Introduction: How did DeFi go from a geek's toy to Wall Street's new darling?
In the past few years, a buzzword has been frequently mentioned in the financial circle - DeFi (Decentralized Finance). A few years ago, when geeks were just starting to build some strange financial tools on Ethereum, no one expected these "toys" would eventually catch the attention of traditional financial moguls on Wall Street.
Looking back from 2020 to 2021, DeFi rose rapidly at a jaw-dropping speed. At that time, the total value locked (TVL) in the entire market soared from several billion dollars to a peak of 178 billion dollars. Protocols with strange names like Uniswap and Aave suddenly became popular projects in the global crypto scene.
However, for most ordinary investors, DeFi always feels like a maze filled with traps. Wallet operations are headache-inducing, and smart contracts are as incomprehensible as Martian language, not to mention the daily anxiety of preventing assets from being hacked all at once. Data shows that even though DeFi is so popular, the proportion of investment institutions in the traditional financial market that have truly entered is less than 5%. On one hand, investors are eager to try; on the other hand, they are hesitant to act due to various barriers.
But the capital's sense of smell is always the keenest. Starting in 2021, a new tool specifically designed to solve the problem of "how to easily invest in DeFi" has emerged, which is the Decentralized ETF (DeETF). It combines the concept of ETF products in traditional finance with the transparency of blockchain, retaining the convenience and regulation of traditional funds while also taking into account the high growth potential of DeFi assets.
It can be understood this way: DeETF is like a bridge, one end connecting to the "hard-to-enter" new world of DeFi, while the other end connects to a wide range of investors familiar with traditional financial products. Traditional institutions can continue to invest using their familiar financial accounts, while blockchain enthusiasts can easily combine their investment strategies as if they were playing a game.
So, how has DeETF gradually emerged alongside the growth of Decentralized Finance? What kind of evolution has it undergone, and how has it become a new force in the field of on-chain asset management step by step? Next, we will start from the birth of Decentralized Finance and talk about the story behind this new financial species.
Part One: From DeFi to DeETF: The Development History of On-Chain ETFs
(1) Early Exploration (2017-2019): Those Initial Attempts and the Seeds Sown
If DeFi is a financial revolution, then its beginning must be closely related to Ethereum. Between 2017 and 2018, several early projects on Ethereum, such as MakerDAO and Compound, first showcased to the world the possibilities of decentralized finance. Although the ecosystem at that time was still very limited in scale, novel financial practices like lending and stablecoins had already sparked a small wave in the geek community.
At the end of 2018 and the beginning of 2019, Uniswap emerged, providing an unprecedented "Automated Market Maker (AMM)" model, allowing people to no longer be tormented by complex order books, making "trading" much easier. From 2017 to 2018, MakerDAO and Compound showcased the possibilities of decentralized lending and stablecoins. Subsequently, the automated market maker (AMM) model launched by Uniswap at the end of 2018 and the beginning of 2019 greatly simplified on-chain trading. By the end of 2019, the TVL of DeFi had approached 600 million dollars.
At the same time, traditional finance's attention has quietly begun to emerge. Some keen financial institutions are subtly laying out blockchain technology; however, at this time, they are still troubled by complicated technical issues and unable to truly participate. Although no one explicitly proposed the concept of "DeETF" at that time, the need for a bridge between traditional funds and Decentralized Finance (DeFi) had already begun to take shape at this stage.
(2) Market Explosion and Concept Formation (2020-2021): The Eve of DeETF's Arrival
In 2020, a sudden pandemic changed the direction of the global economy and prompted a large influx of capital into the cryptocurrency market. DeFi exploded during this period, with TVL skyrocketing at an astonishing rate, increasing from 1 billion dollars to 17.8 billion dollars a year later.
Investors are pouring in so crazily that the Ethereum network is congested to the point where there was an extreme situation where transaction fees exceeded 100 USD. A series of dazzling new models such as liquidity mining and yield farming have made the market heat up quickly, but at the same time, they have exposed a huge barrier to user participation. Many ordinary users lament: "Playing DeFi is really much harder than stock trading!"
At this moment, some traditional financial companies began to keenly capture the opportunity. DeFi Technologies Inc., a Canadian listed company (stock code: DEFTF), is a typical representative. This company originally engaged in traditional businesses unrelated to cryptocurrency, but decisively transformed in 2020 to launch financial products that track mainstream DeFi protocols (such as Uniswap and Aave), allowing users to participate in the DeFi world as simply as buying and selling stocks on traditional exchanges. The emergence of such products is also a sign of the official germination of the "DeETF" concept.
At the same time, the decentralized sector is quietly taking action. Projects like DeETF.org are beginning to experiment with managing ETF portfolios in a decentralized manner using smart contracts, but these attempts are still in the early stages.
(3) Market Reshuffle and Maturity of Models (2022-2023): DeETF Formalization
The boom of Decentralized Finance didn't last long. In early 2022, the collapse of Terra and the bankruptcy of FTX, a series of black swan events, almost destroyed investor confidence. The TVL of the DeFi market plummeted from 178 billion dollars to 40 billion dollars.
But crises are often accompanied by opportunities. The severe fluctuations in the market have made people realize that the DeFi field urgently needs more secure and transparent investment tools, which in turn has driven the development and maturation of DeETF. During this period, "DeETF" is no longer just a concept, but has gradually developed into two clear models:
Traditional financial channels are further strengthened: institutions like DeFi Technologies are taking advantage of the trend to expand their product lines, launching more robust ETPs (Exchange-Traded Products) and listing them on traditional exchanges, such as the Toronto Stock Exchange in Canada. This model significantly lowers the participation threshold for retail investors and is also favored by traditional institutions.
The rise of on-chain decentralized models: During the same period, on-chain platforms such as DeETF.org and Sosovalue were officially launched, enabling asset management and portfolio trading directly through smart contracts. These platforms do not require centralized custody, allowing users to create, trade, and adjust their own investment portfolios. This particularly attracts crypto-native users and investors seeking absolute transparency.
At the same time, traditional finance's attention has quietly begun. Some astute financial institutions are quietly laying out blockchain technology, yet they are still troubled by complex technical issues, unable to truly participate. Although no one explicitly proposed the concept of "DeETF" at that time, the need for a bridge between traditional funds and Decentralized Finance (DeFi) was already beginning to emerge at this stage.
(2) Market Explosion and Concept Formation (2020-2021): The Eve of DeETF's Debut
In 2020, a sudden pandemic changed the trajectory of the global economy and prompted a massive influx of capital into the cryptocurrency market. DeFi exploded during this period, with TVL surging at an astonishing rate, from 1 billion dollars to 178 billion dollars a year later.
Investors flooded in so much that the Ethereum network became congested, even leading to an extreme situation where transaction fees exceeded 100 dollars. A series of dazzling new models like liquidity mining and yield farming made the market heat up quickly, but at the same time exposed a huge barrier to user participation. Many ordinary users lamented: "Playing DeFi is really much harder than stock trading!"
At this moment, some traditional financial companies began to keenly capture the opportunity. DeFi Technologies Inc., a Canadian listed company (stock code: DEFTF), is a typical representative. This company originally engaged in traditional businesses unrelated to cryptocurrency, but decisively transformed in 2020 and started to launch financial products that track mainstream DeFi protocols such as Uniswap and Aave. Users can participate in the DeFi world as simply as buying and selling stocks on traditional exchanges. The emergence of such products is also a sign of the official germination of the "DeETF" concept.
At the same time, the decentralized track is also quietly taking action. Projects like DeETF.org are starting to experiment with managing ETF portfolios in a decentralized manner directly through smart contracts, but these attempts are still in the early stages.
(3) Market Restructuring and Model Maturity (2022-2023): The Formalization of DeETF
The boom of Decentralized Finance did not last long. In early 2022, the collapse of Terra and the bankruptcy of FTX, a series of black swan events, nearly destroyed investors' confidence. The DeFi market's TVL plummeted directly from $178 billion to $40 billion.
But crises often come with opportunities. The severe fluctuations in the market have made people realize that the DeFi sector urgently needs safer and more transparent investment tools, which in turn has propelled the development and maturity of DeETF. During this period, "DeETF" is no longer just a concept, but has gradually developed into two clear models:
Traditional financial channels are further strengthened: Institutions like DeFi Technologies are seizing the opportunity to expand their product lines, launching more robust ETPs (Exchange-Traded Products) and listing them on traditional exchanges, such as the Toronto Stock Exchange in Canada. This model significantly lowers the participation threshold for retail investors and is also favored by traditional institutions.
The rise of on-chain decentralized models: During the same period, on-chain platforms like DeETF.org and Sosovalue were officially launched, directly implementing asset management and portfolio trading through smart contracts. These platforms do not require centralized custody, allowing users to create, trade, and adjust their investment portfolios independently. This particularly attracted crypto-native users and investors seeking absolute transparency.
These two models develop in parallel, gradually clarifying the DeETF track: on one hand, through traditional financial channels, and on the other hand, emphasizing complete decentralization and on-chain transparency.
(4) Advantages are gradually emerging, while challenges cannot be ignored
As of today, DeETF has gradually demonstrated its unique advantages:
High ease of use, significantly lowered participation threshold: Whether in traditional models or on-chain models, the participation threshold for retail investors has been greatly reduced.
More transparent and flexible investments: On-chain model allows for 24/7 trading, with asset portfolios adjustable at any time.
Risk control and investment diversification: Investors can easily build a multi-asset portfolio to reduce the volatility risk of a single asset.
But at the same time, challenges are gradually emerging:
Uncertain regulatory environment: The US SEC has very strict regulations on crypto ETFs, and compliance costs remain high.
Smart Contract Security Risks: Between 2022 and 2023, hacker attacks caused losses of about 1.4 billion USD to DeFi protocols, leaving investors still worried.
However, despite these challenges, DeETF is still regarded as one of the important innovations in the future financial market. It gradually blurs the lines between traditional investors and the crypto market, making asset management more democratized and intelligent.
Part Two: The Rise of Emerging Projects, the DeETF Track Flourishes
(1) From a Single Model to Diverse Exploration: The New Landscape of DeETF
As the DeETF concept gradually gains acceptance in the market, this emerging field has entered a "hundred flowers bloom" stage after 2023. Unlike the early days when there was only a single ETP (Exchange-Traded Product) model, DeETF is now rapidly evolving along two paths:
One approach is to continue using traditional financial logic by issuing ETPs through regular exchanges, such as DeFi Technologies, continuously enriching the categories of DeFi assets, allowing traditional investors to easily invest in on-chain assets just like buying stocks;
Another path is a more radical one that is closer to the spirit of cryptocurrency—a pure on-chain, decentralized DeETF platform. Users do not need a brokerage account, do not need KYC, and can simply create, trade, and manage their asset portfolios on-chain with just a cryptocurrency wallet.
Especially in the past two years, platforms like DeETF.org and Sosovalue have become pioneering explorers in the direction of on-chain native asset portfolios. Among them, Sosovalue supports multi-theme portfolio strategies (such as GameFi and blue-chip portfolios), providing users with a "one-click purchase + traceable" ETF product experience, attempting to solve the portfolio management threshold issue in a lighter way.
In terms of institutional pathways, in addition to DeFi Technologies, the influence of RWA leader Securitize cannot be ignored. It is tokenizing traditional financial assets such as U.S. private equity, corporate bonds, and real estate in a compliant manner, and introducing primary market investors into the on-chain market. Although this approach is not directly referred to as DeETF, its combined asset custody structure and KYC mechanism already possess the core characteristics of DeETF.
They put forward the concept of "24/7 trading, no intermediaries, and user-owned combinations", breaking the pattern of traditional ETFs being limited by trading hours and custodians. According to the data, by the end of 2024, the number of active on-chain ETF portfolios on DeETF.org has exceeded 1,200, and the total value of locked positions has reached tens of millions of dollars, becoming an important tool for DeFi native users.
In the direction of specialized asset management, organizations like Index Coop have also begun to standardize and bundle DeFi assets, such as launching the DeFi Pulse Index (DPI), providing users with a "ready-to-use" DeFi blue-chip asset portfolio, reducing the individual coin selection risk.
It can be said that starting from 2023, DeETF has transformed from a singular attempt into a diverse competitive ecosystem, with projects of different routes and positions flourishing.
(2) New Trends in Smart Asset Portfolios: Who is Making DeETF More User-Friendly?
In the past few years, the DeETF sector has undergone a phased evolution from "DIY free combination" to "preset combination one-click purchase." Platforms like DeETF.org advocate for a "user-selected" combination mechanism, while Sosovalue tends to favor a productization path based on "thematic strategies," such as GameFi blue-chip packages and L2 narrative combinations. These types of platforms are mostly aimed at users with an existing investment research foundation.
However, it is still rare to truly hand over the "portfolio strategy" to algorithmic automation.
This is precisely the entry point for YAMA (Yamaswap), which has won the first Juchain hackathon: it is not stacking combinations on traditional Decentralized Finance, but rather trying to make DeETF "smarter."
Specifically, YAMA does not want users to bear all the pressure of investment research, but instead has built an AI-driven asset allocation recommendation system. Users only need to input their needs, such as "stable returns", "focus on the Ethereum ecosystem", and "preference for LST assets", and the system will automatically generate recommended portfolios based on on-chain historical data, asset correlations, and backtesting models.
Similar concepts have also appeared in the TradFi world in Robo-advisor services, such as Betterment and Wealthfront, but YAMA has brought it on-chain and completed asset management logic at the contract level.
In terms of deployment, YAMA chooses to operate on Solana and Base, significantly reducing usage costs. Compared to the GAS costs of dozens of dollars on the Ethereum mainnet, this architecture is naturally more suitable for everyday asset portfolio interactions, especially friendlier to retail users.
In terms of portfolio security, YAMA's smart contracts support the on-chain disclosure of portfolio components, weights, dynamic changes, etc. Users can track the operation of strategies at any time, avoiding the "black-box configuration" of traditional Decentralized Finance aggregation tools.
Unlike other platforms, YAMA emphasizes a combination experience of "self-deployment" + "AI portfolio recommendation" - addressing the pain point of "not knowing how to invest" while maintaining the transparency and self-management of "asset control."
This type of product pathway may represent the direction of the next stage of the DeETF platform transitioning from "structural tools" to "intelligent investment research assistants."
(3) The DeETF track is forming a fork evolution path
As the structure of crypto users shifts from trading-focused to a demand for "portfolio management", the DeETF track is gradually diverging into several different development paths.
For example, DeETF.org still emphasizes user autonomy in configuration and free combination, suitable for users with a certain level of understanding; Sosovalue further productizes asset portfolios, launching on-chain thematic ETFs, such as "Solana Infrastructure Portfolio" and "Meme Ecosystem Basket", resembling the style of traditional funds. Index Coop and others focus on standard index products, aiming for long-term stable market coverage.
In traditional DeFi projects, DeFi Technologies and Securitize target retail and institutional investors respectively, representing two different paths of compliance exploration—the latter has become one of the first RWA platforms to receive an SEC exemption, providing a model for the compliance process of on-chain asset portfolios.
However, from the perspective of user interaction, the entire sector is beginning to show a new trend: a smarter and more automated asset allocation experience.
For example, some platforms have started to introduce AI models or rule engines to dynamically generate configuration suggestions based on user goals and on-chain data, attempting to lower the threshold and improve efficiency. This type of model also shows significant advantages against the backdrop of the continuous expansion of DeFi users and the increasing demand for investment research.
YAMA is one of the representatives on this path: it has made a structural integration between AI combination recommendations and on-chain self-deployment, while using a low-cost, high-performance public chain for deployment, allowing ordinary users to complete asset allocation without the need for "complex operations."
Although each path is still in its early stages, an increasing number of DeETF platforms are beginning to shift from "pure tools" to "strategic service providers." This also reveals the underlying evolutionary logic of the entire crypto asset management space: it is not just about decentralization, but also about simplifying and removing professional barriers in the financial experience.
Conclusion: From Trends to Practice: DeETF Reshaping the Future of On-Chain Asset Management
In the past few years, the cryptocurrency industry has experienced too many frenzied ups and collapses. Every new concept's birth has been accompanied by market clamor and skepticism, and DeFi is no exception. The DeETF, originally a niche and marginal cross-field, is quietly accumulating energy, becoming the next branch of on-chain finance that deserves serious attention.
Looking back at the development of Decentralized Finance, a clear main line can be seen:
From the initial smart contract experiments to building open trading and lending protocols, and then to triggering large-scale capital flows, DeFi has completed in six to seven years what traditional finance took decades to achieve. Now, DeETF, as the "upgraded version of user experience" for DeFi, is taking on the task of further popularizing and lowering the barriers.
Data shows that although the overall scale of the DeETF track is still small, its growth potential is enormous. According to a report by Precedence Research, the DeFi market is expected to grow from $32.36 billion in 2025 to approximately $1.558 trillion by 2034, with a compound annual growth rate (CAGR) of 53.8%. This means that in the next five years, under the rapid development of DeFi, DeETF will not only be a part of the DeFi ecosystem but is also likely to become one of the most important application scenarios for on-chain asset management.
Standing at this point today, we can already see different types of explorers:
There are companies like DeFi Technologies that attempt to enter traditional finance by issuing more compliant and familiar crypto ETP products;
There are platforms like DeETF.org that adhere to on-chain autonomy, emphasizing free combination and complete transparency;
There are also emerging forces like YAMA, which not only continue the spirit of decentralization but also introduce AI-assisted portfolio construction, attempting to make on-chain asset management truly "intelligent and personalized."
If the early DeFi solved the question of "can finance be decentralized," today's DeETF and projects like YAMA are addressing the issue of "can decentralized finance be affordable and accessible for more people."
Future on-chain asset management should not just be an arbitrage tool for a few, but rather a capability that any ordinary investor can master. And DeETF is precisely that key.
From MakerDAO to Uniswap, from DeFi Technologies to YAMA, every advancement in Decentralized Finance is a refreshing take on the concepts of financial freedom, transparency, and inclusiveness. Today, DeETF is redefining the way on-chain asset management works, and innovative projects like YAMA are injecting new imagination into this path.
The story is far from over. But the future is slowly taking shape.
The content is for reference only, not a solicitation or offer. No investment, tax, or legal advice provided. See Disclaimer for more risks disclosure.
From DeFi to DeETF: Who is quietly rewriting the underlying logic of DeFi asset allocation?
Introduction: How did DeFi go from a geek's toy to Wall Street's new darling?
In the past few years, a buzzword has been frequently mentioned in the financial circle - DeFi (Decentralized Finance). A few years ago, when geeks were just starting to build some strange financial tools on Ethereum, no one expected these "toys" would eventually catch the attention of traditional financial moguls on Wall Street.
Looking back from 2020 to 2021, DeFi rose rapidly at a jaw-dropping speed. At that time, the total value locked (TVL) in the entire market soared from several billion dollars to a peak of 178 billion dollars. Protocols with strange names like Uniswap and Aave suddenly became popular projects in the global crypto scene.
However, for most ordinary investors, DeFi always feels like a maze filled with traps. Wallet operations are headache-inducing, and smart contracts are as incomprehensible as Martian language, not to mention the daily anxiety of preventing assets from being hacked all at once. Data shows that even though DeFi is so popular, the proportion of investment institutions in the traditional financial market that have truly entered is less than 5%. On one hand, investors are eager to try; on the other hand, they are hesitant to act due to various barriers.
But the capital's sense of smell is always the keenest. Starting in 2021, a new tool specifically designed to solve the problem of "how to easily invest in DeFi" has emerged, which is the Decentralized ETF (DeETF). It combines the concept of ETF products in traditional finance with the transparency of blockchain, retaining the convenience and regulation of traditional funds while also taking into account the high growth potential of DeFi assets.
It can be understood this way: DeETF is like a bridge, one end connecting to the "hard-to-enter" new world of DeFi, while the other end connects to a wide range of investors familiar with traditional financial products. Traditional institutions can continue to invest using their familiar financial accounts, while blockchain enthusiasts can easily combine their investment strategies as if they were playing a game.
So, how has DeETF gradually emerged alongside the growth of Decentralized Finance? What kind of evolution has it undergone, and how has it become a new force in the field of on-chain asset management step by step? Next, we will start from the birth of Decentralized Finance and talk about the story behind this new financial species.
Part One: From DeFi to DeETF: The Development History of On-Chain ETFs
(1) Early Exploration (2017-2019): Those Initial Attempts and the Seeds Sown
If DeFi is a financial revolution, then its beginning must be closely related to Ethereum. Between 2017 and 2018, several early projects on Ethereum, such as MakerDAO and Compound, first showcased to the world the possibilities of decentralized finance. Although the ecosystem at that time was still very limited in scale, novel financial practices like lending and stablecoins had already sparked a small wave in the geek community.
At the end of 2018 and the beginning of 2019, Uniswap emerged, providing an unprecedented "Automated Market Maker (AMM)" model, allowing people to no longer be tormented by complex order books, making "trading" much easier. From 2017 to 2018, MakerDAO and Compound showcased the possibilities of decentralized lending and stablecoins. Subsequently, the automated market maker (AMM) model launched by Uniswap at the end of 2018 and the beginning of 2019 greatly simplified on-chain trading. By the end of 2019, the TVL of DeFi had approached 600 million dollars.
At the same time, traditional finance's attention has quietly begun to emerge. Some keen financial institutions are subtly laying out blockchain technology; however, at this time, they are still troubled by complicated technical issues and unable to truly participate. Although no one explicitly proposed the concept of "DeETF" at that time, the need for a bridge between traditional funds and Decentralized Finance (DeFi) had already begun to take shape at this stage.
(2) Market Explosion and Concept Formation (2020-2021): The Eve of DeETF's Arrival
In 2020, a sudden pandemic changed the direction of the global economy and prompted a large influx of capital into the cryptocurrency market. DeFi exploded during this period, with TVL skyrocketing at an astonishing rate, increasing from 1 billion dollars to 17.8 billion dollars a year later.
Investors are pouring in so crazily that the Ethereum network is congested to the point where there was an extreme situation where transaction fees exceeded 100 USD. A series of dazzling new models such as liquidity mining and yield farming have made the market heat up quickly, but at the same time, they have exposed a huge barrier to user participation. Many ordinary users lament: "Playing DeFi is really much harder than stock trading!"
At this moment, some traditional financial companies began to keenly capture the opportunity. DeFi Technologies Inc., a Canadian listed company (stock code: DEFTF), is a typical representative. This company originally engaged in traditional businesses unrelated to cryptocurrency, but decisively transformed in 2020 to launch financial products that track mainstream DeFi protocols (such as Uniswap and Aave), allowing users to participate in the DeFi world as simply as buying and selling stocks on traditional exchanges. The emergence of such products is also a sign of the official germination of the "DeETF" concept.
At the same time, the decentralized sector is quietly taking action. Projects like DeETF.org are beginning to experiment with managing ETF portfolios in a decentralized manner using smart contracts, but these attempts are still in the early stages.
(3) Market Reshuffle and Maturity of Models (2022-2023): DeETF Formalization
The boom of Decentralized Finance didn't last long. In early 2022, the collapse of Terra and the bankruptcy of FTX, a series of black swan events, almost destroyed investor confidence. The TVL of the DeFi market plummeted from 178 billion dollars to 40 billion dollars.
But crises are often accompanied by opportunities. The severe fluctuations in the market have made people realize that the DeFi field urgently needs more secure and transparent investment tools, which in turn has driven the development and maturation of DeETF. During this period, "DeETF" is no longer just a concept, but has gradually developed into two clear models:
At the same time, traditional finance's attention has quietly begun. Some astute financial institutions are quietly laying out blockchain technology, yet they are still troubled by complex technical issues, unable to truly participate. Although no one explicitly proposed the concept of "DeETF" at that time, the need for a bridge between traditional funds and Decentralized Finance (DeFi) was already beginning to emerge at this stage.
(2) Market Explosion and Concept Formation (2020-2021): The Eve of DeETF's Debut
In 2020, a sudden pandemic changed the trajectory of the global economy and prompted a massive influx of capital into the cryptocurrency market. DeFi exploded during this period, with TVL surging at an astonishing rate, from 1 billion dollars to 178 billion dollars a year later.
Investors flooded in so much that the Ethereum network became congested, even leading to an extreme situation where transaction fees exceeded 100 dollars. A series of dazzling new models like liquidity mining and yield farming made the market heat up quickly, but at the same time exposed a huge barrier to user participation. Many ordinary users lamented: "Playing DeFi is really much harder than stock trading!"
At this moment, some traditional financial companies began to keenly capture the opportunity. DeFi Technologies Inc., a Canadian listed company (stock code: DEFTF), is a typical representative. This company originally engaged in traditional businesses unrelated to cryptocurrency, but decisively transformed in 2020 and started to launch financial products that track mainstream DeFi protocols such as Uniswap and Aave. Users can participate in the DeFi world as simply as buying and selling stocks on traditional exchanges. The emergence of such products is also a sign of the official germination of the "DeETF" concept.
At the same time, the decentralized track is also quietly taking action. Projects like DeETF.org are starting to experiment with managing ETF portfolios in a decentralized manner directly through smart contracts, but these attempts are still in the early stages.
(3) Market Restructuring and Model Maturity (2022-2023): The Formalization of DeETF
The boom of Decentralized Finance did not last long. In early 2022, the collapse of Terra and the bankruptcy of FTX, a series of black swan events, nearly destroyed investors' confidence. The DeFi market's TVL plummeted directly from $178 billion to $40 billion.
But crises often come with opportunities. The severe fluctuations in the market have made people realize that the DeFi sector urgently needs safer and more transparent investment tools, which in turn has propelled the development and maturity of DeETF. During this period, "DeETF" is no longer just a concept, but has gradually developed into two clear models:
These two models develop in parallel, gradually clarifying the DeETF track: on one hand, through traditional financial channels, and on the other hand, emphasizing complete decentralization and on-chain transparency.
(4) Advantages are gradually emerging, while challenges cannot be ignored
As of today, DeETF has gradually demonstrated its unique advantages:
But at the same time, challenges are gradually emerging:
However, despite these challenges, DeETF is still regarded as one of the important innovations in the future financial market. It gradually blurs the lines between traditional investors and the crypto market, making asset management more democratized and intelligent.
Part Two: The Rise of Emerging Projects, the DeETF Track Flourishes
(1) From a Single Model to Diverse Exploration: The New Landscape of DeETF
As the DeETF concept gradually gains acceptance in the market, this emerging field has entered a "hundred flowers bloom" stage after 2023. Unlike the early days when there was only a single ETP (Exchange-Traded Product) model, DeETF is now rapidly evolving along two paths:
One approach is to continue using traditional financial logic by issuing ETPs through regular exchanges, such as DeFi Technologies, continuously enriching the categories of DeFi assets, allowing traditional investors to easily invest in on-chain assets just like buying stocks;
Another path is a more radical one that is closer to the spirit of cryptocurrency—a pure on-chain, decentralized DeETF platform. Users do not need a brokerage account, do not need KYC, and can simply create, trade, and manage their asset portfolios on-chain with just a cryptocurrency wallet.
Especially in the past two years, platforms like DeETF.org and Sosovalue have become pioneering explorers in the direction of on-chain native asset portfolios. Among them, Sosovalue supports multi-theme portfolio strategies (such as GameFi and blue-chip portfolios), providing users with a "one-click purchase + traceable" ETF product experience, attempting to solve the portfolio management threshold issue in a lighter way.
In terms of institutional pathways, in addition to DeFi Technologies, the influence of RWA leader Securitize cannot be ignored. It is tokenizing traditional financial assets such as U.S. private equity, corporate bonds, and real estate in a compliant manner, and introducing primary market investors into the on-chain market. Although this approach is not directly referred to as DeETF, its combined asset custody structure and KYC mechanism already possess the core characteristics of DeETF.
They put forward the concept of "24/7 trading, no intermediaries, and user-owned combinations", breaking the pattern of traditional ETFs being limited by trading hours and custodians. According to the data, by the end of 2024, the number of active on-chain ETF portfolios on DeETF.org has exceeded 1,200, and the total value of locked positions has reached tens of millions of dollars, becoming an important tool for DeFi native users.
In the direction of specialized asset management, organizations like Index Coop have also begun to standardize and bundle DeFi assets, such as launching the DeFi Pulse Index (DPI), providing users with a "ready-to-use" DeFi blue-chip asset portfolio, reducing the individual coin selection risk.
It can be said that starting from 2023, DeETF has transformed from a singular attempt into a diverse competitive ecosystem, with projects of different routes and positions flourishing.
(2) New Trends in Smart Asset Portfolios: Who is Making DeETF More User-Friendly?
In the past few years, the DeETF sector has undergone a phased evolution from "DIY free combination" to "preset combination one-click purchase." Platforms like DeETF.org advocate for a "user-selected" combination mechanism, while Sosovalue tends to favor a productization path based on "thematic strategies," such as GameFi blue-chip packages and L2 narrative combinations. These types of platforms are mostly aimed at users with an existing investment research foundation.
However, it is still rare to truly hand over the "portfolio strategy" to algorithmic automation.
This is precisely the entry point for YAMA (Yamaswap), which has won the first Juchain hackathon: it is not stacking combinations on traditional Decentralized Finance, but rather trying to make DeETF "smarter."
Specifically, YAMA does not want users to bear all the pressure of investment research, but instead has built an AI-driven asset allocation recommendation system. Users only need to input their needs, such as "stable returns", "focus on the Ethereum ecosystem", and "preference for LST assets", and the system will automatically generate recommended portfolios based on on-chain historical data, asset correlations, and backtesting models.
Similar concepts have also appeared in the TradFi world in Robo-advisor services, such as Betterment and Wealthfront, but YAMA has brought it on-chain and completed asset management logic at the contract level.
In terms of deployment, YAMA chooses to operate on Solana and Base, significantly reducing usage costs. Compared to the GAS costs of dozens of dollars on the Ethereum mainnet, this architecture is naturally more suitable for everyday asset portfolio interactions, especially friendlier to retail users.
In terms of portfolio security, YAMA's smart contracts support the on-chain disclosure of portfolio components, weights, dynamic changes, etc. Users can track the operation of strategies at any time, avoiding the "black-box configuration" of traditional Decentralized Finance aggregation tools.
Unlike other platforms, YAMA emphasizes a combination experience of "self-deployment" + "AI portfolio recommendation" - addressing the pain point of "not knowing how to invest" while maintaining the transparency and self-management of "asset control."
This type of product pathway may represent the direction of the next stage of the DeETF platform transitioning from "structural tools" to "intelligent investment research assistants."
(3) The DeETF track is forming a fork evolution path
As the structure of crypto users shifts from trading-focused to a demand for "portfolio management", the DeETF track is gradually diverging into several different development paths.
For example, DeETF.org still emphasizes user autonomy in configuration and free combination, suitable for users with a certain level of understanding; Sosovalue further productizes asset portfolios, launching on-chain thematic ETFs, such as "Solana Infrastructure Portfolio" and "Meme Ecosystem Basket", resembling the style of traditional funds. Index Coop and others focus on standard index products, aiming for long-term stable market coverage.
In traditional DeFi projects, DeFi Technologies and Securitize target retail and institutional investors respectively, representing two different paths of compliance exploration—the latter has become one of the first RWA platforms to receive an SEC exemption, providing a model for the compliance process of on-chain asset portfolios.
However, from the perspective of user interaction, the entire sector is beginning to show a new trend: a smarter and more automated asset allocation experience.
For example, some platforms have started to introduce AI models or rule engines to dynamically generate configuration suggestions based on user goals and on-chain data, attempting to lower the threshold and improve efficiency. This type of model also shows significant advantages against the backdrop of the continuous expansion of DeFi users and the increasing demand for investment research.
YAMA is one of the representatives on this path: it has made a structural integration between AI combination recommendations and on-chain self-deployment, while using a low-cost, high-performance public chain for deployment, allowing ordinary users to complete asset allocation without the need for "complex operations."
Although each path is still in its early stages, an increasing number of DeETF platforms are beginning to shift from "pure tools" to "strategic service providers." This also reveals the underlying evolutionary logic of the entire crypto asset management space: it is not just about decentralization, but also about simplifying and removing professional barriers in the financial experience.
Conclusion: From Trends to Practice: DeETF Reshaping the Future of On-Chain Asset Management
In the past few years, the cryptocurrency industry has experienced too many frenzied ups and collapses. Every new concept's birth has been accompanied by market clamor and skepticism, and DeFi is no exception. The DeETF, originally a niche and marginal cross-field, is quietly accumulating energy, becoming the next branch of on-chain finance that deserves serious attention.
Looking back at the development of Decentralized Finance, a clear main line can be seen:
From the initial smart contract experiments to building open trading and lending protocols, and then to triggering large-scale capital flows, DeFi has completed in six to seven years what traditional finance took decades to achieve. Now, DeETF, as the "upgraded version of user experience" for DeFi, is taking on the task of further popularizing and lowering the barriers.
Data shows that although the overall scale of the DeETF track is still small, its growth potential is enormous. According to a report by Precedence Research, the DeFi market is expected to grow from $32.36 billion in 2025 to approximately $1.558 trillion by 2034, with a compound annual growth rate (CAGR) of 53.8%. This means that in the next five years, under the rapid development of DeFi, DeETF will not only be a part of the DeFi ecosystem but is also likely to become one of the most important application scenarios for on-chain asset management.
Standing at this point today, we can already see different types of explorers:
If the early DeFi solved the question of "can finance be decentralized," today's DeETF and projects like YAMA are addressing the issue of "can decentralized finance be affordable and accessible for more people."
Future on-chain asset management should not just be an arbitrage tool for a few, but rather a capability that any ordinary investor can master. And DeETF is precisely that key.
From MakerDAO to Uniswap, from DeFi Technologies to YAMA, every advancement in Decentralized Finance is a refreshing take on the concepts of financial freedom, transparency, and inclusiveness. Today, DeETF is redefining the way on-chain asset management works, and innovative projects like YAMA are injecting new imagination into this path.
The story is far from over. But the future is slowly taking shape.