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DeFi and particularly stablecoins took off in 2025.
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More than 50% of the value locked in DeFi applications is on Ethereum.
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Ethereum’s dominant market share could help it reach new heights if DeFi continues to grow.
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10 stocks we like better than Ethereum ›
Ethereum (CRYPTO: ETH) is the second largest cryptocurrency, with a market capitalization of approximately $480 billion (as of October 21). Even though the cryptocurrencies that are exploding tend to be smaller coins, Ethereum has made a big jump this year, going from less than $1,400 in April to almost $5,000 in August.
Since then, it has declined by 22%, with the entire crypto market in recession. But in the long run, Ethereum could be one of the leading cryptocurrency investments. Here is the biggest tailwind in its favor.
One of the most interesting uses of blockchain technology is as an alternative to the traditional financial system. Developers can use smart contracts, which are programs built on a blockchain, to create a variety of decentralized financial services. This is called decentralized finance (DeFi). Here are some examples of what is possible:
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Stablecoins that track the value of other assets, like the US dollar or gold
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Lending platforms where users can get cryptocurrency loans or deposit their own cryptocurrency to earn interest
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Savings protocols that pay interest on cryptocurrency deposits
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Cryptographic tokens that represent ownership of real-world assets (RWA), such as stocks or U.S. Treasury bonds.
DeFi has grown rapidly and gained widespread acceptance in 2025. The United States passed the Genius Act in July, which regulates stablecoins, and the stablecoin market grew from $205 billion at the start of the year to $308 billion today. During the same period, the value of tokenized RWAs increased from $16 billion to $34 billion.
Stablecoins, tokenized RWAs, and other DeFi services all need a blockchain platform to operate. While there are many smart contract blockchains that can fill this role, Ethereum is the most popular choice, and it’s not a close race.
The total value locked (TVL) in DeFi applications is $151 billion, according to DefiLlama. Nearly two-thirds (63%) of this sum, or some $86 billion, is on Ethereum. Ethereum also holds 54% of the stablecoin market. As the first and largest blockchain with smart contract capabilities, Ethereum has gained a significant lead over the competition.
Expectations are high for DeFi. Fortune Business Insights predicts the market will grow 27% annually through 2032. British Bank Chartered standard predicted that the stablecoin market will be worth $2 trillion by 2028.
