GuShiio.com The core of DeFi is to provide a more innovative and efficient system that solves TradFi inefficiency through a proven PMF (Market Fit Point).
Author: Cheeezzyy
Compiled by: Felix, PANews
Since the launch of “DeFi Summer” in 2021, DeFi has made great progress. Today, DeFi has established multiple mature areas, and its growth and activities in each area are self-sustaining.
Even so, its development is still early because the market value of cryptocurrencies is still around US$3.3 trillion, while TradFi’s market value is US$133 trillion.
The core of DeFi is to provide a more innovative and efficient system that solves TradFi inefficiency through a proven PMF (Market Fit Point). DeFi is also made up of multiple key areas, which often follow an oligopoly structure.
In the fourth quarter of 2024, the DEX platform Raydium (Solana-based automated market maker) accounted for approximately 61% of the market, surpassing Uniswap as an industry leader. It is worth mentioning that Raydium’s TVL is only about 39% of Uniswap’s.
Although Raydium’s rise may have been caused by the Solana Ecosystem’s Memecoin Season, its LT (note: user life cycle, which measures user activity) durability remains uncertain.
The winners in the perp DEX space are prominent. Hyperliquid’s dominance has been further consolidated since the third quarter of 2024, with its market share increasing from 24% to 73%(3 times).
Overall trading volume of perp DEX has been recovering since the fourth quarter of 2024, and daily trading volume is currently approximately US$8 billion, compared with only US$4 billion at the time.
Hyperliquid continues to challenge CEX’s status as a price discovery platform.
Since 2024, Aave’s dominance in the lending sector has increased:
- Deposits: 42.1% to 65.78%
- Loans: 31% to 61%
Even though Aave does not have the most attractive yields, it is still the first choice in the lending space due to its long-standing reputation and user trust in the agreement.
In the revenue field, leader Pendle is leading the development, with a market share of over 50%. Its unique value proposition lies in discovering the preferred promoter of industry value. Despite the slowdown in overall DeFi market development and sluggish market sentiment, Pendle still maintains the TVL record.
In terms of TVL, liquidity pledges (LST) are by far the largest area in DeFi, at approximately $35 billion.
Lido Finance is the undisputed dominant player with a market share of approximately 70%, almost monopolizing the LST space, with its TVL ($24.8 billion) being 5.17 times that of its competitor Binance bETH ($4.8 billion).
This dominance is not driven by pledge yields, but by stETH’s asset value:
- Best asset utilization: The most integrated asset in DeFi
- The most trustworthy service: the preferred institutional pledge solution for funds and entities
Credibility and trust are key to adoption.
As for liquidity re-pledge, the market trend is roughly the same. Notably, ether.fi’s market share increased from 35.3% to 63%. Because even though ether.fi’s pledge volume in S1 and S2 declines, its TVL will still increase by approximately 770% in 2024.
This growth is driven by the following factors:
- First-mover advantage in the ecosystem
- Extensive DeFi integration
- Trust in product suites
Lombard’s performance in the BTC-Fi space closely reflects trends in the LST/LRT space, with its market share steadily rising to 49.5%.
As Babylon matures, demand for BTC, the primary safe asset, will grow exponentially and bring a US$2 trillion market opportunity.
Because LBTC is the most integrated, widely used and security-focused LRT in DeFi, Lombard has become a primary asset for institutional trust and widespread adoption like stETH. Lombard will dominate the industry.
All in all, it is clear that each DeFi field has found its own PMF, forming an overall ecological complementarity. This is the rise of new Primitive sets that disrupt CeFi.
As DeFi enters the next phase of expansion, it will see more new verticals introduced into untapped markets and even integrated into CeFi:
- Ethena Labs: Plans to integrate TradFi payments
- Mantle: Mantle Index Fund and Mantle Banking integrate cryptocurrency with TradFi
As more and more institutions are interested in DeFi, such as BlackRock participating in DeFi and WLFI’s DeFi portfolio and spot ETFs through BUIDL, they are optimistic about the future development of DeFi.
Related reading: Preliminary exploration of DeFAI: Deep integration of DeFi and AI, three core scenarios promote large-scale application of DeFi
