DeFi 3.0: What changes have happened since "Summer of DeFi"?

Author: Solihat Salihu

Compilation: Vernacular Blockchain

Remember DeFi Summer in 2020? During those crazy days, staking yield farming, food tokens, and APYs that look like phone numbers emerged one after another. (Ah, those days when you check out “crops” every five minutes are really memorable.) But if you’ve been hibernating since then, DeFi in 2025 may surprise you.

The era of pure speculative pledge has passed, and the mentality of "rushing first and talking" no longer exists. DeFi has grown up today, put on a suit (a metaphor of course) and began to really solve real-world problems. Let's take a look at what changes have happened to DeFi and why these changes are important.

1. The evolution of DeFi: Looking back on the past

Imagine the growth process of DeFi, like a teenager growing up. DeFi 1.0 is "wild adolescence" - full of experimentation, extremely risky, and has made many expensive mistakes. At that time, automatic market makers (AMM), income farming and borrowing agreements were born one after another. Everything was exciting but difficult to sustain.

DeFi 2.0 attempts to solve liquidity problems through protocol-owned liquidity and more complex Token economics. Remember Olympus DAO and a bunch of imitators? That is the "tuition fee" paid by DeFi in sustainable economics.

Now, by 2025, we have entered the DeFi 3.0 era and everything is completely new.

2. Real-world Assets (RWA): DeFi becomes more pragmatic

What is the biggest change? DeFi is no longer just a paradise for crypto trading. Do you remember those years when people said that blockchain will subvert traditional finance? Now, it's really happening.

Take a mortgage as an example. In 2024, we witnessed the first large-scale, successful on-chain mortgage lending application. Now homeowners can access the global liquidity pool directly to get loans at more favorable rates, while investors can participate in real estate lending without relying on traditional banks.

Supply chain finance has also found its home in DeFi. Small businesses no longer have to wait for months to complete payment processing—they can tokenize invoices for immediate liquidity. It's like having a magic wand that turns future receivables into available funds right in front of you.

3. The rise of institutional-level DeFi

There is one thing that almost no one could have expected in 2020: traditional financial institutions are now one of the largest users in the DeFi ecosystem. Banks that once scoffed at cryptocurrencies are now not only running their own verification nodes, but also actively participating in the DeFi protocol.

But it's not just about entering a big bank. DeFi's infrastructure is also constantly upgrading to meet the compliance needs of institutions. For example, a segregated liquidity pool specifically for compliance agencies, a built-in KYC/AML (Know Your Customers/Anti-Money Laundering) audit mechanism, and a DeFi system that provides authority management for organizations while maintaining the core advantages of decentralization.

4. Safety: From "REKT" to Indestructible

Remember that smart contract vulnerability attacks occurred every week in DeFi? (Those "fund security" memes now look like prehistoric relics). DeFi security has made considerable progress since then.

Modern DeFi protocols adopt multi-layer protection measures, and formal verification of smart contracts has become a standard process. Insurance agreements no longer just provide simple compensation for hacker attacks, but have developed into a comprehensive protection system covering a variety of risks.

The most eye-catching progress? It is an AI-powered security system that can monitor and block attacks in real time. It’s like having a super smart bodyguard who protects your digital assets at any time.

5. User experience: No longer "rocket science"

If you have experienced the early days of DeFi, you should still remember the tension when connecting wallets and exchanging tokens, for fear of losing funds if you make an operation mistake. And the DeFi interface is now intuitive so that even my mother has successfully completed her first transaction recently (yes, I'm as surprised as you).

Account Abstract completely eliminates concerns about Gas fees and complex wallet management. Social Recovery mechanism makes it no longer a disaster to lose a private key. Cross-chain operation? Now it's as easy as sending an email.

6. A new look of income generation

APYs of 1000% have long been history (sorry to let you down). Today, the income generation mechanism has become more mature and sustainable. Real Yield—a gain from real economic activities, rather than simply token inflation—has become the industry standard.

The benefits of modern DeFi come from transaction fees, loan interest, and returns from real-world assets (RWA). These gains may not be as crazy as 2020, but they are more sustainable and more in line with economic logic.

7. Supervision: Finding a balance point

Plot reversal: Regulation did not kill DeFi, but instead promoted its growth. Regulatory clarity in 2025 opens the door to wider adoption of DeFi. Yes, some protocols remain fully decentralized, while others proactively embrace compliance. This "hybrid ecosystem" not only provides users with choices, but also provides guarantees to a certain extent.

8. The road ahead

Looking ahead, DeFi is being shaped by several major trends:

DeFi has become more specialized, and various protocols have begun to focus on specific industries or application scenarios. The “one-size-fits-all” model has gradually given way to customized solutions.

As the integration with traditional finance continues to deepen, the boundaries between DeFi and TradFi (traditional finance) are becoming increasingly blurred, ultimately pushing the global financial system to become more efficient.

Social influence projects are gradually emerging, and more and more DeFi agreements are beginning to focus on global issues such as financial inclusion and climate finance.

9. Is this related to you?

Whether you are an old DeFi player or a curious newcomer, these changes are worth paying attention to. DeFi is no longer just a playground for crypto enthusiasts, but is gradually becoming an important part of global financial infrastructure.

What's even better is that the entry threshold is lower than ever before. You don’t need to have a deep understanding of complex financial tools or blockchain technology to benefit from DeFi – just like driving without having to understand how the engine works.

If you want to explore modern DeFi, try it from a small scale. Focus on protocols that have been established and have real-life application value, understand the risks, and always follow a timeless investment wisdom: never invest more than you can afford to lose.