- Decentralized finance (DeFi) lending platforms now hold over $50 billion in total value, reflecting rapid institutional growth.
- User-focused fintech apps are connecting to DeFi infrastructure behind the scenes to offer yield and loans with a smoother experience.
- Tokenized versions of traditional financial assets, such as U.S. Treasuries and credit funds, are increasingly integrated into DeFi platforms.
- Crypto-native asset managers are allocating capital professionally across DeFi protocols, with assets under management rising from $1 billion to $4 billion in six months.
- Mainstream companies, including Coinbase and Bitget Wallet, use DeFi to deliver new lending and yield products to users.
Decentralized finance lending protocols are seeing significant growth, with the value locked on major platforms like Aave, Euler, Spark, and Morpho increasing above $50 billion and climbing toward $60 billion. The sector’s expansion is marked by wider institutional involvement and more advanced risk management, according to a recent report from analytics firm Artemis and DeFi platform Vaults.fyi.
The report found that the total value locked in these protocols has grown by 60% in the past year. Authors stated: "These are not merely yield platforms; they are evolving into modular financial networks undergoing rapid institutionalization." The study also notes that new DeFi growth is coming from being integrated into the backend of user-facing apps, making it easier for customers to access loans or earn yield without complex steps.
The trend, sometimes called the "DeFi mullet," involves keeping a traditional-looking app at the front, while DeFi systems run in the background. For example, Coinbase now lets customers borrow against their Bitcoin through Morpho’s DeFi system, already originating more than $300 million in loans. Similarly, Bitget Wallet offers users a 5% yield on USDC and USDT stablecoins, powered by Aave, without leaving the wallet app. Paypal offers a yield of approximately 3.7% on its PYUSD stablecoin, though it does not use DeFi.
The report highlights that traditional financial products are appearing in DeFi through tokenization. Real-world assets (RWA) like U.S. Treasuries, which are government debt instruments, as well as credit funds, are increasingly used in DeFi platforms. Protocols such as Pendle allow users to separate yield from the principal investment, making strategies more flexible. Pendle now manages more than $4 billion in value, mostly in tokenized stablecoin yield products.
The rise of on-chain asset managers is another key development. Companies like Gauntlet, Re7, and Steakhouse Financial now professionally manage and allocate digital capital. Assets managed by these firms have quadrupled since January, moving from $1 billion to over $4 billion.
According to the report, large fintech firms such as Robinhood or Revolut may start using DeFi systems to offer additional lending and stablecoin-based services. This could provide them with extra revenue streams in the future by connecting more users to DeFi-backed financial products.
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