Decentralized finance (DeFi) produced approximately $8 billion in onchain revenue by 2025, according to a detailed analysis published by researcher Vadym, which maps the full spectrum of where DeFi revenue actually comes from. The analysis shows that the yield is abundant overall, but unevenly distributed, often circular and in many cases difficult to package into structured products.
The findings come as returns in DeFi have dried up. Interest rates on major lending platforms have converged with the Federal Reserve’s policy rate, and the offering rate for ‘safe’ stablecoins now averages around 3% – lower than the US Treasury and Secured Overnight Financing Rate. On Aave, the average yield over 30 days is up $USDC and USDT is around 2%. Of the more than $20 billion in stablecoin vaults in Ethereum and its Layer 2 systems, 58% of TVL earn less than 3% APY, the report said.
Where the $8 billion comes from
The analysis identifies five primary sources of return, each with different risk profiles and scalability constraints.
AMM trading fees were the largest category at approximately $4.2 billion, with Uniswap, Meteora and Raydium accounting for 62% of the total. But the analysis warns that these fees are notoriously difficult to capture in structured products. Liquidity providers – especially those using concentrated liquidity – often lose money on toxic order flow, and LP managers’ vaults have failed to gain meaningful traction.
Borrow interest generated approximately $1.76 billion in money markets, including Aave, Morpho, Spark, Maple and Fluid. Money markets account for over 60% of total DeFi TVL, making lending the economic backbone of the sector. However, the analysis found that roughly half of all loan demand is recursive: users borrow to fall back on other sources of yield, such as liquid staking tokens or yield-bearing stablecoins. In Aave’s Ethereum implementation, approximately 39% of loan demand goes to leverage $ETH using rewards, while another 11.6% go through Ethena’s sUSde.
Perps financing costsdeveloped largely onchain by Ethena, contributed approximately $300 million. Ethena’s sUSDe gets its returns from deploying rewards and short-term financing rates – a mechanism that drew both praise and alarm when it launched in 2024.
Real world assets generated an estimated $600-900 million, with US Treasuries holding the largest share of the RWA market at approximately 41% and private credits at 25%.
Network Staking and MEV Rewards make up the rest, with Ethereum issuance totaling around one million $ETH in 2025. The MEV-derived part of the staking yield is on a downward trend, as private order flow routing – which now handles around 90% of swaps – has reduced the chances of front running.
Untapped and underdeveloped resources
The analysis also highlights categories where returns remain negligible. Insurance underwriting generated just $5.5 million in premiums in 2025, primarily through Nexus Mutual. Options – despite CeFi open interest of $30-50 billion – have approximately $1.8 billion in onchain OI without a structured product. Volatility selling and protocol risk transfer remain largely untouched, which the analysis suggests is a potential opportunity as risk management becomes more competitive.
Sky’s Law of Equilibrium
As a case study of how protocols put together these disparate revenue streams, the analysis examines Sky (formerly MakerDAO), whose savings rate of 3.75% USDS has attracted significant capital during the compression. Sky’s TVL rose 38% in March, making it the fourth largest DeFi protocol, with the sUSDS savings pool alone accounting for around $6.5 billion in deposits.
The breakdown shows that around 70% of Sky’s revenue comes from off-chain origination – mainly $USDC earning Coinbase rewards through the peg stability module (PSM) and RWA exposure through products like BlackRock’s BUIDL and Janus Henderson funds. The remaining 30% comes from onchain sources, with Spark serving as Sky’s primary allocation arm, directing capital to Sparklend, Maple’s institutional lending, Anchorage, and other yield-bearing opportunities depending on prevailing interest rates.
The implication, the analysis argues, is that even as TradFi proceeds increasingly flow through approved channels, their redistribution is happening on-chain, setting a floor for DeFi rates and potentially paving the way for a next generation of yield derivatives, including fixed income products, interest rate swaps and structured tranches.
This article was written using AI workflows. All of our stories are curated, edited, and fact-checked by a human.