Digital Asset Summit 2025: Day 2 Recap - Bridging TradFi and DeFi in the New Regulatory Era

The Digital Asset Summit 2025 kicked off with a bang in New York City this week, bringing together the brightest minds in blockchain, finance, and policy. Day 2 delivered profound insights into the rapidly evolving landscape of digital assets, with discussions ranging from valuation frameworks to real-world asset tokenization. Let me take you through the highlights of what might be the most consequential crypto conference of the year.

The New Regulatory Dawn

Perhaps the biggest news came from Brad Garlinghouse, CEO of Ripple, who announced that the SEC is no longer pursuing their appeal in the Ripple case after a nearly four-year legal battle. "This is a moment to celebrate," Garlinghouse declared, marking a significant victory not just for Ripple but for the broader crypto industry.

The regulatory tide seems to be turning, with Bo Hines, Executive Director of the President's Council of Advisers on Digital Assets, sharing exciting developments on the administration's approach to crypto. "This is really a coming of age for digital assets and the crypto space, and we wanted to make sure that we were shepherding that," Hines stated. When asked about the government's interest in acquiring crypto assets, he quipped, "They keep asking me how much [crypto] do you want. That's like asking a country 'How much gold do you want?' I mean, as much as you can get."

Congressman Ro Khanna also made an appearance, emphasizing bipartisan cooperation: "If there's something that's good for the American people, I'll always look to be across the aisle."

Valuation Frameworks: Beyond Traditional Metrics

A fascinating panel on crypto valuation frameworks revealed that traditional metrics aren't directly applicable to crypto due to the early stage and volatile nature of projects. The consensus was that token prices are "90% flows and 10% fundamentals," with the market cap of XRP versus Ethereum cited as evidence.

Panelists noted that investment firms are becoming more selective, focusing on doxxed teams building superior products that enable token value capture. There's also a shift toward equities where traditional valuation metrics are more relevant.

One intriguing concept discussed was "moneyness" – the idea that Layer 1 tokens need to function as money to succeed, enabling their use as collateral and increasing the velocity of money. As one panelist put it, "Moneyness for a token is the same as the PE valuation on a stock."

Real World Assets: The Next Frontier

The tokenization of real-world assets (RWAs) emerged as a major theme, with SuperState presenting its tokenized stable fund designed for crypto-native customers like protocols, DAOs, and foundations involved in DeFi.

MakerDAO is allocating a billion dollars to RWAs and could potentially invest $5-10 billion in the future, using SuperState alongside BlackRock and Centrifuge to manage assets backing their stablecoin.

The spectrum between permissionless and permissioned assets was explored in depth. While permissionless assets cater to on-chain DeFi users who may not want rigorous onboarding, permissioned assets target institutional investors seeking yield-bearing products with appropriate compliance.

As one speaker noted, "Tokenization can be seen as replacing the backend plumbing of traditional finance infrastructure with blockchain," with benefits including cost-effectiveness, efficiency, and 24/7 trading.

DeFi and TradFi: The Great Convergence

Sergey Nazarov of Chainlink and Stani Kulechov of Aave discussed the growing collaboration between DeFi and traditional finance. Aave is developing an institutional-grade version called Horizon, enabling various activities with RWAs, while Chainlink focuses on making off-chain assets more auditable and bringing trust to these assets on-chain.

"The internet-based financial system was a transition from paper, and now there's a transition from the internet-based financial system to the Web3 financial system. And that understanding definitely did not exist there four or five months ago," Nazarov observed.

Aave was described as "the JP Morgan of DeFi" due to its reliability and stringent security measures, while Chainlink provides critical infrastructure for reliability in data, cross-chain operations, and RWA management.

Macro Perspectives: Fed Policy and Global Economy

Mohamed El-Erian provided valuable insights on the Federal Reserve's stance and the broader economic landscape. El-Erian warned against dismissing "soft data" (survey data) as purely political, noting that both households and companies anticipate higher inflation in the short and long term.

"Pay attention to what companies are saying, companies are worried about higher costs. Companies are asking the question, can we pass on the higher costs into higher prices?" El-Erian cautioned.

On the role of stablecoins in the economy, El-Erian noted, "Stablecoins are an important addition to what we have in the ecosystem," while distinguishing between Bitcoin and gold: "Gold has an identity. Bitcoin has multiple identities. And that's the difference between the two."

Building the Market Data Infrastructure

Mike Cahill, CEO of Pyth Network, presented their vision for revolutionizing market data. Valued at $1 billion, Pyth aims to create a global financial market by providing real-time, low-cost market data across asset classes. With over 120 institutions supplying data encompassing more than 1,200 price rates, instruments, or symbols, Pyth is used by 500 applications on over 100 blockchains.

Partnerships with trading firms like Jane Street and Virtue, banks like Nomura, crypto exchanges like Binance and Coinbase, and fintechs like Revolut highlight the broad industry support for this initiative.

"Our ultimate goal? We want to have, literally, the price of everything everywhere... We're trading a truly global financial market," Cahill stated.

Institutional Adoption: From ETFs to Strategic Reserves

Cathie Wood of ARK Invest highlighted the "digital property rights revolution" as the "sleeper" of the three revolutions currently underway. Meanwhile, Matt Hougan of Bitwise shared insights on ETFs, noting that "ETFs are going to end up being $10, $20, $30 billion products, but only when ETH gets its vibe back."

Kyle Samani predicted a "high probability" of seeing a staking ETF this year, adding an additional layer to the institutional offerings in the space.

With Eric Peters of Coinbase suggesting that President Trump is prepping us for a potential "shallow recession" and the administration's increased interest in Bitcoin reserves putting "pressure on everyone" who has one, the institutional landscape appears poised for significant evolution.

Looking Forward

As Day 2 of the Digital Asset Summit 2025 concluded, the overwhelming sentiment was one of optimism tempered with pragmatism. The industry stands at a crossroads, with regulatory clarity emerging, institutional interest deepening, and the lines between traditional and decentralized finance blurring.

In the words of Brad Garlinghouse, "Tribalism is the enemy of progress here." This collaborative spirit was evident throughout the day's discussions, suggesting that the path forward lies not in competition but in cooperation across the entire financial ecosystem.

As we move into Day 3 of the summit, one thing is clear: the digital asset space is maturing rapidly, and those who can navigate the intersection of innovation, regulation, and traditional finance will be best positioned to thrive in this new era.