Key Takeaways
- DeFi as a standalone category is fading as financial activity converges on blockchains.
- Tokenized private credit is predicted to be the primary driver of on-chain finance growth.
- The total value of the on-chain finance sector is projected to reach $1 trillion.
- Stablecoin payment volume is forecast to hit a staggering $50 trillion by 2026.
- The market should anticipate a major on-chain credit default as the sector matures.
The Convergence of Finance: From "DeFi vs. TradFi" to On-Chain Markets
According to Sid Powell, CEO of Maple Finance, the era of treating decentralized finance (DeFi) as a distinct sector is over. He argues that the future lies in the seamless integration of all capital market activity onto blockchain networks. This shift will see institutions cease to differentiate between traditional and decentralized finance, leading to a unified on-chain financial ecosystem.
“DeFi is dead as a separate category,” Powell states, predicting that all capital market activity will eventually settle on blockchains.
The Engine of Growth: Tokenized Private Credit
While tokenized assets like U.S. Treasuries have gained attention, Powell identifies tokenized private credit as the true powerhouse for the next phase of growth. This shift from public to private debt instruments on-chain is expected to propel the entire sector's market capitalization toward the $1 trillion milestone.
Major Forecasts for the On-Chain Economy
Powell's vision for the near future includes two pivotal developments:
- A High-Profile Credit Default: As the on-chain private credit market expands and matures, Powell anticipates a significant, headline-making default. He views this not as a failure, but as a necessary rite of passage that will establish real-world risk parameters and legitimacy for the asset class.
- The $50 Trillion Stablecoin Wave: Driven by small businesses and neobanks seeking drastically lower transaction fees, stablecoin payment volume is projected to explode to $50 trillion annually by 2026. This would represent a fundamental transformation in global payment rails, moving a substantial portion of commercial activity on-chain.
In essence, the narrative is evolving from a battle between DeFi and Wall Street to a story of absorption and transformation. The infrastructure of blockchain and smart contracts is poised to become the new foundational layer for global capital markets, with private credit and efficient payments leading the charge.
