Chainlink co-founder Sergey Nazarov estimates decentralized finance has reached approximately 30% of the path toward mainstream adoption. Regulatory frameworks that establish trust mechanisms could drive adoption to 50%, he said.
What Happened: Growth Projections
Nazarov stated that DeFi could achieve 50% global adoption once regulatory frameworks clarify how these systems establish reliability and accountability.
The sector recorded substantial growth in lending protocols during 2025, with cumulative total value locked rising from $53 billion in January to more than $127 billion, according to industry reports.
Regulators continue examining how to apply existing compliance requirements, including Know Your Customer and Anti-Money Laundering rules, to permissionless blockchain systems. Curve Finance founder Michael Egorov identified legal uncertainty, liquidity constraints and smart contract security vulnerabilities as persistent obstacles. Michael Selig, chief counsel for the crypto task force at the Securities and Exchange Commission, emphasized that regulatory focus should center on technical architecture of onchain applications rather than broad terminology.
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Why It Matters: Institutional Capital
Nazarov projects U.S. regulatory decisions will influence international frameworks because numerous governments seek compatibility with American financial infrastructure.
Clear regulations enabling banks, investment funds and custodians to allocate client capital into decentralized systems could accelerate institutional participation, analysts noted.
The co-founder estimates adoption could reach 70% when institutions gain efficient mechanisms for moving client assets into DeFi. Full parity between decentralized and traditional finance institutional capital allocations might emerge by 2030, he added. Stablecoins and tokenized assets have expanded, while DeFi lending protocols posted 72% year-to-date gains according to Binance Research.
Mainstream deployment by pension funds, insurance companies and international banks requires enhanced custody infrastructure, established legal precedents and improved security protocols against exploitation.
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