DeFi Hits $225B TVL in 2025 as Focus Shifts to Stablecoin Growth

The decentralized finance (DeFi) sector saw its Total Value Locked (TVL) rise to $225 billion in 2025. This marked a new all-time high, slightly above the $204 billion recorded during the 2021 cycle. While the numbers suggest growth, some analysts see the trend as a pause for reflection rather than a breakthrough.

Crypto figure Hercules_Defi responded by saying, “This should be a reality check, not a milestone to celebrate.” He pointed out that although TVL is higher, real user expansion remains limited. The data suggests most of the capital comes from repeat users or larger holders rather than new retail entrants.

Stablecoins and Simpler Yield Products Gain User Preference

As DeFi protocols continue to evolve, stablecoins have shown consistent growth. Combined market capitalizations of USDT and USDC surpassed $260 billion in 2025. According to Hercules_Defi, people want digital dollars onchain, but they do not want to deal with complex DeFi tools to access them.

This shift is also visible in the rise of yield-bearing stablecoins and real-world assets (RWAs). These instruments have attracted over $20 billion in value, mostly from larger investors.

Hercules added, “That’s not saturation that’s under-penetration,” signaling there’s still room for broader adoption, especially among retail users.

Analysts point to platforms like Aave, Ethena Labs, and Pendle Finance as current leaders in offering simplified, yield-based products. These platforms are gaining attention not through high-risk strategies, but by delivering returns that are easy to understand and access.

Kolten from 0xKolten stated, “Users want simple, understandable yield not more farms, not more gimmicks.”

The current DeFi environment shows that making yield accessible and safe may be more important than introducing new technical products. Experts agree that to reach mass adoption, yield must be embedded in everyday apps or delivered in a way that doesn’t feel like crypto.