Invisible DeFi Drives $50 Billion Institutional Surge in Yield Platforms

- Streamlined DeFi protocols drive increasing institutional interest in onchain yield. - Major platforms like Coinbase adopt DeFi to enhance functionality and user engagement. On June 18, 2025, The Block reported that a significant rise in institutional interest in onchain yield is being driven by the "invisible DeFi" trend. Under this trend, DeFi protocols streamline their interfaces, making decentralized finance more accessible to a wider range of users, not just crypto-natives. According to The Block on June 18, this "invisible DeFi" approach enables platforms to embed DeFi functionalities directly into their user interfaces, an integration that effectively masks the underlying complexities. This approach aims to increase user retention, open new monetization channels, and improve capital efficiency. The Block also highlighted on June 18 that this new interaction method positions DeFi as backend infrastructure for mainstream finance, with users often remaining unaware they are engaging with decentralized protocols. Key drivers of this trend include partnerships and substantial investments in DeFi platforms. Notably, Coinbase partnered with the decentralized lending protocol Morpho to power its credit operations, a collaboration that has originated over $300 million in loans. Additionally, the total value locked (TVL) in leading collateralized lending platforms like Aave, Spark, and Morpho has climbed to over $50 billion. These platforms offer 30-day lending yields on USDC ranging from 4% to 9%, a range that compares favorably with traditional benchmarks, such as the three-month U.S. Treasury bills, which yielded around 4.3% during the same period. A significant increase in assets under management by crypto-native asset managers, such as Gauntlet and Steakhouse Financial, also indicates growing institutional interest, as these firms' assets surged from $1 billion in January to $4 billion. These firms deploy capital across various onchain opportunities using professional frameworks and risk parameters. Furthermore, platforms like Euler, Morpho, and Aave are developing permissioned markets, demonstrating a deliberate effort to meet institutional investors' needs. These white-gloved markets are designed to provide a trusted environment for institutions, which in turn facilitates greater institutional adoption of DeFi. This overall trend indicates a shift in institutional sentiment, as institutions now view DeFi as a configurable and complementary layer to mainstream finance, rather than an entirely disruptive force. Consequently, Fintech companies, wallets, and exchanges are leveraging DeFi as an invisible backend infrastructure by integrating its benefits into their existing platforms. As of June 18, 19:17 UTC: Aave (AAVE) was trading at $258.91, with its 24-hour trading volume having decreased by 4.63%. Kaspa (KAS) traded at $0.071, showing a 2.71% decrease. Arbitrum (ARB) was at $0.301, recording a 1.85% decrease. Bitcoin (BTC) traded at $104,247.92, reflecting a 0.66% decrease. Meanwhile, USDC (USDC) remained stable, trading at $1, and its 24-hour volume increased by 0.01%.