What is Decentralized Finance and how to invest in its top products? (2025)

2021-06-29, 06:46

By 2025, Decentralized Finance (DeFi) will have revolutionized global finance by eliminating reliance on banks and costly traditional financing. With the total locked value reaching unprecedented levels, the ecosystem has significantly matured, focusing on true peer-to-peer foundations, enhanced security mechanisms, and seamless cross-chain integrations. Solutions like Gate Hodl & Earn now offer competitive passive income opportunities, addressing the issues retailers face in the traditional financial system, where they lose money on every credit card transaction.

The DeFi landscape of 2025

Since the concept of Bitcoin (BTC) originated in 2009 and was officially named in 2018, the Decentralized Finance ecosystem has significantly developed. By 2025, the total value locked in DeFi protocols has reached unprecedented levels, far exceeding the early record of $37.067 billion set in 2021.

Key Developments in 2025:

Returning to P2P fundamentals: DeFi platforms are refocusing on permissionless peer-to-peer interactions, creating a truly decentralized lending environment where users can set their own terms.
Enhanced security mechanisms: Advanced cryptographic hashing combined with improved consensus algorithms significantly reduce vulnerability to attacks.
Cross-chain integration: Major protocols can now run seamlessly across multiple blockchains, going beyond Ethereum the initial dominance

Gate Hodl & Earn has expanded its product offerings to include these innovations while maintaining competitive interest rates and a diverse range of cryptocurrency options to serve users seeking passive income opportunities through the platform.

Decentralized Finance Concept and Investment

The global financial system makes it easy for businesses to rely on banks for high-cost financing, such as letters of credit. As a result, the cost for retailers to conduct transactions using letters of credit is significant. This is the background for the emergence of Decentralized Finance (DeFi). DeFi provides solutions to issues related to traditional financing.

What is DeFi?

DeFi is short for Decentralized Finance, which is a blockchain-based financial system that does not involve intermediaries such as brokerage firms, banks, or exchanges; instead, it uses smart contracts. Ideally, DeFi is a system that allows sellers, buyers, borrowers, and lenders to interact peer-to-peer using intermediary software, rather than having transactions facilitated by institutions. This process reduces costs.

Decentralized Finance platforms allow users to borrow or lend, earn interest, and trade, speculating on prices and hedging risks with cryptocurrencies, derivatives, and insurance. In addition, it reduces the inequalities of the current system, as it treats all users equally.

DeFi provides solutions to many problems, including:

Centralized control
Access Restricted
Inefficiency
Information is not transparent
Insufficient interoperability

The future development of DeFi

Since 2020, DeFi has experienced tremendous growth and has caused a significant stir in the cryptocurrency ecosystem. Last year, the total value locked increased by 14 times.
In 2021, the total value locked doubled to $37.67 billion. Some experts believe that DeFi will replace and take over modern finance. Currently, most well-known cryptocurrency exchanges have launched DeFi platforms. Among them, Gate Wealth Management is one of the most noteworthy platforms in the industry.

Gate Hodl & Earn

In Gate Hodl & Earn, users can earn passive interest income in various ways just by holding assets. In “Wealth Management Treasure,” cryptocurrencies are locked for a period of time and cannot be withdrawn in advance. When the lock-up period ends, the principal and interest are automatically unlocked. In addition, PoS staking products allow users to utilize cryptocurrencies at any time while earning daily interest on their cryptocurrency balance. Gate offers multiple token staking tables while also providing more returns.

You can participate in the following ways:

Enter the website https://www.Gate/hodl Click on “Wealth Management”.
View all products on the page.
Select a financial management project and enter the detailed page of that project.
Click “Buy Now”, the purchase amount depends on your balance.
If the balance is insufficient, click “Buy Coins”.
Click on “My Holdings” to view purchase history.

DeFi Ecosystem on Gatechain

Gatechain is a public blockchain that supports decentralized transactions and ensures the security of on-chain assets. It offers a unique vault account to handle exceptional transactions and provides a settlement mechanism to address issues of lost and stolen private keys. In addition, it offers a complete Decentralized Finance ecosystem, allowing users to explore DeFi and trade the latest products.

Advantages of the ecosystem on Gatechain:

Low Fees
Eliminate excessively high fees
Instant Trading
Transaction confirmation only takes a few minutes.
High Security
Transactions can be revoked, making them more secure.
Clearing mechanism

In the event of theft or loss of private keys, it can ensure that users can recover their assets.

Advantages of Gate Finance Treasure

There are many types of DeFi currencies: Gate has over 70 types of DeFi currencies.
High Leverage: Perpetual contract trading supports leverage of up to 20 times.
Rewards: There are Defi currency rewards, and airdrop benefits and free giveaway events are held periodically.

Gate is a global exchange that supports trading of over 500 cryptocurrencies. It has more than 6 million registered users from 224 countries and regions worldwide. On Gate, users have more investment options.