Decentralized finance (DeFi) is enjoying a renaissance, stoked by a bonfire of U.S. deregulation. Assets under management across DeFi protocols have, as of early 2025, quadrupled—going from $1 billion in AUM to more than $4 billion. This extraordinary growth is undoubtedly fueled by President Donald Trump’s deregulatory agenda, which has allowed institutional confidence in both crypto and DeFi to flourish. The amount of funds, or total value locked (TVL), in top DeFi lending protocols has skyrocketed over $50 billion. Aave, Morpho and Spark are at the forefront as it quickly nears $60 billion.
DeFi Sector Growth
The merged TVL on these three key DeFi lending marketplaces has increased by about 60% in a single year. By late June 2025, it had jumped to about $50–60 billion. This wave isn’t just an outlier—it’s part of a larger trend accelerating acceptance and use of DeFi technologies throughout the financial system.
Yield tokens have gained new explosive popularity this cycle with the Pendle protocol, which allows users to tokenize and trade yield-bearing positions, now over $4B in TVL. This milestone further highlights the increasing sophistication and diversification of DeFi products. Nearly $2 billion of the newly deployed capital is locked into just one DeFi lending platform: Morpho Protocol.
Coinbase’s crypto-backed loan service, powered through Morpho Protocol, has already originated more than $300 million in loans. With Aave now integrated within Bitget Wallet, users can enjoy a competitive APY rate of 5% on USDC/USDT without the hassle of switching between applications. These recent advancements underscore the growing accessibility and convenience of DeFi services.
Regulatory Shifts and Market Confidence
Beyond some veritable black swans and close kin DeFi, distillation of recent flurry in activity can be laid at feet of hawkish regulatory sea changes spawning Stateside. On April 10, 2025, President Trump’s signature on a largely bipartisan bill included the repeal of controversial IRS reporting requirements for DeFi brokers. This action largely repealed provisions in the 2021 infrastructure law that everyone feared would kill DeFi innovation in its crib.
Many industry observers point to the confidence in President Donald Trump’s deregulatory agenda for building institutional confidence in crypto and DeFi. These policy developments have largely mirrored the ongoing wave of evolving sentiment among institutional users in the DeFi space. With him vocally backing the GENIUS Act, a bill to regulate stablecoins Trump continues to cement his pro-crypto credentials.
"America the UNDISPUTED Leader in Digital Assets" - Donald Trump
President Trump called the legislation “incredible.” He demanded it come to his desk right away and that there be “NO DELAYS, NO ADD ONS” of DeFi. His strong and proactive stance on digital assets sends a strong message of clarity and focus regarding the future of U.S. financial policy.
Institutional Adoption and Future Outlook
The recent wave of institutional capital looking into DeFi is changing the narrative of decentralized finance. The considerable boost in TVL and the development of defiprotocols such as Pendle demonstrate a market proofing itself. As the regulatory plays begin to clear the path, institutions are more eager to put capital into DeFi projects.
Arnold Kirimi is a crypto and Web3 journalist, covering trends and developments in DeFi. His unique perspective highlights how quickly and dramatically the DeFi world changes. Continuously educating yourself on emerging opportunities and threats is key.
The integration of DeFi services into established platforms like Coinbase and Bitget Wallet further validates the potential of decentralized finance to disrupt traditional financial systems. As regulatory clarity comes into focus and institutional adoption deepens, the DeFi sector is set to experience further expansion and innovation.
