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The year 2024 saw the decentralized finance (DeFi) ecosystem rebound from a subdued 2023, driven by improved market sentiment and a wave of protocol innovations. The TVL in DeFi protocols surged by 116% from ~ $62 Bn to ~ $134 Bn, with Liquid staking protocols leading the space with a market share of ~ 44%.
For more such detailed insights, read our in-depth “Crypto Outlook 2025” report.
Key developments
Category Wise TVL
Liquid staking sector emerged as the leader with a TVL of ~ $60 Bn, driven by protocols like Lido, Jito, Rocketpool and more. Lending protocols ended the year with a TVL of ~ $49 Bn, followed by Bridge based protocols with a TVL of ~ $38 Bn. One of the hot narratives of the year – RWA based protocols saw their TVL increase by ~ 44%, as they entered the Top 10 categories (in terms of TVL) in 2024.
TVL per chain
Ethereum continued its dominance with a ~ 57% market share, followed by Solana ~ 7.7%. Bitcoin captured a ~ 5% market share driven by the Bitcoin L2 narrative. Newer chains like Base and Sui demonstrated impressive performance and ended the year with a ~ 2.8% and ~ 1.3% market share.
Major Developments
DEXs expanded their share of overall crypto trading, as spot DEX volumes grew from roughly 9% to over 11% of centralized exchange (CEX) spot volume, peaking ~ 14% in October.
DEX trading bots such as Trojan, Bonkbot, and Maestro carved out a niche by offering advanced order execution, streamlined interfaces, and rapid-fire “sniping” of newly launched tokens. Their collective daily volumes frequently reached hundreds of millions of dollars, which highlight traders’ willingness to pay for a frictionless trading experience.
Prediction markets also benefited from heightened interest during the U.S. election cycle, with Polymarket’s monthly volumes topping ~ $2 Bn in the lead-up to November.
Derivatives DEXs followed suit, climbing from under 3% to 4%, reflecting renewed on-chain speculation. Much of this shift stemmed from emerging protocols outpacing incumbents like Uniswap and Curve. For instance, Raydium on Solana captured about ~ 30% of spot volume.
Mcap of Hyperliquid
Hyperliquid, another emerging protocol, led derivatives trading via a specialized Layer-1 optimized for high-speed transactions as it airdropped ~ $1.8 Bn to over ~ 90K users and saw its Mcap rise over ~ 750% to ~ $9.27 Bn.
Incentive structures in DeFi continued to evolve, as points-based programs gained traction. Various protocols granted points to users—redeemable for tokens in the future—allowing teams to test and refine reward mechanisms prior to an official token launch.
TVL in Pendle
Yield-trading platforms, most notably Pendle, built upon these models by integrating restaking tokens that offered both yield and speculative upside tied to forthcoming airdrops which led to a massive growth in its TVL (over 1500% to $4.6 Bn).
MEV (Maximal Extractable Value) mitigation also made strides. Protocols like CoW Swap and UniswapX adopted solver-based auctions to channel some of the value away from validators or MEV “searchers,” redistributing it to traders and liquidity providers. Though mostly protocol-specific, these efforts signaled a growing emphasis on fairer value capture within DeFi.
Finally, cross-chain interoperability advanced through messaging protocols like LayerZero, which enabled cross-chain lending, bridging, and swapping via streamlined paths. Solver networks facilitated more cohesive access to fragmented liquidity, though bridging remained a significant portion of inter-chain traffic. Still, 2024 gave a solid glimpse of a future in which cross-chain mechanics are increasingly automated and invisible to end users.
Outlook for 2025
Looking ahead, 2025 promises greater competition, refined incentives, and expanded accessibility across the DeFi landscape. DEXs (spot and derivatives) will likely continue eroding CEX market share, fueled by user-centric interfaces, rapid settlements, and cost efficiencies particularly on networks like Solana, Base, or specialized appchains that can tailor network parameters to trading.
Real world assets could experience a slowdown in tokenized treasuries if interest rates decline, yet the broader RWA category may persist in forging new connections between off-chain and on-chain finance, targeting idle stablecoins in DAO treasuries or tapping into higher-yield yet riskier tokenized credit markets.
Interoperability will continue shifting from a bridging-centric experience to one where messaging is built into the protocol stack. Solver networks will expand their multi-chain orchestration capabilities, reducing manual asset transfers and improving route discovery.
Amid this broader evolution, money market protocols that leverage historically idle assets (e.g., NFTs, tokenized gaming items, and real-world holdings) will become increasingly relevant in 2025. For instance, a project could allow tokenized gold, real estate fractions, or high-value NFTs to serve as loan collateral, instantly converting otherwise static assets into active capital.
Why Check Out Our Full Report?
Our comprehensive report, “Crypto Outlook 2025”, provides an in-depth analysis of the evolving crypto landscape. It features deep insights into key verticals, & emerging narratives, along with expert opinion on different sectors.
Read the full report here: Link
