Welcome to the first edition of DeFi in 5 (this is a big one)!
Each week, we’ll aim to bring you the newest, most notable things happening in DeFi – from tokenization to trading to prediction markets and beyond.
Here’s what you can expect:
Chart of the week – the most eye-catching DeFi charts I can find
Market pulse – an overview of market conditions, yield, and narratives
Featured project – teams that are building the future of our industry
Tokenization news – tracking the mass migration of assets onchain
DeFi x AI – the latest developments in AI-powered finance
From the marketplace – the latest news from DEXs, money markets, vaults, and more
Best of the rest – any other news that caught our attention
Tons of bullet points
I seem to have launched this series during what’s been the most packed week of news in a long time. There’s a lot to go over, so let’s start!
As metals markets stay hot, gold-backed tokens are attracting serious capital. There are now over 1.1M oz. of gold represented onchain – up over 120% since early August.
📊 Token Performance
To filter out market noise/dead tokens and avoid heavy concentration of derivatives (staked tokens, vault tokens, etc.), we track our own “DeFi20 Index,” which equally weights 20 assets from leading DeFi project spanning multiple sectors:
The DeFi20 Index:
Lending – AAVE, SKY, MORPHO, KMNO, EUL
Trading/Derivatives – UNI, HYPE, PENDLE, JUP, CRV, AERO
Tokenization – ONDO, CFG, SYRUP
Yield/Asset Management – ETHFI, ENA, FF
Infra – CC, HASH, ZRO
DeFi20 Leaders and Laggards:
DeFi20 vs the market (7d returns):
DeFi 20: +2.57%
Altcoins (total market w/o top-10 assets): +2.11%
Broader DeFi (based on CoinGecko): +1%
Total Market: -2.94%
📈 Yield Tracker
Tracking the best yields in DeFi for major tokens and stables (pools/vaults w/$10M+ in assets, yields don’t include extra rewards/incentives)
Majors:
11.5% Yield: GMX’s WBTC/USDC pool on Arbitrum
11.1%* Yield: Morpho’s Gauntlet WETH vault on Katana
6.9% Yield: Marinade Finance’s MSOL staking pool on Solana
*includes 5.6% in KAT, MORPHO rewards
Stables:
29.3% Yield: Pendle’s sUSDai PT on Arbitrum
15% Yield: Wildcat’s Hyperithym Private USDC Vault on Ethereum
6.9% Yield: Avantis’ USDC pool on Base
📰 Key Narratives
Borrowing against onchain stocks
Hundreds of tokenized tickers can now be used as collateral to earn yield via major lending markets including Morpho, Kamino, and Euler.
Institutional custody of onchain collateral
Anchorage Digital, a federally qualified custodian, has integrated with Morpho and Kamino.
Lombard Finance announced plans to enable institutional BTC holders to earn on their BTC while keeping it in custody.
Agentic payments
Coinbase and Stripe are bringing payment-enabled AI agents to DeFi, rewriting the way data is accessed and monetized.
Layer Zero was all over the headlines last week when they announced the Fall 2026 launch of their new network: Zero.
As a result, Layer Zero is this week’s featured project!
It’s worth noting that before this announcement, only those with insider info knew about their plans to launch their own network. The project has historically been known as the largest player in the “interop” space – enabling fast and easy token transfers between their massive network of 160+ blockchains.
Before we dive into the announcement and its implications, I want to give some context on how influential Layer Zero already was in the industry.
OFTs
Their OFT (Omnichain Fungible Token) standard is the most widely-used way to give tokens the ability to interact across different types of blockchains. Their adoption grew 174% in 2025, with 684 OFT tokens in circulation at year end.
Stablecoins
At the end of 2025, over 71% of all stablecoins were compatible with LayerZero. Notable examples include:
Tether’s USDT0, which reached $62B in volume last year
PayPal’s PYUSD, which saw 564% supply growth after integrating LayerZero
Onchain Activity
LayerZero facilitated $133B worth of token transfers in 2025 – roughly 260% more than 2024’s $37B. The second half of the year showed major progress, totaling $93B in volume – over 130% higher than the first half.
For more stats on LayerZero’s impressive 2025 activity, check out their annual recap here.
So, what did LayerZero do now?
Last Wednesday, they publicly revealed their plans to create their own blockchain network – something they’d kept secret for ~2.5 years.
As anyone who’s been paying attention to crypto knows, announcements of new blockchains aren’t what they used to be. These days, new launches have become so common that they hardly move the needle anymore – even the most highly anticipated ones can’t seem to gain traction once they’re live.
LayerZero’s Zero network is one of the few that may actually make new chains exciting again.
Why? Because instead of trying to improve current infrastructure, it seeks to completely transform how blockchains operate.
Rather than go deep into the tech (you can do that here or here if you want), I want to try to explain this in an understandable way that nails down the core concepts.
Core Improvement #1: Zero Makes Life Easier For Validators
Most blockchains:
Transactions are validated by potentially thousands of machines around the world
All of them have to read and store all transaction history every time a “block” of transactions is accepted by the network
This major bottleneck is known as the “Replication Problem”
Zero:
Validators don’t have to constantly do these high-overhead tasks (re-executing everything)
Instead, the network generates proofs that the historical data is present and accurate
The proofs are basically a zip-file where the contents can be verified without anyone seeing them
Validators only need to download the proofs rather than entire history – much more efficient
Core Improvement #2: Zero Combines Decentralization And Performance
Most blockchains:
Claim this is true for their network, but it isn’t
Actually have to choose between decentralization and performance
Ethereum chooses decentralization – a validator node can be run on “normal” hardware, allowing anyone to contribute
Solana (and most chains) choose performance – running a validator is an expensive and large operation, because you need hardware that can process a lot of data extremely fast
Zero:
The “Core Improvement #1” process separates the execution of transactions and verification of historical data
Validators execute
“Provers” verify via proofs
The reduced overhead of validators enables the general public to run their own validator node with “normal” hardware
It also frees up memory and compute power, which is then used to improve the network’s overall performance
The result – a network with Ethereum’s decentralization and Solana’s performance
Overall, Zero is the anti-thesis of Ethereum, its L2s, and “general-purpose” L1s as we know them today. It's its own chain. An L1. But it's not a single, unified execution layer, and it also doesn't come with the friction that "the layers on top of layers" approach introduces.
This design maintains trust across a network of specialized sections that can scale massively, which Zero refers to as Atomicity Zones. Similar to a multi-core CPU, all Zones run in parallel.
Each Zone benefits from Zero’s performance, and the performance of one Zone can’t interfere with that of another Zone.
For example, assume one Zone is dedicated to trading, and another is dedicated to stablecoin payments. These activities both generate consistently high levels of activity. But since they’re separate zones, any increase of activity in one won’t affect the performance of the other.
Once Zero launches, it’ll run on 3 Zones, designed for:
General-purpose apps
24/7 institutional-grade trading
Stablecoin payments
I’ll finish this off with Zero’s impressive list of partners, including institutional heavyweights like:
Citadel – among the world’s largest market makers, handles ~25% of US equity volume
DTCC (The Depository Trust & Clearing Corporation) – world’s largest clearinghouse, processes $4Q+ per year in volume
ICE (Intercontinental Exchange) – parent company of the New York Stock Exchange
These specific partnerships show the growing influence of blockchain tech in the world of traditional finance. Other notable partners include Google Cloud, Ark Invest, and Tether.
That rounds up this week’s featured project! Let’s move onto the news.
The convergence of tokenized equities and lending markets is here, using Chainlink’s real-time, 24/7 pricing
Specifically, holders of tokenized equities from Ondo Finance and xStocks can now earn yield
This evolution of onchain opportunities showcases the composability and permissionlessness of DeFi – marketplaces and infrastructure providers can seamlessly and permissionlessly integrate with one another to bring new products to the space in a matter of hours
Quick Stats:
Ondo and xStocks make up a majority of the tokenized equity space with a combined 270+ tickers and $770M+ in value
Ondo Global Markets has brought over 200 US equities (e.g. QQQon, TSLAon, etc.) to Ethereum, Solana, and more
Ondo Integrations — Euler, Sentora, Morpho, Gauntlet
For the first time, holders of equities tokenized by Ondo Global Markets can now borrow against their positions on Ethereum via Euler Finance’s lending platform
Euler is using Sentora’s STEY (Sentora Tokenized Equity Yield) infrastructure to provide automated strategies for Ondo’s tokenized stocks to maximize risk-adjusted returns
Ondo’s SPYon and QQQon can now be used as collateral on Morpho, which is the 4th largest DeFi app with over $9B in deposits
Gauntlet, an institutional-grade asset manager, has already launched a Morpho vault with $6B+ in QQQon and SPYon deposits
xStocks Integrations — Kamino, Falcon, PiggyBank
Additionally, Chainlink is enabling this for xStocks (e.g. SPYx, QQQx, NVDAx, etc.) on Kamino – Solana’s top lending app
Falcon Finance is launching the SPYX vault on Solana to maximize yield on SPYx
PiggyBank was among the first to launch xStocks vaults with their SPYx vault last October
RockawayX launched a new RWA vault on Kamino – Solana’s top lending app – to generate market-neutral yield
About RockawayX:
The official curator of the vault – they’ll manage USDC deposits across RWA-focused apps including Figure’s PRIME, Huma, OnRe, and Solstice
One of the top digital asset managers in the world, with over $2B in AUM
Key Integrations:
PRIME – earns yield via onchain HELOCs
Huma – earns yield from fees paid by businesses who tap Huma for lines of credit
OnRe – earns yield from onchain reinsurance
Solstice – earns yield from delta-neutral managed strategies
Blackrock’s BUIDL stablecoin is now live on Uniswap, marking its first DeFi-native integration
BUIDL passes short-term Treasury yield to stakers, serving as an alternative to USDC/USDT, which accrue yield to their parent companies
This integration brings much-needed liquidity to BUIDL – while still limited to qualified investors, the BUIDL/USDC pool Uniswap is the first DeFi liquidity pool where they can swap it in real-time, 24/7
There’s currently ~$1.8B in BUIDL tokens onchain
BUIDL tokenization is handled by Securitize, which has tokenized $3.4B worth of assets – more than any other platform
BlackRock also announced they’re buying Uniswap’s UNI token
Final Roundup
The IMF brought attention to the change in collateral assets for major stablecoins USDT and USDC
Compares collateral mix from June 2021 to that in June 2025
USDT – shift from other short-term assets/cash → majority US Treasury Bonds
USDC – shift from other short-term assets/cash → split between US Treasuries and RRP agreements
The original report was published in December 2025
GromaCoin is essentially an onchain REIT – it “looks” like a stablecoin (starts at $1 value) but accrues yield over time, similar to dividends
Backed by 125+ properties, starting in the Boston area with plans to expand further
Maple Finance’s retail-focused private credit-backed assets – syrupUSDC and syrupUSDT – passed $1B in AUM
These stablecoins accrue yield from various loans to whitelisted institutions
Their total AUM (including products unavailable to retail investors) is ~$4B
Within a week of ERC-8004 going live, Daydreams launched over 32k 8004-compatible agents – track the growth here
ERC-8004 is an onchain identity system for agents that use the x402 protocol to make automated financial transactions over the internet
This lets agents build a public reputation (for creditworthiness, etc.)
Basically, x402 can monetize all data on the web – allows agents to pay for the exact data they need when they need it (as opposed to subscribing to APIs, etc.)
Also lets them incrementally buy compute power as needed to perform operations
Ethereum also launched 8004 last week and saw over 13k agents register in the first 24 hours
Coinbase launches Agentic Wallets (AWAL)
Before – wallets had to be pre-built into agents
Now – add a wallet to existing agents in seconds
Uses x402 – allows not just AI-powered research/task completion, but also lets agents actively pay for data and compute they need to give the best results
Also lets them perform DeFi operations (trade, lend, borrow, etc.) with funded wallets
See AWAL live in action here
Bankrbot has had a similar feature for a while, and its community has integrated identity features (8004, ENS) and more – works on DeFi/prediction market apps across several networks including Base, Ethereum, and Solana
Stripe is bringing x402 to millions of merchants worldwide
Allows businesses to accept onchain payments for individual pieces of data, directly charging x402-compatible agents
This will initially run on the Base network with USDC, but will expand to more networks, payment methods, and fiat currencies
Bullet launches their perps DEX on Solana mainnet
Solana is consistently the leading network when it comes to trading volume for spot assets, more than doubling the next largest chain (Ethereum) in January with $117B+ in January
However, their presence in perps volume is far from the top (currently 9th place in 30-day perps volume)
Bullet aims to change this by being the first platform to bring an institutional-grade trading experience to Solana
While liquidity builds on mainnet, this initial launch phase is gated access-only, with general access coming later
Here’s a quick overview of the tech that makes Bullet stand out on Solana and beyond
Anchorage, a federally regulated custodian, has integrated with major DeFi lending apps Morpho and Kamino
Opens the door for institutional money managers to provide yield-generating DeFi strategies while meeting compliance requirements
Morpho’s customizable loan platform has attracted billions of dollars’ worth of collateral from professional curators such as Steakhouse, Gauntlet, and more
Lombard announces Bitcoin Smart Accounts
Lombard is one of the largest “BTCfi” projects in the world, allowing over $1B in BTC to earn yield through various managed strategies
BTC has been far and away the most popular crypto asset when it comes to institutional and “whale” investors and money managers – with ~$500B currently sitting idle with qualified custodians
Bitcoin Smart Accounts enable BTC held by institutional custodians to be brought onchain and put to work earning yield – without transferring the tokens, ensuring compliance standards are still met
Royco Protocol launches Royco Dawn to whitelisted users
Splits DeFi vaults into junior and senior tranches
Junior deposits provide downside protection to Senior deposits
Junior deposits earn a higher yield to compensate the additional risk
In The Numbers:
Hyperliquid has almost doubled the volume of Coinbase in 2026 ($2.6T vs $1.4T)
EtherFi’s revenue generation is on par with major fintech apps
Revenue per user = $256
Several times higher than Wise and Revolut (~$83 and ~$60 per user respectively)
Also higher than Chime ($227/user)
Barely trailing SoFi (~$264/user)
On the heels of BlackRock’s commitment to buy UNI, top global asset manager Apollo announces they’re buying Morpho’s MORPHO token
Coinbase’s nano futures contracts for BTC and ETH are live on Interactive Brokers
Hinkal Protocol enabled private transactions on Base, Arc, and EtherFi
Robinhood Chain’s testnet goes live on Arbitrum
China has once again “banned crypto”
This time specifically focused on Yuan-pegged stablecoins and other tokens backed by Chinese assets (e.g. government debt)
The catch: future CCP-approved projects may be allowed
A long list of institutional activity on Ethereum from January
Fidelity Digital Assets launched their FIDD stablecoin
JP Morgan seeded a $100M tokenized money market fund
Qivalis – a consortium of 12 Euro-area banks announced a plans to launch a new Euro stablecoin
Tokenized commodities on the network reached a combined $5B market cap
Ondo Finance reached $1.8B in tokenized assets on Ethereum, including tokenized BitGo shares within hours of their IPO
Crypto projects have raised over $2B so far this year
Wondering if Strategy and Michael Saylor are in trouble due to the recent price drop? We covered that in-depth last week here!
Wrapping Up
That’s all for our very first issue of DeFi In Five! If you made it this far, thanks for reading.
Be sure to let us know what stuck out to you, or if we missed any other key events over the past week. And finally, make sure to subscribe below — see you next week!
