M R Yuvatha, Senior Correspondent, Startupcity

• Indian startups integrate blockchain with banks for compliant, tokenized finance solutions.
• $500M+ funding in 2025 fuels TVL, RWA tokenization, and hybrid ecosystems.
• From rural credit to insurance, they are shaping India’s $500B tokenized future.

As India solidifies its position as the world's third-largest fintech hub in 2025, the fusion of Decentralized Finance (DeFi) with traditional finance (TradFi) is no longer a distant dream it's a burgeoning reality.

With over 10,200 fintech startups and $1.45 billion in sector funding through September 2025, according to Tracxn, Indian DeFi innovators are bridging the gap between blockchain's borderless potential and the regulatory rigor demanded by banks like HDFC, ICICI, and global players such as MUFG.

DeFi's total value locked (TVL) in India has crossed $5 billion this year, fueled by real-world asset (RWA) tokenization and compliant yield products that echo TradFi's stability. Boston Consulting Group forecasts RWAs in emerging markets like India to reach $2 trillion by 2030, drawing institutional capital wary of crypto's volatility.

These startups aren't just coding smart contracts, they're crafting hybrid ecosystems with KYC integrations, RBI-compliant stablecoins, and tokenized bonds that appeal to conservative investors. Backed by VCs like Peak XV and Bessemer, and partnering with legacy banks, they've secured over $500 million in funding this year alone.

Also Read: Why NFT Driven Startups Are Resurrecting Gamer Funding

India’s DeFi Power Surge

Here are the top 10 Indian DeFi startups captivating TradFi list that ranked by funding traction, TVL growth, and institutional tie-ups.

From Mumbai's crypto exchanges to Bengaluru's protocol labs, they're poised to inject $100 billion from Indian banks into DeFi by 2027.

Polygon Labs

Founded in Mumbai in 2017 as Matic Network, Polygon Labs has evolved into India's DeFi crown jewel, offering a layer-2 scaling solution that slashes Ethereum gas fees by 99.9%. Its AggLayer enables seamless cross-chain DeFi liquidity, powering over 1,000 dApps with $3 billion TVL. In Q1 2025, Polygon's POL token upgrade unlocked restaking yields up to 8%, attracting DeFi protocols like QuickSwap.

TradFi hook: Partnerships with Reliance Jio for Web3 telecom payments and NRW.BANK's €100M tokenized bond issuance in July 2025. HDFC Bank piloted Polygon for tokenized fixed deposits, ensuring SEBI compliance.

Funding: $451 million total, including a $450 million round in 2022 led by Sequoia Capital India (now Peak XV) and SoftBank Vision Fund. A $50 million extension from Mark Cuban and Balaji Srinivasan in March 2025 fueled AggLayer expansions.