Original: Delphi Digital
Compiled by: Yuliya, PANews
As the market refocuses on practical value, decentralized finance (DeFi) is regaining momentum. From stablecoins to the intent execution layer, innovation is on the fast track, and here are 10 key insights into the future development of DeFi.
1. Consumer-grade DeFi applications are on the horizon
Crypto payment cards are evolving from simple cash-out channels to self-custodial smart contract wallets that can directly interact with DeFi protocols. New crypto payment cards like Gnosis Pay, Argent, and Fuse support programmable spending, auto-replenishment, and integration with lending protocols, bringing the vision of unbanking closer to reality than ever before.
2. zkTLS opens new frontiers for DeFi
Zero-knowledge TLS (zkTLS) technology allows users to prove sensitive data on-chain without exposing private information. Projects like 3Jane (credit lending), Camp Network (customized user experiences), and Showdown (Web2 gaming) are leveraging zkTLS to expand DeFi into new markets. This could drive mainstream adoption of on-chain credit scoring and low-collateral lending.
3. Revenue-sharing stablecoins are reshaping the market landscape
Stablecoin issuers have been earning massive revenues from reserve interest, but DeFi projects are disrupting this model. New stablecoins like M^0, Agora, and Paxos USDG share earnings with applications, incentivizing wallet and DeFi platform integrations. This could drive the decentralization of stablecoin issuance and reshape the competitive landscape by rewarding distribution partners, rather than relying solely on network effects.
4. DeFi value is shifting from protocol layers to the front-end
The value of DeFi protocols is shifting towards entities that control exclusive order flows, particularly wallets and intent-driven front-ends. Platforms like Jupiter and Phantom are positioning to monetize order flows, aiming to reshape the value distribution in DeFi. As the MEV supply chain matures, the competitive focus will shift from DEXes to the front-end, and distribution capabilities will become key to value capture.
5. 2025 will be the year of DEX growth and aggregator-driven trading
On-chain trading is undergoing a significant transformation as DEX volumes rise and aggregators redefine execution.
- Angstrom is tackling MEV and LVR issues;
- Bunni v2 enhances passive liquidity strategies;
- Whetstone Research is innovating token issuance mechanisms through Doppler.
6. Uniswap's strategic positioning
Uniswap is transitioning from a single DEX to become the liquidity infrastructure for DeFi:
- Uniswap Labs' v4 Hooks feature supports customizable AMMs, automated LP management, and advanced order types;
- Unichain as a dedicated DeFi blockchain with high-speed and anti-MEV properties;
- UniswapX is poised to become the primary intent execution layer for DeFi.
7. The transformation of DeFi trading paradigms
DeFi trading is evolving towards modular, intent-driven, and high-speed execution. New-generation DEX architectures are emerging to optimize liquidity, execution quality, and MEV protection:
- Valantis Labs provides a modular DEX framework supporting flexible exchange development;
- Arrakis Finance integrates OTC order flows via RFQ to shield LPs from MEV;
- Fluid uses "smart collateral" to enable leveraged market making and automated fee optimization;
- Order book DEXes: High-performance blockchains like Monad, Sui, and Aptos are enabling efficient order book trading.
8. The evolution of prediction markets
Prediction markets are moving beyond pure speculation, such as:
- Limitless Exchange offering on-chain 0DTE derivatives for efficient pricing and leverage;
- Truemarkets ensuring fair outcomes through its Truth Oracle + AI-driven verification and decentralized governance.
As these models develop, prediction markets could become a core component of on-chain finance.
9. The rise of Starknet
Despite challenges, Starknet's low-cost transactions, staking mechanics, and expanding ecosystem lay the foundation for its growth.
Key catalysts:
- Bitcoin rollups could make Starknet the BTC Layer 2 leader;
- Lower blob costs provide a scaling advantage over other L2s;
- On-chain gaming is becoming a new driver of adoption.
10. Challenges and Innovations
While DeFi has seen rapid development, it currently faces some critical challenges.
- High entry barriers: Limited support from centralized exchanges forces users to go through Ethereum cross-chain or rely on intermediary services;
- Insufficient token incentives: Many top protocols lack token or reward programs, resulting in low user engagement.
However, these challenges signal significant innovation potential in DeFi:
- Low-collateral lending products
- Lending aggregators
- Interest rate derivatives
- On-chain securitization protocols
- Advanced prediction markets
Looking ahead, the next wave of DeFi will focus on improving efficiency, risk management, and developing more sophisticated financial tools.
