Improvement in DeFi regulatory environment, leading projects show differentiated performance

Recently, the U.S. regulatory environment has sent positive signals for the DeFi sector, indicating a more friendly development environment is on the horizon. However, the DeFi market presents a complex situation: some leading protocols are performing well with strong fundamental data; others are showing weak growth and poor token price performance. Although there has been a rapid rebound in DeFi tokens recently, it remains to be seen whether this is driven by short-term emotional fluctuations or deeper value drivers. Let us focus on the latest developments and data performance of leading DeFi projects, analyzing the opportunities and challenges within.

Regulatory Environment Improvement: DeFi Welcomes "Innovation Exemption" Framework

The U.S. Securities and Exchange Commission has recently shown a significant shift in its regulatory attitude towards Decentralized Finance (DeFi). In a cryptocurrency roundtable, the SEC chairman stated that the fundamental principles of DeFi align with core American values and supports self-custody of crypto assets. He emphasized that blockchain technology enables financial transactions without intermediaries, and regulatory bodies should not hinder such innovations.

It is worth noting that the chairman has revealed for the first time that he has instructed research on an "innovation exemption" policy framework targeting DeFi platforms, aimed at accelerating the introduction of on-chain products and services to the market. He also clearly stated that developers of self-custody or privacy-focused software should not bear legal liability solely for releasing code, and mentioned that mining and staking in themselves do not constitute securities transactions.

The head of the SEC's crypto task force also expressed support, emphasizing that publishers should not be held accountable for the use of code by others, but at the same time warning that centralized entities must not evade regulation by using the "decentralized" label.

These statements are viewed by the market as a significant positive, leading to a substantial increase in DeFi token prices. If the "innovation exemption" framework 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 Analysis: Weak Growth in TVL, Strong Rebound in Tokens

After the release of favorable regulatory news, DeFi tokens generally saw an increase, especially the top projects which experienced significant gains. However, is this merely a short-term market reaction or a result of natural growth in the industry? We analyzed the recent six months of data from the top 20 DeFi protocols.

Overall, the TVL growth of these leading DeFi protocols in the first half of 2025 is not significant. 7 protocols saw a decline in TVL, while 5 had growth of no more than 5%. The fastest growth was seen in the RWA project BUIDL launched by BlackRock. Among traditional DeFi protocols, Aave performed the best, with a TVL exceeding $26 billion, reaching a new historical high and growing by over $6 billion in the first half of the year. The Spark from the Sky series grew by 72.97%.

It is worth noting that the JustLend TVL in the TRON ecosystem decreased by 39.82% in the first half of the year, making it the top protocol with the largest decline. Other popular protocols such as Sky, Lido, EigenLayer, and Uniswap also experienced varying degrees of decline.

In terms of token prices, the top 20 DeFi protocols' tokens experienced an average maximum drawdown of 57% in the first half of 2025. Despite the recent market recovery bringing a rebound, most protocol tokens have not returned to their early-year levels. Only SKY's governance token MKR has increased by 44.8% compared to January 1st, and AAVE has barely returned to its early-year price. Overall, these tokens have dropped an average of 24% compared to the beginning of the year.

However, the tokens of these DeFi projects have generally seen a significant rebound recently, with an average low point rebound of about 95.59%. Several tokens such as ether.fi, Sky, Aave, EigenLayer, and Pendle rebounded by more than 150%. In terms of trends, the recent low points of these tokens were concentrated on April 7, similar to the overall cryptocurrency market trends, but the rebound strength is generally better than that of other types of tokens.

It is worth noting that the price trends of tokens do not seem to have a direct correlation with the performance of the TVL of DeFi protocols.

Performance Divergence of Top Projects

Among many DeFi projects, the performance of some leading projects is particularly noteworthy:

Aave, as a leading project, had outstanding performance in the first half of the year, repeatedly breaking historical highs and expanding to 18 public chains. To boost the token price, the Aave community launched the "Aavenomics" proposal, which includes measures such as weekly million-dollar token buybacks. Although Aave's lending rates are not high, it has a strong depth that attracts many large investors. Overall, Aave has achieved increases in both fundamentals and market performance, and it remains a benchmark for the development of Decentralized Finance protocols.

Uniswap officially launched version V4 in 2025, introducing more flexible custom logic and significantly reducing Gas fees. The launch of Unichain further expands its competitiveness in the Decentralized Finance ecosystem. Although the TVL declined in the first half of the year, it was mainly affected by the drop in Ethereum prices, while the ETH staking volume has increased compared to the beginning of the year. Unichain quickly captured the market and has become the second-ranked public chain in terms of TVL on Uniswap.

Sky (formerly MakerDAO) has undergone a comprehensive brand upgrade, resulting in a decline in TVL, but the Spark protocol within the ecosystem has shown new potential in the RWA direction. The combined TVL of the two protocols exceeds $11 billion, ranking in the top three. The price of MKR tokens has performed remarkably, rising from a low of $800 to $2100, an increase of over 170%. However, the complex upgrade plan makes it difficult for the market to form a simple understanding, which is not conducive to dissemination.

The innovative "re-staking" concept of EigenLayer has attracted attention, with TVL experiencing explosive growth before temporarily retracting. However, it has re-entered a growth cycle since April, increasing from $7 billion to $12.4 billion in two months, a growth rate of 77%. The market seems to be redefining the value of re-staking.

As a leader in liquid staking, Lido once dominated the market with stETH, and its TVL approached $40 billion. However, with the rapid growth of Ethereum L2, Lido's excessive reliance on the Ethereum mainnet (over 99% share) has shown signs of decline, and its TVL has continued to decrease. Its token's recent rebound has not matched that of other DeFi tokens. Although it still ranks second, how to quickly adapt to more markets has become the key for Lido to maintain its leading position.

The improvement of the regulatory environment has injected vitality into the U.S. DeFi market, which is expected to alleviate the long-standing uncertainty that has plagued project parties. Data trends show that the momentum for DeFi development is becoming increasingly independent, and it even begins to feed back into the value of underlying public chains. In the future, clearer regulations may attract more traditional financial capital into the DeFi space. At the same time, attempts by traditional financial giants to launch DeFi products indicate a broader integration prospect and more intense market competition. This new situation opened up by regulatory easing may become the starting point for DeFi to mature and deeply integrate with traditional finance.