Track market-moving stories before they get noisy

Not financial or tax advice. PANews content is strictly educational and informational and is not investment advice, financial advice, tax advice, legal advice, or a solicitation to buy or sell any digital asset, security, or financial product. Do your own research and consult qualified advisers.

Disclosure. PANews may publish sponsored content, partner content, advertisements, affiliate links, event promotions, and market commentary involving Web3 projects, service providers, or financial products. PANews personnel, contributors, or affiliates may hold digital assets or other interests related to covered topics. See our Terms of Service.

This site is protected by reCAPTCHA.

Compound’s COMP governance token rose 27.3% over 24 hours on October 20, outpacing Bitcoin and Ether, The Defiant reported. The token also led both benchmarks over the past seven and 28 days.

No announcement, governance vote or partnership has been identified as a catalyst for the move. COMP had traded around $21.60 on October 17, according to CoinMarketCap data.

Protocol deposits lag the token rally The rally has not been matched by activity on the lending protocol. Compound’s total value locked remains below its late-September level, according to The Defiant.

Compound’s protocol TVL stood at about $1.53 billion in early September, when the Compound Foundation launched an Institutional Market for USDC lending on Compound v3. The market accepts ETH collateral at loan-to-value ratios of up to 87%, as well as wstETH, WBTC and cbBTC, and is part of a $52 million institutional program.

No link between the institutional push and this week’s price move has been reported.

Disclosure: This article was edited by Vivian Nguyen. For more information on how we create and review content, see our Editorial Policy.

Fudan University's Qiu Xipeng team raises over RMB 1 billion in funding, plans to build an AI assistant similar to the one in the movie *Her*

Beating AI News (Dongcha) — Mosi Intelligence, founded by Fudan University professor Qiu Xipeng, announced the completion of over RMB 1 billion in Pre-A round financing, led by Huake Fund, with participation from Guokai Science and Technology Innovation and Shanghai Science and Technology Innovation Fund, among others. Founded at the end of 2024, the company is led by Li Shimin, a student of Qiu Xipeng, as its CEO. The proceeds from this round will be used for research and development of full-modal real-time interactive technology and global commercialization. Mosi aims to build AI that not only understands human speech but also grasps users' emotions and surrounding context. For example, if a user says "It's a bit cold" in a car, the AI will adjust the air conditioning based on in-vehicle temperature, the speaker's identity, and past preferences. It also needs to know when to respond and when to remain silent. Technically, the team has open-sourced models including MOSS-Audio and MOSS-VL-Realtime. The former can analyze emotions in speech, identify different speakers, and recognize ambient sounds. The latter can continuously process video, answer questions in real time while viewing, and revise responses based on changes in the visual feed. Currently, Mosi is integrating voice, vision, memory, and tool calling capabilities into the MOSS Live real-time interaction system, targeting use cases such as smart cockpits and AI hardware. The company said it has already delivered products to some enterprise clients, with a long-term goal of building an AI assistant like the one in the movie *Her*, capable of continuously understanding the user's context.

4 minutes ago

Hong Kong, China will list its second spot Solana ETF on October 13.

According to official announcements from Solana, Hong Kong will launch its second spot Solana ETF. The Pando Solana ETF (2831.HK) is scheduled to list on the Hong Kong Stock Exchange on October 13. Solana noted that the total net asset value of global spot SOL ETFs currently stands at $1.9 billion, with cumulative net inflows reaching $1.61 billion.

4 minutes ago

Blockchain firm Wuwen Xinqiong secures 2.3 billion yuan in Series C funding, with no plans to build data centers.

Beating AI Express News: Tsinghua-backed AI infrastructure firm Wuwei Xinqiong has secured 2.3 billion yuan in Series C financing, bringing its total funding to 4.3 billion yuan. Founded in 2023, Wuwei Xinqiong does not develop chips or build its own data centers. Instead, it integrates computing power from chips including Huawei Ascend, NVIDIA, and AMD via software, offering large language model (LLM) training and inference services to clients. Developers can also directly call models through APIs without self-deployment. Bloomberg reported on October 1, citing people familiar with the matter, that Wuwei Xinqiong has secretly submitted an IPO application to the Hong Kong Stock Exchange, with an expected listing as early as the first half of 2027. Its pre-IPO valuation is said to be around 14.3 billion yuan.

4 minutes ago

Bank of Korea Governor apologizes for insufficient risk warnings on single-stock leveraged ETFs

Bank of Korea Governor Rhee Chang-yong said on the 12th at the National Assembly’s Finance and Economy Committee state audit meeting: “We failed to issue sufficient warnings about single-stock leveraged ETFs, and we apologize to the public for this. At the end of May, I did not fully grasp the volatility in South Korea’s domestic stock market and the memory chip sector.” Additionally, regarding the Bank of Korea’s June Financial Stability Report, which had judged that single-stock leveraged ETFs “are expected to prevent domestic investment funds from flowing overseas and help expand foreign capital inflows,” Rhee also admitted the judgment was wrong, stating: “In hindsight, this assessment was inappropriate.”

4 minutes ago

The cross-chain interoperability sector has rallied sharply, with W leading the gains, followed by ZRO, AXL, STG and others.

According to HTX market data, tokens in the cross-chain interoperability sector have rallied sharply, with Wormhole (W) leading the surge, gaining over 60% in 24 hours and briefly breaking $0.03. LayerZero (ZRO) also strengthened, surpassing $2.2 with a 24-hour increase of more than 12%. Axelar (AXL) crossed $0.06, rising 9.7% in 24 hours; Stargate (STG) broke $0.2, up 23.7% in 24 hours. On the news front: Wormhole is advancing W 2.0 tokenomics, introducing reserves, staking yields and a bi-weekly unlock mechanism, and has completed multi-chain deployments for Hyperliquid HYPE as well as institutional-grade integrations including Ripple RLUSD. LayerZero has seen a sharp recent growth in TVL, launched the Bridge Sentinel security solution in partnership with Blockaid, and completed the integration of Stargate (STG) tokens into the ZRO ecosystem while carrying out ongoing buybacks. Axelar is expanding multi-chain connections, actively participating in the XRP ecosystem as a bridge for the XRPL EVM sidechain. Stargate is finalizing its token merger and migration to the LayerZero ecosystem, with multiple major trading platforms supporting STG-to-ZRO conversions.

4 minutes ago

Analysis: Bitcoin closes above $83,000 on the weekly chart, bulls remain in control

Benjamin Cowen, founder of crypto market research platform ITC, posted that Bitcoin closing above $83,000 on its weekly chart signals bulls remain in control, while bears need to prove they have taken over market dominance. Cowen noted that based on his past experience, employing the dollar-cost averaging (DCA) strategy in the second half of U.S. midterm election years is a prudent move; this strategy worked in 2018 and 2022, and he hopes it will hold true in 2026.

4 minutes ago

Gm everyone,

Proposal 613 was cancelled by the Proposal Guardian on 7 October. I am putting forward a narrower alternative for discussion.

It does not close the EPCF. It changes who holds the keys. The EPCF and the mainnet SVR revenue would move from Safes the Foundation controls alone to the Community Multisig, which needs five of nine signers.

The funds Pool Holdings on 8 October Who can move it today After this proposal EPCF 500,000 USDC and 4,583,411 USDC supplied to cUSDCv3 2-of-3 Safe; two signers are Foundation nominees Community Multisig, 5-of-9 Mainnet Chainlink SVR 355.95 ETH 2-of-4 Safe “controlled by the Foundation” Community Multisig, 5-of-9 The same two addresses, 0x0660…6bF2 and 0xA415…897E, are owners of both Safes and meet both thresholds on their own.

How this differs from Proposal 613 Proposal 613 closed the EPCF and sent everything to the Governor Timelock. @pennblockchain objected that this removes the fund’s rapid-response role, and other delegates said the same in their vote rationales.

That objection is fair, and this alternative accepts it. The EPCF keeps its purposes, its size and its 48-month term. Emergency deployment stays available.

The problem is sole control The DAO has already decided what custody of DAO funds should look like. The Treasury Escrow is owned by the Governor Timelock. The TMC needs four of six signers to start a withdrawal. Every withdrawal waits out a cooldown, the Community Multisig can block it, and governance can reclaim the assets.

The EPCF and the SVR revenue have none of that.

EPCF. Proposal 535, Section 6, gives the Foundation two of three signers. Section 4 lets it deploy funds “at its discretion when, in its judgment” a threat qualifies. SVR. The Foundation’s March update says the Safe “is controlled by the Foundation and held in trust for the DAO”. It adds that there are “no explicit governance instructions” for the funds. Together that is about 5.08M USDC and 356 ETH of DAO money behind two keys from one organisation.

If the treasury itself sits behind a committee, a cooldown and a safeguard, why do these two pools sit behind nothing?

Why this matters now Section 3 of Proposal 535 lets the Foundation:

convert a portion of EPCF assets into COMP and delegate such COMP for the purposes of participating in Compound governance.

The V2 reserves show how that kind of discretion has been used. Proposal 536 gave the Foundation 8.42M DAI “exclusively to support protocol operations and governance continuity”. Its text never mentions delegation or using the entirety of the funds to purchase COMP and vote on its own proposals. The chain shows the following.

Date (UTC) What happened Transaction 9, 15 and 25 April 7,988,003 USDC left the V2 Reserves Safe for one address, which forwarded all of it to a Binance deposit address by 26 April 1, 2, 3 14 April The Safe delegated its COMP voting power to the Foundation tx 5 May, 09:46 344,780 COMP arrived in the Safe, 58 minutes before the voting snapshot for Proposals 580 and 582 tx 5 May, 14:46 The Foundation voted 912,717 COMP for Proposal 580, which created the TMC tx 20 and 21 May 100,000 COMP left the Safe for that same address and was forwarded to a second wallet 1, 2 22 May to 10 September That wallet deposited COMP at eight exchanges: Binance, Bybit, OKX, Coinbase, KuCoin, Bitget, Gate.io and Bitvavo. Net of what came back, all 100,000 was on exchanges by 10 September wallet 2 September 900,261 USDT arrived in the Safe from that wallet tx 3 and 10 September A further 50,000 COMP took the same route 1, 2 As of 8 October that wallet has sent 213,800 COMP to exchanges and received 93,049 back. It still holds 29,250.

The Foundation’s 28 September statement says “there has been no trading”. Trades inside an exchange are not visible on-chain, so I cannot say how much was sold. The Foundation can. It has not published its agreement with the trading firm or the purchase, transfer and disposal records. None of this activity is reported in the “Transparency Threads”.

I have called this misappropriation, and the Foundation disputes that.

Another wallets activity also raises similar questions. 0xb164…6432 delegates to the Foundation’s voting address. It received 60,028 COMP before the Proposal 535 snapshot in February and sent all of it to the same Binance deposit address 4 hours 25 minutes after voting closed. In May it received 100,024 COMP before the snapshot for Proposals 580 and 582, and began sending it back 28 minutes after voting closed.

Why the Community Multisig It is nine organisations, not one. Five of nine must sign. It already holds the DAO’s safeguard roles. It is the Pause Guardian, the Safeguard on the Treasury Escrow and the Proposal Guardian. It is fast. On 7 October it executed a 5-of-9 transaction less than nine hours after Proposals 612 and 613 were queued. It was suggested at the start. In February, @blockful proposed a DAO-elected council or the Proposal Guardian members as managers, so that responsibility would not rest solely with the Foundation. I have criticised this multisig’s composition, and I stand by that. This proposal is the minimum, not the ideal. Five of nine signers from nine organisations is a stronger check than two signers from one.

Compound DAO is voting on whether its treasury should have to wait longer before moving money. Proposal 612 would stretch key treasury delays from two days to ten, giving COMP holders more than a week to react before funds leave.

The vote is already lopsided. A wallet linked to delegate Humpy has cast 1.75 million COMP votes in support, enough to push the proposal past quorum. Against votes sit at 921,000.

What Proposal 612 actually changes Ugur Mersin submitted the proposal on October 2, 2026. Voting opened on October 4 and is scheduled to wrap up on October 7.

The core change targets two settings. The Treasury Escrow withdrawal cooldown would rise from 2 days to 10 days. The Treasury Timelock minimum delay would also climb from 2 to 10 days.

The proposal also sets an expiration on the Escrow at 17 days. That creates a seven-day withdrawal window after the ten-day cooldown ends. If funds are not withdrawn in that window, the opportunity lapses.

Advertisement

Proposal 612 would give the Governor Timelock explicit roles as both executor and canceller over the Treasury Timelock. The main governance contract would hold the power to push treasury actions through, and also the power to kill them.

The stated goal is to line up treasury execution timelines with Compound’s full governance process. A two-day window is shorter than the time it takes the DAO to propose, debate, and vote on almost anything.

Why the treasury is under a microscope The proposal did not appear out of thin air. It follows recent activity by the Treasury Management Committee, or TMC.

On September 29, 2026, the TMC transferred $3 million in stablecoins. It then deployed $2 million USDC into a Uniswap V3 COMP position. The two-day delays governing these moves were set under the 2026 Treasury Management Program.

Recent accusations asserted that the Compound Foundation swapped 8.42 million DAI for roughly 344,780 COMP shortly before important proposal votes. Those are allegations, not findings, but they help explain why treasury oversight has become a front-burner issue.

Humpy returns to the spotlight Humpy has a history of large COMP accumulation and has been involved in governance proposal dynamics across various DAOs.

The 921,000 COMP voting against shows the proposal is not universally popular. Some delegates may see ten days as too slow for a committee tasked with managing capital in fast-moving markets.

What this means for Compound and COMP holders If Proposal 612 passes, every significant TMC action would come with a ten-day public waiting period and a clear path to cancellation through governance. Transfers like the $3 million stablecoin move or the $2 million USDC liquidity deployment would sit in a queue long enough for delegates to review, debate, and potentially block them.

A ten-day delay plus a seven-day withdrawal window means treasury actions could take more than two weeks from approval to completion.

The things to watch are straightforward. First, whether the vote holds through the scheduled October 7 close. Second, how the TMC adjusts its strategy under longer delays if the proposal passes. Third, whether the allegations involving the Compound Foundation’s DAI-to-COMP swap lead to further proposals targeting governance integrity.

Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.

Records show 344,780 COMP increased the Foundation’s voting power before a $52 million V4 budget vote. The proposal had enough support to pass without those tokens.

Free newsletters

Good reporting. Delivered.Choose your coverage: crypto and DeFi, the future of finance, or both.

Free. Unsubscribe anytime.

Not financial or tax advice. PANews content is strictly educational and informational and is not investment advice, financial advice, tax advice, legal advice, or a solicitation to buy or sell any digital asset, security, or financial product. Do your own research and consult qualified advisers.

Disclosure. PANews may publish sponsored content, partner content, advertisements, affiliate links, event promotions, and market commentary involving Web3 projects, service providers, or financial products. PANews personnel, contributors, or affiliates may hold digital assets or other interests related to covered topics. See our Terms of Service.

This site is protected by reCAPTCHA.

Sovereign AI is emerging as Wall Street’s next big AI trade. Instead of betting on which chatbot wins, investors are looking at who controls the data and infrastructure underneath every model.

The idea surfaced on the Compound and Friends podcast, where analyst Dan Ives flagged Nvidia and Palantir as early beneficiaries.

What Sovereign AI Actually MeansSovereign AI means a country or company keeps its own data and AI models under its own control instead of running them through someone else’s platform.

Nvidia CEO Jensen Huang has pitched a national version of this idea for years. He has told governments in India, Japan, France, and Canada to keep their data at home.

Rather than send it to foreign model providers, Huang argues, nations should build the infrastructure themselves. He calls the resulting spending the largest infrastructure buildout in human history, projected at $85 trillion over 15 years.

In July, Huang put £500 million into UK cloud firm NScale. He called Britain a future “AI superpower.”

Palantir is running the same playbook for enterprises. In June, it partnered with Nvidia on a Sovereign AI Operating System.

The system lets companies train models on their own hardware. It keeps the resulting model weights in-house instead of renting a hosted API.

Palantir’s stock has drawn fresh Wall Street attention since. Its US commercial revenue jumped 149% year over year in the second quarter of 2026. Palantir tied that jump directly to sovereignty demand.

What Could Happen Next, According to Tom LeeFundstrat co-founder Tom Lee has a warning about ceding AI control. On the same podcast, he flagged the risk of relying on models built and trained by someone else.

China controlling these models will make these recursive loops will like make you dumb you know like or they’ll like lead you to wrong conclusions like it’s a kind of mind control.

Lee made the comment on the Compound and Friends podcast.

Lee also argues that institutional investors still have room to add AI exposure. He notes the biggest gains so far remain concentrated among a narrow group of early backers.

Whether sovereign AI is a genuine edge or clever marketing is still being tested. But with Nvidia and Palantir both leaning on the idea, sovereign AI looks set to stay part of the conversation.

Disclaimer

This Explainer provides general factual and educational information. It is non-personalised, does not consider your circumstances or assess suitability, and is not investment research, financial, investment, legal or tax advice, an offer or a recommendation. References to assets, products, providers, protocols or laws are illustrative and do not imply endorsement. Information, regulation and availability may change or vary by jurisdiction; verify material facts using official sources. Crypto-assets and related products may result in total loss.

The market takes ETH, wstETH, WBTC and cbBTC as collateral against USDC at loan-to-value ratios of up to 87%. Compound says borrowing is open to anyone, with approval required only for the 200,000 USDC in supplier rewards.

Compound Foundation has opened a USDC lending market that takes ETH, wstETH, WBTC and cbBTC at loan-to-value ratios of up to 87%, three weeks after relaunching the protocol around institutional credit.

The Institutional Market is the first product out of the $52 million program COMP holders approved in May, and it went live under a control structure the DAO never voted on. The Treasury Management Committee administers the market and a separate Safe holds authority over its collateral and parameters, an arrangement a Compound delegate is now asking COMP holders to reverse.

The market lends USDC against ETH, wstETH, WBTC and cbBTC, and runs on Compound v3. Compound holds $1.53 billion in total value locked with $638 million borrowed against it, sixth among lending protocols on DefiLlama and up 23% over 30 days. Ethereum carries $1.42 billion of that, or 93%. COMP trades at $20.88, up 9% over seven days, for a market cap of $212 million.

"With today's Institutional Market launch, we are taking the first step toward building infrastructure to meet institutional client demands, including better capital efficiency, clearly defined risk, and a much higher standard of service," said Aaron Schnarch, executive director of Compound Foundation. "We are encouraged by the market demand, and look forward to launching additional capabilities over the coming months."

Oversubscribed At LaunchCompound says the market was oversubscribed on day one, with DeFi Saver, K3, KPK and Yearn taking part. The company gave no figure for how much was subscribed.

"Compound is combining the capital efficiency of onchain markets with the level of service institutional participants expect. The ability to access more efficient borrowing while working directly with a team that understands institutional requirements makes this a compelling new market for us," said Marcelo Ruiz de Olano, co-founder and CEO of KPK.

Four Assets, One BorrowThe collateral list is short and liquid: two forms of ether and two forms of wrapped bitcoin.

Compound's argument is that a market holding only those four assets can run higher loan-to-value ratios than one that has to price the tail, and that lenders capture better economics as a result. Borrowing is open to anyone. The approval process and a 100,000 USDC minimum deposit apply to the boosted supplier rewards, which run to 200,000 USDC paid pro rata over three months against a $20 million supply cap.

Compound's market page puts ETH at an 87% loan-to-value ratio, wstETH at 85%, and WBTC and cbBTC at 81%, with a $10 million borrow cap on each. Liquidation factors run from 93% on ETH to 86% on the two bitcoin assets, and liquidation penalties from 5% on ETH to 10% on WBTC and cbBTC.

The Foundation has described the market to delegates as an Institutional Comet built under v3.5, outside the V4 roadmap the DAO funded, to test an institutional use case. Compound also says v3 has run four years without an exploit, a claim worth stating as the company's own.

Who Holds The KeysCompound delegate ugurmersin asked COMP holders on Sept. 9 to move ultimate control of the market to Compound governance, writing that the DAO "does not currently appear to have ultimate control over Institutional Comet" and that he could find no governance authorization for the current structure or any way for COMP holders to revoke it. The proposal would leave day-to-day operation with the Foundation and the committee while requiring the administrators to publish a full permissions map within 10 business days and transfer ultimate authority within 30. It also notes that the committee's mandate from the DAO covers treasury management, not administering a lending market. The Foundation had not responded on the forum as of Wednesday.

Mostly Still In ReserveCOMP holders approved the budget on May 8, with 1.88 million COMP in favor and none against, and it executed two days later. The Foundation made it public on Aug. 17 alongside four hires from Coinbase, Anchorage, NEAR and Maple. Schnarch, the executive director, was chief operating officer of Anchorage Digital and chief executive of Coinbase Custody. The two-year budget runs $28 million for operations and $24 million for growth, but only $14 million went to the Foundation's multisig; the other $38 million sits in reserve against milestones that include a staffed engineering team and a production v3 integration kit.

Shipping an institutional product three weeks in is the first of those milestones met in public. Whether the remaining $38 million follows is a DAO decision, not a Foundation one.

The $480 Billion LineCompound's boilerplate puts the protocol at "approximately $480B in deposits and borrowing volume" since 2018. Compound sits behind Aave's $17.5 billion and Morpho Blue's $9.6 billion in a lending category holding $50.2 billion across 639 protocols, with 3.1% of the total.

Compound wrote the template for onchain lending in 2018 and now holds less than a tenth of Aave's deposits, and the institutional market is its attempt to win back size on terms and service rather than rates. Compound calls it the first in a planned series built around different collateral types and borrower profiles.

CORRECTION, Borrowing is open to anyone and approval applies only to the supplier rewards; COMP holders approved the program in May and the Foundation made it public in August; the participant is K3. The story has also been updated with the market's liquidation parameters and with a governance proposal filed Sept. 9.

Compound Foundation has launched a USDC lending market with loan-to-value ratios of up to 87% as part of its $52 million plan to attract institutional capital.

Summary

The market supports ETH, wstETH, WBTC, and cbBTC as collateral for USDC borrowing. Loan-to-value ratios range from 81% for Bitcoin collateral to 87% for ETH. Compound said DeFi Saver, K3, KPK, and Yearn joined the oversubscribed launch. A Compound delegate has questioned whether the DAO retains final control over the market. Compound Foundation said in a Sept. 9 announcement that its Institutional Market runs on Compound v3 and separates selected collateral into a lending pool designed around specific liquidity and risk conditions.

Borrowers can use Ether (ETH), wrapped staked Ether, Wrapped Bitcoin, or Coinbase Wrapped BTC to access USDC. The market gives ETH an 87% loan-to-value ratio, while wstETH carries an 85% ratio. WBTC and cbBTC each have an 81% ratio.

Each collateral asset has a $10 million borrowing cap. Liquidation factors range from 86% for WBTC and cbBTC to 93% for ETH, while penalties begin at 5% for ETH and rise to 10% for both Bitcoin-backed assets.

Compound promoted the product as an institutional-only market in its announcement. However, its official market page states that anyone can borrow, while approval applies to suppliers seeking additional incentives.

Compound market pairs higher LTVs with a narrow collateral list By limiting the market to four liquid collateral assets, Compound said it can offer terms based on their individual risk and liquidity profiles instead of applying one set of conditions across a large group of tokens.

Institutions often manage larger positions and follow internal risk controls that differ from those of retail users, according to the foundation. Compound said the new structure provides increased borrowing capacity, defined collateral parameters, and direct operational support.

A dedicated contact will assist participating institutions with onboarding, market updates, and other operational matters. Compound also said USDC suppliers will receive the standard market yield, while approved lenders can qualify for extra incentives.

The rewards program will distribute as much as 200,000 USDC on a pro-rata basis over three months. Applicants must supply at least 100,000 USDC, and only the first $20 million in eligible deposits will count toward the program.

Compound said the market was oversubscribed when it opened, naming DeFi Saver, K3, KPK and Yearn among the participants. The foundation did not provide the amount committed or explain how much demand exceeded the available capacity.

“With today’s Institutional Market launch, we are taking the first step toward building infrastructure to meet institutional client demands, including better capital efficiency, clearly defined risk, and a much higher standard of service,” Compound Foundation Executive Director Aaron Schnarch said.

According to Schnarch, early demand encouraged the foundation, which plans to release more capabilities over the coming months.

KPK co-founder and CEO Marcelo Ruiz de Olano said direct access to a team familiar with institutional requirements made the market attractive to his company.

“Compound is combining the capital efficiency of onchain markets with the level of service institutional participants expect,” Ruiz de Olano said.

Institutional market follows Compound’s $52 million program Three weeks before the product launch, crypto.news reported on Compound’s new management team and its DAO-approved, two-year development program.

COMP holders approved $28 million for operations and another $24 million for growth and incentives. The package represents the largest development allocation in the protocol’s history, according to the foundation.

Only $14 million was moved to the foundation’s multisignature wallet at the start of the program. The remaining $38 million stayed in reserve, with future releases linked to delivery targets such as assembling an engineering team and producing a Compound v3 integration kit.

Along with Schnarch, the management group includes Chief Operating Officer Christopher Donovan and Chief Product Officer Steven Liu. Team members brought experience from Coinbase Custody, Anchorage Digital, Near Foundation, Maple Finance, HSBC, and Broadridge Financial.

The program covers institutional lending, real-world assets, and tools that allow financial companies to connect with Compound’s infrastructure. Improving capital efficiency also forms part of the plan, as does building credit products around traditional finance requirements.

Founded in 2018, Compound helped establish blockchain-based borrowing and lending through permissionless markets governed by COMP holders and delegates. The foundation says the protocol has processed about $480 billion in cumulative deposits and borrowing volume, although the figure does not represent current assets held on the platform.

Data cited by The Defiant placed Compound’s total value locked near $1.53 billion around the launch, with approximately $638 million borrowed. Ethereum accounted for about $1.42 billion, or 93%, of the protocol’s locked assets.

US financial firms are also expanding crypto-backed credit For US institutions, Compound’s use of USDC and Bitcoin or Ether collateral places the product alongside several recent crypto-backed lending programs, although the legal structures and access models differ.

In August, JPMorgan’s collateral program was reported to allow institutional clients to pledge Bitcoin and Ether for US dollar loans through its Kinexys digital asset platform. Fidelity Digital Assets and Coinbase Custody were named among the custodians holding the pledged assets.

Kraken and Maple also introduced a USDC-funded lending facility in June. Their structure uses a bankruptcy-remote special purpose vehicle to fund overcollateralized loans backed by Bitcoin and Ether, with Maple providing senior financing and Kraken servicing the loans.

Retail access to onchain credit has expanded through centralized platforms as well. Coinbase added an Ethena-linked USDC vault in June, using Morpho markets and allocations managed by Steakhouse Financial.

Unlike bank and special-purpose-vehicle lending arrangements, Compound’s new market operates through its v3 smart-contract infrastructure. The foundation described Compound v3 as having completed four years of production use without an exploit, a performance claim made by Compound rather than an independent auditor.

Compound delegate questions who controls the market While the product was open, Compound delegate ugurmersin submitted a governance proposal asking for the DAO to receive ultimate authority over the Institutional Market.

The delegate said Compound governance did not appear to have approved the market’s current control structure. According to the proposal, the Treasury Management Committee administers the product, while a separate multisignature wallet holds authority over its collateral settings and other parameters.

Ugurmersin also said the committee’s existing DAO mandate covers treasury management rather than the operation of a lending market. The delegate could not identify a mechanism allowing COMP holders to withdraw the administrators’ permissions under the present setup.

Under the proposed changes, the foundation and committee could continue handling daily market operations. Administrators would have 10 business days to publish a full map of their permissions and 30 days to transfer final authority to Compound governance.

The Compound Foundation had not posted a public response to the governance proposal at the time of publication.

Not financial or tax advice. PANews content is strictly educational and informational and is not investment advice, financial advice, tax advice, legal advice, or a solicitation to buy or sell any digital asset, security, or financial product. Do your own research and consult qualified advisers.

Disclosure. PANews may publish sponsored content, partner content, advertisements, affiliate links, event promotions, and market commentary involving Web3 projects, service providers, or financial products. PANews personnel, contributors, or affiliates may hold digital assets or other interests related to covered topics. See our Terms of Service.

This site is protected by reCAPTCHA.

In a major change in leadership, Compound Foundation announced a total leadership overhaul of its management structure.  According to the foundation, four executives joined the protocol’s management structure as part of its targeted expansion.

According to the report, Aaron Schnarch will take over as Executive director, and Christopher Donovan as the COO. Furthermore, Leo Eikelman takes over as Chief Tech Officer, while Steven Liu will be the CPO.

These appointments mark the largest leadership shake-up in the crypto industry over the past year. These changes are aimed at making Compound [COMP] a competitive asset.

Compound DAO deploys $52M for DeFi expansion In addition to the leadership shake-up, Compound DAO approved  a major development fund of $52 million. The budget allocated $28 million to operations and $24 million to project growth over the next two years.

As per the reports, the $28 million will entail fields such as risk, marketing, and engineering. Moreover, the projects will seek the development of Compound V4. Additionally, $14 million was allocated to the foundation’s multisignature wallet. This major investment comes as Compound attempts to regain market share in the highly competitive lending market.

As such, the foundation hopes that institutional credit could offer a new growth path. With significant funds dedicated to the development of V4, the project wants V4 and institutional products to bridge the gap between DeFi and TradFi. Even more importantly, the investment reflects a broader transformation across the DeFi sector.

How did COMP price react? With the news, COMP made some gains on the price charts, rising to $18 before slightly retracing.  With the price hike, the altcoin flipped its 20, and 50-day EMAs, indicating short-term upside momentum. 

At press time, Compound was trading around $17.6, up 8.6% on the daily charts. Over the same period, altcoin’s trading volume surged over 648% to $43 million, indicating strong market participation. 

Fresh market demand mostly drove the market activity as the Exchange Supply Ratio (ESR) crashed to a three-month low of 0.12. 

Source: Cryptoquant Low ESR implies more COMP has flowed out of exchanges. Often, higher outflows strengthen upside momentum, leading to more gains.

In fact, the altcoin’s Relative Strength Index (RSI) has been on a strong upward trajectory, rising to 65. At this level, the indicator suggests that buyers are active.

Source: Tradingview Typically, such a market setup, if sustained, precedes more gains on the price charts.  Therefore, if this demand holds, Compound will close above $18 and target $20.

Final Summary Compound announced a total overhaul in leadership structure and approved a $52 million development budget.  COMP broke out, surged to $18, then slightly retraced to $17. 

PANews reported on August 18 that, according to SoSoValue data, crypto market sectors were mixed, with Bitcoin (BTC) up 1.57%, breaking through $64,000; Ethereum (ETH) up 0.42%, breaking through $1,900. The DeFi sector stood out, rising 1.06% in 24 hours, with Compound (COMP) up 8.92%, Morpho Token (MORPHO) up 5.30%, and Hyperliquid (HYPE) up 1.41%.

In other sectors, the Layer1 sector rose 0.47% in 24 hours, with Zcash (ZEC) up 4.15%; the Layer2 sector rose 0.46%, with Polygon(ex-MATIC) (POL) up 6.29%; the Meme sector rose 0.18%, with PIPPIN (PIPPIN) surging 16.38%; the PayFi sector rose 0.01%, with SafePal (SFP) up 2.45%.

In addition, the CeFi sector fell 0.13%, with OKB down 5.06%; the AI sector fell 3.42%, with Worldcoin (WLD) down 7.54% and Velvet (VELVET) sharply down 43.90%.

3 min read

Compound Finance has placed a $52 million bet and leadership renewal on its pivot to institutional DeFi. (Miguel Parera/Unsplash)Summary

Compound Finance overhauled its leadership and approved a record $52 million budget as it seeks to revive growth after its total value locked fell to $1.2 billion from a $12 billion peak in 2021.The protocol is pivoting toward institutional clients by developing real-world asset offerings, partner integrations and credit infrastructure designed to meet traditional finance compliance and technical standards.Industry executives say the new leadership team and sizable budget align with a broader shift in DeFi toward serving financial institutions, after the sector’s overall assets declined amid market weakness and security exploits.Compound Finance, one of the oldest decentralized finance (DeFi) lending protocols, replaced its leadership team and approved a $52 million budget on Monday to attract new capital after the value of assets locked on the platform tumbled to $1.2 billion from a peak of $12 billion in September 2021.

The company said it will now focus on attracting institutional users and will offer real-world assets, partner integration and credit infrastructure for traditional financial markets.

Compound pioneered decentralized lending when it started up in 2018, popularizing the concept of earning yield on crypto deposits without intermediaries. It said it has processed roughly $480 billion in deposits and borrowing volume since its inception. Over the past few years, it has lost ground to competitors such as Aave, which holds more than 11 times its TVL with $14.8 billion, DeFiLlama data shows.

As an industry, DeFi is operating from a weakened base. TVL across the sector has fallen by more than a third since the start of the year to roughly $70 billion, driven by a broad correction in the crypto market, compressed yields and a run of protocol exploits, including the $292 million KelpDAO hack in April. Still, the sector is forecast to reach $2.7 trillion by 2030, with tokenized real-world assets (RWAs) among the fastest-growing segments, according to a Standard Chartered projection.

"Now is a great time for initiatives like these, where real capital goes toward both the structural work and the bringing in of bright minds from the institutional sphere who can explain it to a risk committee in their own language,” said Gal Stern, chief business development officer at deBridge, over Telegram. “That combination is what brings institutional confidence back."

The new team includes Chief Operating Officer Christopher Donovan, who previously held the same role at the Near Foundation. Steven Liu, who scaled Maple Finance from $500 million to $5 billion in assets, joins as chief product officer and the former CEO of Coinbase Custody, Aaron Schnarch, becomes an executive director. Other appointees join from Anchorage Digital, HSBC, Broadridge Financial and Maple Finance, the company said.

"DeFi is a remarkable innovation; however, it has achieved limited institutional adoption," Schnarch said in a statement. "Current product offerings fall short of meeting the traditional finance bar, especially as it pertains to compliance and technical requirements."

The move is a logical response to the shift in DeFi's user base, according to Ran Hammer, chief business officer at Orbs.

"Retail participation is a fraction of what it was, and the chain has quietly become a venue for settlement, execution and interaction between financial institutions," Hammer said. “Since DeFi summer, the space has turned into something completely different, essentially a new financial layer for institutions. So bringing in leadership that speaks that language is exactly the right direction."

The size of the allocated budget, the largest approved by Compound's decentralized autonomous organization (DAO), may help underline its commitment.

"The $52 million and a bench with that much institutional experience is a serious move, and it should improve its execution," said Himanshu Sahay, co-founder and chief technology officer of crypto lending firm Arch Lending, but institutions will want more than credentials. They "aren't underwriting teams, they’re underwriting structures."

12345678910

Compound, the protocol that helped invent DeFi lending back when “yield farming” was still a novel concept, is making its biggest strategic pivot in years. A $52 million, two-year funding proposal is heading to the Compound DAO with a clear thesis: the future of the protocol runs through institutional finance, not retail incentives.

Of that total, $14 million has already been greenlit for immediate deployment. The rest will unlock in tranches tied to specific milestones, a structure that essentially puts the development team on a performance plan funded by the protocol’s own treasury.

What the money buys The $52 million splits into two buckets. Roughly $28 million goes toward operations, covering the engineering and product teams needed to build Compound V4. The remaining $24 million is earmarked for growth and incentives, though “incentives” here carries a different meaning than it used to.

Rather than spraying tokens at liquidity providers and hoping the TVL number goes up, Compound is directing between $8 million and $10 million, representing 35% to 45% of the growth allocation, specifically toward institutional partnerships. Think onboarding compliance-minded financial firms, not subsidizing anonymous whale farmers.

Advertisement

The architectural centerpiece of V4 is a hub-and-spoke system for liquidity management. In plain terms, instead of siloed lending markets that each need their own pool of capital, the new design routes liquidity through a central hub that can allocate it across multiple spokes. The result is better capital efficiency and more granular risk management for the kind of counterparties who have compliance departments and legal counsel.

Year-one milestones include assembling a full product and engineering team, shipping upgrades to the existing V3, and delivering a private alpha of V4. That staffing requirement isn’t just a nice-to-have. It’s a gate: the full funding allocation won’t release until the team is in place.

The institutional pipeline Compound claims more than 10 high-profile partners are already committed, with over 20 additional institutions in active discussions. The protocol is betting that the DeFi market’s next growth phase won’t come from retail traders chasing triple-digit APYs but from professional capital looking for programmable, transparent lending infrastructure that can satisfy regulatory requirements.

Compound’s bet is that it can reclaim relevance in this race. The protocol was once the undisputed leader in decentralized lending, pioneering the concept of algorithmic interest rates and governance tokens with COMP. But it gradually lost ground to Aave, which expanded more aggressively across chains and asset types.

The V4 proposal reads as an acknowledgment that competing on incentives alone wasn’t working. Pouring tokens into liquidity mining programs became a treadmill: impressive numbers while the rewards lasted, deflating metrics once they stopped.

Why this matters beyond Compound For the DAO governance model, this proposal is an interesting stress test. Asking a decentralized community to approve $52 million in spending, with clear accountability structures and performance gates, is more sophisticated than the typical “should we adjust this fee parameter” governance vote.

The risk, of course, is execution. Compound needs to hire the right team, ship working software, and convert those 20-plus institutional conversations into actual integrations, all while its DAO maintains the conviction to keep releasing funds at each milestone. The tranche structure provides some protection against a team that takes the money and underdelivers, but it also means development could stall if any single milestone proves harder than expected.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.

The DAO approved the two-year budget in May with 1.88 million COMP in favor and none against. Compound holds about $1.2 billion in deposits, against Aave's $14.8 billion.

Compound Foundation named four executives recruited from Coinbase Custody, Anchorage Digital, the NEAR Foundation and Maple Finance to spend a $52 million budget on turning the 2018 lending protocol into credit infrastructure for banks and asset managers.

The hires arrive with Compound at roughly a twelfth of Aave's size. Compound V3 and V2 hold about $1.23 billion in deposits combined, according to DefiLlama, against $14.8 billion at Aave and $8.06 billion at Morpho Blue. What the Foundation is selling institutions is operating history: running since 2018, the most forked codebase in DeFi, and, by the Foundation's account, zero bad debt since launch. That last record held through November 2025, when Compound paused withdrawals in three stablecoin markets on risk manager Gauntlet's recommendation to head off bad debt as Elixir's deUSD collapsed.

$38 Million Behind MilestonesCOMP holders approved the money in Proposal 582, which executed on May 10 with 1.88 million COMP in favor and nothing against or abstaining. Turnout ran more than double the 600,000 to 850,000 COMP that routine risk-parameter votes drew over the same period.

The funding proposal splits $52 million across two years: $28 million for operations, including engineering, integrations, risk and marketing, and $24 million for growth, including institutional onboarding, market seeding and curator expansion. Only $14 million went to the Foundation's own multisig. The remaining $38 million sits in a Program Reserve controlled by a 5-of-7 Treasury Management Committee multisig, released against milestones: a staffed engineering team and a production V3 integration kit for the first tranche, a tier-one curator onboarding for the second, a public V4 testnet for the third. Undeployed budget earns yield for the DAO until certification.

The DAO created that committee in Proposal 580, executed two minutes later, pulling roughly $18.95 million in V2 reserves and $6.94 million in V3 surplus reserves into treasury escrow alongside about $32 million already sitting in Aera and Avantgarde vaults.

"DeFi is a remarkable innovation, however, it has achieved limited institutional adoption," said Aaron Schnarch, the Foundation's new Executive Director, in a statement. "We know the demand is there, but current product offerings fall short of meeting the traditional finance bar, especially as it pertains to compliance and technical requirements."

Nine Of Eleven ETFsSchnarch was most recently COO of Anchorage Digital and before that CEO of Coinbase Custody. The Foundation credits him with securing 11 of 12 U.S. bitcoin ETF custody mandates. Coinbase said in July 2024 that it was "custodian powering 9 of 11 spot bitcoin ETFs," having started as custodian for eight of the funds that began trading in January 2024. At Anchorage, Schnarch oversaw the bank's role in the Global Dollar Network, the Paxos-led USDG consortium launched in November 2024 with Robinhood, Kraken, Galaxy Digital, Bullish and Nuvei.

The other three appointments:

Christopher Donovan, COO. Former COO and General Counsel of the NEAR Foundation, where he helped launch NEAR Intents, the cross-chain liquidity protocol the Foundation says has cleared more than $20 billion in volume. Previously a partner at Outlier Ventures.Steven Liu, Chief Product Officer. Former Head of Product at Maple Finance, which the Foundation says he scaled from $500 million to $5 billion in assets under management. Maple currently holds about $2.42 billion in TVL, per DefiLlama. Earlier roles at Anchorage Digital, Amazon and HSBC.Leo Eikelman, CTO. More than four years in engineering leadership at Coinbase Institutional, where he led development of Prime Onchain Wallet. Earlier roles at Amazon and InvestorCOM.The Foundation told delegates in its June program update that it had appointed a CTO from "tier-one digital asset and big-tech companies," hired two protocol engineers and added a non-executive director, without naming them at the time.

Permissioned Vaults, Tokenized EquitiesWhat the $52 million builds is set out in the Foundation's V4 roadmap, published in January: an integration suite letting brokerages and fintechs embed Compound lending, tokenized equities accepted as collateral against stablecoin borrowing, permissioned vaults with KYC and AML controls, portfolio-aware risk management with dynamic loan-to-value calibration, and a third-party risk manager with authority to reallocate liquidity in real time.

Some of it lands before V4. The July update put the V3 integration kit at development complete, the Institutional Comet in launch testing and a new liquidation engine in controlled testing. The Foundation launched its own front end at compound.xyz on June 29, where a Compound Institutional Market is now taking early-access signups. The Foundation says the first institutional product ships within weeks.

Compound is arriving after its two larger competitors. Aave Labs launched Horizon for institutions borrowing stablecoins against tokenized assets, and Morpho raised $175 million to expand curated lending.

Ninety-Eight Percent Below PeakCompound's own site puts cumulative deposits and loans at about $480 billion and all-time loans at $57 billion. Current activity is smaller: V3 generated about $1.77 million in fees over the past 30 days and $29.1 million over the past year, per DefiLlama.

TVL peaked above $12 billion in November 2021 and fell to about $1.4 billion by February 2026, when The Defiant examined the decline. Founder Robert Leshner left in June 2023. Proposal 62 shipped a bug in October 2021 that over-distributed COMP rewards, costing the DAO tens of millions of dollars. In July 2024, Compound offered COMP stakers 30% of protocol reserves to defuse what delegates called a governance attack by the whale known as Humpy, who had pushed through a vote to move roughly $24 million of treasury COMP into a vault his associates controlled.

COMP traded near $16.26 on Monday, up less than 1% over 24 hours, per CoinGecko, for a market cap around $163 million. The token sits about 98% below its May 2021 high of $854.45.

Delegates Want Spend DataDelegates have started pressing for numbers the Foundation has not yet published. In the June thread, Tane asked for capital deployment broken out by operational category "as originally committed in the funding proposal," Curia questioned how an R&D Comet initiative fits Year 1 milestones, and DAOplomats proposed a standard monthly template covering milestone delivery, hiring and spend-to-date. The Foundation agreed to include aggregated deployment data going forward. Neither the June nor July update disclosed spending.

Before the vote, delegate compw1n challenged the growth plan's curator selection, arguing performance data favored Steakhouse Finance and Sentora over Gauntlet, whose role in Compound governance delegates have contested before. No delegate voted against the budget.

In the summer of 2020, a governance token called COMP turned decentralized finance inside out. Compound, a lending protocol on Ethereum, began distributing COMP tokens to anyone who lent or borrowed on the platform, and within weeks, hundreds of millions of dollars flowed into smart contracts that had held a fraction of that the month before. Users were not just earning interest on deposits; they were earning a second layer of rewards, governance tokens, on top of the base yield, and then depositing those tokens elsewhere to earn a third layer. The practice acquired a name, yield farming, and for a brief, fevered period, annual returns exceeded 1,000% on major platforms. The rates were unsustainable, the risks were poorly understood, and the strategies were genuinely novel. Three years later, the fever broke, the unsustainable yields collapsed, and what remained was a permanent feature of the DeFi economy: the practice of actively deploying capital across protocols to maximize returns. Yield farming did not disappear after DeFi Summer. It grew up.

Summary

Yield farming is the practice of depositing cryptocurrency into DeFi protocols to earn returns from trading fees, lending interest, governance token rewards, or protocol incentive programs. The strategy encompasses multiple categories: liquidity provision on decentralized exchanges, lending on money markets, automated vault strategies, and points-based programs that convert to future token allocations. Sustainable yields in DeFi typically range from 3-15% for stable pairs and 10-30% for volatile pairs, with higher advertised rates usually reflecting temporary subsidies, token inflation, or risks that are not priced into the headline number. The term “farming” is borrowed from gaming culture, where players repeat actions to accumulate resources. In DeFi, the resource is yield, and the repeated action is depositing capital wherever the return is highest. The analogy extends further than most people realize: farming in games is tedious, repetitive, and rewards those who optimize ruthlessly. DeFi yield farming is the same. The casual farmer deposits stablecoins into Aave and earns 4%. The professional farmer splits capital across eight protocols on four chains, compounds rewards hourly through automated strategies, hedges impermanent loss with options positions, and earns 12-20% while monitoring smart contract risk across every position. The difference between the casual and professional farmer is not just in returns; it is in the understanding of where yield comes from, because yield that appears to come from nowhere always comes from somewhere, and the farmer who does not know the source is usually the source.

The mechanics: what happens when you deposit Yield farming, stripped to its simplest form, involves three steps: you deposit tokens into a smart contract, the protocol uses your tokens for some productive purpose, and you receive a share of the value that purpose generates. The productive purposes vary by protocol type, but they fall into a small number of categories.

On a decentralized exchange like Uniswap or Curve, the productive purpose is market-making. You deposit a pair of tokens, say ETH and USDC, into a liquidity pool, and the DEX uses your tokens to facilitate trades between those assets. Every time a trader swaps ETH for USDC or vice versa, they pay a fee (typically 0.3% on Uniswap v2, variable on v3), and that fee is distributed proportionally among all liquidity providers in the pool. Your return depends on the volume of trades flowing through the pool relative to its total size: a pool with $10 million in deposits and $1 million in daily trading volume generates a different return profile than one with $10 million in deposits and $100,000 in daily volume. The yield is real, it comes from fees paid by real traders, but it is not free: providing liquidity exposes you to impermanent loss, a cost that can exceed the fees earned if the price ratio of your deposited tokens changes significantly.

On a lending protocol like Aave, Compound, or Morpho, the productive purpose is credit intermediation. You deposit tokens, the protocol lends them to borrowers who pay interest, and you receive a share of that interest. Borrowers must overcollateralize their loans (deposit more value than they borrow), which protects lenders from default risk at the protocol level, though smart contract risk remains. Lending yields fluctuate with demand: when lots of people want to borrow USDC (often to lever up during bull markets), the interest rate rises; when borrowing demand drops, yields compress. Stablecoin lending rates have ranged from below 1% to above 15% in recent years, driven almost entirely by the market cycle.

On a yield aggregator like Yearn Finance, Beefy, or Sommelier, the productive purpose is strategy execution. You deposit tokens into a vault, and the vault’s smart contract automatically executes a farming strategy: depositing into lending protocols, providing liquidity, claiming reward tokens, swapping them for the base asset, and redepositing. The vault automates the compounding and rebalancing that a manual farmer would need to do themselves, charging a performance fee (typically 10-20% of profits) in exchange. Vaults are the passive farmer’s tool: they abstract away the complexity of multi-protocol strategies and reduce gas costs by batching operations across all depositors. The tradeoff is opacity, you are trusting the vault’s strategy and its smart contract code, and a layered risk: the vault contract can fail, the underlying protocol contracts can fail, and the strategy itself can underperform if market conditions change faster than the vault rebalances.

The taxonomy: types of yield farming The yield farming landscape has diversified into several distinct categories, each with different return profiles and risk characteristics.

Liquidity provision farming is the oldest and most straightforward form. You deposit token pairs into DEX pools and earn trading fees. On concentrated liquidity DEXs like Uniswap v3, you can specify a price range for your liquidity, concentrating your capital where trading activity is highest and earning more fees per dollar deployed. The tradeoff is that concentrated liquidity amplifies impermanent loss when prices move outside your range, and managing positions actively requires constant attention or automated position managers.

Incentivized farming adds a second yield layer. Protocols distribute their own governance tokens to liquidity providers as a subsidy to attract deposits. During DeFi Summer 2020, COMP, SUSHI, and dozens of other tokens were distributed this way, producing triple-digit APYs that attracted billions in capital. The incentive model has evolved: modern incentive programs tend to be more targeted (rewarding specific pools or behaviors) and time-limited (vesting schedules, lock-ups, or decreasing emission rates). The fundamental dynamic has not changed: incentivized yields are subsidized by token inflation, and the sustainability of the return depends entirely on whether the token’s price holds while emissions dilute the supply.

Lending farming is lower-risk and lower-return. Depositing stablecoins into Aave or Compound earns a base interest rate from borrower payments. Some lending protocols add governance token incentives on top, creating a total yield that exceeds the base rate. The appeal is simplicity and the absence of impermanent loss: your deposit stays in the asset you deposited, and your return is denominated in the same asset. The risk is primarily smart contract exposure and, for non-stablecoin deposits, the underlying token’s price volatility.

Points farming emerged in 2024-2025 as a new incentive model. Instead of distributing tokens directly, protocols award off-chain “points” for depositing capital or using the product. Points are expected to convert to governance tokens at a future token generation event, but the conversion ratio is unknown until that event occurs. EigenLayer’s restaking points, Blast’s ecosystem points, Ethena’s shard system, and Hyperliquid’s points program all used this model. Points farming introduces a unique risk: you are earning a claim on a future asset whose value, issuance, and distribution rules are all unknown. The speculative element is explicit, and the returns are entirely dependent on the eventual token’s price and your share of the total point supply.

Recursive or leveraged farming amplifies returns and risks. A farmer deposits collateral into a lending protocol, borrows against it, deposits the borrowed tokens into another protocol (or the same one), and repeats. Each loop earns an additional layer of yield but also increases the farmer’s exposure to liquidation risk: if any of the underlying assets drops in price, the chain of positions can unwind in a cascade of forced sales. Leveraged farming was responsible for some of the most spectacular blowups in DeFi’s history, and it remains a strategy reserved for operators who understand exactly what they are leveraging and what triggers their liquidation.

The math that lies: APY, APR, and what the numbers actually mean Yield farming returns are universally quoted as APY or APR, and both numbers lie, though in different ways.

APR, annual percentage rate, is the simple interest rate without compounding. If a pool earns 1% per month on deposits, its APR is 12%. The number is honest about what the rate has been but says nothing about what it will be: APR is backward-looking, a measurement of recent performance extrapolated to a year, and DeFi rates change daily or hourly based on capital flows and demand. A pool showing 50% APR when you check it may show 5% APR a week later because $100 million in new deposits arrived and diluted the yield.

APY, annual percentage yield, includes the effect of compounding. The same 1% per month, compounded, produces an APY of 12.68%. In DeFi, the compounding frequency varies: some vaults compound daily, others weekly, and the difference in APY can be significant for high-yield positions. The number is useful for comparing strategies with different compounding frequencies but adds a layer of abstraction that can obscure the underlying rate.

Both metrics share a critical flaw when applied to incentivized farming: they value the reward tokens at their current price. A pool showing 200% APY in governance token rewards assumes the governance token maintains its current price for the entire year. If the token drops 80%, which is not unusual for newly-launched DeFi tokens, the real APY is 40%, and if everyone who farmed the token sells their rewards simultaneously (which is what typically happens), the selling pressure itself drives the price down, creating a reflexive loop where the advertised yield self-destructs.

The honest way to evaluate yield farming returns is to decompose the yield into its sources and assess the sustainability of each. Fee-based yield from trading volume is sustainable as long as the trading volume persists. Interest from lending is sustainable as long as borrowing demand exists. Governance token incentives are sustainable only if the token’s price absorbs the emission schedule without collapsing. Points-based yields are entirely speculative until the token launches. Any headline APY above 15-20% for stablecoin strategies or 30-50% for volatile pair strategies should be treated with skepticism and decomposed into its sources before capital is committed.

Impermanent loss: the cost the headline yield hides Impermanent loss is the single most important concept in yield farming, and it is the one most farmers understand least well. It occurs whenever you provide liquidity to a constant-product AMM (like Uniswap) and the price ratio of your deposited tokens changes relative to when you deposited them.

The mechanism is mathematical and unavoidable. A constant-product AMM maintains the invariant x * y = k, where x and y are the quantities of the two tokens in the pool and k is a constant. When an external price change occurs, arbitrageurs trade against the pool to bring its internal price in line with the market price, and this rebalancing changes the composition of your position. If you deposited 50% ETH and 50% USDC and ETH doubles in price, arbitrageurs will buy ETH from the pool (cheap relative to the market) and sell USDC into it, leaving the pool with less ETH and more USDC. Your position is now worth less than if you had simply held the original tokens in your wallet.

The magnitude depends on the price change. A 1.25x price move produces approximately 0.6% impermanent loss. A 2x move produces 5.7%. A 5x move produces 25.5%. For concentrated liquidity positions, where capital is allocated to a narrow price range, the impermanent loss is amplified proportionally to the concentration factor, creating a tradeoff between higher fee earnings and higher impermanent loss exposure.

The term “impermanent” is misleading. The loss is impermanent only in the sense that it reverses if the price ratio returns to its original value. In practice, prices rarely return to exactly where they were, and for trending assets, the loss is permanent and growing. For stablecoin-stablecoin pairs (USDC/USDT), impermanent loss is negligible because both tokens track the same price. For volatile pairs (ETH/MEME, SOL/bonk), impermanent loss can easily exceed the trading fees earned, producing a net loss despite a seemingly positive APY.

The practical implication: impermanent loss must be subtracted from the headline yield to determine the real return. A pool showing 30% APY in trading fees but experiencing 15% impermanent loss is actually yielding 15%. A pool showing 10% APY with 12% impermanent loss is losing money. Tools like APY.vision, Revert.finance, and DeBank allow farmers to track their actual P&L including impermanent loss, and anyone providing liquidity without tracking this number is flying blind.

The risk stack: what can go wrong, ranked by frequency Yield farming risks form a hierarchy, and the most common risks are not the ones that make headlines.

Token price decline is the most frequent source of loss. If you farm with volatile tokens and the token price drops 40%, your 15% APY is irrelevant: you lost money. This is not a DeFi-specific risk but a market risk that yield farming amplifies because it encourages deploying capital into the highest-yield (often the highest-volatility) opportunities.

Impermanent loss, as described above, is the second most common source of loss for liquidity providers. It is predictable, measurable, and almost universally underestimated.

Smart contract exploits are the most consequential risk. DeFi protocols are code, and code has bugs. In 2024, over $1.7 billion was stolen from DeFi protocols through smart contract exploits, oracle manipulation, and governance attacks. Your deposited funds are held in smart contracts that can be exploited, and the composability of DeFi, where one protocol deposits into another which deposits into a third, creates cascading risk: a bug in a downstream protocol can affect every protocol built on top of it. Audits reduce but do not eliminate this risk; some of the largest exploits have targeted audited code.

Rug pulls and protocol abandonment are distinct from exploits. In smaller, newer protocols, the development team may drain the protocol’s funds and disappear, or simply stop maintaining the code and let the protocol decay. Rug pulls are less common on major, established protocols but remain a significant risk in the long tail of DeFi, particularly on newer chains where the protocol ecosystem is less mature.

Liquidation risk applies to leveraged farming strategies. If you borrow against your deposits and the collateral value drops, the protocol liquidates your position, selling your collateral to repay the loan, often at a significant loss. During sharp market downturns, cascading liquidations create forced selling that amplifies the crash, and leveraged farmers are the first casualties.

Regulatory risk is the slowest-moving but potentially the most disruptive. Centralized yield products, Celsius, BlockFi, Gemini Earn, were shut down or restructured under SEC enforcement. Pure DeFi yield farming, interacting directly with permissionless smart contracts, has not been directly targeted, but the regulatory boundary between “decentralized” and “centralized” is legally ambiguous, and the DeFi frontends that most users interact with are operated by companies subject to jurisdiction.

The Curve Wars and the economics of liquidity incentives No discussion of yield farming is complete without the episode that revealed the mechanism’s deepest dynamics: the Curve Wars.

Curve Finance, a DEX optimized for stablecoin and similar-asset swaps, introduced a system where CRV token holders who locked their tokens for up to four years (receiving vote-escrowed CRV, or veCRV) could direct the protocol’s token emissions to specific liquidity pools. Pools receiving more emissions attracted more liquidity providers, which deepened liquidity, which improved trading execution, which attracted more volume, which generated more fees. The right to direct CRV emissions became, in effect, the right to attract liquidity, and protocols whose stablecoins or tokens needed deep Curve pools began competing for that right.

The competition took the form of bribes: protocols paid veCRV holders to vote for their preferred pools. Convex Finance emerged as the dominant intermediary, aggregating CRV deposits and voting power and selling governance votes to the highest bidder. At the peak of the Curve Wars, protocols were paying $1.50-2.00 in bribes per $1 of CRV emissions directed to their pools, a ratio that only made sense because the liquidity those emissions attracted was worth more to the protocol than the bribe cost.

The Curve Wars revealed a fundamental truth about yield farming economics: liquidity is a commodity that goes to the highest bidder, and yield farming returns are, in the long run, determined by the cost protocols are willing to pay to rent that liquidity. When protocols pay high incentives, yields are high. When they stop paying, yields collapse and capital migrates elsewhere. The farmer who understands this dynamic, that they are selling a service (liquidity) to protocols willing to rent it, has a fundamentally clearer view of their position than the farmer who believes high yields are a natural property of DeFi.

Yield farming and US taxes: the compliance reality US tax treatment of yield farming is complex, largely ungoverned by specific guidance, and imposes significant record-keeping burdens on active farmers.

Every yield farming reward is a taxable event. The IRS treats tokens received as farming rewards, whether from trading fees, lending interest, governance token distributions, or vault profits, as ordinary income at fair market value when received. If you claim 100 COMP tokens worth $50 each, you owe income tax on $5,000, regardless of whether you sell the tokens. If you later sell those tokens at $80 each, you owe capital gains tax on the $3,000 gain ($30 per token times 100 tokens). If you sell at $20 each, you have a $3,000 capital loss that can offset other gains.

Compounding creates a tax nightmare. Vaults that auto-compound, selling reward tokens and redepositing the proceeds, generate a taxable event at every compound cycle. A vault that compounds daily creates 365 taxable events per year, each requiring the fair market value of the tokens at the moment of compounding. No DeFi protocol issues 1099 forms. The burden of tracking every event falls entirely on the farmer.

Impermanent loss has no clear tax treatment. The IRS has not addressed whether impermanent loss constitutes a realized loss (deductible against income) or an unrealized loss (not deductible until the LP position is closed). Most tax advisors treat impermanent loss as realized only upon withdrawal of the LP position, but the treatment is not settled.

Token swaps within a strategy are taxable. If a vault sells governance tokens for stablecoins as part of its compounding strategy, each swap is a taxable disposition. Multi-hop strategies that involve three or four token swaps per cycle generate taxable events at each hop.

The practical advice for US yield farmers: use a crypto tax tracking platform (Koinly, CoinTracker, TokenTax, ZenLedger) from day one. Retroactive tracking across multiple chains, protocols, and wallet addresses is exponentially harder than real-time tracking. Budget for tax compliance as a cost of farming, because the marginal gains of active yield farming can be significantly reduced by the tax and accounting costs of documenting them.

How to start: a practical path for beginners If you want to explore yield farming, a progressive approach minimizes your risk while building your understanding.

Begin with stablecoin lending. Deposit USDC or USDT into Aave on Ethereum mainnet or Arbitrum. The yield is modest, currently 3-8% depending on market conditions, but the risk profile is the simplest in DeFi: no impermanent loss, single-asset exposure, and Aave is one of the most audited and battle-tested protocols in the ecosystem. This step teaches you the mechanics of connecting a wallet, approving transactions, depositing, and monitoring a position.

Graduate to stablecoin LP positions. Providing USDC/USDT liquidity on Curve earns trading fees from stablecoin swaps with minimal impermanent loss (both tokens track the dollar). The yield is typically higher than pure lending, and the experience teaches you how LP positions work, how to read pool statistics, and how to claim and compound rewards.

Explore yield aggregator vaults. Depositing into a Yearn or Beefy vault automates the compounding process and exposes you to the vault’s strategy, which may span multiple protocols. Read the vault’s strategy description, understand what protocols it deposits into, and check the TVL and age of the vault (older, larger vaults have been more heavily tested).

Only after you are comfortable with these steps should you consider volatile pair liquidity provision, concentrated liquidity positions, or leveraged strategies. Each step up the complexity ladder adds risk, and the most common yield farming losses come from farmers who jumped to advanced strategies before understanding the basics.

Regardless of strategy, follow these operational principles: use established protocols with multiple audits and significant TVL. Deploy capital you can afford to lose. Monitor your positions regularly. Use hardware wallets for large deposits. Diversify across multiple protocols and chains. Track your taxes from day one. And remember the fundamental question: if you do not know where the yield comes from, you are the yield.

Frequently asked questions Is yield farming still profitable in 2026? Yes, but the character of profitability has changed. The triple-digit APYs of DeFi Summer 2020 are gone for mainstream protocols. Sustainable yields on stablecoin deposits range from 3-10%. Volatile pair liquidity provision yields 10-30% but carries impermanent loss risk. Points farming and early-protocol incentives can produce higher short-term returns but with significant uncertainty. Professional yield farmers earn competitive returns through active management across multiple protocols and chains, but casual farming with set-and-forget deposits produces modest, savings-account-level yields on stablecoins.

What is the difference between yield farming and staking? Staking secures a proof-of-stake blockchain network and earns validator rewards. Yield farming provides liquidity, lending capital, or strategic deposits to DeFi protocols and earns trading fees, interest, or incentive tokens. The risk profiles differ: staking risk is primarily slashing and lock-up periods; yield farming risk includes impermanent loss, smart contract exploits, token price collapse, and liquidation (for leveraged strategies). Some activities blur the line: depositing liquid staking tokens like stETH into a DeFi lending protocol combines both staking and yield farming in a single position.

Can you yield farm with Bitcoin? Not directly on Bitcoin’s blockchain, which does not natively support the smart contracts required for DeFi protocols. However, wrapped Bitcoin (WBTC on Ethereum, tBTC via Threshold Network) can be deposited into Ethereum DeFi protocols for yield farming. Some Bitcoin layer-2 networks and sidechains are building native DeFi capabilities, but the ecosystem is much smaller and less battle-tested than Ethereum’s. The wrapping process itself introduces risk: your BTC is held by a custodian or smart contract that issues the wrapped token, and that intermediary is a single point of failure.

What is the safest yield farming strategy? Lending stablecoins (USDC, USDT, DAI) on established, multi-year, multiply-audited lending protocols (Aave, Compound, Morpho) on Ethereum mainnet or major layer-2 networks. This strategy eliminates impermanent loss, minimizes token price risk, and uses the most heavily-tested smart contracts in DeFi. The yield is modest, typically 3-8% APR, but the risk-reward profile is the most conservative available in decentralized finance. Even this strategy carries non-zero smart contract risk and stablecoin depeg risk, but both are well-understood and historically rare on established platforms.

How much money do you need to start yield farming? The answer depends entirely on which blockchain you use. On Ethereum mainnet, gas costs for depositing, claiming rewards, and withdrawing can run $50-200 per transaction, making yield farming impractical with less than $5,000-10,000 in capital. On layer-2 networks like Arbitrum, Base, or Optimism, gas costs are typically under $1, allowing meaningful farming with $500-1,000. On Solana, transaction costs are fractions of a cent, and farming is accessible with even smaller amounts. The minimum is set by gas economics, not by protocol requirements: most protocols have no minimum deposit, but if your gas costs exceed your expected yield, the position is economically irrational.

Disclaimer: This article is for informational purposes only and should not be considered financial or investment advice.

Someone just walked into BonkDAO, spent roughly $4.4 million on tokens, and walked out with approximately $20 million from the treasury. Not by hacking smart contracts. Not by finding a zero-day exploit. By simply showing up to vote when nobody else did.

Welcome to the era of the “apathy attack,” a term coined by Dr. NickA (Nick Almond), Head of Governance at Jito Foundation, to describe a governance exploit pattern that has now hit DAOs from Compound to BonkDAO. The vulnerability isn’t in the code. It’s in the community.

How the BonkDAO attack unfolded On July 6, 2026, an attacker acquired enough BONK tokens to surpass the DAO’s 1% quorum requirement. Only about 2.9% of total participants actively voted on the malicious proposal, spread across just 7 wallets. The proposal passed and drained roughly 4.43 trillion BONK tokens, valued at approximately $20 million, from the treasury.

Post-attack, the stolen tokens were reportedly moved into a newly established “BONK 2.0” multisig DAO controlled by the attacker and their associates.

Advertisement

The irony is thick: BonkDAO specifically set its quorum at 1% as a measure to deter apathy by making governance participation easy. Instead, the low threshold made governance capture trivially cheap.

Compound’s earlier warning shot Compound, one of DeFi’s most established lending protocols, faced its own governance crisis back in July 2024. Declining voter participation created the conditions for a similar exploit pattern, where proposals could be pushed through without meaningful community consensus. The incident was serious enough that Compound established the Compound Governance Working Group specifically to boost engagement and prevent future attacks.

Dr. NickA has drawn a direct line between these incidents, framing them as part of the same systemic vulnerability. The attack vector doesn’t target code. It targets disengagement. Historical data on DAO voter participation paints a grim picture. Turnout across token-weighted DAOs can dip below 10%, and in some cases falls as low as 0.1% to 3%.

The governance paradox The BonkDAO attack is especially instructive because the $4.4 million spent to acquire tokens yielded roughly $20 million in stolen assets. That’s nearly a 5x return on a governance exploit.

Some protocols have experimented with alternative models. Quadratic voting, conviction voting, and delegate systems all attempt to solve different aspects of the participation problem. But none have achieved widespread adoption, and the dominant model remains one-token-one-vote with fixed quorum thresholds.

What this means for investors Traders and investors evaluating DAO-governed protocols should be paying close attention to governance participation metrics. A protocol with consistently low voter turnout and a large treasury is essentially advertising its vulnerability. The ratio of treasury size to quorum cost becomes a rough measure of exploit profitability.

The emergence of “BONK 2.0” as an attacker-controlled entity adds another wrinkle. If stolen governance tokens can be reorganized into new structures that claim legitimacy, the attack doesn’t just drain a treasury. It fragments a community. Recovery becomes a legal, social, and technical challenge all at once.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.

Samsung Electronics and SK Hynix each unveiled major chip investment plans Monday at a presidential briefing in Seoul. Neither announcement stopped their stocks from falling sharply.

Samsung dropped 5.3% to 321,500 won from a Friday close of 339,500 won. SK Hynix fell 3.4% to 2,583,000 won from 2,673,000 won. The KOSPI settled near 8,258, down from 8,411.

Why the Announcements Didn’t Move Markets HigherSamsung Group presented a roughly 1,000 trillion won spending package to President Lee Jae-myung. SK Group followed with a separate 1,000 trillion won plan. Both cover new semiconductor fabs, AI data centers, and chip cluster development over the next decade. Fortune reported the combined figure at around $1.3 trillion.

Markets shrugged. The Korea Exchange scrapped its planned launch of weekly options contracts tied to Samsung, SK Hynix, Hyundai Motor, and LG Energy Solution. Regulators pulled the product after retail investors poured into daily double-leveraged ETFs, pushing KOSPI volatility to record highs. That decision removed a key tool for short-term traders and hit speculative appetite immediately.

Despite a breakout last 12 months, the KOSPI is down in the last month and opened the new week down again. Image Source: Trading ViewChip Selloff and Middle East Pressure Compound the PainGlobal tech sentiment stayed negative. Last week, South Korea’s market triggered circuit breakers twice on fears over AI chip valuations. Samsung and SK Hynix make up roughly 42% of the KOSPI, so chip selling anywhere hits Seoul hard. South Korean retail investors who borrowed heavily during recent rallies now face compounding losses.

🚨 KOSPI JUST CLOSED ONE OF ITS WORST WEEK OF 2026.

South Korean market is down 10% in just one week, wiping out roughly ₩550 TRILLION ($350 BILLION) from the market.

AI and semiconductor stocks are leading the collapse as panic spreads across Korean markets. pic.twitter.com/iSBrIyoj7H

— Crypto Rover (@cryptorover) June 27, 2026 Middle East tension added pressure. The US struck Iranian military targets over the weekend. Both sides then agreed to halt attacks and meet on Tuesday in Doha. Japan’s Nikkei 225 also fell as SoftBank retreated, extending a pullback after six consecutive record sessions.

Celer and Compound Hacked: dYdX, Pendle, and Other DeFi Platforms at Risk

Two prominent crypto projects have been exploited and many more could be at risk after two-factor authentication (2FA) was disabled, at the front-end, for projects using Google Domains amid a migration to Squarespace.

Posted July 11, 2024 at 2:27 pm EST.

The recent hacks of Compound Finance and Celer Network’s front-end domains on Wednesday revealed at least an additional 124 domains are at risk of exploitation by virtue of their registration with website-building company Squarespace, according to security experts. 

Compound Finance, one of the largest decentralized protocols with a total locked value of nearly $2.2 billion, is hosting a phishing site, said Michael Lewellen, head of solutions architecture at blockchain security firm OpenZepplin, on X. He warned users not to interact with the website until further notice.

Another attacker, perhaps the same one or group, also attempted to take over the front-end domains of Celer Network. The team said on X that the takeover was intercepted and that their “investigation indicates that the attack vector likely involved third parties beyond our control.” 

In a conversation with Unchained, the founder of blockchain network Glue and prominent white-hat hacker who goes by Ogle indicated that Compound Finance and Celer Network’s use of Squarespace to host their front-end websites is what allowed these exploits to occur. 

“Right now, [Compound Finance is] exploited to the point that links are changed and so people can be phished,” he added. Phishing is a type of scam where exploiters use deception to make people reveal sensitive information or install malicious software. 

Please avoid interacting with the compound[.]finance website until further notice.

It is part of the widespread domain compromise occurring right now. By visiting the site, or clicking any associated links, you will be putting yourself at risk. We and others are diligently…

— Compound Labs (@compoundfinance) July 11, 2024

The at-risk websites initially used Google Domains, but Squarespace acquired the Google Domains business, completing its acquisition of assets in September 2023. 

The recent exploits were “almost certainly” from the migration of Google Domains to Squarespace, said Ogle. “What I’ve learned is that during that migration 2FA [short for two-factor authentication] was disabled.” 

Compound Finance and Celer Network “probably did have 2FA enabled on Google, but then once it got switched over, not the case anymore,” he added.

“Google sold their domain business to Squarespace a few months ago and the forced migration of domains to Squarespace removed 2FA causing all these domains to be vulnerable and several have been hijacked,” said Bobby Ong, the co-founder of CoinGecko, on X.

Read More: $1 Million Bounty On Offer for Finding Bugs On Solana Validator Client Firedancer

Domains of Top Protocols At-Risk The number of crypto protocols joining the likes of Compound Finance and Celer Network may grow, as the pseudonymous founder of DefiLlama, who goes by the screen name @0xngmi on X, noted that 124 additional front-end domains of prominent crypto protocols are using Squarespace including Pendle Finance, Hyperliquid, dYdX, Nostra Finance, Axelar Network, Polymarket, Thorchain, Aptos Labs, NEAR, and Safe. 

A spokesperson for Safe, a wallet infrastructure provider, confirmed with Unchained that Squarespace is involved with its front-end website, but emphasized they haven’t identified any abnormal activity and have systems in place to detect irregular changes. 

“We currently remain unaffected,” Safe’s spokesperson said. “Our teams will continue to monitor the situation and keep our community and users informed.”

“As always, stay vigilant,” the spokesperson at Safe added. In a similar vein, the dYdX trading team said to Unchained over Telegram, “dYdX.exchange is secure with no detected vulnerabilities” and that they will also continue to “monitor the situation.” Axelar Network also has not identified any issues with its domain and will continue to track for any further developments, per a post on X. 

Read More: 50% of Illicit Funds End Up At Centralized Crypto Exchanges, Chainalysis

The domains of these protocols —  barring Compound Finance and Celer Network  — remain unaffected. Yet Ogle says protocol team members should be worried as the situation is “not good” and that people should not go to any of these websites “under any circumstances until the official Twitter says it’s safe.”

At presstime, Compound(dot)Finance gets redirected to Compound-Finance(dot)app, in which the latter is flagged by Google as a dangerous site. “Attackers on the site you’re trying to visit might trick you into installing software or revealing things like your password, phone, or credit card number,” according to Google’s warning.

The message Google raises when people try to visit compound(dot)finance, which gets redirected to compound-finance(dot)app. If a user proceeds despite the flagrant, red warning, they’ll see a website that looks like a standard crypto protocol.

The interface of the phishing site is hosted by Compound Finance’s front end. Difference Between a Domain and Protocol While the domain websites of crypto projects may go down in the event of a hijacking, the actual protocols remain unaffected. People or bots can still interact with a project’s smart contract without going through a front-end website, Ogle said. 

“You could transfer funds on the blockchain, you could go through their bridge, all that kind of stuff can happen without ever even using the website.” Even if a protocol’s front-end domain is attacked and “taken down by these hackers right now or whatever, you still don’t lose your money. You still have access to it.”

Representatives of Squarespace did not immediately respond to Unchained’s requests for comments.

UPDATE (July 12, 2024 10:03 a.m. ET) Includes status update of Axelar Network

The coalition has secured ETH commitments to refill the bridge in tranches and will use Aave and Compound governance proposals to liquidate the exploiter's remaining positions.

DeFi United, a coalition of decentralized finance (DeFi) ecosystem participants, on Tuesday published the technical implementation plan to restore the backing of Kelp DAO's rsETH and recover roughly 107,000 tokens still controlled by the exploiter.

The exploit targeted rsETH's LayerZero-powered bridge on the Unichain to Ethereum route, where a forged inbound packet was verified on the Ethereum side without a corresponding burn on Unichain. The attack released 116,500 rsETH from the Ethereum-side adapter, with proceeds distributed across multiple addresses and supplied as collateral on lending protocols.

Seven addresses associated with the exploiter currently hold active rsETH-backed positions on Aave and Compound, representing approximately 107,000 rsETH of the original 116,500 rsETH stolen.

Restoring BackingDeFi United said it has secured the ETH commitments needed to restore rsETH’s backing, with final execution subject to governance approvals and definitive agreements. The committed ETH will be converted into rsETH in tranches and transferred to the bridge lockbox contract, allowing the bridge to resume normal operation.

The process targets rsETH's nominal exchange ratio of 1.07 ETH. The coalition's fundraising effort has progressively chipped away at the original 163,200 ETH shortfall.

LayerZero Labs on Tuesday pledged more than 10,000 ETH to the effort, donating 5,000 ETH directly to DeFi United and depositing an additional 5,000 ETH to strengthen Aave markets' liquidity. The firm said it would also strategically deepen liquidity for Aave's GHO stablecoin.

Clearing Exploiter’s PositionsRecovering the exploiter’s excess collateral requires governance proposals pertaining to Aave’s Ethereum and Arbitrum deployments. The execution involves a controlled liquidation sequence: the rsETH oracle price will be temporarily adjusted to enable efficient liquidation, generating a temporary deficit to be addressed in a subsequent step. Recovered rsETH will be transferred to a DeFi United multisig and redeemed for ETH through Kelp's standard redemption procedure, with the resulting ETH applied to clear the Aave Ethereum and Arbitrum deficits.

The Aave clearing process aims to recover approximately 13,000 ETH. Compound will take a similar approach with DeFi United providing the liquidity, recovering an estimated 16,776 ETH.

WETH and rsETH reserves on Ethereum Core, Arbitrum, Base, Mantle, and Linea will remain frozen during the process. The final phase involves unpausing and unfreezing rsETH and ETH across affected instances and restoring loan-to-value ratios for any assets whose configurations were temporarily adjusted.

RisksDeFi United flagged several execution risks. ETH deployment is contingent on finalizing agreements and governance approvals. Deliberate interference by the attacker could result in incomplete accrual of deficits, requiring additional liquidation steps to fully resolve the positions. Residual bridge risk also remains until the newly implemented LayerZero and Kelp security measures are validated in production.

This article was written with the assistance of AI workflows. All our stories are curated, edited and fact-checked by a human.

Morgan Stanley raises Micron's price target to $1,200, maintains 'Overweight' rating.

Morgan Stanley released a report raising Micron Technology (MU.O)’s price target from $1,050 to $1,200, while maintaining an "Overweight" rating. The investment bank lifted its fiscal 2027 earnings per share (EPS) forecast for the chipmaker by roughly 40% to $168, and upgraded its free cash flow (FCF) projection from $104 billion to $140 billion. Aligning with Micron’s management, the bank holds that AI will push DRAM demand to consistently outpace supply significantly after 2027. Micron’s last fiscal quarter results matched this trend, with both its quarterly performance and outlook showing notable upside potential.

1 minutes ago

US officials: Israel has withdrawn troops from parts of the buffer zone in southern Lebanon.

A U.S. State Department official said Israel has withdrawn from parts of the buffer zone in southern Lebanon, describing the move as a "goodwill gesture" toward the Lebanese government.

1 minutes ago

CBRS trades below IPO price post-earnings: Erases all gains six weeks after listing, two smart money firms net $5.8 million from first-day IPO shorts.

According to Hyperinsight monitoring, Cerebras (CBRS), the AI chip firm previously dubbed "Nvidia’s strongest challenger", saw its stock price fall in stages after reporting its first quarterly results since going public, as negative guidance overshadowed better-than-expected performance. The stock has dropped roughly 22% since the earnings release and officially broke below its IPO price today. On-chain whales are overall bearish. CBRS trades at $184 on the Hyperliquid platform, down 7.7% in 24 hours. Large-scale short positions (million-dollar level) total around $11.62 million, 2.39 times the long positions ($4.87 million). Two major short positions were placed precisely at high levels as early as the IPO day or even before the IPO: - Whale 0xe0ff: Shorted at $284.51 on May 14 with a 3x leveraged position of $6.13 million, generating an unrealized profit of $3.24 million (+104%); - Whale 0x9996: Shorted at $275.92 on May 11 with a 5x leveraged position of $5.48 million, generating an unrealized profit of $2.64 million (+162%). It is learned that both addresses currently hold short positions in both CBRS and SPCX, and have recorded substantial unrealized profits, preferring to place short positions at high levels before or on the day of major stock listings. With the realization of negative earnings news in this round, the combined unrealized profit of the two positions is around $5.88 million. Currently, the average entry price of CBRS short whales is around $275, and the current price is over 30% lower than that. The nearest short liquidation line is at $200.13, about 7% away from the current price.

1 minutes ago

Multiple high-performing domestic public mutual fund products have tightened their purchase restrictions.

E Fund Management announced in its latest filing that the E Fund Information Industry Select Fund, managed by Zheng Xi, has cut its purchase limit to 10,000 yuan. The same purchase limit reduction to 10,000 yuan applies to another fund under his management, E Fund Information Industry Fund, while E Fund Global Growth Select Hybrid Fund (QDII) has lowered its purchase limit to 10 yuan. In addition, Guolianan Preferred Industry Fund, Harvest Tech Innovation Fund, and Principal Performance-Driven Fund have also announced purchase limits or adjustments to their limits recently. Jin Zicai, a fund manager closely watched by the market, imposed additional purchase limits on multiple public offering funds under his management, with the four funds involved cutting their purchase limits to 500 yuan starting June 23. Purchase limits on high-performing funds likely stem from multiple considerations: they can avoid return dilution caused by short-term concentrated subscriptions, and proactive limits during overheated market conditions also send risk warning signals to the market. As the first half of the year draws to a close, such moves have become increasingly frequent. Overall, Wind data shows that since June alone, 19 funds with year-to-date net asset value returns exceeding 90% have suspended large subscriptions or adjusted their purchase caps. (Source: Cailian Press)

1 minutes ago

The US stock market's optical communication sector rises across the board in pre-market trading, with Corning up 9.28%.

According to Bitget market data, the U.S. stock market's optical communication sector saw broad pre-market gains, with MRVL rising 4.99%, LITE up 3.24%, Nokia up 3.11%, Corning up 9.28%, and AXTI up 6.69%.

1 minutes ago

US-listed AI chip stocks saw mixed pre-market performance, with Qualcomm surging 13%.

According to Bitget market data, U.S. AI chip stocks posted mixed pre-market performance: Qualcomm (QCOM.O) surged 13%, Intel (INTC.O) rose nearly 6%, AMD (AMD.O) gained nearly 4%, and Google (GOOG.O) declined 1.4%.

1 minutes ago

TLDR: Compound governance approved an oracle tweak that enabled liquidation of stolen rsETH collateral. The attacker used 116,500 rsETH as collateral to borrow ETH and wstETH across Compound v3. DeFi United seized nearly $30M after temporary oracle bounds forced undercollateralization. The recovered rsETH was redeemed into ETH to help restore KelpDAO’s damaged bridge reserves. DeFi governance proved capable of acting as an emergency recovery mechanism after the April 2026 KelpDAO exploit. Roughly 116,500 rsETH worth $292 million were stolen and deployed as collateral on Compound v3.

Standard liquidation rules offered no path to recovery, since the stolen rsETH still priced normally. A governance-approved oracle adjustment changed that, eventually enabling DeFi United to seize roughly $30 million. The recovery marked one of the most coordinated on-chain interventions in DeFi’s history.

Why Standard Liquidation Rules Could Not Touch the Attacker’s Position On April 18, 2026, attackers exploited a vulnerability in KelpDAO’s LayerZero bridge infrastructure. About 116,500 rsETH worth $292 million were released illegitimately from the Ethereum-side escrow.

The attack was widely attributed to North Korea’s Lazarus Group. Rather than selling, the attacker deployed them as collateral across multiple lending protocols.

On-chain data shows the attacker opened a Compound v3 position within minutes of the exploit. ETH and wstETH were borrowed in tranches against the stolen rsETH tokens.

Partial withdrawals helped manage the collateral ratio in the same window. The position was active and borrowing real assets before the protocol could respond.

In the weeks that followed, the position remained technically healthy at market prices. Compound’s rsETH markets were frozen, and loan-to-value ratios were set to zero.

The stolen rsETH still priced normally despite having no legitimate backing. Automated liquidation mechanisms therefore had no grounds to trigger.

DeFi lending liquidations depend on collateral value falling below set thresholds. Because rsETH had not dropped in price, the attacker’s position stayed above water.

There was no admin key or circuit breaker available to freeze the account. DeFi governance was therefore the only available instrument to act.

How a Governance Proposal Triggered Liquidation and Recovered the Collateral The Compound Foundation engaged risk partners, including Gauntlet, to find a resolution pathway. Gauntlet submitted a proposal for a modified oracle for Compound’s rsETH markets.

The new oracle kept the Kelp DAO exchange rate feed as its primary source. It also added configurable price bounds operable by the Compound multisig.

Santiment Intelligence noted that an oracle adjustment pushed the attacker’s position into liquidation. This allowed DeFi United to seize roughly $30 million in collateral.

👏 How was Compound governance able to help recover stolen rsETH from the KelpDAO exploiter? An oracle adjustment pushed the attacker’s position into liquidation, allowing DeFi United to seize ~$30M in collateral.

Check out our latest deep dive below. 👇https://t.co/LvqxqLrBYe pic.twitter.com/im4ot8o8xd

— Santiment Intelligence (@SantimentData) May 13, 2026

Temporarily setting the price floor below market value triggered undercollateralization. A DeFi United Recovery Guardian multisig then repaid the borrowed assets and seized the collateral.

Santiment data recorded $29,044,839 in Compound v3 liquidations on May 9th at 02:30 UTC. The event covered 12,426.70 rsETH at a price of $2,337.29 per token.

Notably, rsETH showed no meaningful price distress during the event. The collateral was removed cleanly without triggering a broader market selloff.

The seized collateral was redeemed through KelpDAO’s system and converted back to ETH. Those funds helped refill the damaged bridge lockbox that backed rsETH.

After completion, the oracle was restored to normal market levels. No persistent changes were made to the Compound protocol.

PANews reported on May 14th that the Compound Foundation stated that, following collaboration with the Aave and KelpDAO teams, all WETH and wstETH Comet positions involved in the rsETH vulnerability exploit were closed over the weekend, and all rsETH held by the attackers has been transferred to DeFi United. Compound stated that this swift action effectively mitigated market risks and protected the protocol's suppliers and reserve funds. Transfer restrictions on Ethereum WETH and wstETH Comet have now been lifted, and all Comet markets have resumed normal operation.