Last year marked a significant turning point for the crypto ecosystem, driven by market institutionalization, the landmark adoption of ETFs and much more. At 50 Partners, we remain committed to our long-term convictions: supporting the builders who are crafting the future of decentralized infrastructure.

This article draws from our direct observation of builders activity throughout 2025. The objective is simple: turning our daily dealflow into a structured dataset to better understand where development efforts are truly concentrated across the ecosystem.

Our reading of the market has been shaped by the projects we identified and met throughout 2025:

• 1,033 projects identified: Covering a significant portion of the European ecosystem.

• 336 projects met: Representing just over 32% of identified projects that led to at least one in-depth discussion.

A Clear Thematic Concentration

Beyond the numbers, the distribution itself is what stands out. While innovation continues across a wide range of areas, a clear majority of projects gravitated toward three specific verticals. These themes represented the core of our dealflow and dominated the conversations we had throughout the year.

More than passing narratives, they appeared to define where builders were allocating their time, capital, and attention in 2025.

While DeFi was long associated primarily with lending protocols and decentralized exchanges (DEX), the ecosystem we observed this year reflects a much deeper level of specialization.

The priority is no longer simply accessing liquidity. It is about optimizing it and building products sophisticated enough to compete with the standards of traditional finance.

Decentralized perpetual exchanges, along with the infrastructure and applications built around them, represented a significant share of our dealflow this year. We are witnessing a shift. Derivatives trading, once dominated by large centralized platforms, is steadily migrating on-chain, reshaping the structure of the market.

• The DEX vs CEX dynamic: In 2025, perpetual trading volumes on decentralized exchanges reached meaningful milestones. By year-end, Perps DEX volume represented nearly 12% of total perpetual volume on centralized exchanges, compared to 3.7% at the beginning of the year. (source: CoinGecko)
  

• Record acceleration: The data confirms this momentum. In October 2025, monthly perpetual volumes on decentralized exchanges reached an all-time high of $903.56 billion, representing a tenfold increase in just one year. (source: CoinGecko)

• The hyperliquid effect: The historical hierarchy has been meaningfully reshaped by the emergence of new players such as Hyperliquid, Lighter, and edgeX. Hyperliquid alone has generated $2.74 trillion in trading volume since January 2025, illustrating the scale and speed at which new on-chain venues are gaining traction. With the introduction of HIP-3, metrics continue to evolve rapidly. On February 5th, daily trading volume reached $5.2 billion, driven in part by the launch of gold and silver derivatives (Source: The Block).

• The retention challenge: Looking ahead to 2026, the key challenge for the ecosystem will be to convert this momentum into sustainable traction by capturing organic liquidity that can persist beyond incentive programs.

Prediction markets reached a new level of maturity this year. No longer viewed solely as betting platforms, they are increasingly recognized as serious financial tools capable of generating real-time probability data.

• The Polymarket & Kalshi effect: The success of Polymarket and Kalshi has played a defining role in legitimizing the model, both within the ecosystem and among a larger audience. Their traction demonstrated that prediction markets are not niche experiments, but platforms capable of attracting substantial liquidity and sustained user engagement.

• The rise of an infrastructure layer: Builders are no longer focused on launching “another Polymarket.” Instead, they are increasingly building on top of existing primitives:

  • Trading terminals & bots: Professional-grade interfaces featuring advanced charting tools and full order book integration.

  • Data analytics tools: Solutions designed to extract actionable signals from prediction markets and make them usable across the broader DeFi ecosystem.

The narrative around on-chain privacy has undergone a meaningful transformation. Historically viewed as a standalone segment requiring entirely new infrastructure, privacy is increasingly being integrated as a protocol-level building block within existing layers. Rather than operating in isolation, it is becoming a composable component of broader blockchain architectures.

This approach preserves the liquidity and interoperability of major networks, while enabling the deployment of privacy solutions tailored to concrete use cases.

• Unlocking institutional participation: Full blockchain transparency creates a structural paradox. For institutional participants, broadcasting positions in real time often means exposing themselves to front-running and adverse execution. Privacy emerges as a direct response to this constraint, enabling on-chain execution while preserving proprietary strategy.

• A diversification of use cases: Far from being limited to anonymous transactions, privacy is becoming a foundational component across a growing range of applications. This evolution is reflected in concrete use cases: dark pools enabling confidential OTC transactions, secure storage and messaging solutions powered by advanced cryptographic primitives, as well as integrations within prediction markets and digital banking platforms seeking to guarantee users a higher level of financial confidentiality.

• A mature technological toolkit: This shift toward application-layer integration is made possible by the growing maturity of core cryptographic primitives (ZK, FHE, MPC and TEEs). These technologies now act as modular privacy engines, capable of being embedded across layers and deployed in a wide range of use cases.
  

Aggregators are increasingly acting as an intelligence layer, abstracting technical complexity to deliver optimized execution for end users.

• Yield aggregators (the "yield war"): Competition has intensified as protocols seek to attract and retain liquidity through increasingly sophisticated incentive mechanisms.

• Strategy automation: The development of vaults that automate leverage management and liquidation risk, making advanced strategies accessible to a broader user base.

• DEX aggregators: Execution models built around competitive solvers to ensure price efficiency, execution quality, and secure settlement.

These solutions remain the key to UX abstraction and mass-market onboarding. As the on-chain landscape grows more complex and fragmented, aggregators act as the essential piece, providing a seamless interface for the end-user.

From an investment perspective, these use cases often present a low barrier to entry with immediate, obvious utility. This explains the high volume of early-stage projects and hackathon initiatives we’ve seen recently. While the space is crowded, the challenge for these founders shifted from 'building the tool' to 'capturing and retaining the flow' in an increasingly competitive environment.

Infrastructure can no longer be reduced to questions of scalability or network performance. The next phase is about tackling the deeper constraints to widespread adoption: coordinating payments seamlessly, consolidating fragmented liquidity, strengthening system resilience, and unlocking pools of capital that have so far remained dormant.

We observed a strong emergence of projects focused on payment rails and orchestration layers, reflecting a broader transition from speculative crypto usage to utility-driven applications

• Operational efficiency: A clear push toward instant settlement as an alternative to slow and fragmented legacy systems.

• Orchestration: The need for infrastructure capable of bridging bank accounts and on-chain environments, with integrated KYC and AML compliance built directly into the flow.

The proliferation of networks, across both L1s and L2s, has led to significant liquidity fragmentation, which now stands as one of the main constraints on on-chain financial performance. While interoperability infrastructure such as LayerZero has matured and become widely adopted, we are observing a broader shift in paradigm. The next phase of infrastructure will be shaped by architectures such as Zero. By leveraging zero-knowledge proofs to separate execution from verification, these systems move beyond monolithic designs toward parallelized performance, unlocking a new level of scalability on-chain.

The challenge is no longer limited to connectivity between chains, but to the emergence of a new generation of protocols building on these foundations to improve capital efficiency. Initiatives such as Fluid illustrate this shift. Rather than simply linking networks together, these protocols address the internal fragmentation of liquidity pools by mutualizing capital across multiple use cases, including trading, lending, and collateralization.

DePIN has been less prominent this year than it was in 2024. This slowdown can largely be attributed to limited real-world adoption, prompting the market to shift its attention toward solutions perceived as more immediate and resilient.

However, major outages affecting AWS and Cloudflare in late 2025 served as a reminder of the fragility of a fully centralized internet, reinforcing the long-term case for decentralized resource networks. Significant market segments remain largely untapped, particularly in areas such as compute, storage, and other critical infrastructure layers.

Bitcoin is increasingly evolving into an active and scalable infrastructure layer. The core challenge lies in unlocking its vast pool of dormant liquidity and putting it to productive use.

Programmable Bitcoin: A new wave of solutions leverages Bitcoin’s native security to secure other networks or generate yield directly on top of it. Bitcoin is no longer confined to passive holding; it is progressively becoming an active component of the broader on-chain economy.

Stablecoins are no longer just reserve assets. They are increasingly emerging as the foundational rails of global commerce, as well as everyday peer-to-peer transactions. By becoming the dominant unit of account on-chain, stablecoins create a direct value anchor within the crypto economy, reinforcing liquidity depth and protocol stability. This standardization enables more sophisticated financial use cases while reducing friction between the real economy and on-chain activity.

• Cross-Border Efficiency: Companies are increasingly seeking instant settlement solutions to bypass traditional banking constraints and reduce friction across jurisdictions.

• Use-case segmentation: A growing number of specialized projects are emerging, addressing compliance, payment processing, and direct settlement to enable seamless integration into existing consumption habits.

This trend represents a direct response to excessive reliance on the US dollar and to evolving regulatory constraints.

• The MiCA opportunity: The emergence of clearer regulatory frameworks is encouraging market participants to launch regulated stablecoins denominated in euros, yen, or reais, effectively bringing national currencies on-chain.

• Local payment corridors: New rails are being developed, such as BRL-denominated stablecoins integrated with Brazil’s PIX system, significantly reducing foreign exchange costs compared to traditional banking channels.

The objective is to transform crypto from a purely speculative asset into a practical tool for everyday financial management.

As Jay Yu of Pantera Capital writes in “Building Permissionless NeoBanks”

“To put in simple terms, fintech neobanks won by owning the customer interface for money, changing the medium users store, spend, grow, and borrow money.”

Neobanks didn’t win by rebuilding banking infrastructure. They won by redesigning the experience around it. The rails largely stayed the same, but by making finance mobile-native and intuitive, they changed how people interact with money.

A similar pattern is emerging on-chain, where differentiation often comes from the interface rather than deep changes to the underlying infrastructure:

• Card adoption at scale: Debit cards linked to on-chain wallets are becoming a standard, enabling instant conversion of digital assets into real-world purchasing power for both retail users and businesses. In practice, however, most current implementations remain primarily retail-focused.

• Community-driven models: A growing segmentation is emerging around ecosystems such as Solana or Base, around core values such as privacy, or around specific use cases such as tax optimization. Interfaces are increasingly designed to serve distinct communities rather than a broad, undifferentiated audience.

The emergence of specialized providers equipped with regulatory licenses and payment rails, including card issuance, compliance, and settlement infrastructure, enables neo-banks to launch rapidly without bearing the full regulatory complexity themselves. This standardization of the underlying infrastructure reflects the growing momentum around on-chain card usage and accelerates the proliferation of specialized banking interfaces. Differentiation is increasingly driven by user experience, community alignment, and targeted use cases, rather than by the payment layer itself.

AI is emerging as an execution layer, improving the efficiency and responsiveness of on-chain infrastructure.

• AI agents: The x402 protocol represents a critical missing piece in enabling AI agents to operate as autonomous economic actors, each with their own wallet and capacity to transact on-chain. At the same time, initiatives such as OpenClaw underline the growing need for native on-chain identity and wallet infrastructure tailored to AI agents. As autonomous actors begin to transact independently, programmable payments and verifiable identity become critical layers. The momentum around Circle’s “USDC OpenClaw Hackathon” reflects early efforts to build this agent-native financial stack.

• Data analysis & trends: AI is increasingly used to correlate social signals with on-chain activity in order to identify emerging narratives and transform raw data into actionable opportunities. However, this segment is undergoing a rigorous natural selection process. Despite a significant influx of new entrants, we observe high levels of attrition. The complexity of real-time analysis and the difficulty of isolating truly predictive signals mean that while projects are abundant, very few succeed in delivering scalable and reliable value.

• DeFAI (AI as the new strategy manager): AI is moving from advisory functions toward autonomous portfolio management, optimizing yield positions and arbitrage strategies with a level of speed and consistency that often exceeds human execution.

Blockchain technology has increasingly established itself as a recognized solution for managing both financial and real-world assets in a liquid manner. This evolution is reflected in the growing diversification of financial instruments now being issued and traded on-chain.

• Tokenized equities (e.g., Backed Finance with xStocks): Direct access to publicly listed equities such as Apple or Tesla, as well as index funds, enabling on-chain exposure to global traditional markets.

• Fixed income & T-Bills (e.g., Ondo, BlackRock’s BUIDL): The integration of US Treasury yields as a foundational collateral layer for lending protocols, embedding a form of “risk-free rate” directly into on-chain financial infrastructure.

• Private credit (e.g., Figure): Direct financing of businesses and the tokenization or securitization of receivables, extending credit markets onto on-chain infrastructure.

After the exuberance of recent years, the Social and Gaming sectors are entering a necessary phase of consolidation and a renewed focus on sustainability.

• Rationalization of Business Models: The market is gradually moving away from hyper-financialized models such as Play-to-Earn and refocusing on organic user retention. The priority is now to build experiences where financial incentives complement genuine utility, rather than serving as the sole engine of growth

• On-Chain Reputation as a Financial Primitive: A particularly strategic development lies in decentralized social scoring systems. By aggregating user history, interactions, and behavioral data, Social Web3 could evolve into a foundational layer for credit assessment. Over time, on-chain reputation scores may serve as a basis for undercollateralized lending, transforming social capital into a tangible and functional financial asset.

This section outlines our partners’ perspective on the evolution of the market and highlights the sectors where we believe the next wave of innovation is likely to emerge.

According to our partners and the core team, 2026 may mark the end of crypto as a “curiosity” and the beginning of its role as foundational infrastructure.

Privacy: Privacy is no longer an ideological debate but an operational requirement for institutional adoption. Regulated participants need confidentiality over amounts, counterparties, and strategies, while preserving auditability and reporting capabilities.

In 2026, the key challenge will be the emergence of standards enabling private yet selectively disclosable transaction flows, fully compatible with compliance frameworks.

Privacy is therefore evolving into an infrastructure layer in its own right, alongside settlement and liquidity.

Some ideas / Calls for projects:

• Private payment rails: Solutions focused on confidential and compliant value transfer.

• Pluggable privacy Tools: Middleware and SDKs that bring privacy features to existing platforms (Wallets, DEXs, Neobanks, etc.).

• Institutional privacy infrastructure: Solutions specifically designed to onboard institutions on-chain by balancing privacy with regulatory requirements.

Solutions Built on top of prediction markets:

After validating their relevance through sustained trading volumes, prediction markets are entering a new phase of functional structuring. They are expected to evolve from purely speculative tools into foundational components for decision-making, risk pricing, and hedging. In 2026, value creation is likely to concentrate around solutions built on top of these markets, rather than within the core platforms themselves. As the ecosystem matures, prediction markets will continue to professionalize and integrate into broader financial workflows.

Some ideas / Calls for projects:

• PM aggregators: Solutions that aggregate different available markets to trade arbitrage opportunities, making markets more efficient and enabling new products to be built on top of the unified liquidity.

• Finance-oriented PM: Prediction Markets dedicated to addressing financial products that were historically complex to build on-chain, leveraging PM capabilities for options, structured products, and composable hedging (thanks to HIP-4 initiative for example).

DeFi & on-chain finance landscape

DeFi is shifting from a standalone category to a silent back-end infrastructure. It is now being embedded directly into fintechs, banks, and gaming to power liquidity and settlement. As technical complexity is abstracted away, the focus has moved from speculation to pure utility. For the end user, DeFi is becoming invisible functioning as the faster, more efficient rails for global finance.

Significant improvements are still required at the infrastructure and execution layers.

(i) Improving on-chain Execution efficiency: On-chain execution efficiency is becoming the definitive technical battleground for DeFi. Innovations like Prop AMMs, private market makers, and solvers are optimizing liquidity and costs, though they raise new centralization risks. While invisible to the end-user, this infrastructure layer is now the primary driver of long-term protocol competitiveness.

(ii) Tackling liquidity fragmentation: While the last cycle focused on multi-chain expansion, the current challenge is solving the resulting liquidity fragmentation. The next generation of protocols will prioritize capital efficiency by tapping into deep, existing protocols with large liquidity (like Hyperliquid, Morpho…) from day one. This shift will drastically accelerate product iteration by removing the friction of bootstrapping liquidity from scratch.

Some ideas / Calls for projects:

• Liquidity abstraction & capital efficiency layers: Protocols enabling developers and financial applications to seamlessly access existing liquidity pools across ecosystems, allowing new products to be built without requiring independent liquidity bootstrapping.

• On-chain infrastructure “picks and shovels”: Tooling and middleware enabling complex on-chain financial primitives to be integrated into simple, consumer-friendly front-ends such as fintech apps, neobanks, and institutional platforms.

• Order flow, block Building & execution Markets: Innovations around order flow routing, solver design, block construction, and validator optimization remain critical for improving best execution standards and validator performance across decentralized networks.

RWA composability

Tokenization will extend beyond traditional financial assets to encompass tangible, real-world sources of yield. Demand is likely to shift toward more predictable cash flows, less correlated with the broader crypto ecosystem. In 2026, the most relevant projects will be those capable of providing access to these returns while mastering legal structuring, risk management, and distribution. Real-world assets are increasingly positioning themselves as a meaningful bridge between traditional finance and DeFi.

Some ideas / Calls for projects:

• Tokenization of real world yield: More product build on top of RWA, using their yield to construct more complex yield solutions and adress more. traditionnal actors with on-chain solutions.

• Liquidity effiency on RWA: Solutions trying to tackle liquidity inefiecnies for RWA, making transferable those assets for easlity and facilitating liquidity depth.

Cloudflare-like infrastructure: Recent large-scale outages have highlighted the systemic fragility of centralized internet infrastructure. As more financial and economic activity moves on-chain, resilience becomes non-negotiable. There is a growing need for decentralized protection, routing, and uptime layers capable of mitigating single points of failure and ensuring continuity under stress.

Decentralized Compute: Despite early experimentation, decentralized compute remains largely underpenetrated. As AI workloads and ZK proving demand continue to increase, reliable and cost-efficient distributed compute networks could become foundational infrastructure for the next wave of on-chain applications.

On-chain Moody’s: As institutional capital enters the ecosystem, standardized and independent risk assessment frameworks will become essential. An “on-chain Moody’s” capable of rating protocols, liquidity profiles, and smart contract risk could provide the transparency and benchmarking layer needed to scale trust.

Sources & References

CoinGecko – DEX to CEX Ratio Report
https://www.coingecko.com/research/publications/dex-to-cex-ratio

The Block – HIP-3 Daily Volume by DEX
https://www.theblock.co/data/decentralized-finance/derivatives/hip-3-daily-volume-by-dex/embed

Kalshi – Protocol Volume (Source: DeFiLlama)
https://defillama.com/protocol/kalshi

Polymarket – Protocol Volume (Source: DeFiLlama)
https://defillama.com/protocol/polymarket?tvl=false&events=false

Amazon Web Services – Service Health Dashboard
https://health.aws.amazon.com/health/status

Cloudflare – System Status History
https://www.cloudflarestatus.com/history

Microsoft Azure – Status History
https://azure.status.microsoft/status/history/

Artemis – Adjusted Stablecoin Transactions by Region (Ethereum & Solana)
https://app.artemisanalytics.com/stablecoins

Jay Yu – Building Permissionless NeoBanks
Author profile: https://x.com/0xfishylosopher
Full Article: https://panteracapital.com/building-permissionless-neobanks/

Rain Card – Collateral Transfer Volume (Source: Dune Analytics, @Alex Obchakevich)
https://dune.com/obchakevich/rain-card

Last year marked a significant turning point for the crypto ecosystem, driven by market institutionalization, the landmark adoption of ETFs and much more. At 50 Partners, we remain committed to our long-term convictions: supporting the builders who are crafting the future of decentralized infrastructure.

This article draws from our direct observation of builders activity throughout 2025. The objective is simple: turning our daily dealflow into a structured dataset to better understand where development efforts are truly concentrated across the ecosystem.

Our reading of the market has been shaped by the projects we identified and met throughout 2025:

• 1,033 projects identified: Covering a significant portion of the European ecosystem.

• 336 projects met: Representing just over 32% of identified projects that led to at least one in-depth discussion.

A Clear Thematic Concentration

Beyond the numbers, the distribution itself is what stands out. While innovation continues across a wide range of areas, a clear majority of projects gravitated toward three specific verticals. These themes represented the core of our dealflow and dominated the conversations we had throughout the year.

More than passing narratives, they appeared to define where builders were allocating their time, capital, and attention in 2025.

While DeFi was long associated primarily with lending protocols and decentralized exchanges (DEX), the ecosystem we observed this year reflects a much deeper level of specialization.

The priority is no longer simply accessing liquidity. It is about optimizing it and building products sophisticated enough to compete with the standards of traditional finance.

Decentralized perpetual exchanges, along with the infrastructure and applications built around them, represented a significant share of our dealflow this year. We are witnessing a shift. Derivatives trading, once dominated by large centralized platforms, is steadily migrating on-chain, reshaping the structure of the market.

• The DEX vs CEX dynamic: In 2025, perpetual trading volumes on decentralized exchanges reached meaningful milestones. By year-end, Perps DEX volume represented nearly 12% of total perpetual volume on centralized exchanges, compared to 3.7% at the beginning of the year. (source: CoinGecko)
  

• Record acceleration: The data confirms this momentum. In October 2025, monthly perpetual volumes on decentralized exchanges reached an all-time high of $903.56 billion, representing a tenfold increase in just one year. (source: CoinGecko)

• The hyperliquid effect: The historical hierarchy has been meaningfully reshaped by the emergence of new players such as Hyperliquid, Lighter, and edgeX. Hyperliquid alone has generated $2.74 trillion in trading volume since January 2025, illustrating the scale and speed at which new on-chain venues are gaining traction. With the introduction of HIP-3, metrics continue to evolve rapidly. On February 5th, daily trading volume reached $5.2 billion, driven in part by the launch of gold and silver derivatives (Source: The Block).

• The retention challenge: Looking ahead to 2026, the key challenge for the ecosystem will be to convert this momentum into sustainable traction by capturing organic liquidity that can persist beyond incentive programs.

Prediction markets reached a new level of maturity this year. No longer viewed solely as betting platforms, they are increasingly recognized as serious financial tools capable of generating real-time probability data.

• The Polymarket & Kalshi effect: The success of Polymarket and Kalshi has played a defining role in legitimizing the model, both within the ecosystem and among a larger audience. Their traction demonstrated that prediction markets are not niche experiments, but platforms capable of attracting substantial liquidity and sustained user engagement.

• The rise of an infrastructure layer: Builders are no longer focused on launching “another Polymarket.” Instead, they are increasingly building on top of existing primitives:

  • Trading terminals & bots: Professional-grade interfaces featuring advanced charting tools and full order book integration.

  • Data analytics tools: Solutions designed to extract actionable signals from prediction markets and make them usable across the broader DeFi ecosystem.

The narrative around on-chain privacy has undergone a meaningful transformation. Historically viewed as a standalone segment requiring entirely new infrastructure, privacy is increasingly being integrated as a protocol-level building block within existing layers. Rather than operating in isolation, it is becoming a composable component of broader blockchain architectures.

This approach preserves the liquidity and interoperability of major networks, while enabling the deployment of privacy solutions tailored to concrete use cases.

• Unlocking institutional participation: Full blockchain transparency creates a structural paradox. For institutional participants, broadcasting positions in real time often means exposing themselves to front-running and adverse execution. Privacy emerges as a direct response to this constraint, enabling on-chain execution while preserving proprietary strategy.

• A diversification of use cases: Far from being limited to anonymous transactions, privacy is becoming a foundational component across a growing range of applications. This evolution is reflected in concrete use cases: dark pools enabling confidential OTC transactions, secure storage and messaging solutions powered by advanced cryptographic primitives, as well as integrations within prediction markets and digital banking platforms seeking to guarantee users a higher level of financial confidentiality.

• A mature technological toolkit: This shift toward application-layer integration is made possible by the growing maturity of core cryptographic primitives (ZK, FHE, MPC and TEEs). These technologies now act as modular privacy engines, capable of being embedded across layers and deployed in a wide range of use cases.
  

Aggregators are increasingly acting as an intelligence layer, abstracting technical complexity to deliver optimized execution for end users.

• Yield aggregators (the "yield war"): Competition has intensified as protocols seek to attract and retain liquidity through increasingly sophisticated incentive mechanisms.

• Strategy automation: The development of vaults that automate leverage management and liquidation risk, making advanced strategies accessible to a broader user base.

• DEX aggregators: Execution models built around competitive solvers to ensure price efficiency, execution quality, and secure settlement.

These solutions remain the key to UX abstraction and mass-market onboarding. As the on-chain landscape grows more complex and fragmented, aggregators act as the essential piece, providing a seamless interface for the end-user.

From an investment perspective, these use cases often present a low barrier to entry with immediate, obvious utility. This explains the high volume of early-stage projects and hackathon initiatives we’ve seen recently. While the space is crowded, the challenge for these founders shifted from 'building the tool' to 'capturing and retaining the flow' in an increasingly competitive environment.

Infrastructure can no longer be reduced to questions of scalability or network performance. The next phase is about tackling the deeper constraints to widespread adoption: coordinating payments seamlessly, consolidating fragmented liquidity, strengthening system resilience, and unlocking pools of capital that have so far remained dormant.

We observed a strong emergence of projects focused on payment rails and orchestration layers, reflecting a broader transition from speculative crypto usage to utility-driven applications

• Operational efficiency: A clear push toward instant settlement as an alternative to slow and fragmented legacy systems.

• Orchestration: The need for infrastructure capable of bridging bank accounts and on-chain environments, with integrated KYC and AML compliance built directly into the flow.

The proliferation of networks, across both L1s and L2s, has led to significant liquidity fragmentation, which now stands as one of the main constraints on on-chain financial performance. While interoperability infrastructure such as LayerZero has matured and become widely adopted, we are observing a broader shift in paradigm. The next phase of infrastructure will be shaped by architectures such as Zero. By leveraging zero-knowledge proofs to separate execution from verification, these systems move beyond monolithic designs toward parallelized performance, unlocking a new level of scalability on-chain.

The challenge is no longer limited to connectivity between chains, but to the emergence of a new generation of protocols building on these foundations to improve capital efficiency. Initiatives such as Fluid illustrate this shift. Rather than simply linking networks together, these protocols address the internal fragmentation of liquidity pools by mutualizing capital across multiple use cases, including trading, lending, and collateralization.

DePIN has been less prominent this year than it was in 2024. This slowdown can largely be attributed to limited real-world adoption, prompting the market to shift its attention toward solutions perceived as more immediate and resilient.

However, major outages affecting AWS and Cloudflare in late 2025 served as a reminder of the fragility of a fully centralized internet, reinforcing the long-term case for decentralized resource networks. Significant market segments remain largely untapped, particularly in areas such as compute, storage, and other critical infrastructure layers.

Bitcoin is increasingly evolving into an active and scalable infrastructure layer. The core challenge lies in unlocking its vast pool of dormant liquidity and putting it to productive use.

Programmable Bitcoin: A new wave of solutions leverages Bitcoin’s native security to secure other networks or generate yield directly on top of it. Bitcoin is no longer confined to passive holding; it is progressively becoming an active component of the broader on-chain economy.

Stablecoins are no longer just reserve assets. They are increasingly emerging as the foundational rails of global commerce, as well as everyday peer-to-peer transactions. By becoming the dominant unit of account on-chain, stablecoins create a direct value anchor within the crypto economy, reinforcing liquidity depth and protocol stability. This standardization enables more sophisticated financial use cases while reducing friction between the real economy and on-chain activity.

• Cross-Border Efficiency: Companies are increasingly seeking instant settlement solutions to bypass traditional banking constraints and reduce friction across jurisdictions.

• Use-case segmentation: A growing number of specialized projects are emerging, addressing compliance, payment processing, and direct settlement to enable seamless integration into existing consumption habits.

This trend represents a direct response to excessive reliance on the US dollar and to evolving regulatory constraints.

• The MiCA opportunity: The emergence of clearer regulatory frameworks is encouraging market participants to launch regulated stablecoins denominated in euros, yen, or reais, effectively bringing national currencies on-chain.

• Local payment corridors: New rails are being developed, such as BRL-denominated stablecoins integrated with Brazil’s PIX system, significantly reducing foreign exchange costs compared to traditional banking channels.

The objective is to transform crypto from a purely speculative asset into a practical tool for everyday financial management.

As Jay Yu of Pantera Capital writes in “Building Permissionless NeoBanks”

“To put in simple terms, fintech neobanks won by owning the customer interface for money, changing the medium users store, spend, grow, and borrow money.”

Neobanks didn’t win by rebuilding banking infrastructure. They won by redesigning the experience around it. The rails largely stayed the same, but by making finance mobile-native and intuitive, they changed how people interact with money.

A similar pattern is emerging on-chain, where differentiation often comes from the interface rather than deep changes to the underlying infrastructure:

• Card adoption at scale: Debit cards linked to on-chain wallets are becoming a standard, enabling instant conversion of digital assets into real-world purchasing power for both retail users and businesses. In practice, however, most current implementations remain primarily retail-focused.

• Community-driven models: A growing segmentation is emerging around ecosystems such as Solana or Base, around core values such as privacy, or around specific use cases such as tax optimization. Interfaces are increasingly designed to serve distinct communities rather than a broad, undifferentiated audience.

The emergence of specialized providers equipped with regulatory licenses and payment rails, including card issuance, compliance, and settlement infrastructure, enables neo-banks to launch rapidly without bearing the full regulatory complexity themselves. This standardization of the underlying infrastructure reflects the growing momentum around on-chain card usage and accelerates the proliferation of specialized banking interfaces. Differentiation is increasingly driven by user experience, community alignment, and targeted use cases, rather than by the payment layer itself.

AI is emerging as an execution layer, improving the efficiency and responsiveness of on-chain infrastructure.

• AI agents: The x402 protocol represents a critical missing piece in enabling AI agents to operate as autonomous economic actors, each with their own wallet and capacity to transact on-chain. At the same time, initiatives such as OpenClaw underline the growing need for native on-chain identity and wallet infrastructure tailored to AI agents. As autonomous actors begin to transact independently, programmable payments and verifiable identity become critical layers. The momentum around Circle’s “USDC OpenClaw Hackathon” reflects early efforts to build this agent-native financial stack.

• Data analysis & trends: AI is increasingly used to correlate social signals with on-chain activity in order to identify emerging narratives and transform raw data into actionable opportunities. However, this segment is undergoing a rigorous natural selection process. Despite a significant influx of new entrants, we observe high levels of attrition. The complexity of real-time analysis and the difficulty of isolating truly predictive signals mean that while projects are abundant, very few succeed in delivering scalable and reliable value.

• DeFAI (AI as the new strategy manager): AI is moving from advisory functions toward autonomous portfolio management, optimizing yield positions and arbitrage strategies with a level of speed and consistency that often exceeds human execution.

Blockchain technology has increasingly established itself as a recognized solution for managing both financial and real-world assets in a liquid manner. This evolution is reflected in the growing diversification of financial instruments now being issued and traded on-chain.

• Tokenized equities (e.g., Backed Finance with xStocks): Direct access to publicly listed equities such as Apple or Tesla, as well as index funds, enabling on-chain exposure to global traditional markets.

• Fixed income & T-Bills (e.g., Ondo, BlackRock’s BUIDL): The integration of US Treasury yields as a foundational collateral layer for lending protocols, embedding a form of “risk-free rate” directly into on-chain financial infrastructure.

• Private credit (e.g., Figure): Direct financing of businesses and the tokenization or securitization of receivables, extending credit markets onto on-chain infrastructure.

After the exuberance of recent years, the Social and Gaming sectors are entering a necessary phase of consolidation and a renewed focus on sustainability.

• Rationalization of Business Models: The market is gradually moving away from hyper-financialized models such as Play-to-Earn and refocusing on organic user retention. The priority is now to build experiences where financial incentives complement genuine utility, rather than serving as the sole engine of growth

• On-Chain Reputation as a Financial Primitive: A particularly strategic development lies in decentralized social scoring systems. By aggregating user history, interactions, and behavioral data, Social Web3 could evolve into a foundational layer for credit assessment. Over time, on-chain reputation scores may serve as a basis for undercollateralized lending, transforming social capital into a tangible and functional financial asset.

This section outlines our partners’ perspective on the evolution of the market and highlights the sectors where we believe the next wave of innovation is likely to emerge.

According to our partners and the core team, 2026 may mark the end of crypto as a “curiosity” and the beginning of its role as foundational infrastructure.

Privacy: Privacy is no longer an ideological debate but an operational requirement for institutional adoption. Regulated participants need confidentiality over amounts, counterparties, and strategies, while preserving auditability and reporting capabilities.

In 2026, the key challenge will be the emergence of standards enabling private yet selectively disclosable transaction flows, fully compatible with compliance frameworks.

Privacy is therefore evolving into an infrastructure layer in its own right, alongside settlement and liquidity.

Some ideas / Calls for projects:

• Private payment rails: Solutions focused on confidential and compliant value transfer.

• Pluggable privacy Tools: Middleware and SDKs that bring privacy features to existing platforms (Wallets, DEXs, Neobanks, etc.).

• Institutional privacy infrastructure: Solutions specifically designed to onboard institutions on-chain by balancing privacy with regulatory requirements.

Solutions Built on top of prediction markets:

After validating their relevance through sustained trading volumes, prediction markets are entering a new phase of functional structuring. They are expected to evolve from purely speculative tools into foundational components for decision-making, risk pricing, and hedging. In 2026, value creation is likely to concentrate around solutions built on top of these markets, rather than within the core platforms themselves. As the ecosystem matures, prediction markets will continue to professionalize and integrate into broader financial workflows.

Some ideas / Calls for projects:

• PM aggregators: Solutions that aggregate different available markets to trade arbitrage opportunities, making markets more efficient and enabling new products to be built on top of the unified liquidity.

• Finance-oriented PM: Prediction Markets dedicated to addressing financial products that were historically complex to build on-chain, leveraging PM capabilities for options, structured products, and composable hedging (thanks to HIP-4 initiative for example).

DeFi & on-chain finance landscape

DeFi is shifting from a standalone category to a silent back-end infrastructure. It is now being embedded directly into fintechs, banks, and gaming to power liquidity and settlement. As technical complexity is abstracted away, the focus has moved from speculation to pure utility. For the end user, DeFi is becoming invisible functioning as the faster, more efficient rails for global finance.

Significant improvements are still required at the infrastructure and execution layers.

(i) Improving on-chain Execution efficiency: On-chain execution efficiency is becoming the definitive technical battleground for DeFi. Innovations like Prop AMMs, private market makers, and solvers are optimizing liquidity and costs, though they raise new centralization risks. While invisible to the end-user, this infrastructure layer is now the primary driver of long-term protocol competitiveness.

(ii) Tackling liquidity fragmentation: While the last cycle focused on multi-chain expansion, the current challenge is solving the resulting liquidity fragmentation. The next generation of protocols will prioritize capital efficiency by tapping into deep, existing protocols with large liquidity (like Hyperliquid, Morpho…) from day one. This shift will drastically accelerate product iteration by removing the friction of bootstrapping liquidity from scratch.

Some ideas / Calls for projects:

• Liquidity abstraction & capital efficiency layers: Protocols enabling developers and financial applications to seamlessly access existing liquidity pools across ecosystems, allowing new products to be built without requiring independent liquidity bootstrapping.

• On-chain infrastructure “picks and shovels”: Tooling and middleware enabling complex on-chain financial primitives to be integrated into simple, consumer-friendly front-ends such as fintech apps, neobanks, and institutional platforms.

• Order flow, block Building & execution Markets: Innovations around order flow routing, solver design, block construction, and validator optimization remain critical for improving best execution standards and validator performance across decentralized networks.

RWA composability

Tokenization will extend beyond traditional financial assets to encompass tangible, real-world sources of yield. Demand is likely to shift toward more predictable cash flows, less correlated with the broader crypto ecosystem. In 2026, the most relevant projects will be those capable of providing access to these returns while mastering legal structuring, risk management, and distribution. Real-world assets are increasingly positioning themselves as a meaningful bridge between traditional finance and DeFi.

Some ideas / Calls for projects:

• Tokenization of real world yield: More product build on top of RWA, using their yield to construct more complex yield solutions and adress more. traditionnal actors with on-chain solutions.

• Liquidity effiency on RWA: Solutions trying to tackle liquidity inefiecnies for RWA, making transferable those assets for easlity and facilitating liquidity depth.

Cloudflare-like infrastructure: Recent large-scale outages have highlighted the systemic fragility of centralized internet infrastructure. As more financial and economic activity moves on-chain, resilience becomes non-negotiable. There is a growing need for decentralized protection, routing, and uptime layers capable of mitigating single points of failure and ensuring continuity under stress.

Decentralized Compute: Despite early experimentation, decentralized compute remains largely underpenetrated. As AI workloads and ZK proving demand continue to increase, reliable and cost-efficient distributed compute networks could become foundational infrastructure for the next wave of on-chain applications.

On-chain Moody’s: As institutional capital enters the ecosystem, standardized and independent risk assessment frameworks will become essential. An “on-chain Moody’s” capable of rating protocols, liquidity profiles, and smart contract risk could provide the transparency and benchmarking layer needed to scale trust.

Sources & References

CoinGecko – DEX to CEX Ratio Report
https://www.coingecko.com/research/publications/dex-to-cex-ratio

The Block – HIP-3 Daily Volume by DEX
https://www.theblock.co/data/decentralized-finance/derivatives/hip-3-daily-volume-by-dex/embed

Kalshi – Protocol Volume (Source: DeFiLlama)
https://defillama.com/protocol/kalshi

Polymarket – Protocol Volume (Source: DeFiLlama)
https://defillama.com/protocol/polymarket?tvl=false&events=false

Amazon Web Services – Service Health Dashboard
https://health.aws.amazon.com/health/status

Cloudflare – System Status History
https://www.cloudflarestatus.com/history

Microsoft Azure – Status History
https://azure.status.microsoft/status/history/

Artemis – Adjusted Stablecoin Transactions by Region (Ethereum & Solana)
https://app.artemisanalytics.com/stablecoins

Jay Yu – Building Permissionless NeoBanks
Author profile: https://x.com/0xfishylosopher
Full Article: https://panteracapital.com/building-permissionless-neobanks/

Rain Card – Collateral Transfer Volume (Source: Dune Analytics, @Alex Obchakevich)
https://dune.com/obchakevich/rain-card