There is a quiet transformation underway in the Decentralized Finance (Defi).
While the previous Bullmarkt of Defi was powered by eye-watery and dubious yields and speculative frenzy, the current growth is powered by the sector to become a back-red financial low for user-oriented apps and increasing institutional participation, according to a Wednesday report by Analytics company Artemis.
The total value locked (TVL) on top Defi lending – protocols – including Aave, Euler, Spark and Morpho – has risen after $ 50 billion and was approaching $ 60 billion, 60% grew in the past year, the report showed. This growth is driven by rapid institutionalization and increasingly advanced risk management tools.
“These are not only yield platforms; they evolve into modular financial networks that undergo fast institutionalization,” the authors said.
Lending Deposits on Top Defi Protocols (Artemis)
The ‘Defi Mul’
One of the most important trends that the report recently emphasized is that you can easily enclose user-oriented applications in the Defi infrastructure in the backend to offer yield or loans. These functions are abstracted by users who create a more seamless experience, a trend that is often called the “Defi Mullet:” Fintech front-end, Defi Backend, according to the report.
Coinbase users can, for example, borrow against their bitcoin
BTC$ 104,174.85
Holdings powered by Defi -money shooter Morpho’s Backend infrastructure. More than $ 300 million in loans have already been created through this integration from this month, the report noted.
The integration of Bitget Wallet with Lending Protocol Aave offers a yield of 5% on USDC and USDT Holdings about chains without leaving the Crypto Wallet app. PayPal also does something similar with his Pyusd Stablecoin and offers yields almost 3.7% to PayPal- and Venmo Wallet users, albeit without the Defi element.
The report said that crypto-friendly fintech companies with large user bases, such as Robinhood or Revolut, can also adopt this strategy and offer services such as stablecoin credit lines and loans covered by Defi-Markts, creating new income breaks.
Tokenized rwas in Defi
Defi-protocols are increasingly introducing use cases for ground versions of traditional instruments such as American treasuries and credit funds, also known as Real-World assets (RWA).
These tokenized assets can serve as collateral, earn directly yields or be bundled in more complex strategies.
Read more: Tokenized Apollo Credit Fund makes Defi debut with a delivered interest control strategy by Securitize, Gauntlet
Tokenization of investment strategies is also becoming popular. Pendle, a protocol with which users can split revenue flows from Principal, now manages more than $ 4 billion in the total value, much of it in Tokenized Stablecoin yield products.
In the meantime, Ethena’s Susde and similar yielding tokens have introduced products that deliver returns above 8% through strategies such as Cash-and-Carry transactions, while abstracting the operational burden for the end user.
Rise of assets managers at the chain
A less visible but critical trend that is emphasized in the report is the rise of crypto-native assets managers. Companies such as Gauntlet, RE7 and Steakhouse Financial assign capital in defi -ecosystems using professionally managed strategies that resemble the role of traditional asset managers.
These players are deeply embedded in Defi-protocol management, refinement risk parameters and implement capital on a series of structured interest rate-differing products, Tokenized Real-World Activa (RWAS) and modular credit markets.
The report noted that the capital of the sector under management has grown four times since January – from $ 1 billion to more than $ 4 billion.
Read more: Crypto for advisers: Defi proceeds, the revival