Why Did Defi See 10x Growth in 3 Months?

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LayerOneX
@LayerOneXOct 15, 2025

The Spaces gathered builders and founders across crypto—host Cody, Kevin (Layer1X/Quantum DEX), Soren (Water150), Joel (Dash), JPool (Solana liquid staking), Randa (Quintus Protocol), and Miko (PuffVerse)—to unpack the last three months’ DeFi surge and AI’s growing role. Panelists attributed growth to a combination of institutional positioning seeking on-chain yield, stablecoins increasingly serving as settlement rails, the rise of tokenized real-world assets (RWAs), and improving regulatory clarity (e.g., MiCA, U.S. Genius Act). Joel emphasized DeFi’s matured usability and the need for a circular on-chain economy, while Soren offered a contrarian view that recent TVL may be driven by crypto-native whales rather than true institutional flows. Builders detailed practical AI usage: lead triage, marketing, code generation, audits, agentic AI for cross-chain liquidity and intent-driven transactions, and gaming UGC tooling. Risks around AI reliability in finance were noted. Looking forward, drivers include liberal and clear regulation, scalable stablecoin rails and on/off-ramps, RWAs, agentic AI as an onboarding catalyst, and UX that enables “deposit once, multi-step” strategies. The session closed with project invites and a call to sustain momentum responsibly.

X Talks: AI x DeFi Growth, Institutional Adoption, and the Next Liquidity Wave — Panel Summary

Participants and Roles

  • Cody (Host, X Talks; UI/UX designer by trade)
  • Kevin (Cofounder, Layer1X; Quantum DEX)
  • Soren (from Water 150; tokenizing premium spring water rights)
  • Joel (Dash; Business Development & Marketing)
  • AJ (J Pool; Solana liquid-staking platform)
  • Randa (Co-founder, Quintus Protocol; Shariah-compliant DeFi and investment products)
  • Miko (Marketing Director, Puffverse; PuffGo mobile game, user-generated content tools)

Context and Focus

  • Topic: A rapid $1.62B market cap has entered DeFi/crypto in the last 3 months, posting ~50% week-over-week growth. The panel explores what’s driving this surge—institutional inflows, AI adoption, UX improvements—and what will accelerate liquidity and transactions going forward.

What’s Driving the Recent DeFi/AI Growth?

Institutional money and macro factors

  • AJ (J Pool): A marked increase in institutional presence (liquidity providers, investors, some government reps) at Token2049 vs last year. Institutions building SOL/ETH/BTC spot positions now seek yield via liquid staking, lending, LPs—driving TVL and liquidity. Also notes a supportive macro bull backdrop.
  • Kevin (Layer1X/Quantum DEX): Q3 TVL exceeded $230B across chains, with growth no longer concentrated on Ethereum—high-performance L1s/L2s are capturing share. Institutional rails are in place (significant ETF inflows into BTC/ETH in the last quarter), and combined with tokenized treasuries and stablecoins, form an “on-chain capital stack” spreading across multiple chains.
  • Soren (Water 150): Contrarian view—suspects recent TVL growth is largely crypto-native whales rather than true institutions yet. $1.6B is trivial in institutional terms; when real TradFi money arrives, numbers should be far larger.

Stablecoins as the settlement layer

  • Kevin: Stablecoins are quietly becoming the on-chain settlement layer; cited ~$15T Q3 stablecoin volume (acknowledging bot activity). Stablecoins underpin most DeFi activity and cross-chain capital flow.
  • Joel (Dash): Stablecoin accessibility improved with recent U.S. clarity (referenced the “Genius Act”) and EU MiCA, lowering perceived compliance risk and unlocking broader crypto participation.
  • Randa (Quintus): Expects stablecoins to continue expanding with better DeFi building blocks, new security measures, and emerging use cases (e.g., data-backed, AI-integrated stablecoins). TradFi and DeFi-native teams are building new stablecoins; regulation like the U.S. act mentioned by Joel should boost adoption.

Real World Assets (RWAs) migrating on-chain

  • Kevin: RWAs (tokenized U.S. treasuries, credit, yield products) are integrating into DeFi, deepening liquidity and diversifying returns.
  • Randa: RWAs are primed to grow due to improved DeFi primitives, favorable regulation, and user awareness. Notes expanding government openness, particularly in GCC/Middle East (e.g., Dubai’s crypto stance catalyzed innovation and capital flows). RWAs will be a continuing driver.

DeFi maturation, UX, and retail participation

  • Joel: DeFi is simply better and more accessible now—lower barriers than TradFi, fewer constraints, clearer rules. The inherent efficiency superiority of decentralized systems is beginning to show; we may still be early.
  • Miko (Puffverse): Momentum is also shaped by compelling venues (new DEXs like Hyperliquid and others). Patterns resemble past exchange-driven booms (e.g., circa 2018), but sustainability matters. Retail behavior migrates between trading, NFTs, play-to-earn based on where activity concentrates.

How Are Teams Using AI Today?

Business ops, marketing, and dev productivity

  • AJ (J Pool): Uses AI deeply for business development pipelines (lead processing, classification), and for creative production (copy, images, video). Dev team employs tools like Copilot; AI assists audits and accelerates feature delivery. Practical wins include scanning conference attendee lists to identify target LPs/VCs/protocols.

Agentic architecture, liquidity automation, and anti-rug controls

  • Kevin (Layer1X/Quantum DEX): Built AI-powered liquidity loans enabling projects to borrow and launch without capital while protected by anti-rug smart contracts. Researching modular, autonomous AI agents operating across chains, tied to NFT identity and a token intelligence layer. Envisions an agentic SaaS layer embedded at wallet level—users express intents (“find best pool,” “optimize yield”) and AI executes across chains. Forecasts 2026 as the consolidation year when agentic products become the “kingpin.” Today’s exchange volume is heavily bot-driven; AI agents will add real utility—intent-based smart contract access at millisecond execution.

Research acceleration and code generation—with caution

  • Randa (Quintus): Originally banned AI over hallucinations and accuracy issues; reversed stance as models improved. Built a research lab analyzing 300 whitepapers (2021–2023); recent summer research was faster and more publishable. Devs now use agents to generate code—3–4 months of work condensed to ~1 month. Content is faster to produce. Notes AI’s broader user base vs DeFi; agentic UX could onboard the mainstream.
  • Soren (Water 150): AI simplifies consumer access and onboarding, but faulty outputs in finance carry real capital risk. Simple transactions are safer; complex strategies raise error risk. Predicts early users may be burned by immature tooling—advocates cautious adoption.

Gaming: AI for user-generated content

  • Miko (Puffverse): In-game systems use generative AI to assist players in creating and refining mini-games/assets within a large open-world platform (Minecraft/Fortnite-like). AI helps fill gaps and suggest improvements—an example of AI enhancing products without handling money.

What Will Drive Liquidity and Transactions to the Next Level?

Macro/regulatory clarity as the gating function

  • AJ (J Pool): External macro conditions (policy, regulation, broader economic uncertainty) matter more than crypto-internal UX/scalability. To onboard true institutional liquidity, regulations must be liberal and clear. Notes EU MiCA’s relatively accommodating stance—fully decentralized DeFi protocols may avoid heavy compliance burdens—unlocking European institutional capital.

Circular on-chain economy (reduce on/off-ramp friction)

  • Joel (Dash): Liquidity and transactions are inseparable. The key is a circular digital economy where income, expenses, supply chain, accounting, payments, and asset purchases happen natively on-chain. When people earn in crypto and spend in crypto, money “distance traveled” shrinks, volumes soar, and flows become continuous. Broader non-crypto industries must join this loop to break the current siloed behavior.

Agentic AI as the mainstream bridge—plus stablecoin rails

  • Kevin (Layer1X/Quantum DEX): Agentic AI could be the “meme coin cousin” of adoption—the chocolate that gets Web2 users into Web3. The practical drivers: AI-powered user acquisition in DeFi, improved on/off-ramping, and piggybacking on stablecoin rails. If agents make accessing stablecoin rails seamless, that could be the “meme moment” that scales users and volume. Community remains foundational to adoption.

RWAs and stablecoins, globally scaled

  • Randa (Quintus): RWAs and stablecoins will continue expanding as DeFi building blocks improve and regulation turns favorable. Governments (especially GCC/Middle East) show increasing openness to RWAs, potentially importing large economic activity on-chain. Stablecoins will power payments and capital flows at scale.

Real projects, automation, and banks’ blockchain rails

  • Soren (Water 150): Growth will come from real projects and RWAs, with stablecoin adoption letting normies access yield without deep crypto knowledge. Most people don’t care about meme coins—they care about ROI. Bank-issued stablecoins on internal blockchain rails (1:1 with fiat in bank accounts) can be utilized and automated to deliver returns safely.

Layer1X / Quantum DEX Snapshot (from Kevin)

  • Platform: Layer1X — decentralized smart contract L1 enabling truly multi-chain applications.
  • Quantum DEX: Decentralized exchange offering AI-powered liquidity loans (up to ~$2M), with anti-rug smart contracts.
  • Traction: Millions of transactions processed; 62 projects listed in ~135 days; a few million TVL.
  • Vision: Agentic AI frameworks as future SaaS for DeFi—identity-tied agents executing intents across chains.

Risks and Challenges Highlighted

  • AI reliability: Early hallucinations/accuracy issues; financial automation magnifies errors—users can lose funds in complex strategies. Requires careful guardrails and gradual rollout (Soren, Randa).
  • On/off ramps: Still under-innovated due to regulation; streamlining is critical for mainstream flows (Joel, Kevin).
  • Fragmentation: Multi-chain spread is positive but complicates user experience; agentic intent systems could abstract this (Kevin).
  • Bot-dominated volumes: Current exchange activity heavily bot-driven—AI agents should add user-facing utility to these flows (Kevin).

Host Notes and Community Initiatives

  • Cody emphasized AI’s role in reducing learning curves and enabling autonomous, multi-step strategies across protocols—users want “deposit once” auto-optimization.
  • Invites: Weekly “10-minute pitch” every Wednesday at 8:00 AM ET; panelists and projects can present directly to the audience without paid narratives. Regular X Talks every Tuesday at 10:00 AM ET.

Key Takeaways

  • Near-term drivers: Stablecoins as the settlement layer; RWAs integrating with DeFi; DeFi maturation and regulatory clarity (e.g., MiCA, U.S. stablecoin policies); macro tailwinds.
  • Institutional vs crypto-native debate: Some panelists see clear institutional momentum; others argue most recent growth is still crypto-native. True institutional waves would dwarf the current $1.62B figure.
  • UX evolution: Agentic AI and intent-based systems can abstract complexity, enabling “one-deposit, multi-protocol” strategies and cross-chain execution via wallets.
  • Strategic priorities: Build risk-aware, scalable products; improve on/off ramps; leverage stablecoin rails; catalyze circular on-chain economies; ship practical agentic tools with strong safeguards.
  • Outlook: If DEXs maintain momentum, RWAs and stablecoins scale, and agentic AI reduces friction, DeFi liquidity and transaction volumes could enter a structurally higher regime. The ecosystem remains early—panelists agree we’re only scratching the surface.