Defi Renaissance – Why 2025 will be the year of Decentralized and On -Chain Finance?
Recent security violations have stoned the crypto space, featuring the fact that security continues to be a major focus for providers.
In today’s issue, Marcin Kaźmierczak From Redstone Oracles is falling as to why 2025 will be a critical year for Defi and On-chain finance.
Then, then, Kevin Look at the institutional adoption of Bitcoin as seen from the previous 13-F filing and highlighting the basic positions in the Question and Expert.
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Defi Renaissance – Why 2025 will be the year of Decentralized and On -Chain Finance?
The Recent hack bybit For nearly 401.000 ETH, worth about $ 1.5 billion at that time, it was exposed that security would play a huge role in further crypto adoption. Can institutions expand on-chain after such an incident? No doubt. This is something that is gradually adopting next to ensuring leading security methods.
Growing adoption of assets carrying
In traditional finances, yield-forming assets are usually seen as stronger long-term investment than non-productive because they provide investors with continued cash flow and income. This view helps explain why some investors prefer Ether in Bitcoin. Ether is seen as more “productive” as it forces a network that supports a wide range of decentralized applications, benefiting from network effects. Furthermore, the Ether can be stopped to earn the same yield, which aligns well with traditional methods of appreciation to prioritize continuing dividends. Increasing interest in staking, especially in the context of yields that form the yield, is evident in the growth of liquid staking, allowing for no friction and capital-effective staking. This trend was further accelerated in 2024 with the emergence of liquid restoration – for example, Ether.fi.
Source: defi llama, total amount locked in ether.fi
The total amount of staked ether is expected to grow and play an important role in the defi. Around one-third of all ETH-or $ 90 billion-is staked, with further flowing expectations from traditional financial institutions that explore staking. While staking becomes more accessible through fintech applications, some investors may move from custodial to non-custodial solutions as they get a deeper understanding of blockchain technology.
Stablecoin growth
The global demand for US dollar exposure is immense, and Stablecoins is the best way to address it. Stablecoins such as the USDC expand access to the dollar denomination of wealth care and the exchange of streamline value. In 2024, venture capital investments flowed into Stablecoin projects, and we expect further development in this space. Regulatory outlines such as Mika of the EU have provided clearer guidelines, further refining stablecoins and likely driving a higher adoption next year. In addition, stablecoins are combined with traditional financial systems. For example, the visa initiated USDC use on networks like Solana to facilitate faster and better payments. In addition, Paypal entered the market with the PUSD, and Stripe made one of the most significant crypto extraction by buying a bridge to expand stablecoin operations. In 2024, the total capitalization of the Stablecoin market reached a high time, More than $ 200 billion dollars, and continues to set new records in 2025.
Source: Defi Llama, Total Stablecoins Market Cap
Enhanced interoperability and user-friendly non-custodial solution
One major challenge to the defi is to transfer funds to the entire networks to access various investments. By 2025, significant development is expected to eliminate the need of bridging funds by introducing a “one-click solution.” This development should simplify the process for new defi users, likely to attract more space participants. In addition, purse providers are expected to improve on-chain finance security and streamline the onboarding process by removing intricate native crypto-natives. This change, driven by innovations such as ACCOUNT OF ACCOUNT OF ACCOUNTIt aims to make crypto more accessible and easy to use for on-chain financial access. Currently, the irreversible nature of the transactions and the proliferation of sophisticated scams prevents many new users. However, improved security features should encourage more individuals to engage in decentralized finances.
Bitcoin reached $ 100k
While just holding Bitcoin on its native network is not naturally linked to on-chain finance, we have witnessed a growing Bitcoin integration with a decentralized financial ecosystem. For example, approximately 0.5% of the total Bitcoin supply by staking Babylon staking protocol is now locked to secure proof-of-stake (POS) chains. Increasing Bitcoin’s reception of big banks and some governments are expected to create trickle-down effects, changing public perception of digital currencies far from being seen as a legitimate financial instrument, which brings new on-chains.
–Marcin kaźmierczak, coo, redstone oracles
Ask an expert
Q: Can banks hold the crypto with SEC 122?
A: Staff Accounting Bulletin 122 Banks can be encouraged to include digital assets in the regulated financial system. By opening the competition, banks can compete with centralized exchanges. Banks can offer services such as Bitcoin supported by lending, staking and custodial services, treating digital assets similar to traditional properties.
This is a positive transition to a more flexible approach to regulation and balancing investor protection with the facts of operation of financial institutions.
From institutional investment to recognizing the mainstream, this is another major move to how the world looks and interacts with digital possessions.
Q: Which institutions (e.g.
A: The accumulation of sovereignty’s wealth funds, and pension funds are just beginning.
The Mubalad investment company PJSC (the wealth of the Abu Dhabi government owned) holds $ 436 million in a Bitcoin ETF with general ownership under the management of $ 302 billion. Abu Dhabi’s Sovereign Wealth Fund (AIDA) is in charge of a joint $ 1.7 trillion, indicating that their investment in Bitcoin is relatively small part of the general portfolio.
In addition, the past fall, Mubato offers to get Canadian Asset Management Firm CI Financial Corp. for $ 4.6 billion.
In the US, the latest state report of the Wisconsin Investment Board shows the handling of Bitcoin ETF with more than double from the last quarter to over $ 321 million.
Q: Banking on Bitcoin – Which Bank of Canada is leading the charge?
A: Recent Q4 2024 Sec filings It is revealed that banks of the Canadian schedule 1, institutional currency managers, pension funds and wealthy wealth funds have revealed significant handling of Bitcoin (see charts).
Noteworthy, the Bank of Montréal is now leading Canadian banks with $ 139 million in Bitcoin ETF investments. And BMO’s Bitcoin Holdings came from zero up to over $ 100 million in a single year.
Currently, in North America, there are approximately 1,623 large entities holding more than $ 25.8 billion in Bitcoin ETPS.
–Kevin Tam, Digital Asset Research Expert
Keep reading
- Citadel announced plans To offer crypto trading and liquidity.
- Wondering about bybit hack? Stephen Sargeant created a LinkedIn Post Summarizing some of the recovery efforts carried out in support of the crypto community.
- Coinbase announced Last week the SEC would lower its lawsuit against the exchange.
