Since the DeFi Summer of 2021, DeFi has been continuously evolving, with leaders in various fields driving the maturation of the ecosystem through innovation and credibility. With more institutional participation, it will further expand its integration with traditional finance in the future, showcasing tremendous potential.

Author: @0xCheeezzyyyy

Translation: Baihua Blockchain

Since the DeFi Summer of 2021, we have come a long way. Today, DeFi has formed multiple mature sectors, capable of self-sustained growth and activity.

However, comparatively, this is still in its early stages, as the market capitalization of the crypto market is about $3.3 trillion, while the traditional financial market reaches up to $133 trillion. This article reviews some observations regarding the industry-leading platforms.

The core idea of DeFi is to provide a more innovative and efficient system that addresses the major inefficiencies of traditional finance through validated product-market fit (PMF). Similarly, DeFi consists of several key sectors, which often exhibit an oligopolistic structure.

So, what is the situation today?

1. DEX

First, let's look at decentralized exchanges (DEXs): In Q4 2024, @RaydiumProtocol surpassed @Uniswap with about 61% market share, becoming the leader in this field.

Although its total value locked (TVL) is only about 39% of Uniswap's. While this may be related to the memecoin craze of @solana, its long-term performance remains uncertain.

In the perpetual contract DEX space, we have a clear winner.

Since Q3 2024, @HyperliquidX's market share has surged from 24% to 73% (a threefold increase). Since Q4 2024, the overall trading volume of perpetual contract DEXs has continued to grow, with current daily trading volume around $8 billion, compared to $4 billion at that time.

HL (Hyperliquid) is gradually challenging centralized exchanges, attempting to become the primary platform for price determination in the crypto market.

2. Lending

The lending sector is similar. Since 2024, @aave's industry dominance in lending and borrowing has become increasingly evident:
Deposits: from 42.1% to 65.78%
Borrowing: from 31% to 61%

Even without the most attractive yields, Aave remains the preferred platform due to its long-established reputation and the credibility of the protocol.

@pendle_fi is leading the yield sector, setting a historical high for Ethereum TVL (approximately 1.59 million ETH).

Its unique value proposition lies in being a key driver of value discovery in the sector, maintaining a historical high TVL despite a slowdown in the DeFi market and bearish market sentiment.

This clearly demonstrates its strong product-market fit (PMF).

3. Liquid Staking Platforms

Liquid Staking is undoubtedly the largest sector in DeFi by TVL (approximately $35 billion).

@LidoFinance is the undisputed leader, controlling about 70% of the market share, nearly monopolizing the LST market. Its TVL ($24.8 billion) is 5.17 times that of the second-largest competitor, @binance's $bETH ($4.8 billion).

This dominance is not driven by staking yields but by the asset value of $stETH:
Best asset utilization: As the most integrated asset in DeFi.
Most trusted service: Becoming the preferred staking solution for funds and institutions.
Here, credibility and trust are key drivers of widespread adoption.

As for liquid restaking, we also see similar crowd trends.

Notably, @ether_fi's market dominance has significantly increased (from 35.3% to 63%), with its TVL growing by approximately 770% in 2024, continuing to grow even after the S1 and S2 stakedrop ended.
This growth is primarily attributed to:

• First-mover advantage in ecosystems like @eigenlayer, @symbioticfi, and @Karak_Network.
• Extensive DeFi integration
• Trust in the product suite!

@Lombard_Finance's performance in the BTC-Fi sector closely mirrors the trends in the LST/LRT sector, steadily rising to 49.5%.

As @babylonlabs_io matures (currently valued at $5.5 billion), the demand for $BTC as a preferred crypto security asset is expected to grow exponentially, with market opportunities reaching $2 trillion.

@Lombard_Finance has already mastered the industry-leading strategy. With $LBTC as the most widely integrated, used, and security-focused LRT in DeFi, Lombard is positioning it as the preferred asset for institutional trust and widespread adoption, similar to the role of $stETH. Details: https://x.com/0xCheeezzyyyy/status/1886623732770463885

4. Summary

In summary, various sectors of DeFi have found their positions, complementing each other to form a complete ecosystem. This marks the rise of a new native financial model destined to disrupt centralized finance (CeFi), and we are fortunate to witness this process.

As we enter the next phase of expansion, there will be more efforts to explore new verticals, enter untapped markets, and even integrate with CeFi:

• @ethena_labs plans to integrate traditional financial payment systems
• @Mantle_Official's Mantle index fund and Mantle bank plan to combine crypto with traditional finance

With more institutional attention, such as @BlackRock participating in DeFi's $BUIDL, and @worldlibertyfi's DeFi portfolio and spot ETF, the future potential looks very promising.

Article link: https://www.hellobtc.com/kp/du/02/5670.html

Source: https://x.com/0xCheeezzyyyy/status/1888773047433535884

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