DeFi Generated Around $8 Billion in Yield in 2025
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Written by
Simonas Brazionis - Updated 2026-03-25 22:26:51
Decentralized finance produced approximately $8 billion in onchain yield in 2025, according to a detailed analysis of how returns are generated across the ecosystem. While the total figure is substantial, the report highlights that yields are uneven, sometimes circular in nature, and not always easy to structure into consistent investment products.
At the same time, overall yields in DeFi have been declining. Borrowing rates on major platforms are now close to traditional interest rates, and stablecoin returns have dropped to around 3%, which is lower than U.S. Treasury yields. A large portion of stablecoin capital is currently earning relatively low returns.
Table of content
Where DeFi Yield Comes From
The analysis breaks down five main sources of yield in DeFi, each with different levels of risk and scalability.
The largest contributor comes from automated market maker trading fees, which generated over $4 billion. However, capturing these returns consistently is difficult, as liquidity providers often face losses due to market conditions.
Lending activity is another major source, producing around $1.7 billion. Lending platforms remain the backbone of DeFi, but a large share of borrowing is recursive, meaning users borrow funds to reinvest in other yield strategies rather than for external use.
Perpetual futures funding fees contributed a smaller portion, while real-world assets such as tokenized Treasuries and private credit added several hundred million dollars to total yield.
Staking rewards and MEV also play a role, although the share of profits from certain strategies like front-running has been decreasing over time.
Many Yield Opportunities Remain Untapped
The report also points out that several areas of DeFi are still underdeveloped. Insurance products generated very limited income, and options markets remain relatively small compared to centralized platforms.
Strategies such as volatility trading and risk transfer are still not widely utilized, suggesting potential areas for future growth as the market evolves.
Example of How Yield Is Built
As an example, the report looks at a major DeFi protocol that combines different sources of yield. A large share of its returns comes from offchain strategies, including exposure to traditional financial products, while the rest is generated through onchain lending and allocation strategies.
Read More: 10 Best Defi Wallets
This hybrid approach shows how DeFi is increasingly blending with traditional finance, using both onchain and offchain mechanisms to generate returns.
DeFi Moving Toward More Structured Products
The analysis suggests that as traditional finance continues to integrate with blockchain systems, DeFi could evolve toward more structured yield products. These may include fixed-rate instruments, interest rate markets, and more advanced financial tools.
Overall, while yield opportunities in DeFi still exist, they are becoming more complex and competitive, with lower returns compared to previous cycles.
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