For millennia, the financial world has been dominated by traditional banking systems that appeared impervious to change. However, decentralized finance, or DeFi, has emerged in the last decade to challenge that, rewriting the rules and threatening to turn traditional finance into a relic.

Imagine a world where your smartphone is your bank and global transactions take mere seconds; loans are approved without paperwork or credit checks and it takes just minutes to connect to thousands of investors. This is the revolution that DeFi companies are cooking up.

Breaking down the tech and use cases

The DeFi ecosystem is an open financial system built on blockchain tech, providing peer-to-peer (P2P) financial services without needing traditional middlemen such as banks. Users can engage in DeFi lending, borrowing, trading, and earning interest through this system, which operates through automated digital contracts known as “smart contracts.” These contracts are stored on public blockchains like Ethereum and set up to self-execute once certain criteria are met. One of the core tools within the ecosystem is the DeFi wallet, which acts as a digital bank account for cryptocurrencies. Users can store crypto, connect to DeFi apps, swap tokens, and earn interest with these wallets.

Meanwhile, tokenization, which lets asset owners create security tokens that represent fractionalized ownership of their real-world assets, is helping unlock trillions of dollars locked in private investments. This means a much wider pool of investors can access assets such as private equities and commercial real estate—something historically restricted to large institutional investors. Non-fungible tokens (NFTs) are unique digital assets or collectibles stored on the blockchain and a form of tokenization that is growing in popularity. They are also verifiable digital certificates of authenticity.

Most DeFi use cases revolve around decentralized alternatives to traditional financial services such as lending, borrowing, trading, asset management, and insurance. However, the nature of the tech has also opened the doors for unique use cases like blockchain gaming and NFTs. Here are a few examples:

• Lending and borrowing: DeFi enables P2P lending and borrowing of cryptocurrencies. Users can earn interest by lending crypto assets or borrowing crypto by providing collateral. This is one of the most populated segments in the sector, with DeFi companies like AAVE, Compound, and MakerDAO leading the way.
• Trading and exchange: Decentralized exchanges (DEXs) allow the trading of digital assets directly between users, eliminating the need for traditional centralized exchanges (e.g., Uniswap and Curve Finance).
• Digital asset custody: DeFi offers solutions for the secure storage and management of digital assets, including non-custodial wallets and institutional custody platforms like Anchorage. DeFi wallets are used for remittances and transactions, facilitating near-instantaneous transaction settlement and lowering transaction costs.
• Insurance: Cryptocurrency insurance companies such as Coincover provide solutions for protecting digital assets from threats, including user error, infrastructure failures, and hacks.
• Asset tokenization and investment: Allows users to create security tokens that represent fractionalized ownership of real-world assets and investment in them (e.g., Fireblocks).‍
• Blockchain gaming: DeFi concepts are integrated into blockchain-based games, allowing players to own in-game assets as NFTs, earn cryptocurrency through gameplay (play-to-earn), and participate in decentralized gaming economies (e.g., Immutable X).

How DeFi is changing the game

DeFi has improved transaction costs and efficiency by cutting out centralized institutions and promoting financial inclusion through global access. Since all transactions and protocol rules are publicly recorded and freely available on the blockchain, it also provides enhanced transparency. Services include lending protocols that allow borrowing without providing personal identities, higher interest and lower fees than traditional banks, and instant access to loans without credit checks or paperwork.

Furthermore, DeFi promises better financial products with 24x7 service. These benefits not only streamline cross-border transactions but lower the barrier of entry for product innovation, pushing even traditional banking institutions to integrate blockchain technologies into product offerings.

DeFi companies to keep an eye on

Numerous DeFi startups have emerged to disrupt the space, while the heavy hitters of the financial world have also explored ways to enter the field. Most of the top DeFi companies are built on existing blockchains and are involved in borrowing and lending—the highest-funded segment in the space. Along with cryptocurrencies, DeFi has also seen phenomenal growth in the last five years, with over 90% of the top DeFi startups established after 2020.

Some of the major players in the sector have recorded high numbers in terms of total value locked (TVL)—a key metric that represents the total value of digital assets in a particular protocol, smart contract, or blockchain network. Lido hit a TVL of close to USD 40 billion last December while Sky (previously Maker) recorded a TVL of close to USD 4 billion on a single chain, while they also lead the way when comparing top DeFi companies by revenue. AAVE, Uniswap, and JustLend are also notable in terms of their TVLs. However, the constant and rapid movements in the market mean that these numbers can change drastically in the blink of an eye.

Though statistics aren’t freely accessible and massive fluctuations are common, some of these platforms facilitate transaction volumes that go into the hundreds of millions of dollars each day. Uniswap, for example, has a daily volume that usually exceeds USD 100 million, making it one of the leading platforms. Curve Finance and AAVE are also known to handle high transaction volumes, while Synapse reported USD 76 billion in annual transaction volume across 18 million users in 2022. 

Several DeFi startups are also making waves in the space through innovation, promising high growth potential in the coming years. Here’s a look at some of them based on their solutions:

Borrowing and lending

• Anchorage: An institutional borrowing and lending platform that offers a crypto-native digital asset platform that provides custody, trading, staking, governance, and financing for large businesses such as publicly traded companies, hedge funds, and banks. The DeFi company received a federal banking charter in January 2021 and a BitLicense from the New York State Department of Financial Services in December 2024, enabling it to offer crypto services to New York institutions.

DeFi marketplace

• Figure: It entered the space with the launch of Figure Markets, a decentralized exchange for trading cryptocurrency, securities, and blockchain-native alternative investments. Its users can take out loans that leverage their crypto holdings (Bitcoin or Ethereum) as collateral. Institutional users can integrate Figure with their existing trading systems and make deposits and withdrawals in fiat currency.
• Uniswap is an Ethereum-based DEX that allows cryptocurrency trading. It also offers tools for developers to create apps on top of Uniswap’s offerings. Uniswap has reported a TVL of over USD 5.4 billion and integrations with over 300 DeFi apps. In January, it launched Uniswap v4, the latest version of its platform across 12 blockchain networks. The new version introduced “Hooks,” plugins that allow developers to create custom trading features and add-ons directly into the protocol.

Digital asset management and tokenization

• Fireblocks: One of the largest active disruptors in the space, it closed a Series E round of USD 550 million in 2022. Operating mostly in the blockchain infrastructure and asset tokenization segments, its products facilitate the secure handling of digital assets. This includes the Fireblocks Network, an institutional network for fast and secure on-chain settlement, and its proprietary wallet-as-a-service, MPC.
• Phantom: Phantom Wallet delivers a wallet as a browser extension that enables the storage and transfer of tokens in the Solana blockchain. It is non-custodial and comes with a built-in decentralized exchange that allows token swaps. It’s also offered as an Android and iOS app and has reported over 3 million users. Having raised USD 150 million in Series C funding in January, it recently launched a test platform that lets users manage assets from Solana, Ethereum, Bitcoin, and Base within a single wallet interface.

DeFi insurance

• Coincover: A DeFi company that focuses on cryptocurrency insurance, offering solutions for protecting digital assets from threats including user error, infrastructure failures, and hacks. These solutions include recovery of lost crypto keys, digital crypto wallet protection, and individual protection plans.

Blockchain gaming

• Immutable X: A DeFi startup that focuses on enhancing the performance and accessibility of non-fungible tokens (NFTs) and blockchain gaming. Its growth potential is driven by its focus on solving critical challenges in the NFT and gaming sectors, its partnerships with major gaming studios and NFT marketplaces, and its eco-friendly approach using proof-of-stake consensus and purchasing carbon credits.

The DeFi wave is not one to be ignored and incumbents in the traditional finance world have also made strides in terms of DeFi integration and innovation. The world’s largest asset manager, BlackRock, introduced its iShares Bitcoin Trust ETF, which has reached USD 17 billion in assets since its launch in January 2024. JPMorgan’s blockchain platforms handled over USD 1 billion in daily transactions in 2024 alone, while Goldman Sachs enhanced its crypto trading capabilities, offering Bitcoin and Ethereum derivatives to its clients. Fidelity has also explored DeFi tech to transform traditional asset markets through tokenization.

Stay ahead with market intelligence

The DeFi revolution is already upon us and its world is one of constant change. To stay ahead is not just to understand the changes but to identify trends and see the change coming, whether it be in the fintech industry or beyond.

Speeda Edge provides an in-depth insight into the global tech trends of over 200 industries including DeFi, Cryptocurrencies, Digital Wallets, and FinTech Infrastructure. We offers detailed industry research with key information on market size, regulatory and competitive landscapes, company activity, and more. Our comprehensive news coverage also ensures that you stay up-to-date with a host of tech industries including DeFi. These features help companies gain in-depth knowledge to stay ahead of emerging DeFi trends and make data-driven decisions to support growth and innovation strategies.

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