If you close your eyes and summon the 'phantom' of 2020, you might catch a whiff of digital ozone and gunpowder. That era was called the 'DeFi Summer', and rather than a financial revolution, it felt like playing a high-risk arcade game while being feverish.
At that time, we were all alchemists. We were struggling to turn food tokens like Yam, Sushi, and Pickle into gold. Promises of 1000 percent annual interest were flying around, the sleepless Discord server was bustling, and the anxiety that we might encounter a rug pull with a single smart contract operation was always swirling. It was truly a lawless land known as the Wild West, where the only rule was speed, and the only metric was the explosively increasing Total Value Locked (TVL).
As time flows to 2025, the landscape has changed dramatically. The smoke has cleared, and taverns have transformed into polished glass buildings, with architects joining the alchemists. The story of DeFi over the past five years is not merely one of 'mainstreaming,' but of a fundamental change in the essence of decentralized finance at the molecular level.
I would like to sincerely thank the guests on the front lines. Thanks to the valuable insights of Ms. Vivien Lin (Chief Product Officer and Lab Head at BingX Labs), Mr. Griffin Ardern (Head of Research and Options Desk at BloFin), and Mr. Fernando Lillo Aranda (Marketing Director at Zoomex), we have been able to visualize the significant distance between the former speculative frenzy and the current sophisticated clarity. We are now working to dissect how the essence of decentralized finance has changed at the molecular level.
What connects reality.
In the 'Wild West' era of 2020, DeFi was a closed loop. It was a beautiful yet chaotic bubble where volatile assets were borrowed and then staked into even more volatile assets. It was a self-referential mechanism that lived and died by inward booms. But now in 2025, that loop has been broken, and the inflow from the 'real world' has begun.
Vivien Lin, Chief Product Officer and Lab Head at BingX Labs, reflects on the major shift from a speculative world to a foundational one. When asked about the biggest difference between the chaos of the past five years and the present, she emphasizes 'the strengthening of the asset base itself.'
'The biggest change is that real assets and stablecoins have been integrated into a space that was once purely speculative,' Mr. Lin points out.
'DeFi has expanded from a high-yield experiment to an ecosystem that offers a variety of assets including government bond-related products, stablecoins, and instruments for institutional investors. A more balanced and practical financial environment is being created.'
This is a sign that the maturity of 'DeFi Summer' has transitioned into 'DeFi Autumn.' Now is the season of harvest and stability. In 2020, we were chasing ghosts. By 2025, what we are trading is the foundation of the world economy. The past 'high yields' were like a tax imposed on latecomers, but today's yields are produced by the productivity of the real economy, such as government bonds and real estate.
New standards: emphasis on quality over quantity.
Even if we say 'in the past,' it was just five years ago. At that time, we were obsessed with TVL. That was the only important number. We watched as billions stacked up like a stadium scoreboard. But ultimately, we realized that TVL was an illusory god, much of it built on 'circular' value by lending out the same funds multiple times—a paper castle, so to speak.
In 2025, the industry has become more skeptical and possesses a healthier view of data. It is no longer about 'locked amounts,' but rather 'what is actually being used.'
Mr. Lin points out that traditional indicators have been replaced by the search for 'true signals in the noise.'
'There is no universal metric. It depends on what you want to evaluate,' explains Mr. Lin.
'However, one of the newly emphasized indicators is stablecoin TVL. This reflects actual demand and cannot be inflated through the mechanisms of native tokens. It serves as a healthy indicator of actual use and capital confidence.'
When looking at stablecoins, there are no 'moonshots' or memes. What we see is a digital dollar, a testament to confidence in infrastructure. By 2025, how to accumulate stable and non-volatile capital has become an indicator of the protocol's health. This change in indicators reflects a shift in market psychology itself—a transition from gambling to banking.
Businessmen in server rooms.
For years, cypherpunks and degenerates have laughed at the idea of major banks entering DeFi. It was thought that 'they wouldn't understand' and 'regulations would be a barrier.' However, banks did not come to DeFi to join a revolution; they came because the traditional financial infrastructure was aging and DeFi's new pipes were faster, cheaper, and less prone to blockage.
However, banks did not enter through the front door of anonymous DEXs. They created their own private entrances. Mr. Griffin Ardern, head of research and options desk at BloFin, envisions 'institutional DeFi' as an extension of the existing financial industry, more efficient than before.
Mr. Ardern states.
'Large institutions like banks have already begun their introduction to DeFi. However, what they enter with are compliance-aligned products—like on-chain stocks approved by the SEC and settled by DTCC. They will also implement stricter KYC processes on-chain.'
This is not the DeFi of 2020, where one could trade hundreds of millions with just one wallet address. Now, under regulation, we are in the era of 'permissioned' DeFi. Mr. Ardern sees this as the 'birth of a new global market.'
Mr. Ardern continues.
Unlike the former 'Wild West' type of DeFi, the incorporation of cutting-edge blockchain analysis and KYC technology will lead to the formation of a DeFi space that is closer to offshore interbank markets and offshore FX markets. A series of mature solutions based on these two markets will be blockchain-based, enhancing transparency and speed.
This is an extremely important insight. The 'interbank' market—where banks lend and borrow from each other—is the engine that drives the global economy. By blockchainizing this, banks will gain unprecedented transparency. During the financial crisis of 2008, banks could not ascertain each other's health, leading to a credit crunch. In the DeFi-enabled interbank market of 2025, solvency can be instantly verified on-chain.
The appeal of real-world assets (RWA).
'The tokenization of real-world assets (RWA) is what has allowed 'suits' to truly step into the world of 'hoodies.' What was once said in 2020 about 'on-chaining the world' has become a reality by 2025. Whether it's a divided ownership apartment in Berlin or US treasury bonds, the blockchain has become the ultimate record ledger.
However, Vivian Lin points out that we should not confuse 'means' with 'motives.' Banks did not willingly enter this field due to a preference for tokenization; rather, they were compelled to enter because users moved first.
'The tokenization of RWA is a significant catalyst, but it is not the only reason for banks to enter,' Mr. Lin points out. He further states.
'Banks ultimately follow the flow of capital. Therefore, users should understand that their dollars function as votes. As on-chain liquidity increases, traditional financial institutions will have no choice but to participate in that flow, proving that the growth of DeFi is real.'
Every time a small investor moves funds from a traditional deposit account to a tokenized interest-bearing stablecoin, banks lose deposits. As a result, banks were forced to chase dollars on-chain. This is a rare example of a small entity moving the actions of giants through the weight of capital.
The paradox of privacy: the confrontation between old and new forces.
While the institutional aspects of DeFi are strengthening transparency and compliance, another battle is being fought among user demographics. As regulations tighten in 2025, parts of the market retreat into the shadows, and 'ordinary' users continue to search for entry and exit points.
Fernando Lillo Aranda, Marketing Director at Zoomex, sees the widening gap in how people engage. On one hand, there is a growing movement seeking 'full sovereignty.'
'What we are seeing is an increase in users and traders seeking DEXs and CEXs that protect privacy 100%, and they continue to build privacy to avoid regulation and sanctions,' says Mr. Aranda.
This is nothing but the lingering spirit of 2020, a desire to escape state surveillance. However, for the 'mass retail' layer that DeFi wishes to attract, a focus on privacy and self-management becomes a barrier. For pioneers, the 'lawless zone' was exhilarating, but for settlers, it was sheer terror.
Mr. Aranda admits.
'However, 'beginners' do not trust DEXs much and often do not know how to use them. For this reason, it is much easier to create an account with CEX. DeFi has made great strides in the past five years, but due to the clear advantages that CEX still holds for large traders, it needs to continue evolving.'
This is the barrier of 'user experience.' Back in 2020, a PhD in 'Metamask Studies' was required. By 2025, the interface has become sophisticated, but fundamental anxieties remain. Losing your keys means losing all your wealth. For this reason, CEX is still preferred by the general public. CEX provides a 'undo' button that DeFi inherently lacks.
Is it a situation that can be called safe?
Columnists and developers in 2025 are asking the same question as in 2020: 'Is it safe?' The answer in 2020 was a clear 'no.' The answer in 2025 is 'yes, but...'.
Vivian Lin believes that the path to safety lies not merely in improving code quality, but in better tools for understanding the code.
'While DeFi has become the safest and most intuitive it has ever been, each user should approach it with clear goals and plans,' warns Mr. Lin.
'The evolution of better UX, clearer guardrails, and AI reducing the complexities of everyday decision-making is accelerating the flow toward the full adoption of DeFi.'
In 2025, the introduction of AI as 'financial co-pilot' has dramatically changed the situation. Users can now utilize AI agents that detect vulnerabilities in real-time or explain the risks of specific liquidity pools in simple terms, rather than reading through vast documents of smart contract audits. The complexity has not disappeared; it has merely been masked by intelligent design.
The end of the frontier.
The journey from 2020 to 2025 is the story of the market's 'maturity.' Transitioning from the speculative 'DeFi Summer' to the 'DeFi Standard' of international finance.
There is a vision from Griffin Ardern that the 'offshore interbank market' will be rebuilt on a transparent ledger, and there is a realism from Vivian Lin acknowledging that stablecoins and RWA have anchored the industry in reality, along with a frank assessment from Fernando Lillo Aranda that, no matter how much progress is made, the majority will seek simplicity and trust in centralized services.
In 2020, DeFi was an experiment that could fail at any moment. By 2025, DeFi has become an infrastructure that 'must' function. The 'lawless zone' was tamed not by sheriffs, but by engineers, bankers, and millions of users who determined that their dollars were better off on the blockchain than in vaults.
This story is not over. The tensions between privacy and regulation, decentralization and convenience will be key over the next five years. However, looking back at the chaos of 2020 from the heights of 2025, it is clear that 'this is no longer a game.' We are now in an era where each block shapes the currency of the future.
