Derivatives, Including on Bitcoin Layer 2 Solutions
DeFi derivatives have steadily grown this year, with platforms like Hyperliquid, Jupiter, and GMX leading the way. In 2025, the DeFi landscape is expected to evolve further, expanding to new blockchain ecosystems and incorporating a wider range of assets, such as leveraged prediction markets.
Moreover, we will likely witness the introduction of the first derivatives exchanges within the Bitcoin DeFi space, marking a significant milestone for Bitcoin’s Layer 2 (L2) ecosystem. These exchanges will allow Bitcoin to serve as the underlying asset for minting stablecoins, which can then be utilized on decentralized derivatives exchanges. This development has the potential to unlock billions of dollars in dormant capital while also providing traders with new opportunities to hedge their positions without relying on centralized exchanges.
Increasing Focus on User Experience and Accessibility
The decentralized finance (DeFi) sector has made significant strides in improving user interface (UI) and user experience (UX) over the past few years. Venture capitalists have heavily invested in projects aimed at addressing challenges related to user onboarding and retention. While wallet design has seen notable improvements, considerable work is still needed to further enhance the DeFi user experience, especially given the rapid growth in use cases, networks, and protocols, which add layers of complexity.
In 2025, DeFi projects that capture more significant market share and total value locked (TVL) will offer innovative products and features and package them within a seamless, intuitive interface. Coupled with enhanced educational resources and the growing knowledge of DeFi among crypto users, this will make decentralized markets more accessible than ever before.
AI-Powered DeFi Solutions
We can also expect a surge in AI-powered DeFi tools in 2025, particularly in areas like automated trading, risk assessment, and predictive analytics. Autonomous AI agent bots that can execute trades or trigger smart contracts based on predefined conditions are poised for explosive growth in the DeFi space.
The intersection of blockchain and artificial intelligence (AI) is already evident in projects like Decentralized Physical Infrastructure Networks (DePIN), which use blockchain technology to create markets for resources like GPU computation and AGI training data. Web3 has proven to be an ideal platform for such activities. However, where retail users will truly feel the impact of AI is in its ability to enhance DeFi experiences directly, offering them a more robust and accessible way to interact with decentralized financial tools.
The Rise of AI Assistants in DeFi
In 2025, AI assistants will become an integral part of decentralized finance (DeFi), assisting users in identifying optimal investment strategies, uncovering the best yield farming opportunities, and discovering retroactive airdrops. Savvy traders will leverage these AI tools to extract more excellent value and mitigate risk by detecting potential threats early. Just as it has become difficult to imagine a world without tools like ChatGPT for daily inquiries, we will soon find it hard to picture DeFi without the aid of reliable AI assistants.
Ran Yi co-founded Orderly Network, a cloud-based liquidity infrastructure founded in 2022. Designed to revolutionize trading, Orderly Network offers a permissionless, omnichain liquidity layer. Ran Yi is also a co-founder of WOO Network and a passionate advocate for DeFi's democratizing potential. With 15 years of experience in global asset management and 5 years in the crypto space, Ran Yi has a strong background in traditional finance, having worked at prestigious institutions like China Merchants Bank and Freddie Mac. He holds a Bachelor of Science from Carnegie Mellon University and an MBA from CEIBS.
Conclusion
As we look toward 2025, the decentralized finance (DeFi) sector is on the verge of significant transformation. Omnichain DeFi is poised to become the standard, addressing liquidity fragmentation and unlocking greater user efficiency. Institutional adoption is set to accelerate, driven by improved infrastructure and deeper liquidity in tokenized real-world assets. Meanwhile, the rise of DeFi derivatives and the integration of AI-powered solutions will further expand the ecosystem’s capabilities, providing users with advanced tools for trading and risk management.
User experience and accessibility will remain key focal points, with projects that offer seamless interfaces likely to capture the most significant market share. Additionally, AI assistants will become indispensable for traders, helping them navigate complex markets, optimize strategies, and mitigate risks.
In 2025, DeFi will continue to evolve, offering more robust, intuitive, and powerful solutions that democratize access to financial services, creating new opportunities for institutional and retail participants. The convergence of blockchain, AI, and omnichannel technologies signals a new era for DeFi that promises to be more accessible, efficient, and secure than ever before.
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