Author: DappRadar

Compiled by: Felix, PANews

Although Bitcoin reached a new high in the first week of October, the third quarter of 2025 laid a perfect foundation for year-end developments. Dapps have been affected by the downturn in the crypto market, but innovation has never ceased. Over the past three months, the continuous rise of Dapps has been witnessed, with tokenization becoming a key pillar of the industry, NFTs gaining momentum, and DeFi TVL reaching new highs.

Key Points:

• The average daily number of active wallets on Dapps was 18.7 million, representing a 22.4% decrease from the previous quarter.
• Gaming solidified its market dominance, increasing from 20.1% in the second quarter to 25% in the third quarter. NFTs (accounting for 18.5%) and DeFi (accounting for 17.9%) followed closely behind.
• DeFi’s TVL reached a new record high, with the total TVL across all blockchains and protocols amounting to $237 billion.
• NFT trading volume nearly doubled this quarter, reaching $1.58 billion. Meanwhile, NFT sales hit a quarterly high, reaching 18.1 million units.
• Sports emerged as the primary growth market for NFTs, with transaction volumes in this category surging by 337% to reach $71.1 million.
• Losses from hacking dropped to their lowest point this year at $434 million, but the threats have become increasingly complex.

1. As the momentum of SocialFi and AI wanes, Dapp usage declines.

The daily average number of active unique wallets for Dapps fell by 22.4%. In Q3, Dapps attracted an average of 18.7 million wallets per day. Across the quarter, the number of active wallets decreased in every category, with social and AI categories experiencing the most significant declines.

Throughout the quarter, the appeal of the AI category diminished, with the average number of active wallets dropping from 4.8 million in Q2 to 3.1 million in Q3. This downward trend is evident in the success of Virtuals Protocol, a launchpad for AI agents. In Q2, Virtuals Protocol attracted 10,000 active wallets daily, with millions of users flocking to the platform. Today, it attracts between 1,000 and 1,500 active wallets daily, with an average daily trading volume of approximately $100,000.

Beyond AI, social Dapps have also been affected. In Q2, social Dapps had 3.8 million daily active wallets. However, this number plummeted by more than half in Q3, falling to 1.57 million active wallets. Various social Dapps, including The Arena, Layer3, and OnchainGM, peaked in Q2 but experienced a substantial decline in activity over the past three months.

When segmented by market sectors, both the social and AI categories lost market share over the last quarter. In Q2, AI was the third most active market sector, accounting for 18.6%, but this figure dropped to 16.8% in Q3. The social sector was hit harder, declining from 15.9% to 8.4%. In terms of market dominance, the NFT segment has gained market share, now ranking second with 18.5%. Meanwhile, gaming remains the dominant category in the Dapp industry, holding a 25% market share.

Earlier this year, gaming, DeFi, and AI were dominant, closely followed by social and NFT. The situation reversed in Q3. Gaming remained dominant, but NFT’s ranking improved, now holding second place. DeFi and AI follow closely, while social is now the weakest market segment, surpassed by the diverse range of Dapps in the ‘other’ category.

Looking at individual Dapps, gaming Dapps still dominate. While the shopping app KAI-CHING attracted the most active wallets, gaming Dapps occupy a significant portion of the top five. ‘World of Dypians’ is a social gaming metaverse, HOT Protocol offers gamified services, and KGeN is an interactive gaming platform.

2. DeFi TVL reaches a new all-time high of USD 237 billion

As cryptocurrency prices rise, innovation is driving the DeFi market to new highs. Lending protocols are thriving, and cross-chain liquidity has become a hot topic in the industry, while the rise of meme coins and AI tokens has brought substantial liquidity to certain ecosystems. Additionally, the rise of stablecoins is bringing DeFi into the spotlight of traditional finance.

In Q3, the United States passed three pieces of cryptocurrency legislation, with the GENIU Act standing out. This bill provides the first legal framework for payment stablecoins, requiring issuers to hold cash reserves or short-term U.S. Treasury bonds. Meanwhile, corporations and investment funds have poured billions of dollars into Bitcoin through Bitcoin ETFs. The launch of the Plasma stablecoin chain, along with announcements from companies like Circle and PayPal about launching networks, highlights the demand from traditional financial institutions for this crypto version of the U.S. dollar, euro, Korean won, or Japanese yen.

It is against this backdrop that the DeFi sector set a new TVL record. At the end of Q3, USD 237 billion was locked in DeFi smart contracts. This is an all-time high, and with the continued development of real-world asset tokenization and progress in stablecoin-related areas, this may mark the beginning of a large influx of liquidity.

However, despite Ethereum’s longstanding leadership in the DeFi space, it did not take the limelight in Q3. Although Ethereum still leads with a TVL of USD 119 billion, its TVL declined by 4%.

Solana successfully maintained its second position but experienced the largest drop among the top ten blockchains. Solana’s TVL fell by 33% to USD 13.8 billion, primarily due to waning momentum around Pump.fun and meme coins.

The situation for the other eight blockchains on the list is much more optimistic. BNB Chain launched the perpetual DEX Aster, which caused a stir. Hyperliquid, specifically designed for on-chain perpetual trading, has also gained significant attention over the past year, with its TVL growing by 29% to USD 2.85 billion. This reflects a broader trend this quarter where the functionalities of DEXs are gradually becoming as sophisticated as those of CEXs.

3. NFT sales volume hits a new high since 2022

Due to the lower trading prices of many NFTs currently, the trading volume has slightly declined. However, the number of transactions in 2025 has increased. The first quarter recorded sales of 7 million NFTs, and the second quarter reached 12.5 million. This upward trend is continuing. In the third quarter, the market recorded over 18.1 million NFT sales, generating a transaction volume of $1.6 billion.

The increase in sales volume has not been reflected in practical applications. Although the number of NFT traders reached its highest monthly figure in 12 months, the growth remains minimal compared to the number of sales.

In the first quarter of 2025, there were 1.66 million wallets trading NFTs. During the same period, 7 million NFTs were sold, meaning that each wallet traded an average of 4.2 NFTs. In Q3, 2.14 million wallets traded 18.1 million NFT assets. This indicates that each wallet traded an average of 8.4 NFTs.

Between the two quarters, sales grew by 158%, while the number of wallets only increased by 28.6%. This suggests strong support from existing participants rather than a significant influx of new users.

The only NFT category showing a decline is gaming-related NFTs. In the past quarter, the trading volume of gaming NFTs fell by 17%, and the number of units sold decreased by 32%. In contrast, sports-related NFTs saw their trading volume grow by 337% to $71 million, with sales increasing by 143% to 4.1 million units.

The surge in trading volume was also driven by certain developments. For instance, OpenSea launched a campaign for its upcoming token, rewarding the most active traders on its platform. This encouraged users to trade low-value NFTs to meet daily targets. As a result, OpenSea successfully increased its sales volume by 29%, reaching 9.27 million assets.

Meanwhile, Profile Picture (PFP) NFTs, led by CryptoPunks, Moonbirds, BAYC, and Pudgy Penguins, gained attention. PFP trading volumes grew by 187% quarter-over-quarter, reaching $544 million. While CryptoPunks remain the holy grail for NFT collectors, Pudgy Penguins are gradually evolving into an entertainment brand integrated with Web3, encompassing games and other forms of entertainment.

Yuga Labs, the company behind Bored Ape Yacht Club, divested some of its assets to focus on BAYC, MAYC, and Otherside. This has injected new vitality into the Bored Ape community. However, they still sold Moonbirds.

Moonbirds stood out this quarter with 8,311 NFTs sold and a trading volume of $88 million. The intellectual property rights of Moonbirds are now owned by Orange Cap Games, which announced plans in the first week of October to introduce the BIRB token to Solana.

Beyond the data, real change is quietly taking place. NFTs are no longer just JPEG images of monkeys; they are increasingly integrated with emerging Real World Asset (RWA) trends and decentralized finance (DeFi).

The leading NFT collection is Courtyard, which tokenizes physical collectible cards and then sells them as NFTs on the blockchain. Each NFT on Courtyard represents a tokenized physical trading card, such as Pokémon or baseball cards. Users can trade the digital versions of these physical collectibles or redeem the physical cards. In Q3 alone, Courtyard sold 1.55 million items with a transaction volume exceeding $145 million.

A new trend emerged in September: NFT micro-strategies. Token Works launched PunkStrategy, an automated protocol concept for buying and selling CryptoPunks assets. Users acquire PNKSTR tokens, and 10% of the trading fees go into a pool. Once the protocol accumulates sufficient funds, it purchases the cheapest CryptoPunk and lists it for sale at a 20% markup.

After the CryptoPunk is sold on the open market, the protocol uses the acquired ETH to purchase PNKSTR from the market. These tokens are subsequently burned, removing them from circulation. Thus, PNKSTR becomes a way to gain exposure to CryptoPunks without purchasing expensive NFTs.

NFTs are no longer just about collections. These digital assets can represent ownership of physical assets or become part of automated DeFi protocols.

4. The threat of hackers never ceases, with $434 million stolen.

In Q3, hackers stole cryptocurrencies worth over $434 million. The largest incidents involved social engineering and exploits. In July, a hacker exploited a malicious contract in GMX V1 to manipulate internal accounting safeguards, enabling the extraction of funds beyond their entitlement, resulting in a $42 million loss. Days later, CoinDCX lost $44 million due to a server breach.

The most recent incident occurred in September when the social project UXLINK suffered a multi-signature vulnerability attack, leading to the theft of assets valued at $21.7 million. Additionally, the hacker gained unauthorized minting rights and issued 1 billion UXLINK tokens. The subsequent selloff caused the token’s value to plummet by 70%. Ironically, the hacker later lost tokens worth $48 million due to a phishing attack.

The second-largest event in Q3 was the hack on Turkish exchange BTCTurk. However, the top-ranking incident involved a victim who lost 783 bitcoins (worth approximately $91 million) through a social engineering scam. The attackers impersonated exchange and wallet customer service to deceive the victim. Specific details remain unknown, but with the rise of AI tools, such attacks seem increasingly likely.

These five incidents accounted for the majority of stolen funds in Q3. With $434 million stolen, the intensity of attacks in this quarter appears to have decreased somewhat. However, as real-world asset tokenization expands, more advanced DeFi functionalities emerge, and institutions seek to adopt stablecoins, it is certain that crypto wallets will remain targets for scammers and hackers. Recent reports about zero-click vulnerabilities in the iOS operating system and WhatsApp indicate that crypto users need to remain vigilant.

Conclusion

Q3 demonstrated the resilience and adaptability of Dapps in the ever-evolving crypto market. Despite a decline in daily active wallets and challenges in the SocialFi and AI sectors, Dapps continued to make steady progress and achieved significant milestones. DeFi’s Total Value Locked (TVL) reached a record $237 billion, reflecting robust growth and growing interest from institutional investors, particularly in stablecoins and tokenized assets.

NFT market sales surged to 18.1 million units, highlighting their evolving role beyond collectibles, integrating with DeFi and real-world assets. Gaming remained dominant.

Dapps are gradually becoming part of the everyday lives of users seeking financial services, engaging games, or rare Pokémon cards. Currently, the number of active wallets is in the millions, but soon it will reach billions.

Related Reading: Dapp Report for August: On-chain Activity Cools Down, NFTs Continue to Recover

Tomarket Daily Combo 12 October 2025: Play to Earn $TOMA Tokens and Level Up in Web3 Gaming

The crypto world continues to merge with entertainment, and this week, Tomarket has taken another step forward in redefining how users interact with decentralized ecosystems. Its viral feature — the Tomarket Daily Combo — has rapidly become one of the most popular play-to-earn activities on Telegram, giving players around the world an opportunity to earn $TOMA tokens while having fun.

Within just a few months, the Tomarket ecosystem has seen explosive growth, amassing more than 10 million active users. With simple gameplay, daily combo challenges, and real token rewards, Tomarket has positioned itself at the forefront of the “Tap2Earn” revolution that’s taking over Web3 gaming.

What Is Tomarket?

Tomarket is a decentralized gamified marketplace designed to make trading and earning fun and accessible for everyone. The platform blends blockchain-based trading tools with mini-games that reward participation and interaction.

Users can earn $TOMA tokens by engaging in different in-app activities, such as tapping, completing combos, and playing special daily challenges. On average, active participants can accumulate 300 to 500 $TOMA tokens per game, with up to three games available each day. That equates to over 1,000 tokens daily for active players — an impressive incentive for those exploring the growing “earn-by-playing” model.

Beyond gaming, Tomarket’s decentralized marketplace also allows users to trade assets like Protocol Points, Real World Assets (RWA), Pre-Market Coins, Crypto Yields, and even Pre-Vesting Tokens. This combination of gaming, liquidity tools, and financial incentives makes Tomarket one of the most innovative ecosystems in the current crypto landscape.

The Rise of Tomarket’s Daily Combo

Among all of Tomarket’s features, the Daily Combo stands out as the community favorite. It’s a simple yet highly engaging game where users perform a series of tap actions or movements in a specific order — similar to entering a cheat code in a classic video game.

Each day, the platform provides a new combination that players must input to unlock rewards. When done correctly, the system instantly credits the player with bonus $TOMA tokens, keeping engagement high and the experience fresh.

This format is not only fun but psychologically rewarding — it creates a daily habit. Users return regularly to check for the latest combo codes, a dynamic that has helped Tomarket achieve viral growth, especially across Telegram groups and Web3 communities.

How to Redeem Combo Codes

The process of using combo codes in Tomarket is straightforward but highly interactive. Players receive daily instructions within the Telegram mini-app. These can be as simple as:

“Tap Tomato Head 2x, Tap Hamster 1x, Swipe Left.”

When users perform these moves correctly in sequence, they instantly earn bonus $TOMA tokens and other in-game perks.

Combo codes are refreshed every day, ensuring that players never run out of challenges. This mechanic keeps the ecosystem active while also reinforcing user loyalty — one of the reasons Tomarket has been able to scale so rapidly in such a short time.

The gamified mechanics also help strengthen the token’s internal economy. With new players joining daily and a limited token supply, the ongoing demand for $TOMA within the platform is expected to support both engagement and token value over the long term.

How to Play Tomarket Daily Combo

Playing Tomarket’s Daily Combo is easy and intuitive — all it takes is a Telegram account and a few taps. Here’s how you can start:

1. Open Tomarket in Telegram via the official mini-app.

2. Play the Tap2Earn game every hour to collect $TOMA tokens.

3. Access the Daily Combo section to complete your daily challenge and unlock bonus tokens.

4. Log in daily for continuous streak rewards and additional bonuses.

5. Invite friends through the referral program to earn extra $TOMA.

Each successful day increases your total earnings and contributes to your rank within the Tomarket ecosystem.

Ranking System and User Progression

To make the experience even more engaging, Tomarket has introduced a ranking system featuring 10 distinct levels — from “Clay” (beginner) all the way up to “Immortal” (elite). Players advance through these ranks by earning Tomato Stars, which are achieved through consistent gameplay and daily participation.

As players climb higher, the rewards become more substantial. Each rank unlocks new bonus multipliers, aesthetic upgrades, and access to exclusive combo challenges. This creates a sense of progression that feels both rewarding and competitive — much like leaderboards in traditional mobile games, but with real-world tokenized rewards.

Economic Utility of $TOMA Tokens

At the heart of this ecosystem lies the $TOMA token, the primary digital asset driving the Tomarket economy.

These tokens can be used for a range of purposes:

• Trading within the Tomarket marketplace for digital or real-world assets.

• Upgrading ranks or unlocking features within the gaming interface.

• Participating in liquidity pools or staking events once the token’s full DeFi integrations roll out.

The Tomarket team has hinted at future plans to introduce cross-chain interoperability, allowing $TOMA to be bridged to major blockchains like Ethereum, BNB Chain, and Solana. This could transform the in-game token into a truly utility-based digital asset with wide ecosystem support.

The Broader Impact: Gamification Meets Finance

Tomarket’s success reflects a growing trend in Web3 — the fusion of finance and entertainment. By turning decentralized trading into an interactive experience, Tomarket removes the intimidation often associated with crypto markets.

Players who might not have traditional financial expertise are now learning the basics of blockchain economics while earning small amounts of crypto. This approach could democratize access to the digital economy and encourage greater participation in decentralized ecosystems.

Experts note that platforms like Tomarket represent a new wave of user engagement, where “play” and “profit” intersect seamlessly. Similar to how early mobile games reshaped app engagement, gamified DeFi experiences are now doing the same for blockchain adoption.

Community Growth and Market Potential

The Tomarket community has expanded globally, particularly across Asia, Europe, and Latin America. Telegram groups dedicated to sharing Daily Combo codes now boast hundreds of thousands of members.

In an environment where most blockchain projects struggle to maintain engagement, Tomarket’s ability to generate organic, daily participation stands out. Analysts believe that such consistent activity could position Tomarket among the top 10 Telegram-based Web3 apps by the end of 2025.

This momentum also increases the appeal of the $TOMA token for pre-market investors and traders looking for early exposure to emerging Web3 ecosystems.

Final Thoughts

The Tomarket Daily Combo isn’t just another game — it’s an experiment in merging entertainment with decentralized finance. By rewarding consistent participation and encouraging exploration of blockchain-based assets, Tomarket has managed to create a self-sustaining ecosystem that is both engaging and financially beneficial.

As the platform continues to evolve, its unique approach to combining gaming mechanics, token incentives, and marketplace trading could set a new benchmark for how the next generation interacts with crypto.

If Tomarket’s trajectory continues, $TOMA could soon become one of the most recognized tokens in the play-to-earn and decentralized marketplace sectors.

Writer 

@Ellena

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 Check out other news and articles on Google News

Disclaimer:

The articles published on hokanews are intended to provide up-to-date information on various topics, including cryptocurrency and technology news. The content on our site is not intended as an invitation to buy, sell, or invest in any assets. We encourage readers to conduct their own research and evaluation before making any investment or financial decisions.

hokanews is not responsible for any losses or damages that may arise from the use of information provided on this site. Investment decisions should be based on thorough research and advice from qualified financial advisors. Information on HokaNews may change without notice, and we do not guarantee the accuracy or completeness of the content published.

Welcome to Slate Sunday, CryptoSlate’s weekly feature showcasing in-depth interviews, expert analysis, and thought-provoking op-eds that go beyond the headlines to explore the ideas and voices shaping the future of crypto.

I’m balanced on a box with a spotty WIFI connection and a glitching computer. Moving house disrupts literally every aspect of your life, yet I’m determined to maintain an unbroken workflow.

It kind of lends itself to crypto anyway. The number of meetings I’ve taken from an airport, theme park, or some other random place is racking up.

In the spirit of building the airplane as we fly, I expect Alexei Zamyatin, the mastermind behind the BTCFi project Build on Bitcoin (BOB), has done the same. He doesn’t seem to mind as I’m thrown out of our call halfway through our chat and have to reconnect.

One quick tether from my phone and we’re back in business. I want to pick his brains on one of the most misunderstood concepts in crypto: Bitcoin DeFi. What is it, what’s wrong with it, and does it even matter for Bitcoin holders still clutching their keys in silent conviction?

‘Blockchain, not Bitcoin’, and back again

Alexei got into Bitcoin through a back door, “like many people did.” With a background in computer science, he started working at an IT research center in Austria, where his colleagues were “really excited about privacy and censorship resistance.” That naturally led him to Bitcoin.

Fascinated by blockchain technology, he soon turned his attentions from Bitcoin to other altcoins and their functionality. Besides stacking and holding, Alexei saw a world of possibilities:

“I got really excited about what else we can do with the technology. So I guess early on, I was in the blockchain, not Bitcoin camp.”

He admits that his position changed fairly quickly once he understood the real value of BTC as an asset, and he set about finding ways to combine the technology of smart contract platforms like Ethereum with Bitcoin as the asset.

Alexei then fell down the rabbit hole of merge mining and cross-chain bridges, co-authoring early work on Ethereum rollups, before founding BOB:

“We had a mission to really build a platform that acts as a gateway to Bitcoin DeFi, allowing Bitcoin holders to deploy their BTC into the DeFi ecosystem in a secure and transparent manner and get access to these DeFi opportunities with a single click.”

Finding the pain points

Yet the world of BTCFi is still emerging, and it all feels somewhat stuck in first gear compared with glitzy Ethereum L2s and dApps. Why is that? Alexei doesn’t sugarcoat it:

“If you want to use Bitcoin in DeFi today, you have to wrap it to other chains, and you have to pick among 50 plus providers that are fragmented, and not super transparent.”

Wrapping, bridging, risk, these are the sticky realities, and don’t forget the users themselves. According to a recent survey by GoMining, 77% of Bitcoin holders have never even tried Bitcoin DeFi, and 65% can’t name a single BTCFi project.

CEO of GoMining, Mark Zalan (who’s about as old-school banking as they come, running IT for large commercial banks), confirms it’s not just Bitcoin users getting lost. He told me:

“Crypto in general, Bitcoin in particular, is still very complicated in terms of usability. It is still a ways off from the very sort of intuitive user-focused experience that best-of-breed products like Apple are able to offer… That’s not unique to crypto. It’s not unique to Bitcoin. This is a challenge that every startup developing environment faces.”

Not all users will jump through hoops

Mark says there will always be initial adopters who are technical in nature, focused on the product, and able to “jump through a particular set of hoops, because that’s what early adopters do.” But to draw in a wider base, BTCFi has to meet the rest of its userbase where it’s at. He shares:

“What the survey told us is it feels like we’re in that moment with Bitcoin, and the next hurdle to general wider adoption is making it a lot more user-friendly, both in terms of concepts and in terms of usability.”

For Alexei, it’s a two-fold dilemma. He concedes that the UX is “mainly for experts,” better navigated by those with computer science degrees. But the incentives of holding Bitcoin also need improving.

“Bitcoin has no native yields… It’s not the same as holding Bitcoin as an asset, or staking it and getting more of it, like you have with Ethereum or Solana. So it’s a very different risk profile here. The second problem is, with Bitcoin and DeFi, that it’s not native yet.”

Building something different

So what does BOB actually offer? Alexei claims to provide the easiest and safest way to earn with Bitcoin. BOB Gateway taps into the best of both Bitcoin and Ethereum, enabling multi-chain Bitcoin yield and swaps on any chain with just one click.

Users effectively become validators on the network and are prevented from carrying out malicious actions like double-signing because they can be slashed and have their BTC removed.

This fraud-proof, validator-slashing approach is more than just a technical pitch; it’s a defense against the nightmare scenario:

“If you attack the system, you will lose your Bitcoin. And in return for you securing the system and staking your Bitcoin, you get Bitcoin staking rewards. These are paid from the fees that BOB generates as a chain.”

And best of all? Unlike some other services that allow users to earn rewards in another token, as it’s native Bitcoin, the rewards are paid in BTC.

Who needs Bitcoin DeFi anyway?

But is this really for the crowd that bought Bitcoin just to hold and watch? Mark recalls many conversations at The Bitcoin Conference in Vegas in May, saying:

“The overall sense is that it’s still complicated.”

Yikes. If Bitcoin DeFi is complicated for Bitcoiners, who are generally orders of magnitude more tech-savvy than you’re average consumer, what hope is there for the rest of the world?

Alexei is diplomatic:

“I wouldn’t say that they [Bitcoiners] are not our customers. It’s important to accept that there is an adoption curve, and people who are just inherently against using financial products. That doesn’t have anything to do with Bitcoin itself; that’s just people who don’t want to use financial products. The vast majority of especially the younger generation, is very keen on yield. We use neobanks. We want to make sure that we protect ourselves against inflation.”

He points out that the same predicament is true for BTC holders. While Bitcoin is generally accepted as a good hedge against inflation, it’s still not maximizing yield by sitting idle:

“That’s stale capital if you don’t do anything with it, and we see more and more demand for yield on Bitcoin… What people really, really want is something like Ethereum, where you just stake your Bitcoin and you get more BTC. And actually, that’s something that we’re working on.”

“There are so many bridges, there are so many hurdles, and the UX is just terrible. That’s why we launched BOB Gateway, which allows you to just one-click deploy your Bitcoin into all these other DeFi opportunities across these 11 chains.”

Bob Gateway is all about access, allowing users to connect simply and natively to multiple chains and stake their BTC, uncomplicating some of the sticking points of other existing solutions.

What’s next for BTCFi? And what could go wrong?

With every big chain chasing Bitcoin liquidity, BOB is determined to be the “shovel seller” in the next gold rush. And the early results?

“The system is stable. We’re seeing quite a bit of early activity. We’re pretty close with teams on BNB, Base, Unichain, Avalanche… And we see a lot of interest from networks that we don’t yet support, like Aptos, Solana, and so on… because a lot of apps are just looking for easier ways to onboard users into the protocols, so I think it’s a very good first sign.”

Can anything go wrong with Bitcoin DeFi? Alexei concedes that there’s always “technical risk” with open-source protocols but says it decreases over time as more people use and verify them. And as for malicious actors? Well, there’s no incentive:

“Like if you attack the system, you’ll lose your Bitcoin. But if you don’t, then you won’t lose your Bitcoin, right? It’s pretty straightforward.”

As Bitcoin DeFi evolves and the userbase grows more sophisticated, I ask Alexei if anything else concerns him, like the institutionalization of the space, and the ravenous appetite of entities like Strategy and Metaplanet gobbling up the BTC supply.

He’s by no means blasé about the risks, but points out that the benefit of Bitcoin’s proof-of-work system, unlike proof-of-stake, is that holding more Bitcoin doesn’t give you more control of the network. In that respect, Michael Saylor’s strategy isn’t a threat. However, it’s important that we don’t simply recreate traditional finance on blockchain rails.

“Owning a large percentage of the supply gives you some influence, and bad actors will try to use this influence. But at the end of the day… the network is distributed and decentralized enough that just because MicroStrategy accumulates so much BTC, it’s not going to break the system… The biggest risk is probably that governments just seize these funds.”

Final thoughts

There’s a clear sense, even from founders, that Bitcoin DeFi is still a market in the making; less “Apple Store experience” and more command line.

The gold rush is on, but there are still plenty of hills to climb: native yield, user experience, an education gap, and the ever-present shadow of centralization.

If the problems get solved, the next wave of Bitcoiners may never settle for just HODLing again. But for those in the trenches, that’s a pretty big if for now.