Ethereum-based Decentralized Finance (DeFi) shows unprecedented surge in Total Value Locked (TVL); identifying the spearheading DeFi projects in this growth spurt.

In 2025, Ethereum's DeFi landscape is witnessing a revolutionary shift, with key projects leading the charge. These pioneering platforms are expanding the horizons of decentralized finance (DeFi) by offering innovative services such as liquid staking, decentralized lending and borrowing, decentralized exchanges (DEXs), synthetic stablecoins, and new infrastructure for yield trading and liquidity provision.

Pioneering Projects Transforming DeFi

Lido Staked Ether

Lido Staked Ether is revolutionizing DeFi by enabling liquid staking. This innovation allows users to stake ETH while remaining liquid by receiving tokenized staked assets, enhancing capital efficiency and participation in staking rewards.

Aave and Compound Finance

Aave and Compound Finance are prominent DeFi lending and borrowing protocols. They facilitate decentralized credit markets where users can lend, borrow, or earn interest without intermediaries.

Uniswap

Uniswap remains the leading decentralized exchange, pioneering automated market makers (AMMs) that allow trustless and permissionless token swaps, advancing DeFi trading.

Maker

Maker issues the DAI stablecoin and allows decentralized savings and borrowing, providing a decentralized alternative to centralized stablecoins and traditional loans.

Frax Finance

Frax Finance operates as a multichain platform offering stablecoin issuance, liquid staking, and lending markets, enhancing cross-chain interoperability and diversified DeFi use cases.

Pendle

Emerging as a new DeFi infrastructure project, Pendle specializes in innovative yield trading mechanisms, attracting significant institutional investment. It's often compared to Aave for its growing capability and influence.

Ethena

Ethena creates synthetic stablecoins with yield generation through delta-neutral strategies, achieving rapid growth and offering investors a new stablecoin option with attractive returns.

Aerodrome

Aerodrome serves as a key liquidity provider in the Base ecosystem (Coinbase's Layer 2 on Ethereum), benefiting from institutional backing and integration to capture liquidity demand, signaling liquidity solutions are evolving beyond Ethereum mainnet.

The Impact on DeFi

These innovations collectively transform DeFi by improving capital efficiency, enabling institutional participation, scaling transaction throughput via Layer 2s, expanding stablecoin varieties, and offering advanced financial products like yield derivatives. Ethereum continues to dominate the smart contract and DeFi ecosystems partly due to these projects, with growing institutional ETF inflows and new protocol upgrades enhancing scalability and adoption.

The Growth of Ethereum's DeFi Ecosystem

The total value locked (TVL) in DeFi on Ethereum has grown by 30% this year, with Ethereum's network having a share of over 53% of the global TVL of this digital financial ecosystem. Key protocols such as Lido, Aave, EigenLayer, Etherfi, and Sky are driving this growth.

Notable TVL Figures

Aave: $19 billion, representing over 21% of the DeFi market.
Sky (formerly MakerDAO): Nearly $5.7 billion, offering stability, decentralized governance, and a refuge for those seeking to minimize risks in a volatile market.
EigenLayer: Over $10 billion, enabling the "restaking" of ETH, allowing users to reuse their locked assets and obtain additional rewards.
Lido: $23 billion, a liquid staking protocol that allows users to deposit ETH and receive liquid tokens.
Etherfi: Over $6 billion, combining liquid staking and native re-staking, offering users greater control over their assets and higher yields.
TVL in DeFi on Ethereum: Approximately $62.59 billion.

Conclusion

These leading projects fuel Ethereum's DeFi growth by broadening decentralized financial services, lowering barriers to entry, increasing liquidity and composability, and introducing yield and synthetic asset innovations that push the traditional financial paradigm toward decentralized alternatives. The rise in TVL on Ethereum and the leadership of key projects are laying the groundwork for a future where decentralized finance is an essential component of the global financial system.

Ethereum-based Decentralized Finance (DeFi) shows unprecedented surge in Total Value Locked (TVL); identifying the spearheading DeFi projects in this growth spurt.