DeFi has evolved from hype-driven activity to a more mature infrastructure focused on real adoption and efficiency, especially after major collapses of centralized platforms like Celsius, BlockFi, and FTX exposed systemic weaknesses.

2025 marks a pivotal year where DeFi is expected to surpass centralized exchanges in market significance and trust, signaling a major industry milestone.

By late 2024, DeFi's total value locked (TVL) approached $130 billion, surpassing traditional finance in sectors like derivatives and asset management, while many centralized exchanges are retreating due to compliance issues.

Regulatory clarity is boosting DeFi's legitimacy, with leading protocols like Uniswap advocating for sensible policies, and during SEC lawsuits against Binance and Coinbase, decentralized exchanges saw trading volumes surge by 444% as traders seek refuge.

In Q2 2025, the top 10 decentralized exchanges facilitated $876 billion in spot trades, a 25% increase from the previous quarter, indicating a shift in market dominance toward DeFi, while centralized exchanges experienced a 28% decline in spot volume.

Decentralized exchanges have significantly improved, leveraging better blockchain latency to enable onchain order books and hybrid models that combine AMMs with order books, thereby enhancing liquidity and reducing slippage.

DeFi's growth is driven by expanding trading volumes, lending protocols like Aave holding deposits comparable to major banks, and partnerships such as Coinbase’s with Morpho for onchain Bitcoin-backed loans, reflecting increasing credibility and scale.

Centralized exchanges are attempting to integrate DeFi features, exemplified by Coinbase’s integration of Aerodrome on Base and Binance’s rise driven by Aster on BNB Chain, but their core models remain less agile and more heavily regulated.

Security concerns and past hacks, which resulted in over $11 billion lost between 2012 and 2023, have driven users toward self-custody and DeFi protocols, increasing trust in decentralized solutions.

According to SynFutures CEO Rachel Lin, 2025 is a turning point where DeFi surpasses centralized exchanges in market importance and trust, marking a significant industry milestone.

The early DeFi boom in 2020 was characterized by experimentation and hype, leading to a boom-and-bust cycle, but recent years have seen a consolidation phase driven by the need for sustainability.

The bear markets of 2023 and 2024 resulted in the loss of many unsustainable DeFi projects, setting the stage for a new phase focused on stability and maturity.

This consolidation has laid the groundwork for DeFi’s next growth phase, emphasizing stability, maturity, and broader adoption.