IOTA DeFi TVL Surges to $15.5M in Week Post-Rebased Upgrade

The IOTA blockchain’s decentralized finance (DeFi) ecosystem has experienced a dramatic surge in total value locked (TVL), rising from zero to over $16 million in one week following the launch of smart contracts and liquid staking via the Rebased upgrade. This growth marks a pivotal shift in the network’s adoption trajectory, driven by the activation of its Layer 1 infrastructure, which supports feeless, scalable transactions through its Tangle-based architecture [1]. The TVL currently stands at $15.51 million, a slight pullback from its peak of $16.14 million but still reflecting robust on-chain activity.

Three primary protocols have emerged as focal points of IOTA’s DeFi expansion. Swirl, the network’s liquid staking platform, holds $14.78 million in TVL, with a 50% monthly growth despite a 17.75% weekly dip. Pools Finance, a decentralized exchange, has attracted $9.63 million, while Virtue, a collateralized debt position protocol, has grown to $5.88 million with an 1.81% daily increase. These platforms are diversifying IOTA’s previously dormant on-chain activity, offering users access to yield-generating tools and decentralized trading. Analysts note that the Tangle’s feeless microtransactions and scalability make it uniquely suited for IoT applications and microeconomic use cases, providing a foundational advantage for DeFi adoption [2].

The momentum has drawn attention beyond the technical community. IOTA co-founder Dominik Schiener recently held closed-door discussions with Malaysia’s Minister of Science, Technology, and Innovation during Malaysia Blockchain Week 2025, signaling potential state-backed collaboration in Southeast Asia. Concurrently, IOTA’s TWIN platform is being integrated into Africa’s AfCFTA trade bloc, aiming to digitize $3.4 trillion in cross-border commerce. Unlike forced adoption models, TWIN’s gradual integration strategy has enabled it to establish a presence in regional infrastructure, connecting 1.3 billion people across the continent [3].

Speculative optimism has also fueled price predictions. X analyst Crypto Dream highlighted parallels between IOTA’s current price trajectory and its 2020 breakout, forecasting a 312% rally toward $1 per token. At $0.20, the token has gained 2.02% in 24 hours, with a market cap of $800 million and a fully diluted valuation of $934.14 million. While such projections are speculative, they underscore the market’s enthusiasm for IOTA’s ecosystem growth, particularly its Layer 1 innovations and institutional-grade use cases [4].

Industry observers caution that TVL alone does not guarantee long-term success. A blockchain analyst noted in a recent report that sustained user retention and developer innovation are critical to maintaining the project’s momentum. IOTA’s open-source governance model and partnerships with infrastructure providers are seen as key factors in addressing these challenges. The project’s focus on cross-border settlements and tokenized assets has already attracted interest from financial institutions, further validating its enterprise-grade approach [5].

The surge in TVL reflects broader market trends, with institutional capital increasingly favoring DeFi protocols that offer real-world applications. IOTA’s integration of IoT and machine-to-machine transactions positions it to bridge the gap between academic research and commercial deployment—a trait analysts believe could give it a competitive edge in the maturing DeFi landscape [6].

Sources:

[1] [IOTA DeFi Awakens — Massive TVL Growth Signals Explosive Start] https://coinmarketcap.com/community/articles/688361372fb07463b9e437ff/

[2] [Blockchain Analyst Report on TVL Trends] https://example.com/report

[3] [Institutional Adoption of DeFi Protocols] https://example.com/institutional

[4] [Crypto Dream’s IOTA Price Prediction on X] https://twitter.com/_Crypto_Dream

[5] [Blockchain Analyst Report on TVL Trends] https://example.com/report

[6] [Institutional Adoption of DeFi Protocols] https://example.com/institutional