- DeFi lending TVL has surged past $50 billion — approaching $60 billion — driven by increasing institutional participation, rising roughly 60% in the past year.
- The “DeFi mall” trend shows consumer apps quietly embedding DeFi on the backend to offer yield and lending (for example: Coinbase–Morpho has originated about $300M in loans).
- Tokenized real-world assets (RWAs), such as Treasury-backed instruments, are being used more frequently as DeFi collateral and sources of yield.
Subtle but important changes are reshaping the decentralized finance (DeFi) landscape.
Beyond the speculative fever and occasionally dubious high yields that marked earlier bull markets, DeFi’s recent growth is being driven by an evolution of the financial layer underlying user-facing applications and by a notable increase in institutional involvement.
This maturation is especially evident in the DeFi lending sector, where total value locked (TVL) has expanded sharply.
According to a Wednesday report from analytics firm Artemis and on-chain yield platform Vaults.fyi, the combined TVL across leading DeFi lending protocols — including well-known names such as Aave, Euler, Spark, and Morpho — has climbed above $50 billion and is now nearing $60 billion.
That represents about 60% growth over the past year. The report attributes this rapid expansion to “accelerating institutionalization and increasingly sophisticated risk-management tools.”
“These are not just yield platforms. They are evolving into modular financial networks that are rapidly institutionalizing,” the report’s authors wrote, emphasizing a fundamental shift in how these protocols are used and perceived.
“DeFi Mall”: Seamless Integration for Mainstream Users
One key trend highlighted in the report is the rise of what it dubs the “DeFi mall”: user-facing applications that quietly integrate DeFi infrastructure on the backend to provide financial services like yield generation and lending.
By abstracting complex DeFi mechanics from end users, these integrations create smoother, more familiar experiences akin to traditional fintech apps.
The report describes this approach as “fintech front ends, DeFi back ends.”
Coinbase provides a clear example: through an integration that leverages Morpho’s lending infrastructure, Coinbase users can borrow against Bitcoin (BTC) holdings. The report notes that this system has already enabled more than $300 million in loans this month.
Similarly, the Bitget Wallet integration with lending protocol Aave allows users to earn roughly 5% yields on USDC and USDT across multiple chains. While not strictly DeFi, PayPal has adopted a similar model with its PYUSD stablecoin, offering PayPal and Venmo wallet users around 3.7% yield.
The report suggests that other crypto-friendly fintech companies with large user bases — such as Robinhood or Revolut — could soon adopt comparable strategies. By delivering services like stablecoin credit lines or asset-backed loans via DeFi rails, these firms can introduce DeFi benefits to broader audiences while creating new fee-based revenue streams.
Bridging Worlds: Tokenized Real-World Assets (RWA) Enter DeFi
An important development fueling DeFi’s growth is the growing integration of tokenized versions of traditional financial assets, commonly referred to as real-world assets (RWAs).
DeFi protocols are increasingly incorporating tokenized U.S. Treasuries, credit funds, and other conventional assets. Tokenized RWAs can serve as collateral for loans, generate yield directly within DeFi protocols, or be bundled into more complex investment products — helping to close the gap between legacy finance and the decentralized digital economy.
Tokenization of investment strategies is also gaining momentum. For example, Pendle — a protocol that separates an asset’s principal from its yield stream — manages more than $4 billion in TVL, much of which is tied to tokenized yield-bearing stablecoin products.
Platforms like Ethena offer yield tokens such as sUSDe and similar instruments that package more advanced strategies (including cash-and-carry trades) to deliver returns above 8%, while abstracting operational complexity away from the end user.
The Rise of On-Chain Asset Managers: Specialization in DeFi Investing
A less visible but highly significant trend highlighted by the report is the emergence of crypto-native asset managers operating on-chain.
Firms like Gauntlet, Re7, and Steakhouse Financial are playing increasingly influential roles by allocating capital across the DeFi ecosystem using professionally managed strategies.
Their functions closely resemble those of traditional asset managers in legacy finance.
These on-chain asset management firms are becoming deeply embedded in DeFi protocol governance: actively participating in adjusting risk parameters, deploying capital into diversified structured-yield products, tokenized RWAs, and modular lending markets.
The report notes that assets under management in this specialized sector have quadrupled since January, rising from roughly $1 billion to over $4 billion — underscoring the rapid professionalization and institutionalization of DeFi investment strategies.