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The DeFi regulatory environment is warming up, leading to a divergence in performance among top projects, while TVL growth is weak and tokens are experiencing a rebound.
The dawn of DeFi regulation is emerging, top projects show differentiated performance
The regulatory environment in the United States seems to be warming up, bringing new development opportunities for the DeFi sector. Recently, positive signals released by senior regulatory officials indicate that DeFi platforms may welcome a more favorable development environment.
However, against this backdrop of favorable conditions, the DeFi market presents a complex situation: on one hand, the total locked value of some leading protocols, (TVL), has repeatedly reached new highs, and the fundamental data shows strong performance; on the other hand, many well-known DeFi protocols are experiencing sluggish TVL growth, and their token prices remain below the levels at the beginning of the year, indicating that the market's understanding of their value still requires time. Although DeFi tokens have recently seen a rapid rebound, whether this is merely a short-term market sentiment fluctuation or reflects a deeper change in value logic remains to be seen.
Regulatory Attitude Shift: DeFi May Welcome "Innovation Exemption"
Recently, the U.S. Securities and Exchange Commission ( SEC ) has released clear positive signals regarding the regulation of DeFi. In a crypto roundtable meeting, the SEC chairman stated that the fundamental principles of DeFi align with American core values and supports the self-custody of crypto assets. He emphasized that blockchain technology enables financial transactions without intermediaries, and the SEC should not hinder such innovations.
The chairman revealed for the first time that he has instructed the study and development of an "innovation exemption" policy framework aimed at accelerating the market promotion of related products and services for DeFi platforms. He also clearly pointed out that developers of self-custody or privacy-focused software should not bear liability under federal securities laws simply for releasing code, and mentioned that relevant SEC departments have clarified that certain mining and staking activities do not in themselves constitute securities transactions.
The head of the SEC's cryptocurrency task force also expressed support, emphasizing that code publishers should not be held responsible for the use of their code by others, but also warning that centralized entities must not evade regulation by using the "decentralized" label.
Against the backdrop of SEC Republican commissioners promoting more crypto-friendly policies, these statements are viewed by the market as a significant positive, leading to a substantial rise in DeFi token prices. If the "innovation exemption" is implemented, it is expected to create a more relaxed and clear regulatory environment for the development of DeFi projects in the United States.
Data Review: Slow TVL Growth, Token Prices Strongly Rebound
After the release of favorable regulatory news, DeFi tokens generally saw an increase. Several leading project tokens experienced significant increases of 20% to 40%. However, whether this is merely a short-term market driven by news or reflects fundamental growth in the DeFi industry still needs further observation. An analysis of the data from the top 20 DeFi protocols over the past six months shows:
Overall, the TVL growth of these top DeFi protocols in the first half of 2025 is not significant, with 7 protocols even experiencing a decline in TVL. Among the protocols that saw an increase, 5 grew by no more than 5%, essentially maintaining the status quo. The fastest-growing is a RWA project that differs from traditional DeFi protocols. Among other protocols, Aave performed outstandingly, with TVL surpassing $26 billion, reaching a record high, and growing by over $6 billion in the first half of the year. Spark achieved a growth of 72.97%.
It is worth noting that some popular protocols with high market attention, such as Sky, Lido, EigenLayer, and Uniswap, also experienced varying degrees of TVL decline in the first half of the year.
In terms of token prices, the tokens of the top 20 DeFi protocols experienced an average maximum drawdown of 57% in the first half of 2025. Although the recent market recovery has led to a significant rebound in token prices, the vast majority of protocol tokens have still not returned to their price levels from the beginning of 2025. Overall, these tokens have dropped an average of 24% compared to their prices at the start of the year.
However, the token prices of these DeFi projects have generally experienced a significant rebound, with an average increase of about 95.59% from their low points. Several tokens have rebounded by more than 150%. In terms of trends, the recent low points of these tokens are mostly concentrated in early April, similar to the overall trend of the cryptocurrency market, but the rebound strength is generally better than that of other types of tokens.
It is worth noting that, whether from the perspective of price rebound or the overall trend in the past six months, the price trend of the tokens does not seem to have a direct correlation with the TVL performance of these Decentralized Finance protocols.
The differentiation of leading projects is obvious
Among these projects, some DeFi projects are worth paying special attention to:
Aave: As a leader in Decentralized Finance, it performed impressively in the first half of the year, frequently breaking historical highs. It has expanded to multiple public chains and currently supports 18 public chains. To boost token prices, it has introduced new proposals including token buybacks and revenue redistribution. From the perspective of product rates, while Aave may not be high, its depth is substantial, attracting many large investors. Overall, Aave achieved increases in both fundamentals and market performance in the first half of 2025, remaining a benchmark for the development of DeFi protocols.
Uniswap: The V4 version is officially launched in 2025, technically introducing more flexible custom logic and significantly reducing Gas fees. The launch of Unichain further expands its competitiveness in the Decentralized Finance ecosystem. Although TVL declined in the first half of the year, it was mainly affected by the drop in Ethereum prices, while ETH staking volume has increased compared to the beginning of the year. After the launch of Unichain, it quickly captured the market, becoming the second-ranked public chain by TVL on Uniswap.
Sky: Since its brand upgrade in 2024, Sky has undergone a comprehensive transformation. Although the TVL has declined after the upgrade, the Spark protocol within the ecosystem has shown new potential in the RWA direction. The combined TVL of the two protocols exceeds 11 billion USD, ranking among the top. Its token MKR has performed remarkably in 2025, with an increase of over 170%. However, its complex upgrade plan involves multiple aspects, making it difficult for the market to form a simple understanding, which is not conducive to dissemination.
EigenLayer: After pioneering the concept of "re-staking," EigenLayer's TVL has seen explosive growth, currently ranking third. Although the popularity of the concept has decreased in 2024, TVL has re-entered a growth cycle starting in April, increasing by 77% within two months. As the concept's popularity fades, the true value of re-staking may be being redefined by the market.
Lido: As the leader in liquid staking, Lido once dominated the market with stETH, with a TVL nearing $40 billion at one point. However, since the second half of 2024, its strategy of being overly concentrated on the Ethereum mainnet has posed challenges, leading to a continuous decline in TVL. Recently, the rebound of its tokens has been below the average level of other DeFi tokens. Currently, its total TVL still ranks second, and the scale effect remains, but how to quickly adapt to a broader market may be key to maintaining its leading position.
The improvement of the regulatory environment has undoubtedly injected new vitality into the U.S. DeFi market. The regulatory uncertainties that have long plagued project teams are expected to ease, and some pending innovations may be realized. The data trends are also worth noting: although Ethereum remains the main platform for TVL, the development momentum of DeFi has shown independence and even started to feed back into the value of the underlying public chain.
In the future, clearer regulations may attract more traditional financial capital with a lower risk appetite to enter the DeFi sector. At the same time, the attempts by traditional financial giants to launch specialized DeFi products not only signify a broader integration prospect but also mean that competition in the incremental market will become more intense. This new situation, initiated by regulatory easing, may very well be the new starting point for DeFi to mature and deeply integrate with traditional finance.