1. Consumer-Level DeFi Applications Are Coming

Crypto payment cards are evolving from simple withdrawal channels into self-custody smart contract wallets, which can directly interact with DeFi protocols. New crypto payment cards like Gnosis Pay, Argent, and Fuse support programmable spending, auto-reloading, and integration with lending protocols, making the vision of a bankless world closer to reality than ever.

2. zkTLS Opens a New Frontier for DeFi

Zero-Knowledge TLS (zkTLS) technology allows users to prove sensitive data on-chain without exposing private information. Projects such as 3Jane (credit lending), Camp Network (customized user experience), and Showdown (Web2 games) are leveraging zkTLS to expand DeFi into new markets. This could drive the mainstream adoption of on-chain credit scores and low-collateral lending.

3. Revenue-Sharing Stablecoins Are Reshaping the Market

Stablecoin issuers generate enormous income through reserve interest, but DeFi projects are disrupting this model. New stablecoins such as M^0, Agora, and Paxos USDG share their revenue with applications, incentivizing wallet and DeFi platform integrations. This model could decentralize 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 Layer to Frontend

The value of DeFi protocols is increasingly shifting towards entities that control exclusive order flows, particularly wallets and intent-driven frontends. Platforms like Jupiter and Phantom are monetizing order flows, aiming to reshape the value distribution within DeFi. As the MEV (Miner Extractable Value) supply chain matures, the competitive focus will shift from DEXs to the front end, where distribution capabilities will become key to capturing value.

5. 2025 Will Be the Year of DEX Growth and Aggregator-Driven Trading

With DEX trading volumes rising and aggregators redefining execution methods, on-chain trading is undergoing a significant transformation.

Angstrom is addressing MEV and LVR issues.

Bunni v2 enhances passive liquidity strategies.

Whetstone Research is innovating token issuance mechanisms through Doppler.

6. Uniswap’s Strategic Development

Uniswap is transforming from a single DEX into DeFi’s liquidity infrastructure:

Uniswap Labs v4’s Hooks feature supports AMM customization, automated LP management, and advanced order types.

Unichain, a blockchain designed specifically for DeFi, offers high-speed transactions and MEV resistance.

UniswapX is poised to become the primary intent execution layer in DeFi.

7. DeFi Trading Paradigm Shift

DeFi trading is evolving toward modularity, intent-driven strategies, and high-speed execution. The next generation of DEX architectures is emerging to optimize liquidity, execution quality, and MEV protection:

Valantis Labs offers a modular DEX framework to support flexible exchange development.

Arrakis Finance integrates off-chain order flows via RFQ, protecting LPs from MEV exposure.

Fluid uses “smart collateral” for leveraged market-making and automated fee optimization.

Order book DEX: High-performance blockchains like Monad, Sui, and Aptos are enabling efficient order book trading.

8. The Evolution of Prediction Markets

Prediction markets are no longer just about speculative trading, such as:

Limitless Exchange’s on-chain 0DTE derivatives offer efficient pricing and leverage.

Truemarkets ensures fairness through its Truth Oracle and AI-driven decentralized governance. \
As these models develop, prediction markets could become a core component of on-chain finance.

9. Starknet’s Growth

While Starknet still faces challenges, its low-cost transactions, staking mechanisms, and expanding ecosystem lay the foundation for growth.

Key catalysts include:

Bitcoin rollups could make Starknet a leading BTC Layer 2 solution.

Lower blob costs give Starknet a scalability advantage over other Layer 2s.

On-chain gaming is becoming a new adoption driver.

10. Challenges and Innovations

Despite rapid development, DeFi still faces some critical challenges:

High Entry Barriers: With limited support from centralized exchanges, users are often forced to use Ethereum cross-chain or rely on intermediaries.

Insufficient Token Incentives: Many top protocols lack tokens or rewards programs, leading to low user participation.

However, these challenges highlight the enormous innovation potential and growth opportunities for DeFi in areas like:

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 the development of more advanced financial instruments.

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