Is DeFi Dying as a Separate Asset Class? Maple Finance CEO Says the Lines Are Blurring

According to Sid Powell, Chief Executive of Maple Finance, the traditional boundaries separating decentralized finance from conventional capital markets are rapidly dissolving. As institutional players begin migrating private credit onto blockchain networks, the distinction between DeFi and TradFi becomes increasingly irrelevant in practice.

The End of Separation

Powell contends that DeFi no longer operates as an isolated ecosystem. Once institutions establish their operations on-chain for credit activities, they will cease viewing blockchain-based finance through the lens of a separate “DeFi” category. Instead, all capital market operations—whether traditionally called DeFi or TradFi—will converge onto distributed ledgers as the natural settlement layer.

Where Real Growth Lies

The tokenization wave taking shape differs from what many anticipated. Rather than government bond tokenization leading the charge, private credit tokenization emerges as the true catalyst for on-chain finance expansion. This shift reflects where institutional capital is actually flowing and what problems blockchain infrastructure genuinely solves.

Market Size Projections

The implications are staggering. Powell estimates that total DeFi market capitalization could eventually reach the 1 trillion dollar threshold—a figure that underscores how far the sector must mature before achieving institutional-grade scale.

Additionally, stablecoin transaction volumes are forecast to explode to 50 trillion dollars annually. This astronomical figure reflects the expected adoption of blockchain-based settlement for everyday capital movements by financial institutions worldwide.

Red Flags Ahead

Looking toward 2026, Powell anticipates a significant on-chain credit event—likely a high-profile default that tests the resilience of decentralized lending protocols. Such an event could serve as a critical juncture for institutional confidence in on-chain credit markets, potentially accelerating or decelerating mainstream adoption depending on how systems respond.