L1 Scaling Failures, Growth of Rehypothecation & Mass Stablecoin Adoption | 2025 Predictions

In this episode, Mike and Nick discuss three major trends they expect to shape crypto in 2025: the inevitable scaling challenges facing monolithic L1s like Solana and Ethereum, the expansion of rehypothecation across DeFi protocols and bridges, and massive growth in stablecoin adoption driven by regulatory tailwinds and institutional issuers. They explore technical constraints around L1 scaling, analyze the business dynamics pushing protocols toward rehypothecation, and examine why stablecoin market cap could exceed $450B. The conversation also covers complementary predictions around ZK proofs, TEEs, and the American crypto renaissance. Thanks for tuning in and happy holidays!
- -

--
Timestamps:
0:00 Introduction
1:48 Solana & Eth Scale Fails
7:25 American Crypto Renaissance
11:28 Institutions Launching Chains
19:58 Stablecoin Marketcap Exceeds $450B
24:30 2025 is zk Year
29:24 TEE Growth
39:04 Fee Switches, Rehypotheticating Assets
45:23 Celestia 20mbps Throughput
50:26 AI & Crypto Bubble
1:00:23 New Media Models
- -
Disclaimer
Expansion was kickstarted by a grant from the Celestia Foundation.

Nothing said on Expansion is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only, and any views expressed by anyone on the show are solely our opinions, not financial advice. Rex, Jon, and our guests may hold positions in the companies, funds, or projects discussed.

[kristiklaudy]

Thanks so much for the episode! Great predictions and I think that most of them will be spot on. And have to agree. I'm also missing the bear a bit.

[tycn]

Solana with light protocol certainly will scale to as big as the world needs

[AndreAnyone]

What is "T.E." or "TEs"

[OthaRaffaela]

Thanks for the breakdown! I need some advice: I have a SafePal wallet with USDT, and I have the seed phrase. (alarm fetch churn bridge exercise tape speak race clerk couch crater letter). How should I go about transferring them to Binance?

[amoeba]

Monolithic L1s and general purpose L2s will always be testnets for apps, because noisy neighbors and MEV. When apps become big enough they will chose to launch their own appchains.

[desmondchan]

While I'm unsure of the reason why the original podcast host left (i hope all is well irl) i am thankful that Mike is at the helm now.
Expansion podcast was very difficult to listen before as the previous host was unable to put his biases aside and came off as very condescending with many snarky comments and facial expressions. Having biases is fine but unfortunately not as a host as it doesn't allow the viewer to form their own opinions which is the point of a podcast.
Although the cohost had some good and unbiased opinions.

[joegasparro]

Too advanced for me. I cannot really follow what they are saying. New to crypto.