There was a certain energy at crypto conferences in the early days of DeFi, sometime between 2020 and 2021. There were crowded rooms, standing ovations for protocol founders, whiteboards covered in tokenomics diagrams, and an overall vibe of people who were certain they were going to change everything and a little anxious about being believed.
The pledges were sincere and genuine. Permissionless finance would result. Anybody with a phone could start their own bank. Without middlemen, borders, and the dead weight of organizations that had long since ceased to function, capital would move freely. It was captivating. After that, for a number of years, not much happened outside of a small, technically advanced community that created ever-more-complex instruments for one another to trade.
That era is coming to an end. The change is now quantifiable rather than merely promised. In 2025, onchain profits from all blockchain networks were close to $20 billion. In comparison, stablecoin transaction volumes have surpassed those of traditional wire transfer networks, making them appear inefficient. Earlier in 2025, central bankers, government representatives, and prominent financial institutions discussed tokenization as an implementation challenge rather than a theoretical concept at the World Economic Forum in Davos, a location not typically associated with enthusiasm for cryptocurrencies.
Instead of testing onchain capital market infrastructure in sandbox settings, Goldman Sachs, HSBC, BNP Paribas, and Broadridge are developing production systems. For once, the phrase “the infrastructure is finally ready” seems to have some significance.
| Onchain Finance & Tokenization — Key Data | |
|---|---|
| Term “Onchain” | Refers to financial activity conducted directly on blockchain networks — settlements, transfers, contracts, asset issuance |
| Onchain Revenue (2025) | Nearly $20 billion — marking a key maturity milestone for the crypto/blockchain industry |
| Stablecoin Market | USDC and USDT both exceeding tens of billions in circulation — used for cross-border payments, DeFi, and institutional settlement |
| Traditional Securities Eligible for Collateral | $25 trillion currently eligible — out of a potential $230 trillion pool |
| Tokenization Opportunity | Unlocking that untapped $205 trillion gap through improved collateral mobility and digital settlement |
| Key Institutional Participants | Broadridge, BNP Paribas, HSBC, Goldman Sachs — building onchain capital market infrastructure |
| Legislative Milestone (U.S.) | GENIUS Act signed July 2025 — first federal stablecoin regulatory framework |
| World Economic Forum Focus | Tokenization and on-chain capital markets — WEF 2025 |
| Canton Network | Privacy-enabled open blockchain — now powers over half of all digital bond issuances |
| Key Challenge Addressed | Settlement latency, intermediary costs, geographic access barriers, collateral fragmentation |
| DeFi’s First Decade Problem | Built by engineers for engineers — complexity, hidden risk, fragmented liquidity, unsustainable APY incentives |
| Second Decade Vision | Programmable, automated, always-on finance that runs invisibly like internet infrastructure |
Many things that ought to have been stated more clearly at the time are included in the honest account of DeFi’s first ten years. Engineers created the protocols for engineers. Words like “gauge weights,” “liquidity bootstrapping curves,” and “impermanent loss” were barriers disguised as sophistication rather than explanatory complications. The majority of users who engaged in early yield farming lost significant amounts of their gains due to gas costs and improperly timed transactions, clicked through interfaces to claim rewards, manually compounded, and jumped from protocol to protocol chasing hourly-changing APY figures. The promised democratization of finance frequently resembled a part-time, unpaid job keeping an eye on dashboards. Furthermore, the risks—such as governance attacks, Oracle manipulation, smart contract vulnerabilities, and outright fraud—were rarely explained with the clarity they deserved.
That doesn’t take away from what was constructed. The proof of concept was real. Experiments in code-enforced financial agreements, autonomous market creation, and programmable money produced knowledge that was previously unattainable and could not have been produced in any other way. When a technology was applied to millions of real people with different levels of technical proficiency and risk tolerance, there would always be a gap between what it could do in theory and what it actually accomplished. Pets.com was part of the first ten years of the internet. The first generation of execution was more chaotic than the underlying technology warranted, but that didn’t mean the internet wouldn’t change commerce.
The layer beneath the applications is now different. Only $25 trillion of the $230 trillion global securities pool can currently be used as collateral, according to the World Economic Forum’s 2025 analysis of on-chain capital markets. The majority of the world’s investable assets are underutilized in comparison to what they could be if they moved more quickly and freely due to the friction in traditional systems, which include settlement times that require capital to sit idle overnight, batch processing that doesn’t account for cross-border timing differences, and intermediary chains that extract margin at every stage. This is directly addressed by tokenization. Simply put, a tokenized bond that can settle instantly, travel across borders without paying correspondent banking fees, and be used as collateral on the same trading day it is transferred is worth more than one that cannot.
More than half of all digital bond issuances are currently handled by the Canton Network, a privacy-enabled blockchain whose governance model lets institutional participants choose what information they share and with whom. In 2025, Circle’s USDC debuted on Canton, fusing a popular dollar-pegged stablecoin with a yield-bearing instrument and a blockchain infrastructure of regulatory quality. This type of integration—stablecoin, yield, privacy, and programmability—was always conceivable in theory and is now practically feasible. Compared to the early DeFi summer narratives, it’s less thrilling to describe, which is likely a sign that it’s more enduring.
As you watch this happen, you get the impression that everyone’s comparison—despite the fact that it has become cliched—is accurate. Newspapers and retailers were not instantly eliminated by the internet. Before the effects became evident, it spent decades building infrastructure. Since 2009, blockchain has been developing infrastructure, and the first noticeable institution-scale outcomes are now emerging. It’s still unclear which networks will endure, which use cases will predominate, and which of today’s optimistic forecasts will look foolish in retrospect. However, the trajectory appears to be more obvious than it has been in the past ten years. There are rails. They are being used by the institutions. The question now is not whether this works, but rather what will be built upon it in the future.
