A non-exhaustive list of DeFi products I'm excited about for the next couple years:

1) Synthetic traditional assets: provide access to high quality assets. Main challenge: regulatory.

2) Decentralized derivatives: on-chain perpetual swaps, futures, options, structured products, etc. Main challenge: will they be able reel in institutional liquidity?

3) Order book-based exchanges: with L2s and ETH competitors coming online, order book-based exchanges can finally scale. Main challenge: same as above, will institutional liquidity come?

4) Fixed rate borrowing and lending: currently the main loan instruments are floating rates.

5) Under-collateralized borrowing and lending: give people the ability to borrow money without massive collateral. Main challenge: how to build trust between counterparties?

6) Staking pools: similar to PoW mining pools but for staking tokens.

7) Front-end aggregators: as DeFi assets and platforms become more complex, need front-end aggregators for users to seamlessly manage their finances.

8) Cross exchange liquidity bridges: Ability to execute financial transactions on assets from different chains. Main challenge: technical.

What did I miss?

In the long-run I'd like to see more products that serve non-speculative activities. But for now we are still in the speculative phase of DeFi. And that's fine. Speculation attracts ideas, talent, and capital.