Author: Mona El Source: coindesk Translation: Shan Ouba, Golden Finance

Co-founder of Enzyme Finance Mona El Isa said that recent mergers and acquisitions indicate that we are entering a new era in which traditional finance and decentralized finance will work together to build a unified and dynamically evolving financial ecosystem.

M&A activity in the cryptocurrency space surged in the fourth quarter of 2024, a trend that points to a new year driven by post-U.S. election sentiment. More deals are likely to come.

M&A activity is already on the rise, with Stripe’s recent acquisition of Bridge a major milestone that highlights the growing blurring of the lines between traditional finance and digital assets.

According to data from The Block Pro, transaction activity in 2024 still lags behind the all-time high of 271 transactions in 2022, indicating steady but subdued growth. But there are signs that the record could be broken in 2025. With major institutions like BlackRock, Fidelity, and Grayscale launching Bitcoin and Ethereum ETPs, and Trump’s election sparking optimism, a new wave of M&A is on the horizon.

The key question now is - what does mergers and acquisitions mean for promoting innovation in the DeFi field?

Recent high-profile acquisitions, such as Stripe acquiring Bridge and Robinhood acquiring Bitstamp, have highlighted the undeniable intersection between traditional finance and digital assets. These deals are not just about expansion, they are a clear indication that the company is looking to strengthen its offering to meet the growing needs of institutional clients who want secure custody and strong risk management.

Discussions have long pitted DeFi against traditional finance, but recent M&A activity heralds a new possibility of convergence. However, traditional finance faces many challenges when transitioning into the DeFi space, especially in terms of regulatory compliance and accessibility. To address these challenges, traditional finance requires enterprise-grade solutions that not only meet stringent regulatory requirements but also greatly simplify userexperience.

While DeFi platforms are powerful, complex interfaces are often intimidating for non-crypto-native users. Platforms like Enzyme, on the other hand, significantly lower the barrier to entry by integrating smart contracts, automated investment strategies, and risk management tools into an easy-to-use interface through transparent on-chain infrastructure. This approach not only simplifies the digital asset management process but also ensures compliance with the technology while avoiding the complexities common with blockchain technology.

For developers and managers, consolidation can provide more resources in a secure, integrated infrastructure, which is extremely Greatly simplify the innovation process. This globalization trend is bridging the gap between Web2 and Web3, gradually erasing the boundaries between the two and forming a unified and innovative space. This trend is also happening within the decentralized field.

In DeFi, mergers and acquisitions (M&A) promote the realization of composability by integrating the resources, technology and expertise of multiple projects, thereby strengthening different Interoperability between protocols. Composability refers to the ability of different protocols and applications to seamlessly integrate and work together, which enables users to build complex financial solutions and has also become an important catalyst for the growth of the DeFi space. This growing ability to integrate protocols and resources enables developers to create new financial products and lowers the barrier to entry. Developers can build powerful applications without starting from scratch, while users can easily enjoy the convenience brought by Internet services.

Liquid Staking Tokens are a prime example of composability and a key trend expected to grow rapidly in 2025. Users can not only earn staking rewards on these tokens, but also use them as liquidity or collateral, improving capital efficiency and maximizing the asset’s utility in the DeFi ecosystem.

The future of decentralized finance is bright. The mature Ethereum protocol continues to be built and optimized. These advancements, coupled with a more favorable regulatory environment and improved user experience, set the stage for significant growth in DeFi.

The future of decentralized finance lies in composability and interoperability. Networks shouldn't be a barrier to investment, but switching between multiple networks can sometimes be complicated. The simplified interface helps users focus on capturingTake advantage of opportunities rather than get bogged down by technical obstacles.

As M&A activity continues, companies will need to find a balance between the innovation of DeFi and the realities of regulation, governance and market competition. This integration is critical to building a secure ecosystem while also meeting the growing expectations of investors and developers.