The new cycle of trading environment changes opens the "new Decentralized Finance" era, RWAFi and stablecoin payments become new opportunities

Since 2020, AMM, lending protocols, derivatives trading, and stablecoins have become the core infrastructure of the cryptocurrency trading field. Over the past four years, numerous entrepreneurs have continuously iterated and innovated in these areas, pushing projects such as Trader Joe and GMX to new heights. However, as these products gradually mature, the growth of the cryptocurrency trading sector has begun to hit a ceiling, making the birth of a new batch of top projects increasingly difficult.

After the 2024 U.S. elections, the legalization and compliance process of the crypto industry is expected to bring new development opportunities for the industry. The integration of traditional finance and DeFi is accelerating: physical assets such as private credit, U.S. Treasury bonds, and commodities (RWA) are gradually evolving from simple tokenized certificates to yield-generating stablecoins with capital efficiency, providing new choices for crypto users seeking stable returns and becoming a new growth engine for DeFi lending and trading. At the same time, the strategic position of stablecoins in international trade is becoming increasingly significant, with the upstream and downstream infrastructure of the payment sector continuing to thrive. Traditional financial giants are accelerating their布局, injecting more possibilities into the industry.

After the "old DeFi" like Uniswap, Curve, dYdX, and Aave, a new batch of unicorns in the crypto trading space is brewing. They will adapt to changes in the regulatory environment, leverage the integration of traditional finance and technological innovations, open up new markets, and push the industry into the "new DeFi" era. For newcomers, this means no longer needing to obsess over minor innovations in traditional DeFi, but rather focusing on building groundbreaking products that meet the new environment and demands.

This article will conduct an in-depth analysis around this trend, exploring potential opportunities and development directions in the new round of reforms in the cryptocurrency trading sector, providing inspiration and reference for industry participants.

Changes in the Trading Environment of This Cycle

stablecoin compliance has been approved, and the adoption rate in cross-border payments is continuously increasing.

The U.S. House Financial Services Committee plans to introduce a stablecoin bill in the short term, marking a rare bipartisan consensus on stablecoin legislation. Both parties agree that stablecoins can not only consolidate the dollar's position as the global reserve currency but have also become important buyers of U.S. Treasury bonds, harboring immense economic potential.

This bill may become the first comprehensive cryptocurrency legislation passed by the U.S. Congress, promoting widespread engagement with crypto wallets, stablecoins, and blockchain-based payment channels among traditional banks, businesses, and individuals. In the coming years, stablecoin payments are expected to become mainstream, representing another "leap forward" for the crypto market following Bitcoin ETFs.

Although compliant institutional investors cannot directly benefit from the appreciation of stablecoins, they can profit by investing in the infrastructure associated with stablecoins. For example, mainstream blockchains that support a large supply of stablecoins and various DeFi applications that interact with stablecoins will benefit from the growth of stablecoins. Currently, stablecoins account for more than 50% of blockchain transactions, up from 3% in 2020. Their core value lies in seamless cross-border payments, a function that is growing particularly rapidly in emerging markets. Taking Turkey as an example, stablecoin trading volume accounts for 3.7% of its GDP; in Argentina, the premium on stablecoins is as high as 30.5%. Innovative payment platforms attract users into the blockchain ecosystem through local agents and payment systems, using grassroots market strategies to further promote the adoption of stablecoins.

Currently, the cross-border B2B payment market processed by traditional payment channels amounts to about 40 trillion USD, while the global consumer remittance market generates hundreds of billions of dollars in revenue each year. Stablecoins provide a new means for achieving efficient cross-border payments through crypto channels, with adoption rates rapidly increasing, and are expected to penetrate and disrupt this segment of the market, becoming an important force in the global payment landscape.

A stablecoin launched by a certain platform is designed specifically for corporate payments, aiming to enhance the efficiency, stability, and transparency of cross-border payments to meet the demand for dollar-denominated transactions. Meanwhile, a certain payment giant acquired the stablecoin platform for $1.1 billion, making this transaction the largest acquisition in the history of the cryptocurrency industry. The platform provides seamless conversion between fiat currency and stablecoin for enterprises, further promoting the application of stablecoins in global payments. Its cross-border payment platform processes over $5 billion in payments annually and has provided global fund settlement for high-end clients, including a certain well-known enterprise, demonstrating the convenience and effectiveness of stablecoins in international transactions.

In addition, an innovative stablecoin cross-border payment platform supports the exchange of USDT and USDC into 16 fiat currencies and allows direct remittance to bank accounts. Through a simplified onboarding process and instant conversion, the platform enables users and businesses to conduct cross-border payments efficiently and at low cost, breaking down the barriers between traditional finance and cryptocurrency. This innovation not only provides a faster and more cost-effective cross-border payment solution but also promotes the decentralization and seamless connection of global capital flows. Stablecoins are gradually becoming an important component of global payments, enhancing the efficiency and accessibility of payment systems.

is expected to relax the regulation on perpetual contract trading.

Due to the high leverage nature of perpetual contract trading, which can easily lead to customer losses, regulatory agencies in various countries have maintained strict compliance requirements. In many jurisdictions, including the United States, not only are centralized exchanges (CEX) prohibited from offering perpetual contract services, but decentralized perpetual contract exchanges (PerpDEX) also face the same fate. This has directly compressed the market space and user scale of PerpDEX.

However, with Trump's complete victory in the election, the compliance process in the crypto industry is expected to accelerate, and PerpDEX is likely to welcome a spring of development. Recently, two landmark events are worth noting: first, the crypto and AI advisor appointed by Trump has previously invested in established players in this sector; second, the Commodity Futures Trading Commission (CFTC) is expected to replace the Securities and Exchange Commission (SEC) as the main regulator of the crypto industry. The CFTC has accumulated rich experience in the launch of Bitcoin futures trading at the Chicago Mercantile Exchange, and compared to the SEC, its regulatory attitude towards PerpDEX is more favorable. These positive signals may open new market opportunities for PerpDEX, creating more favorable conditions for its growth under future compliance frameworks.

The stable income value of RWA is being discovered by crypto users.

Once, the high-risk, high-return environment of the crypto market left RWA's stable returns overlooked. However, during the recent bear market cycle, the RWA market grew against the trend, with its locked value jumping from less than one million dollars to now a hundred billion dollars level. Unlike other crypto assets, the value fluctuations of RWA are not influenced by crypto market sentiment. This characteristic is crucial for shaping a robust Decentralized Finance ecosystem: RWA not only effectively enhances the diversification of investment portfolios but also provides a solid foundation for various financial derivatives, thus helping investors hedge risks amid severe market turbulence.

According to data, as of December 14, RWA has 67,187 holders, with the number of asset issuers reaching 115, and a total market capitalization of up to $139.9 billion. A trading platform predicts that by 2030, the RWA market size is expected to expand to $16 trillion. This highly potential market landscape, along with the investment appeal brought by its stable returns, is gradually becoming an indispensable part of the Decentralized Finance ecosystem.

After a well-known investment institution collapsed, the crypto industry exposed a key issue: assets lack sustainable income scenarios. With the Federal Reserve starting the interest rate hike process, global market liquidity is tightening, and cryptocurrencies, defined as high-risk assets, have been particularly impacted. In contrast, the yields of real-world assets have been steadily rising since the end of 2021, attracting market attention. From 2022 to 2023, the median yield of DeFi dropped from 6% to 2%, below the risk-free yield of 5% for U.S. Treasury bonds during the same period, causing high-net-worth investors to lose interest in on-chain yields. With on-chain yields drying up, the industry has begun to turn to RWA, hoping to reinvigorate market vitality by introducing off-chain stable income.

In August 2023, a well-known project increased the deposit interest rate in its lending protocol to 8%, sparking a long-dormant resurgence in the DeFi market. Within just a week, the protocol's deposits surged by nearly $1 billion, and the circulating supply of its tokens also increased by $800 million, setting a new high for the past three months. The key factor driving this growth is RWA. Data shows that over 80% of the project's fee income in 2023 came from RWA. Since May 2023, the project has intensified its investment in RWA, purchasing U.S. Treasury bonds in bulk through multiple entities and deploying funds to various RWA lending protocols. As of July 2023, the project had accumulated nearly $2.5 billion in RWA portfolios, with over $1 billion coming from U.S. Treasury bonds.

The successful exploration of this project has sparked a new wave of RWA enthusiasm. Driven by high yields from blue-chip stablecoins, the DeFi ecosystem has quickly responded. For example, a lending platform community proposed to list stablecoins as collateral, further expanding the application of RWA in DeFi. Similarly, in June 2023, the founder of a lending platform launched a new company focused on bringing real-world assets like bonds onto the blockchain, providing users with stable returns similar to the real world.

RWA has become an important bridge connecting real-world assets with on-chain finance. As more and more innovators explore the potential of RWA, the DeFi ecosystem is gradually finding a new path towards stable returns and diversified development.

Licensed institutions on-chain expand market scale

In March of this year, an asset management company launched the first tokenized fund for US Treasuries issued on a public blockchain, attracting market attention. The fund provides qualified investors with the opportunity to earn returns through US Treasuries and was first deployed on the Ethereum blockchain, later expanding to multiple blockchains. Currently, the fund tokens serve as tokenized receipts and do not possess actual utility, but their landmark release marks an important step for tokenized finance.

Meanwhile, a governor announced that the state government plans to issue a stablecoin pegged to the US dollar in 2025, supported by US Treasury bonds and repurchase agreements. The stablecoin is expected to launch in collaboration with a trading platform in the first quarter of 2025, marking a new highlight in the market as a government-level stablecoin experiment.

In the traditional financial sector, a globally leading asset management company is actively exploring various ways to integrate blockchain payment and settlement systems. In addition to considering the issuance of its own stablecoin, it also plans to launch deposit tokens representing customer deposits on the blockchain. As the second largest fund custodian bank in the world, managing over $40 trillion in assets, the company seeks to enhance service efficiency through blockchain technology, marking the digital transformation of traditional financial institutions.