The decentralized finance (DeFi) world is growing fast, and experts are excited about what’s ahead in 2024 and beyond. Big changes are coming, including how decentralized finance works with traditional finance, new tech to make systems faster and cheaper, and how blockchain connects with artificial intelligence (AI).
Defi Meets Traditional Finance
Traditional finance (TradFi) institutions are increasingly using DeFi tools like automated liquidity provision and smart contracts. This integration is helping tokenize real-world assets, which brings more liquidity to decentralized finance platforms and expands access for investors.
Alvin Kan, COO of Bitget Wallet, highlights that TradFi players are recognizing DeFi’s benefits, such as higher yields, transparency, and efficiency. This adoption is helping decentralized finance solidify its role as a transformative force in the financial world.
Kean Gilbert of Lido Finance notes that institutional adoption of crypto, driven by exchange-traded funds (ETFs) for bitcoin and ether, has introduced new opportunities while raising questions about decentralization.
Newest Innovations in Scale-Up for Layer 2
Like the rest of those working on scaling, Brecht Devos from Taiko Labs believes that Layer 2 solutions are the future of the problem being faced by Ethereum. With the rollout, the goal is to increase transaction speed and efficiency without compromising decentralization.
Solana may be the buzz for quicker and cheaper transactions, but as Devos says, Ethereum is the best way to go when it comes to trustless applications due to its strong decentralization and security.
Regulatory Easing Boosts Defi
The news about crypto-friendly Donald Trump’s re-election would further boost DeFi in America. With the new ministry focusing on deregulating everything, there is much more room created for decentralized finance. It would be interesting to observe the way DeFi adoptive projects get succeeded by Trump based on personal relations.
Experts read new rules that can clear out whether crypto tokens are securities. Jawad Ashraf, CEO of Vanar explained, this could happen and protocols like Uniswap and Aave may be in place for fee-switching models, distributing the revenue as dividends to token holders.
AI and DeFi: A Growing Nexus
The combination of blockchain and AI is becoming more prominent. With their adoption by ai16z and Truth Terminal, AI agents are making strides, mainlining increasing token values. Developer quests include inscribing these agents into making them autonomously move between Web2 and Web3 into platform integration.
According to Illia Polosukhin, co-founder of NEAR Protocol, AI agents will coalesce the reality of taking action and transacting seamlessly from one digital space to another.
Surge in DeFi Revenues
DeFi revenues in November 2024 stood at $206 million, reflecting a hike of 114% above the previous month. Such growth becomes a witness for the momentum of the thriving sector carrying into 2025.
Bright Future for Defi
With an administration interested in the United States, and technology making its way into people’s lives, decentralized finance is set for big things. According to John Paller of ETHDenver, “Innovation with the protection of builders” would be the keys to unlocking the full potential of decentralized finance.
The intersection of AI, blockchain, and clarity of regulation will define how the way DeFi moves forward, so it is one area to watch in the near future.
