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DeFi user engagement has sharply declined, with daily active wallets down 33% from earlier in the year — a reflection of broader market volatility. The meme coin boom, once fueled by platforms like Pump.fun and tokens such as TRUMP coin, lost steam by Q2 2025, signaling a shift away from speculative hype. Despite all this, we’ve seen RWA and DEXs thriving even as broader DeFi activities have cooled down.
In contrast to meme coins, stablecoins have emerged as the backbone of DeFi’s evolution, catalyzing deeper integration with traditional finance. Regulatory clarity, exemplified by the GENIUS Act and Circle’s IPO, has spurred fresh institutional interest, especially across lending protocols and tokenized real-world assets (RWAs). Lending platforms like Aave, Morpho and Maple Finance have seen dramatic growth in deposits and usage, with total DeFi lending deposits reaching $67.8 billion.
Meanwhile, RWA platforms — such as Securitize, Ondo Finance and Franklin Templeton — are enabling yield opportunities backed by US Treasuries and other tangible assets, positioning RWAs as a credible bridge between crypto and mainstream investing.
Decentralized exchanges (DEXs) are also undergoing a transformation. Hyperliquid leads the charge in the perps trading space with $1.27 trillion in YTD volume, challenging centralized players in performance and functionality. This shift has paved the way for hybrid platforms like Byreal, which combine the liquidity of CEXs with the transparency of DeFi.
However, not all sectors are thriving: AI-related DeFi (DeFAI) tokens have seen fading interest and price drops, and while liquid staking remains substantial in size, its growth has been hampered by token volatility. Altogether, the report paints a picture of DeFi maturing into a more utility-focused ecosystem, anchored in real-world applications and financial convergence.