DeFi’s Silent Boom: Institutional Growth and Fintech Integration Drive Surge

Decentralized finance (DeFi) is quietly entering a new phase of maturity, driven not by speculative mania, but by deep integration into fintech platforms and increasing institutional adoption. According to a new report by analytics firm Artemis and yield platform Vaults.fyi, DeFi is evolving into a core financial infrastructure powering modern finance.

Top DeFi lending platforms such as Aave, Morpho, Spark, and Euler have seen their total value locked (TVL) surge past $50 billion, climbing nearly 60% in the past year. This growth is largely attributed to institutional participation and the adoption of advanced risk management frameworks. The report describes this shift as the transformation of DeFi into “modular financial networks.”

A key trend driving this adoption is the "DeFi mullet" approach—where user-facing fintech apps offer traditional finance experiences while utilizing DeFi infrastructure in the backend. Coinbase users, for instance, can borrow against their bitcoin holdings using Morpho, with over $300 million in loans already issued. Bitget Wallet allows users to earn up to 5% yield on stablecoins like USDC and USDT via Aave, while PayPal offers 3.7% returns on PYUSD through Venmo, though without DeFi integration.

This backend DeFi integration creates seamless user experiences while maintaining decentralized infrastructure. The report also highlights the potential for fintech giants like Robinhood and Revolut to offer stablecoin-based lending and asset-backed services using DeFi rails.

Another emerging trend is the integration of tokenized real-world assets (RWAs), including U.S. Treasuries and credit funds. These tokenized instruments are now being used as collateral and income-generating tools, adding real-world value to the DeFi ecosystem.

DeFi’s quiet evolution suggests a sustainable and institutional-driven future, signaling its growing role in mainstream finance.