Best Decentralized Finance (DeFi) Projects

Best DeFi Projects for 2025

Decentralized Finance has been one of the most defining trends in crypto since Ethereum introduced smart contracts, evolving through multiple phases with each cycle bringing new, unique use cases.

From its early focus on lending and borrowing to the emergence of innovations like liquid staking and meme coin-centric apps, DeFi has consistently broadened its appeal to a diverse range of investors.

As we look toward the best DeFi projects in 2025, we’ve evaluated over 20 sub-sectors, considering factors such as current narratives, hype among crypto natives, TVL growth, momentum, and accessibility.

Below is the table showcasing the top DeFi projects based on these criteria.

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1. Aave

Aave tops our list as a tribute to the golden era of DeFi. Launched in 2017, the platform still thrives today, currently holding a TVL of $10.5 billion, with a peak of $51 billion in 2022, and holds a 36.3% market share in the crypto lending sector.

Aave enables users to lend and borrow a wide range of tokens without relying on intermediaries. The platform supports over 140 yield pools across 12 blockchains, offering competitive annual percentage yields (APYs), including 6-10% on stablecoins like DAI, USDT, USDC, and USDS.

The AAVE token serves multiple functions: it grants governance rights, allows holders to vote on protocol updates, and can be staked to earn rewards contributing to the platform's security. Aave's innovative approach maximizes capital efficiency and broadens access to financial services.

• Supported Chains: Ethereum, Arbitrum, Avalanche, Polygon, Base, Optimism, Scroll
• Features: Lending, Borrowing, Token Swapping, AAVE Staking
• Top Competitors: Compound, Kamino, Venus, Morpho, Spark, JustLend

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2. Lido

Lido was founded in 2020 and has become the leading liquid staking platform, with a total value locked of $23.5 billion. The protocol allows users to stake Ethereum through stETH, a token that represents staked ETH while remaining fully liquid.

This enables users to trade, lend, or use stETH across various DeFi platforms, all while earning staking rewards. Lido is active across four blockchains, including Ethereum and Solana, with its decentralized structure distributing staking risk across multiple validators.

By utilizing Liquid Staking Derivatives like stETH, users can earn staking rewards without the usual lock-up periods, providing greater flexibility. Lido's native token, LDO, plays a central role in governance, allowing holders to vote on proposals for protocol updates and fee structures.

• Supported Chains: Ethereum, Solana, Moonbeam, Moonriver
• Features: Staking and Wrapping ETH into stETH
• Top Competitors: Binance staked ETH, Jito, Rocket Pool, mETH, Marinade

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3. Hyperliquid

Hyperliquid, a decentralized exchange launched in 2023, has immediately conquered the perpetual futures sector. By running on its own Layer 1 blockchain, it delivers fast and cost-effective trading, supported by deep liquidity and leverage up to 50x on BTC and ETH.

The platform stands apart with its on-chain order book, offering transparency and improved security while giving traders control through limit and stop-loss orders. The HYPE token drives governance and staking within the platform, and its deflationary model aims to raise its value over time.

In late 2024, Hyperliquid executed one of DeFi's largest airdrops, reaching over 90,000 users and expanding its ecosystem. With monthly trading volume exceeding $150 billion, 190,000 active traders, and $10 million in monthly revenue, Hyperliquid is off to a strong start in 2025.

• Supported Chains: Hyperliquid L1
• Features: Spot & Futures Trading, Vaults Deposits, HYPE Staking, Referral Program
• Top Competitors: dYdX, GMX, Jupiter Perps, SynFutures, Drift

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4. Pump.fun

Pump.fun, the most popular DeFi use case from last year, is a platform for creating and trading meme coins on Solana. Users can launch tokens in minutes, and though no coding is required, token creators are often called "devs" with notable creators including Iggy Azalea and Caitlyn Jenner.

With Raydium's liquidity backing it, Pump.fun is one of the protocols with the highest on-chain activity in DeFi. The platform has generated $320 million in revenue and supported the creation of over 5.3 million tokens and the participation of more than 9 million addresses.

Through its bonding curve model, token prices rise as more are bought, giving early participants an edge. Despite its success, Pump.fun faces issues such as rug pulls and regulatory scrutiny in the UK, but the anticipation surrounding a potential token launch and airdrop keeps its popularity high.

• Supported Chains: Solana, Blast
• Features: Deploy and Invest in Meme Coins
• Top Competitors: Sun Pump, PinkSale, DxSale, Juicebox V1

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5. Babylon

Babylon is leading the way in bringing DeFi to Bitcoin, a trend expected to gain even more momentum in 2025. The protocol secures Proof-of-Stake (PoS) networks by utilizing Bitcoin’s security to provide data availability and prevent issues like long-range attacks.

This allows PoS chains to leverage Bitcoin’s hash power without needing to bridge assets. Babylon’s approach mirrors that of Eigenlayer, which uses Ethereum’s security for decentralized services, but Babylon focuses on integrating Bitcoin into PoS systems.

While Babylon doesn’t have a native token, it has attracted significant attention, with 57,000 BTC staked, amounting to over $6 billion in TVL, along with 140,000 delegations and 130,000 stakers. As of early 2025, Babylon's latest Bitcoin staking Phase-1, Cap-3 is currently closed.

• Supported Chains: Bitcoin
• Features: Stake and Delegate BTC
• Top Competitors: Symbiotic, EigenLayer, Karak, exSat Credit Staking, Solayer
  

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What is Decentralized Finance (DeFi)?

Decentralized finance (abbreviated as DeFi) refers to financial services built on blockchain technology, allowing users to engage in activities like lending, borrowing, and trading without intermediaries.

Recent advancements include liquid staking derivatives, which allow users to stake assets while maintaining liquidity, and restaking, which raises network security while enabling users to participate in multiple decentralized activities at once, for higher yield returns.

DeFi also includes meme coins launchpads, making it easy for anyone to create and trade tokens. Prediction markets, such as Polymarket, allow users to bet on future events in a decentralized way.

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Is DeFi Safe?

DeFi security has improved significantly in recent years, with hacks and exploits declining as protocols strengthen their defenses. In 2024, losses from DeFi-related security incidents dropped by 40%, falling from $787 million in 2023 to $474 million.

A major factor in this decline is the reduction in bridge exploits, which had been a significant vulnerability in previous years. Cross-chain bridge hacks fell from $338 million in 2023 to $114 million in 2024, reflecting improvements in bridge security.

While DeFi security has seen positive trends, the broader crypto industry still faces challenges, with centralized platforms experiencing a rise in hacks (DMM Bitcoin, WazirX), proving the ongoing need for vigilance across all areas of digital finance.

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Is DeFi a Good Investment in 2025?

Our analysis shows that DeFi coins are currently undervalued compared to the broader DeFi ecosystem. While total DeFi TVL has grown by 130% over the past year, the market cap of DeFi coins has only increased by 67%, highlighting a disconnect between value creation and token prices.

This gap suggests significant upside potential for DeFi tokens as the market catches up with the underlying growth of decentralized finance platforms.

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How to Find Good Projects in DeFi?

The best platform for analyzing DeFi opportunities is DefiLlama, offering solid tools to track TVL, compare protocols, and evaluate sector performance. Based on our analysis, the top DeFi sectors in 2025 can be categorized into tiers according to their market share:

1. A-Tier (Dominant Sectors - 51.2% Market Share): Includes liquid staking ($59.68B), lending ($49.01B), and bridges ($38.85B).
2. B-Tier (Established Sectors - 22.4% Market Share): Contains DEXs ($25.11B), restaking ($24.85B), and liquid restaking ($14.85B).
3. C-Tier (Emerging Sectors - 8.8% Market Share): Comprises yield ($8.78B), CDP ($8.69B), and RWA ($7.96B).
4. D-Tier (Smaller Sectors - 17.5% Market Share): Combined smaller categories such as Derivatives, Insurance, Launchpads, and more, totaling $50.60B.

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Bottom Line

Despite Ethereum’s 55% dominance in DeFi, chains like Solana and Bitcoin are gaining ground, and we predict that other L1 and L2 projects will continue to capture more market share.

In 2025, the biggest trends will likely revolve around Real World Assets (RWA) and AI agents, which will find their place in DeFi as investors look for ways to capitalize on these narratives.

Whether through high-leverage trading, automation, or yield generation, these narratives will likely lead to a new generation of projects that cater to the current needs of investors.