The rapid growth scenario of DeFi 2.0 under the reorganization of order in 2026

Market Cycle Turning Point: The End of the First Curve and the Rise of the Second Curve

In mid-October 2025, the industry witnessed a historic turning point. A single-day clearing volume hit an all-time high, and within a few days, approximately $40 billion disappeared from the market. On the surface, it appeared that an extremely leveraged structure was liquidated all at once in a low-liquidity environment, but fundamentally, it signified a drastic reduction in market participants and the malfunction of platform loss mitigation mechanisms.

This event symbolized the end of the “First Curve” in the Crypto market. Over the past 16 years, Crypto has grown by creating expectations of consensus and forming speculative environments. However, throughout 2025, that era has definitively closed, and the market is transitioning to a new paradigm.

The major players remaining at the market table are all forced to adapt. Rebuilding the Nash equilibrium cannot be achieved within the existing system and will inevitably be broken by external forces under a new global configuration.

Inertia and Nullification of the Traditional Financial System

By the end of 2025, a major North American exchange announced plans to extend stock trading hours. This symbolizes how traditional finance is facing pressure from Crypto and on-chain markets and is taking defensive measures.

From regulatory trends, traditional financial institutions understand the necessity of transformation but are conflicted over maintaining vested interests. In Q2, industry reactions were highly intense, and the inevitability of change was recognized. However, entering Q3, many participants realized that the market iteration process was slower than expected, leading some to temporarily reverse their strategies. By Q4, frontline players recognized that the cartel alliance of traditional finance was completely collapsing, and they began to face more realistic reforms.

This process is quite classical. All players facing profound change form a psychological sandbox of the Gartner curve, within which the process of participating in the game unfolds.

The fundamental problem with traditional finance is not the invalidation of economic principles but systemic failures within management economics and market production relations mechanisms. Especially after the advent of the digital age, the original management systems can no longer balance regulation and freedom. A widespread misconception across the globe is that “if data exists, it will be used; if methods exist, they will be regulated,” leading to a situation where rule costs and hurdle costs far exceed opportunity and risk costs.

This “Data Medieval” effect hampers development across industries due to financial restrictions, and excessive regulation causes rigidity, creating doctrinal dependence on historical pathways.

Global Kondratiev Wave Cycle and Economic Structural Transformation

Between February 2020 and April 2022, the US M2 money supply increased by over 40%. In the face of such massive currency supply, subsequent QT and QE were merely formalistic emotional adjustments, and the economic value of interest rate adjustments has already been lost.

In the current environment, interest rate cuts are a perfect combination of emotional expectations of recipients and forced decisions by policymakers. This is a psychological constraint caused by bidirectional inertia, which has become a tool to influence markets through emotional value.

Global inflation has fully transitioned into stagflation, and the monetary and fiscal policy adjustments of many central banks have been rendered ineffective. This situation shows a remarkable similarity to the period from 1910 to 1935, suggesting that the previous Kondratiev cycle has finally come to an end.

Rapid Expansion of Emerging Developing Economies

Notably, while developed countries struggle with policy formulation, the growth rates of emerging developing countries and regions worldwide are beyond imagination.

Consistent feedback from international trade companies and payment firms is clear: “There is a demand for stablecoins or platform currencies.” In Nigeria, India, Brazil, Indonesia, Bangladesh, and many countries and regions in Africa, South America, South Asia, Southeast Asia, Eastern Europe, and the Middle East, the application growth rate of stablecoins and Crypto Finance has been exponential for three consecutive years. The actual usage proportion far exceeds that of developed economies and surpasses many local mainstream fiat currencies.

These emerging economies are rapidly expanding as “off-balance-sheet assets,” contrasting with the management difficulties under traditional mainstream global environments. The global economic structure is expected to be reconstructed within five years, and geopolitical relations will also undergo dramatic changes.

On-Chain Asset Management and the Essence of RWA

In 2025, the story of RWA experienced a remarkable revival. The reason is simple: due to the credit collapse of the First Curve, the Second Curve temporarily lacked new agreed-upon terminology, allowing RWA to emerge suddenly and earn the MVP of that year.

Centered on on-chain asset management, RWA Finance is beginning to shape a new market. However, understanding of RWA varies widely; in many regions, it is simply seen as crowdfunding through asset tokenization.

Fundamentally, what is the difference between RWA without fair value and stock crowdfunding at that time? Do illiquid RWA assets truly need tokenization, or do all RWA assets genuinely require liquidity? These questions have not been thoroughly examined by the market in 2025.

The RWA landscape in 2026 will change at a certain rate. Existing US short-term government bonds, commodities, liquidity funds, and credit loans will remain mainstream assets, but real-world business involving DeFi and Crypto Finance brought by emerging developing economies will enter the RWA market as asset suppliers, especially with rapid growth in stablecoin settlements and supply chain finance.

Rapid Expansion of the Stablecoin Market

As of Q4 2025, the total global stablecoin supply reached $305 billion, with a total transaction volume of $4.76 trillion. Comparing roughly to the current global M0 supply of $15 trillion and total global currency transaction volume of $1500 trillion, the stablecoin supply accounts for 2.0%, and its application rate reaches 3.2%.

The average activity level of stablecoins exceeds 160% of traditional fiat currencies. Furthermore, considering the compound annual growth rate of 65% over four years and various embedded factors in 2025, there are reasons to believe that Open Finance will enter a turning point toward mainstream markets within the next 1–2 years.

Implementation of DeFi2.0, DAT2.0, and Tokenomics2.0

DeFi2.0 is not just a term; it describes the fundamental changes and inevitable trends experienced by the Crypto market and Open Finance.

Why can DAT2.0 sustain the linkage value between currency and stocks? Simply put, DAT1.0 was a transfer of value from the Crypto First Curve to traditional finance, whereas DAT2.0 is a fusion of value from the Crypto Second Curve into traditional finance. Unlike the former, the latter’s value has long-term sustainable development.

Tokenomics2.0 is a broader concept. In various financial cases, Tokenomics acts like a financial circuit, continuously modifying and optimizing each financial scene. Over the evolution of the entire industry, general protocols like PT-YT (principal tokens and yield tokens) will gradually form.

These three concepts fundamentally represent the divergence between the development of the Second Curve and DeFi2.0, and are expected to become a powerful mainstream track in the 2026 market.

Outlook for 2026

Reordering of order and deepening of disorder are inevitable. The further chaotic restructuring of the macro environment and the consequent explosion of DeFi2.0 are driven by clear trends and inevitabilities.

The biggest differences from the Kondratiev cycle of the previous century are threefold. First, the speed of phase evolution from information interaction is extremely fast, with differences of 2.5 to over 5 times across various aspects. Second, the explosion space of global geopolitical contradictions is entirely different, increasing the inevitability of conflicts. Third, the nonlinear effects brought by AI and Crypto far surpass industrial electrification.

Meanwhile, the hardware conditions for human social management have not changed much; human lifespan and the emotional digestion capacity of a generation remain roughly the same.

Against this backdrop, market participants need to focus on nonlinear issues and learn to respond to nonlinear triggering situations. Incorporating unexpected changes into plans will become an essential skill for surviving in 2026.

2026 is highly likely to be the year when Crypto and Open Finance cross the gap and rapidly enter the mainstream world and financial markets as independent growth drivers.