5 DeFi predictions for 2025: Rise of AI, Omnichain and BTC derivatives

As an analyst with over a decade of experience in traditional finance and five years delving into the cryptosphere, I find myself gazing into the future of DeFi with an air of both excitement and anticipation. With my background at institutions like China Merchants Bank and Freddie Mac, coupled with my co-founding roles at Orderly Network and WOO Network, I’ve had a front-row seat to the evolution of this revolutionary industry.


As we move into the final months of the year, it’s clear that forecasting time has arrived. This is when experts take a look into the future to identify the trends likely to shape the upcoming year.

However, it’s not mere speculation; those actively engaged in the development of web3 are well-informed about the likely forms of groundbreaking advancements, as they are the very people constructing these innovations at present.

Although it’s impossible to predict with certainty what 2025 will bring, given the current circumstances, I am quite optimistic that these trends are likely to materialize with a higher than average likelihood.

Omnichain DeFi becomes the norm 

In 2025, it’s anticipated that Omnichain DeFi, a system that draws liquidity from various blockchains and centralized resources, will witness widespread adoption. This versatility addresses a major issue faced by current networks – the problem of liquidity fragmentation – by providing superior pricing and abundant liquidity.

Having immediate access to liquidity in a condensed form will boost capital effectiveness and open doors for arbitrage and yield farming opportunities throughout the diverse multi-chain environment. This feature will empower users to draw from virtually limitless liquidity supplied by centralized exchanges directly on the blockchain, thereby offering an enhanced trading experience with reduced custodial risk.

Institutional adoption of DeFi accelerates 

As an analyst, I’ve observed a gradual entry of institutions into DeFi this year, with only minimal exposure to cryptocurrencies mainly through ETFs. However, this trend is poised to shift significantly next year due to the extensive infrastructure development that has been taking place throughout 2024, signaling a potential floodgate of adoption in the future.

Improved on-chain tools for tasks such as compliance, wallet administration, sub-accounts, and reporting allow institutions to engage with on-chain protocols securely, trusting not only the technology’s integrity but also their legal and financial duties. The Tokenized Real World Assets (RWAs) sector, currently worth billions, is where we are most likely to witness substantial institutional investment. This trend is expected to be boosted by the enhanced liquidity provided by cross-chain advancements.

Rise of DeFi derivatives, including on Bitcoin L2s 

This year, Decentralized Finance (DeFi) derivatives have been functioning smoothly, with platforms such as Hyperliquid, Jupiter, and GMX leading the pack. As we move into next year, we anticipate the DeFi sector to undergo significant changes, expanding to various blockchain ecosystems and accommodating a wider array of assets. This could potentially include leveraged prediction markets and other innovative financial tools.

2025 marks the arrival of the first Bitcoin DeFi derivative exchanges, introducing this functionality into the Bitcoin Layer 2 ecosystem for the first time. As Bitcoin acts as the foundation for minting stablecoins, these digital coins can then be utilized in decentralized derivatives exchanges. This setup offers a chance to mobilize billions of dollars previously sitting idle and establishes a means to hedge against various trades without relying on traditional centralized platforms.

Increasing focus on user experience and accessibility

In recent years, it’s become clear that the Decentralized Finance (DeFi) sector has been focusing more on improving User Interface (UI) and User Experience (UX), as venture capitalists are investing heavily in projects aimed at overcoming difficulties related to user sign-up and retention. Although wallet designs have seen notable improvements, there’s still much to be done when it comes to optimizing the DeFi user experience, especially considering the rapid growth in applications, networks, and protocols, which introduces underlying complexity.

In the upcoming year, successful Decentralized Finance (DeFi) projects capturing market share and TVL won’t only provide appealing products and cutting-edge features; they’ll be encapsulated within an user-friendly interface design that makes them effortless to navigate. Combined with enhanced educational materials and expanding awareness of DeFi among crypto enthusiasts, these onchain markets will become more accessible than ever before.

AI-powered DeFi solutions

Prepare for an increase in AI-driven DeFi resources, notably in automated trading systems, risk evaluation tools, and forecasting analytics. These AI agents, specifically self-governing bots capable of executing trades or activating smart contracts upon meeting predetermined criteria, are poised for rapid expansion.

Blockchain technology intertwines with Artificial Intelligence (AI) in several ways, firstly through DePIN that leverages blockchain infrastructure for marketplaces dealing with GPU computing and AI training data. Web3 platforms have already demonstrated their suitability for such activities. As for the retail users, they will truly feel the power of this technology when AI is employed to improve Decentralized Finance (DeFi) interactions, marking the beginning of a tangible experience with its potential.

Next year, AI assistants will be abundant, helping savvy investors discover profitable investment strategies, high-yield farming opportunities, and retroactive airdrops. Smart traders will leverage these assistants to maximize returns and minimize risk via early threat detection. Just as ChatGTP has become an essential tool for handling everyday questions, AI will soon seem indispensable in the world of DeFi, leaving us questioning how we managed without its assistance.

Ran Yi serves as the co-founder for Orderly Network, a groundbreaking cloud liquidity infrastructure established in 2022. This innovative platform aims to transform trading through its borderless, multi-chain liquidity layer that operates without permission. Beyond his role at Orderly Network, Ran is also one of the co-founders of WOO Network, consistently championing the decentralized finance (DeFi) sector’s potential for democratization. With a 15-year career in global asset management and five years of experience in cryptocurrency under his belt, he brings traditional finance expertise to the table, having worked at prestigious institutions like China Merchants Bank and Freddie Mac. Ran earned both his Bachelor of Science and MBA from Carnegie Mellon University and CEIBS, respectively.

As a researcher, I’d like to clarify that the content presented in this article is intended for general informational purposes only. It should not be construed as legal advice or an investment recommendation. The perspectives, ideas, and viewpoints shared here are my own and may not align with those of CryptoMoon. Always consult a professional advisor for specific advice tailored to your situation.

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2024-10-18 18:44