The following is an invited article by Mike Wasyl, CEO of Support.
Defi has accelerated and failed with terrible economic models in the past four years. But there is something romantic in a cheaper economy that increases spectators. By taking off the penguins, the Ponzi patterns and the perpetual jargon, we find a 24/7 market for creating possibilities for generations to fend for themselves. No pensions to scoop ice cream at 30 years old for Gen Z.
Aside from the jokes, we, the younger generations, had no choice but to use the tools that were treated to us. In our brokerage accounts, we click around a beautiful user interface generated by a Megacorp army. But under the facade, we are actually sheltered from canals at a jerky seat that rolls rails old several decades. I don’t want to climb on these ancient roller coaster mountains slinging jazz age Bucket Shop Finance Lingo. There are new rides – new tools that modernize financial experience and help us gain on our own conditions, 24/7. Let’s take a look at a slice of this world and where we could go in 2025.
In Crypto, the staging proof networks offer native rewards to secure the network – “mark”. The development cannot be reproduced in traditional finance and is a revolutionary economic native of blockchains (it’s ours!). The milestone has led to the creation of liquid tokens (LST), which allow users to win rewards without the execution nodes. Liquid stimulation based in Ethereum experienced a precipitated increase until 2024, reaching a summit of $ 70 billion in total locked value (TVL) at the end of the year. The rewards of passive blocks have fueled the number of holders even with the rate of layoff of ETH which oscillates around only 3%.
While Ethereum leads to a value of enhancement, only about 28% of ETH’s offer is actively marked. We believe that this number will increase to 40 to 50% in a few years, with 2025 pivot to unlock institutional capital. More than half of institutional Ethereum holders use liquid stove (LST) token and include the utility of active rewards. While more and more participants in traditional finance venture on the channel, dominance will rise. Despite the rear winds, the competition for the awards will warm up. It is up to capital users and beneficiaries to decide how to effectively stack the yield to maximize the value of their chain guarantee.
As the competition compresses go, stakers will seek new ways of growing beyond the rewards of simple blocks. Offering opportunities is difficult, because liquidity is blocked in protocols DEFI on several channels. The Ethn Eth dotted with a user in a Defi swimming pool is a monolith, generally stuck until yields disappear or better opportunities arise. It is ineffective and limiting, which means that users hunt aerial parameters and disproportionate inflationary awards in the meantime.
Ether.fi, a major player in the ETH restoration space, controls> 50% of the liquid restocking market by allowing users to find ETH through services like Eigenlayer. The “resuming” transforms the inactive LST into re -proponent tokens in liquid (LRTS) which aim to gain additional return by extending ETH safety to other services, by obtaining rewards in return. So far, most yields are loyalty points, tokens and other inflationary economic incentives to occupy users. As more and more guaranteed services have been put online, we will see if there is an adequate access offer to respond to billions of dollars in chain passive income.
Users want flexible, mobile and rewarded and stackable products. But in Defi, the design of the protocol is lagging behind. The simple reuse of economic security is speculative and underlines Ethereum. Most platforms always deal with jalitude as a one -way mechanism – deposit eTh and earn rewards. This leads to the recirculation of capital in the awards loop, the “Ouroboros” which we are talking about in Bracket, where capital never leaves Defi.
However, users want products that provide diversified exposure to new asset classes with “defined and forget” experiences. We would like to remove complexity and have transparent products that prioritize gains but with additional security measures. Product manufacturers ignoring this change in performance leave on blocked leave in a cycle of inflationary awards.
The Playbook for 2025 – Optimization of performance and strategy management
DEFI allows Money-Legos, something that traditional finance has had trouble delivering in banks or brokerage houses due to highly partitioned systems with these old rugging rails of which we have spoken. DEFI, however, unlocked the ability to superimpose high quality guarantees on the chain to compose yields. Consider the ideal state as a digital “yield battery” – rewards for handing the hand, as well as a real trading yield, as well as real world products, as well as economic incentives that generate solid yields Without leaving the ecosystem on a chain.
If products from Lido, Coinbase and Binance could be used alongside active active world through DEFI, users would not have to choose a swimming pool or an opportunity. They could be automatically reassigned among the best options, managing participation according to risk tolerance.
2025 brings an increase in new blood, new products and, above all, a change of perspective on high quality guarantees. For the first time, the assets of jealking, the ETH and the Stablecoins are legitimized by the government and the beneficiaries of influential capital. Tradfi tokenized products such as monetary market funds on chain, credit funds and even hybrid chain / out -of -chain models.
The introduction of these performance producer assets alongside an improved regulatory climate should unlock a wave of new capital deployment – something defined to leave the Ouroboros loop and participate in the global economy. These modifications will require defying to build tool boxes and infrastructure to help billions of dollars while waiting to move at the speed of chain financing.
However, a gap of massive knowledge remains. DEFI manufacturers do not always understand finance, Tradfi does not understand construction on the chain and regulators understand nothing. This is where the experienced manufacturers will help inaugurate the next global finance wave, but they have to play well. We are to precipitate all the 24/7 tokenized markets, offering users the best choices among highly competitive products and services. In 2025, the place to be built infrastructure to connect products and undo energy users to real economic value (new fun rides).
The bottom line
Stagnation in real performance in DEFI exposes the need for new assets, new managers and new bridges to tokenized products and hybrid experiences. Users do not want to be stuck in old systems that do not serve them. Institutional actors receive the message, strengthening confidence in new types of guarantees. The new regulations should inaugurate waves of innovative competitors looking for an advantage, benefiting users like us.
DEFI reaches an inflection point – its long -term viability depends on its ability to evolve beyond the basic reward structures of men in caves and isolated PVP yield battles. We can only recycle capital so long before the journey is no longer fun for anyone. The generation of elements must become an active and adaptive process – the one that incorporates automation (even AI) and diversified income flows from asset classes that move at the speed of chain financing.
Without unlocking a new exposure to assets and a utility on the chain, Defi may become a zero -sum game where capital enters, but real yields stagnate, and the snake eats its own tail. Tradfi is already yield products in Tokenization with institutional support, and DEFI will increase to provide new rides and rails in 2025.
It is therefore in Defi Builders to realize that we are not going to win PvP against each other. Eating our own tails is exhausting. It is time to build new rides and new rails for billions of financial assets in order to keep the promise of a more meritocratic system.
Mentioned in this article
