Decentralized finance (DeFi) could be only a few years from mainstream use, according to Chainlink co-founder Sergey Nazarov. But he warned that major regulatory and institutional barriers still need to be resolved before the sector can scale globally.
“We’re about 30% of the way there,” Nazarov said in an interview with MN Capital founder Michaël van de Poppe published on YouTube on Tuesday.
Nazarov believes DeFi — peer-to-peer financial services built on blockchain rails — could reach 50% global adoption once clearer rules and legislation demonstrate its reliability.
Others in the industry share similar concerns. Curve Finance founder Michael Egorov said in February that regulatory and legal uncertainty remain the biggest obstacles to broader DeFi adoption, alongside compliance requirements such as Know Your Customer (KYC) and Anti-Money Laundering (AML) controls.
Egorov also highlighted challenges around liquidity, transaction transparency and technical security risks.
US approval could trigger a global domino effect
According to Nazarov, regulatory clarity is likely to begin in the United States before spreading internationally. “A lot of governments follow what the US does because they want to be compatible with the US financial system,” he said.
Meanwhile, Michael Selig, chief counsel for the crypto task force at the U.S. Securities and Exchange Commission, recently cautioned that “DeFi” has become something of a buzzword. He argued that regulators should instead focus on the structure of on-chain applications, their technical features, and whether any intermediaries are involved.
Nazarov said DeFi could reach roughly 70% global adoption once institutions have a clear, efficient path to deploy their capital — and their clients’ funds — into decentralized protocols.
Full adoption, he added, will only come when DeFi’s capital base grows large enough to be meaningfully compared with traditional finance.
Chainlink founder predicts full DeFi adoption by 2030
“I think we’ll be at 100% when you can show pie charts comparing the share of client or institutional capital in DeFi versus TradFi,” Nazarov said. He expects such charts to emerge by 2030, similar to today’s metrics that compare the size of the U.S. Treasury market with the stablecoin sector. Even if the percentages start small, he said, they build momentum.
“As that percentage grows, people start to realize — wow, a real share of institutional capital is now in blockchain-based systems,” he said. “That’s when you move from early adopters to the mainstream.”
DeFi lending protocols are already showing strong growth, boosted by rising institutional interest in stablecoins and tokenized assets. According to recent data from Binance Research, cumulative total value locked in DeFi lending has surged more than 72% year-to-date, climbing from $53 billion at the start of 2025 to over $127 billion.
