Author: Jae, PANews
In 2025, the DeFi (Decentralized Finance) market experienced a thrilling roller coaster ride. At the beginning of the year, driven by explosive Layer 2 performance and institutional capital inflows, TVL (Total Value Locked) skyrocketed from $182.3 billion to a historic peak of $277.6 billion, making a trillion-dollar ecosystem seem within reach.
However, in the fourth quarter, an unexpected 10/11 flash crash poured cold water on the market, causing TVL to sharply shrink to $189.3 billion, erasing the year's gains to a negligible 3.86%. This intense volatility revealed the true fabric behind the glamorous narrative of DeFi: on one side, deep evolution in sectors like staking, lending, and RWA; on the other, the fragility and governance fractures caused by leverage accumulation.
This has been a crucible of ice and fire. The market witnessed Lido's dominance in the staking sector.