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3 Surprising Tokenization Stats Reshaping On-Chain Markets in 2026

In brief Gemini will soon list three new cryptocurrencies on its exchange. Prices for Orchid and Chainlink are up big on the news. New York-based cryptocurrency exchange Gemini today announced that it’s adding three new cryptocurrencies to its list of digital offerings: Chainlink (LINK), Dai (DAI) and Orchid (OXT).

While the three tokens will not be available on the exchange until April 24, news of the forthcoming listing is already driving considerable interest for these coins: prices for OXT and LINK, for example, skyrocketed today between 10% and 15%, respectively.

Once the coins are listed on the Winklevoss-backed exchange, Gemini customers will be able to deposit them into their online wallets and start trading soon after. Gemini says it will also be offering USD, Bitcoin and Ethereum trading pairs for LINK, DAI and OXT.

This will bring the total number of cryptocurrencies supported and offered by Gemini to nine. Aside from these three new additions, Gemini also supports Bitcoin, Litecoin, Zcash (ZEC) and Basic Attention Token (BAT). It also offers custody services for 15 coins, including 0x (ZRX), Bread (BRD), Decentraland (MANA) and its own stablecoin Gemini USD (GUSD).

While DAI is also a stablecoin—meaning it’s designed to protect users against volatility—the news appears to have positively influenced the prices of both Chainlink and Orchid.

Orchid’s OXT is now trading for $0.15 per coin, a price level it hasn’t seen since before the mid-March crypto crash. Chainlink, meanwhile, is now priced at $3.40, making it today’s best performing asset in the industry’s top 20 coins by market cap.

In fact, Chainlink has gained more than $1 on its price since the beginning of the week. It’s the first time LINK has soared above the $3 line in nearly a month. Today’s surge marks a one-day gain of $0.60 for the world’s 11th largest cryptocurrency, which powers the “oracle of oracles” network. 

Chainlink broadcasts Internet data on the Ethereum blockchain for use in smart contracts. The other network getting some shine today, Orchid, is predominantly used by those seeking additional privacy to purchase virtual private networking (VPN) bandwidth.

“These assets expand the range of our platform and further our mission to empower the individual through crypto,” Gemini wrote on its blog page. “We look forward to continuing to bring mission-oriented projects to you in the future.”

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On-chain data shows that stablecoin sharks and whales have been strongly accumulating recently, something that could be positive for Bitcoin.

Sharks & Whales Of Stablecoins Like DAI & USDP Are Accumulating According to data from the on-chain analytics firm Santiment, large holders of some stablecoins have been expanding their holdings recently. The relevant indicator here is the “Supply Distribution,” which measures what percentage of the total supply of an asset (in this case, a stablecoin) is being held by which wallet groups in the market.

The addresses are divided into these wallet groups based on the total number of coins that they are currently carrying in their balances. The 1-10 coins cohort, for instance, includes all addresses holding between 1 and 10 tokens of the asset.

In the context of the current discussion, the investor groups of interest are sharks and whales. These are the large investors in the market, who hold some power due to the sheer scale of coins that they can potentially move at once.

Generally, their holdings lie in the $100,000-$10 million range, so in the case of stablecoins, the relevant address group would be the 100,000-10 million coins cohort (as the stables being considered here are those pegged to the USD, one token of theirs has a value of $1).

Now, here is a chart that shows the trend in the Supply Distribution of the sharks and whales for two stables: USDP and DAI.

Looks like both the metrics have observed their values going up in recent days | Source: Santiment on Twitter As displayed in the above graph, the sharks and whales of both of these stablecoins have expanded their supplies recently. In the case of DAI, these humongous investors have bought 2% of the entire circulating supply of the stable during the last couple of weeks or so.

Following this buying spree, the combined supply of the addresses holding between $100,000 and $10 million in the stablecoin has grown to about 40% of the circulating supply.

As for USDP, the stablecoin’s sharks and whales have added 11% of the total supply to their addresses in the past eleven days. This has taken their combined holdings to 29% of the supply.

Usually, investors shift their coins into stables whenever they want to escape the volatility associated with the other cryptocurrencies in the sector. When such holders eventually feel that the time is right to jump back into the other coins, they simply exchange their stablecoins for them.

This shift naturally provides a bullish boost to the asset that they swap into. Thus, the supply of the stables may be looked at as the available “buying supply” for volatile coins like Bitcoin.

Since the sharks and whales of USDP and DAI have loaded up their supplies, Bitcoin and others may benefit from it when they use these reserves for buying (which may not be in the near future, however).

BTC Price At the time of writing, Bitcoin is trading around $30,500, down 1% in the last week.

BTC has only been moving sideways in the last few weeks | Source: BTCUSD on TradingView Featured image from Jake Gaviola on Unsplash.com, charts from TradingView.com, Santiment.net

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SharpLink Gaming has announced a $200 million capital raise aimed at expanding its Ethereum treasury. As ETH solidifies its role as programmable money and a yield-bearing asset through staking, SharpLink is betting big on its long-term potential. The raise positions the company among a rising class of corporates reshaping capital strategy around blockchain-native assets.

Why SharpLink Is Going All-In On Ethereum In an X post, SharpLink Gaming shared an update stating that the company has secured $200 million capital raise through a direct offering priced at $19.50 per share, and has been backed by four global institutional investors.

According to the company, the capital will be strategically deployed to expand its ETH treasury holdings. Upon full deployment, SharpLink expects its ETH reserves to exceed $2 billion, placing it among the most ETH-heavy corporate treasuries globally.

The company focuses on accumulating ETH, staking ETH to earn sustainable on-chain yield, and consistently growing ETH-per-share for long-term shareholders. Ethereum is becoming the foundational layer of global finance infrastructure for tokenized assets, and SharpLink is built to capture that upside.

According to the DuRtY_Crypto post, Vitalik Buterin recently pointed out that ETH treasuries are increasingly valuable, not just as a store of ETH, but as a different vehicle for people to have access to ETH. Instead of simply buying ETH and holding it, investors are turning to companies that hold and manage ETH treasuries.

DuRtY_Crypto has outlined the irony that was unseen between the Bankless crew, who quickly celebrated the mainstream validation. The PulseChain Sacrifice Wallet has skyrocketed to become the 5th-largest ETH holder in crypto with 171,054 ETH. Before the funds rotated into ETH, the wallet was already commanding attention as the largest DAI holder across all chains. Thus, the expert has commended Richard Heart, the controversial figure behind PulseChain, for executing a strategic pivot that few saw coming. 

Ethereum Activity Heats Up As Transaction Volume Nears ATH While prominent figures are raising capital and increasing the ETH treasury’s value, CoinW has also revealed that Ethereum on-chain momentum is surging again. According to data from Etherscan, the network processed 1.87 million transactions on Aug 6th, nearing its all-time high of 1.96 million, which was set back in January 2024.

Meanwhile, the validator queue data shows the ETH pOs exit queue has dropped significantly to 443,164 ETH, worth roughly $1.612 billion. Following the decline, the average exit wait time now sits at 7 days and 17 hours.

With UK regulators officially lifting the ban on crypto exchange-traded notes (cETNs) for retail investors, as reported by CoinW, Ethereum’s performance may experience notable growth. This move signals a major policy shift toward embracing digital asset markets. Furthermore, it will allow individuals to engage in these risk-bearing financial products at their discretion, a move seen as aligning the UK more closely with the global crypto market.

ETH trading at $3,912 on the 1D chart | Source: ETHUSDT on Tradingview.com Featured image from Getty Images, chart from Tradingview.com

The recent passage of the GENIUS Act introduced a new regulatory framework for stablecoins, such as Tether (USDT), drawing increasing attention from traditional and cryptocurrency firms.

Tether’s Regulatory Challenges And Rising Rivals With the stablecoin market growing from $120 billion in October 2023 to $288 billion as of August, Tether’s USDT continues to hold its position as the largest stablecoin. 

However, the Motley Fool team has identified three emerging contenders that are poised to disrupt the company’s dominance and present significant competition.

Tether commands nearly 60% of the stablecoin market, but it has not been without controversy. In 2021, the Commodity Futures Trading Commission (CFTC) fined Tether $41 million for “misleading claims” regarding its reserves, which were allegedly not fully backed by US dollars. 

Furthermore, Tether’s current reporting practices do not align with the requirements set forth by the recently passed GENIUS Act, which mandates stablecoin issuers to publish monthly disclosures about their reserves. 

Notably, the stablecoin issuer only provides these reports on a quarterly basis, potentially opening the door for competitors to capture some of its market share, at least in the United States.

Among the most prominent challengers highlighted is USD Coin (USDC), which boasts a market capitalization of approximately $68 billion. Like Tether, USDC is a fiat-backed stablecoin; however, it has not faced any legal scrutiny regarding its reserves. 

The issuer, Circle, has consistently published monthly attestations since USDC’s inception in 2018. The Motley Tool team asserts that this commitment positions USDC as Tether’s primary competitor, especially as regulatory compliance becomes increasingly crucial. 

The competitive landscape is further complicated by regulatory developments in Europe. Under the European Union’s Market in Crypto-Assets Regulation (MiCA), stablecoin issuers must obtain regulatory approval and meet strict reserve requirements. 

Circle has already achieved compliance with both USDC and its Euro stablecoin, EURC, while Tether has opted to withdraw from the European market entirely.

A New Contender With Ties To XRP Another contender is Dai, now rebranded as USDS, which differentiates itself by adhering to the principles of decentralization. Unlike Tether and USDC, Dai is managed by Sky, previously known as MakerDAO, a decentralized autonomous organization. 

This structure allows anyone holding SKY governance tokens to participate in decision-making processes concerning Dai. Rather than being backed by fiat reserves, Dai is a crypto-backed stablecoin, relying on overcollateralized crypto loans. 

Lastly, Ripple USD (RUSD) enters the fray as a smaller player with a market cap of around $667 million. Despite its size, the Motley Fool asserts that RUSD’s connection to XRP makes it a formidable competitor. 

Ripple, the company behind XRP, has launched RUSD as part of its payment solutions for financial institutions, focusing on efficient cross-border transactions. 

Additionally, RUSD has received regulatory approval from the New York State Department of Financial Services, which adds a layer of credibility and could help it gain traction in the market.

Despite the potential threat, Tether’s figures far surpass those of these three challengers. This suggests that the firm’s reign in the stablecoin market may continue for some time. One thing is certain, though: stablecoins are making a notable entrance into the broader financial landscape.

The daily chart shows the market’s total capitalization dropping toward $3.75 trillion. Source: TOTAL on TradingView.com Featured image from DALL-E, chart from TradingView.com 

Dai Dai Dai Bitcoin: Adjusting Expectations for 2026

PANews reported on March 20 that, according to an official announcement, Binance will support the plan to swap Dai (DAI) tokens and rebrand them as USDS (USDS).

Trading Notice: Binance will cease trading and remove all existing DAI spot trading pairs (BTC/DAI, DAI/JPY, ETH/DAI, and USDT/DAI) at 11:00 AM (UTC+8) on April 7, 2026, and will automatically cancel all pending orders. Binance will reopen spot trading for BTC/USDS, ETH/USDS, and USDS/USDT at 4:00 PM (UTC+8) on April 9, 2026 .

Deposits and Withdrawals: Binance will suspend DAI token deposits and withdrawals at 11:30 AM (UTC+8) on April 7, 2026. Note: DAI tokens deposited after this time will not be credited to your account; please deposit in advance. Binance will reopen USDS token deposits at 3:00 PM (UTC+8) on April 9, 2026. Binance will announce the USDS token withdrawal reopening time separately after the token swap and brand upgrade are completed. After the token swap and brand upgrade are completed, Binance will no longer support DAI token deposits and withdrawals.

NYT May Have Unmasked the Real Satoshi After a 1-Year Probe

Binance completes Dai (DAI) token swap and rebranding to USDS (USDS)

DA Davidson Raises Micron’s Price Target to $2,000, Retains Buy Rating

U.S. investment bank DA Davidson released a research note stating that Micron Technology has entered a new phase with one of the best performance visibility in the semiconductor industry, a stark contrast to its past standing in the sector. Driven by another quarter of results that handily exceeded expectations and positive forward guidance, Micron’s stock price surged sharply. These signals indicate that the current memory chip boom cycle is far from over. While the company is ramping up capacity investments (with capital expenditure (CAPEX) projected to hit $10 billion in the fourth quarter of fiscal 2026, which will bring additional supply), management expects the memory market to remain tight on supply and demand at least through 2027. Against this backdrop, DA Davidson reiterated its "Buy" rating on Micron and raised its price target from $1,500 to $2,000, equivalent to a 20x price-to-earnings (P/E) ratio based on the company’s 2026 calendar year expected earnings per share (EPS).

3 minutes ago

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.

3 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.

3 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.

3 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)

3 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%.

3 minutes ago

DA Davidson Raises Micron’s Price Target to $2,000, Retains Buy Rating

U.S. investment bank DA Davidson released a research note stating that Micron Technology has entered a new phase with one of the best performance visibility in the semiconductor industry, a stark contrast to its past standing in the sector. Driven by another quarter of results that handily exceeded expectations and positive forward guidance, Micron’s stock price surged sharply. These signals indicate that the current memory chip boom cycle is far from over. While the company is ramping up capacity investments (with capital expenditure (CAPEX) projected to hit $10 billion in the fourth quarter of fiscal 2026, which will bring additional supply), management expects the memory market to remain tight on supply and demand at least through 2027. Against this backdrop, DA Davidson reiterated its "Buy" rating on Micron and raised its price target from $1,500 to $2,000, equivalent to a 20x price-to-earnings (P/E) ratio based on the company’s 2026 calendar year expected earnings per share (EPS).

3 minutes ago

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.

3 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.

3 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.

3 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)

3 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%.

3 minutes ago

TL;DR

BA Labs has proposed doubling key LITE-PSM-USDC-A parameters in the Sky stablecoin system from 400 million to 800 million. The proposal says USDC reserves stand at 4.13 billion, up 108% since the last recalibration in October 2024. The change would raise daily refresh capacity to 1.6 billion and total serving capacity to 2.4 billion, according to the forum post. The update has been approved by the Core Facilitator team for an upcoming Executive Vote, but it still needs formal approval before going live. Sky governance is considering a major parameter increase for its LITE-PSM-USDC-A module, a move that would expand the system’s ability to handle large USDC-related stablecoin flows.

In a June 11 forum post, BA Labs, acting as Core Council Risk Advisor, proposed increasing both the pre-minted DAI buffer and the DC-IAM gap parameter from 400 million to 800 million. The proposal describes LITE-PSM-USDC-A as the dominant USDC-DAI trading venue in the Sky stablecoin system.

Sky Proposal Targets Bigger Stablecoin Flow Capacity The Peg Stability Module is a key piece of stablecoin plumbing. In simple terms, it helps absorb conversion flows between USDC and DAI or related Sky ecosystem assets, allowing the system to meet demand without creating unnecessary stress during periods of heavy activity.

BA Labs said USDC reserves currently stand at 4.13 billion. That is more than double the level seen at the last recalibration on October 7, 2024, with the proposal citing a 108% increase in reserves since then.

The recommended parameter change would double the buffer and gap to 800 million. According to the post, that would lift daily refresh capacity to 1.6 billion per day and serving capacity to 2.4 billion.

Why The Buffer Matters Large stablecoin systems can experience sudden flows when users rotate between assets, redeem liquidity or respond to market stress. If the module’s capacity is too small relative to user demand, the system may need more frequent parameter adjustments or face tighter liquidity conditions during heavy conversion days.

The proposal points to several major historical flow events. The heaviest single SellGem day cited by BA Labs drained 1.75 billion DAI on May 18, 2026. Other large days included 1.60 billion on June 20, 2025, 1.41 billion on October 21, 2025, 1.41 billion on March 5, 2026 and 1.31 billion on January 13, 2026.

Those figures explain why the proposed buffer is not just a technical governance detail. In a stablecoin system with billions in reserves, parameter limits can directly affect how smoothly large flows move through the protocol.

Still Awaiting Formal Approval The proposal notes that the Core Facilitator team approved the change for inclusion in an upcoming Executive Vote on June 12. That means the update has advanced procedurally, but it has not yet become active protocol policy.

For DeFi users, the important distinction is that this is a proposed risk and liquidity adjustment rather than an already executed change. If approved in an Executive Vote, the higher limits would give the Sky system more room to handle large USDC conversion flows without repeated manual recalibration.

The move also shows how stablecoin governance is increasingly focused on liquidity operations at very large scale. As reserves grow, the parameters that once looked sufficient can become too small for the system’s real transaction patterns.

For Sky, the question now is whether governance agrees that doubling the LITE-PSM-USDC-A buffer is the right response to that growth.

PANews, June 23 – According to the National Business Daily, on June 23, at the 2026 Volcano Engine FORCE Conference, Volcano Engine President Tan Dai officially unveiled the Doubao video generation model Seedance 2.5. The model is currently in global enterprise beta testing and is expected to officially launch in early July. On-site presentations showed that Seedance 2.5 has completed upgrades across multiple core capabilities, supporting native 30-second single-segment video output and the simultaneous import of 50 full-modality reference materials, enabling more controllable and higher-precision video generation and editing. In addition, the conference announced an upgrade to the previous-generation Seedance 2.0, which now features native 4K video generation capability.

The conference also previewed ByteDance’s new AI copyright commercialization platform, with Stephen Chow becoming one of the platform’s first partners. Leveraging this copyright platform and Seedance’s video generation capabilities, users on Douyin, Jimeng, CapCut, and all tool platforms integrated with Seedance can use officially authorized templates to create derivative works based on classic Stephen Chow film scenes. Tan Dai announced that the related template series and daily creations have already surpassed 100,000.

Posted: November 20, 2019

Yesterday, MakerDAO rolled out Multi-Collateral DAI [MCD] on its platform. While the platform continues its support for Ethereum-based collateral, support for Brave’s Basic Attention Token [BAT] was also added to the platform. Therefore, MCD would be supporting ETH as well as BAT tokens, for the time being. The platform is also eyeing Augur [REP], Golem [GNT], 0x [ZRX], DigixDAO [DGD], and OmiseGo [OMG] as potential assets on the platform.

The latest addition to the Maker platform requires users to migrate from Single Collateral Dai [SAI] to Multi-Collateral Dai. MakerDAO’s Mariano Conti went on to update the community about DAI’s progress and tweeted,

“Just over 12 hours in, some numbers for @MakerDAO Dai: – 2.4 million Dai – 88% ETH, 11% BAT, 1% Sai – 689 Vaults opened – 470k Dai in DSR – 534 Dai generated in Stability Fees – 6 liquidations already!”

At the time of writing, however, the figures had gone way beyond the same. According to DAI Stats, there were a total of 6,403,697.126 DAI in total. Further, about 6,118,083.014 DAI were acquired from ETH, followed by 269,552.625 DAI from BAT. 335.306 DAI were also obtained from SAI. The ETH stability fee and BAT stability were at 4.00 percent. However, the stability fee of SAI was at 0.00 percent.

Additionally, Dai Savings Rate [DSR] was another addition to the platform. This feature will allow users to lock their DAI into Maker’s DSR contract, while gaining a variable interest rate in DAI. At the time of writing, the DAI Savings Rate was at 2.00 percent, while the DAI in DSR was 542,872.369.

The relabeling of the term. ‘Collateralized Debt Position’ [CDP] to ‘Vault’ is another upgrade on the platform. There were a total of 768 vaults opened, during press time.

However, the total number of DAI locked in DeFi was fairly low. After recording an all-time high of 30.022 million in terms of DAI locked in DeFi, on 7 November, things went downhill. The total DAI locked in DeFi, as of today, was 16.235 million.

Decentralized finance (DeFi) lending platform and stablecoin issuer MakerDAO could soon ditch $390 million of crypto exchange Gemini’s GUSD stablecoin from its reserves.

The protocol’s community is currently voting on a proposal to decrease the maximum amount of GUSD to $110 million from $500 million held in Maker’s DAI stablecoin reserve, called the Peg Stability Module (PSM).

Less than 24 hours before the vote’s end, roughly 94% of those who have already voted are in favor of the proposal to cut GUSD. However, a similar proposal in January saw a late rush of votes in favor of retaining GUSD, pushing that side to a razor-thin 50.85% majority.

The vote is significant for GUSD’s future, as Maker holds roughly 88% of the stablecoin’s $568 million circulating supply. Maker backs the value of the $4.5 billion DAI by holding cryptocurrencies such as Circle’s USDC and GUSD in the reserve, and increasingly by investing in real-world assets like government bonds.

Gemini – the crypto exchange founded and run by Tyler and Cameron Winklevoss and the issuer of GUSD – pays a 2% annual reward to MakerDAO for using the token as a reserve asset. The proposal, however, argued that the platform could enjoy better revenue opportunities, for example by investing in short-term U.S. Treasuries, which currently offer about a 5% yield.

Read more: MakerDAO Paves Way for Additional $1.28B U.S. Treasury Purchase

“Reducing GUSD exposure could allow for better capital efficiency by deploying funds into higher revenue generating opportunities,” the proposal said.

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SponsoredUpdated Jun 15, 2023, 8:24 p.m. Published Jun 15, 2023, 8:17 p.m.

2 min read

MakerDAO founder Rune Christensen (Original image by Trevor Jones)Decentralized finance (DeFi) platform and stablecoin issuer MakerDAO has approved a hike in the reward to investors for holding its $4.5 billion DAI stablecoin and to reshuffle DAI’s reserve assets.

In an executive vote concluded Thursday, the MakerDAO community ratified a proposal to increase the DAI Savings Rate (DSR) to 3.49% from 1%, providing additional incentive for investors to hold and lend DAI instead of rivals like popular stablecoins such as USDC and USDT.

The decision happened as Maker – led by a decentralized autonomous organization (DAO) where MKR token owners can vote on proposals – is undergoing a major transformation, including rearranging the backing assets of the DAI stablecoin. The platform increasingly invests in real-world assets such as short-term U.S. government bonds to boost revenues, redistributing a part of it to users through the DSR.

Read more: Lending Platform MakerDAO Approves ‘Constitution,’ Moves Forward With ‘Endgame’ Plan

Hiking the reward is significant because it resets the baseline interest rate across the DeFi ecosystem, spurring higher yields from lending stablecoins while making leverage more expensive, according to Karpatkey, a treasury management provider to decentralized organizations.

It also underscores Maker’s strategic shift, Karpatkey said, because the proposal includes hiking fees on crypto assets to take out a DAI loan. “Originally a platform for leveraged long traders, Maker now positions itself as a bridge to real-world assets (RWA) yield,” said Karpatkey.

The decision will take effect on June 19.

Paxos Dollar out, Gemini Dollar cutThe executive vote also included a slew of other proposals that influence the composition of DAI’s backing reserve assets.

The community effectively ditched Paxos Dollar (USDP) from the reserve by approving a decrease in its debt ceiling to zero. The move has a substantial impact on fintech firm Paxos’ stablecoin, as Maker currently holds roughly half of USDP’s $1 billion supply.

The vote also ratified onboarding the BlockTower Andromeda RWA vault that would allow the additional purchase of up to $1.28 billion in U.S. Treasuries for the reserve, doubling down on giving traditional financial assets a bigger role in DAI’s reserve.

In a separate poll concluded Thursday, MakerDAO voters also favored curbing Gemini Dollar (GUSD) in the reserve to $110 million from $500 million. As CoinDesk reported, the result could jeopardize GUSD’s future as Maker holds 88% of the token’s supply.

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If traditional finance got a blockchain makeover, DeFi protocols would inevitably be the result. Here, decentralized apps (DApps) and smart contracts reign supreme, offering you control over your financial future. 

From staking your digital assets for crypto yield to conducting anonymous crypto swaps, this guide introduces you to the top DeFi protocols to keep an eye on in 2026.

In This Guide:

12 Top DeFi protocols in 2026 DeFi protocols comparedWhat are DeFi protocols?How do DeFi protocols work?Should you use DeFi protocols?Could DeFi replace traditional finance?Frequently asked questions12 Top DeFi protocols in 2026

1. dYdX

Best DeFi protocol for liquid staking

Token

dYdX

Token max supply

1,000,000,000 DYDX

Market cap

$1.499B

TVL

$401.81M

The dYdX protocol provides advanced financial instruments like perpetual and margin trading within the DeFi ecosystem. The leading exchange operates without KYC, allowing for anonymous, trustless trading. It supports perpetual and margin trading, alongside lending and borrowing, and offers competitive fee structures and gas-free trading experiences.

The platform provides lower collateralization levels compared to competitors, increasing accessibility. dYdX also utilizes StarkWare for increased efficiency and lower transaction fees and allows for community contributions and governance.

Notably, dYdX also transitioned to an independent blockchain within the Cosmos ecosystem, enhancing performance and furthering decentralization.

Pros

Advanced trading options No KYC required Low fees Layer-2 scalability Dynamic interest rates Interoperability with Cosmos Cons

Complex for beginners Dependent on Ethereum Limited spot trading New chain transition challenges Ecosystem adaptation required Trade features: Perpetual trading, margin trading, decentralized order book, layer-2 scalability, cross-margin capabilities.

Earning features: Lending, borrowing, dynamic interest rates, trading rewards.

Security features: Self-custodial security, third-party audits, secured by Ethereum protocol.

Platform and ecosystem features: No KYC, open-source code, integration with Cosmos ecosystem, decentralized governance, off-chain order matching.

2. PancakeSwap

Best DeFi protocol for cost-effective transactions

Token

CAKE

Token max supply

450,000,000 CAKE

Market cap

$974.4M

TVL

$2.224B

PancakeSwap is a top-tier DeFi protocol. It focuses on the Binance Smart Chain blockchain, but supports a total of eight networks, including Ethereum.

PancakeSwap’s native crypto is CAKE, which has a total supply of 450 million tokens. This decentralized exchange leverages an automated market maker (AMM) model, allowing for direct, wallet-to-wallet trades without intermediaries, enhancing user control and security.

Moreover, it offers a range of services beyond simple trades, such as yield farming, staking, and lotteries, enabling users to earn rewards in various ways. Its user-friendly interface makes it accessible for beginners, while its innovative features, like the zkBridge technology, ensure secure and efficient transactions across different blockchain networks.

PancakeSwap’s growth is underscored by its status as the first billion-dollar project on the Binance Smart Chain and its continual upgrades, such as the current PancakeSwap V3, demonstrating its commitment to improving functionality and user experience.

Pros

Intuitive interface High APY for liquidity providers (LPs) Supports staking and farming NFT marketplace Cons

No mobile app No native crypto wallet Trade features: Instant crypto trading, liquidity pools, asset bridging, perpetual trading, and cryptocurrency purchasing.

Earning features: Farming, pools, liquid staking, simple staking.

Game and NFT features: Gaming marketplace, prediction market, NFT marketplace for NFTs on BNB Chain.

DeFi and ecosystem engagement: Governance, initial farm offerings (IFOs), gauge voting and revenue sharing, and farm booster.

3. De.Fi

Best DeFi protocol for monitoring

Token

DEFI

Token max supply

1,000,000,000 DEFI

Market cap

n/a

TVL

n/a

De.Fi provides detailed smart contract analysis to detect potential vulnerabilities and assign security scores. It offers an extensive dashboard for monitoring wallet transactions and balances, alongside powerful investment tools for analyzing and controlling positions in DeFi protocols, NFT collections, and lending markets.

Additionally, De.Fi includes specialized security features like the De.Fi Shield and Scanner for thorough contract examination. It also comes with user-friendly transaction tools such as secure crypto sending and De.Fi Swap for easy cryptocurrency exchanges across various blockchains, making it a well-rounded solution for utilizing the DeFi space safely and effectively.

Pros

Advanced security scanning Comprehensive dashboard Real-time analytics User-friendly interface Multi-blockchain support Cons

Complexity for beginners Technical knowledge needed Frequent updates required Smart contract and security features: Vulnerability scanning, smart contract security scoring, De.Fi Shield, De.Fi Scanner.

Portfolio and transaction monitoring features: Comprehensive dashboard, address book, wallet balance tracking, deposited and loaned balances overview.

Investment and exploration features: Market analysis tools, NFT portfolio management, exploration of DeFi opportunities.

Security and protection tools: Asset security assessments, approval checks, risk highlights for tokens and NFTs, customizable security settings.

Transaction and exchange features: Secure cryptocurrency sending, De.Fi Swap, slippage tolerance settings.

4. Uniswap

Best DeFi protocol for community

Token

UNI

Token max supply

1,000,000,000 UNI

Market cap

$8.86B

TVL

$5.543B

Uniswap is another leading decentralized exchange. The native token is UNI, which has a total supply of 1 billion tokens.

Governed by its users through the UNI token, it offers a community-driven experience, unlike centralized platforms. Uniswap’s liquidity pools facilitate secure and direct token swaps, ensuring users maintain complete control over their funds. Originally built on Ethereum, it now supports other Ethereum-compatible networks like Polygon and Optimism, offering lower transaction costs.

Uniswap’s simplicity makes it accessible for beginners while providing advanced features for experienced users. This is rare when it comes to DEXs, which can often be tricky to use and less straightforward than their CEX counterparts. Uniswap also boasts broad token availability and deep liquidity, reducing price impact on large trades.

Additionally, the DEX has integrated NFT trading, enhancing its offerings. With nearly 5 million unique wallet addresses and surpassing $1 trillion in trading volume, its popularity and reliability are evident.

Finally, Uniswap’s swap fees are competitive, especially when compared to centralized exchanges, and users can choose cheaper networks to avoid high Ethereum gas fees.

Pros

Easy-to-use interface Low-cost trades Multiple blockchain networks supported Cons

No mobile app High fees when purchasing crypto (third-party services) Trade features: Instant crypto trading, liquidity pools, asset bridging, cryptocurrency purchasing.

Earning features: Funding liquidity pools, swap fee earnings.

Game and NFT features: NFT marketplace, prediction market.

DeFi and ecosystem engagement: Governance, concentrated liquidity, transaction fee structure.

5. Curve Finance

Best DeFi protocol for stablecoins

Token

CRV

Token max supply

2,091,644,627 CRV

Market cap

$730.32M

TVL

$2.486B

Curve Finance is a leading decentralized exchange (DEX) on the Ethereum blockchain, specializing in the efficient trading of stablecoins and wrapped tokens like wBTC, renBTC, and sBTC. Founded by Michael Egorov, it has quickly risen to prominence, and is particularly famed for its innovative use of liquidity pools and automated market maker (AMM) systems. These allow users to earn high annual interest rates — over 300% in some pools — on deposited cryptocurrency.

The platform distinguishes itself with its unique bonding curve. This is optimized for stablecoins to reduce slippage, allowing significant trades with minimal price impact. This has positioned Curve as a vital component in the DeFi space, especially for those interested in liquidity mining and yield farming.

Curve Finance operates as a decentralized autonomous organization (DAO), with its governance token CRV enabling holders to vote on changes and proposals. This shift to a DAO structure allows Curve to operate with enhanced transparency and community-driven development. Despite its complexity and the potential for impermanent loss, Curve Finance offers significant opportunities for liquidity providers and traders, underlined by security measures including multiple code audits and bug bounties to safeguard user assets.

Pros

Specializes in stablecoins Reduced slippage Governed by DAO Multiple security audits Bug bounties for added safety Cons

Complex for beginners Focused mainly on stablecoins and wrapped tokens Reliance on Ethereum blockchain, leading to potential high gas fees Trade features: Stablecoin specialization, efficient liquidity pools, unique bonding curve, minimal slippage in trades.

Earning features: High annual interest rates from liquidity pools, rewards in CRV tokens, participation in yield farming.

Security features: Multiple security audits, bug bounties, governed by decentralized autonomous organization (DAO).

DeFi and ecosystem engagement: Governance via CRV token, high total value locked (TVL), support for various wrapped tokens.

6. Balancer

Best DeFi protocol for multi-tokens pools

Token

BAL

Token max supply

62,244,253 BAL

Market cap

$268.21M

TVL

$1.242B

Balancer is a versatile and innovative DeFi platform that redefines the concept of decentralized exchanges (DEXs) by combining elements of automated market makers (AMMs) and index funds.

Unlike traditional DEXs — which typically focus on two-token liquidity pools — Balancer’s USP lies in its ability to maintain a balanced portfolio through automatic rebalancing, adjusting the pool’s asset allocations in response to market price changes.

Balancer supports three types of pools: public pools, where anyone can add liquidity and earn trading fees; private pools, where only the creator can contribute liquidity and set parameters; and smart pools, which are private pools with adjustable parameters controlled by a smart contract. This flexibility caters to a wide range of user preferences and risk tolerances.

Furthermore, Balancer’s architecture is designed to function on Ethereum and also on six additional blockchain networks, expanding its accessibility and interoperability within DeFi ecosystems. By providing a decentralized platform for multi-asset liquidity, Balancer contributes significantly to the efficiency of the cryptocurrency market.

Pros

Multi-token pools Automated rebalancing Interoperability Cons

Complex for beginners Limited on smaller chains Trade features: Multi-token pools, automated portfolio rebalancing, customizable pool types (public, private, smart), wide asset variety, minimal slippage through dynamic trading fees.

Earning features: Rewards in BAL tokens, high yield from liquidity provision, participation in liquidity mining, diversified income streams through various pool types.

Security features: Regular security audits, bug bounty programs, non-custodial asset management, transparent smart contract operations.

DeFi and ecosystem engagement: Governance via BAL token, significant total value locked (TVL), interoperability across multiple blockchains, support for a variety of digital assets and wrapped tokens.

7. Summer.fi

Best DeFi protocol for services

Token

Summer.fi

Token max supply

N/A

Market cap

N/A

TVL

$5.345b

Summer.fi, initially known as Oasis.app and one of the earliest MakerDAO projects from 2016, has evolved significantly beyond its original scope.

After Maker became fully decentralized, Summer.fi emerged as a standalone platform, dedicated to establishing a highly trusted application for DeFi capital deployment.

It now transcends being merely an interface for the Maker Protocol. It aims to be the most secure place for engaging with DeFi, providing users with advanced automation features like stop-loss, auto-buy, and auto-sell, as well as strategies such as Constant Multiples for optimizing Vault performance. If your Vault’s collateralization ratio hits your Sell Trigger, Constant Multiple will execute.

Summer.fi prioritizes user experience, offering clear insights into positions, returns, and associated risks, backed by a comprehensive knowledge base reflecting community feedback.

Pros

Comprehensive DeFi services Advanced automation features, (stop-loss, take-profit, auto-buy, etc.) User-friendly interface Integration with multiple protocols (Aave and Maker) Cons

Complex for new users Limited to ERC-20 tokens Borrowing features: Flexible repayment schedules, diverse collateral types, integrated with multiple protocols like Aave and Ajna, protection against market volatility through the Oracle Security Module and constant updates from Chainlink.

Multiplying features: Increase or decrease collateral exposure in one transaction, use borrowed funds to buy more collateral, integration with liquid platforms and the 1inch DEX aggregator for best execution prices, dedicated interface for managing positions.

Earning features: Self-custody solutions for yield earning, compatibility with Aave and Maker protocols, increase yield from StETH, participate in the Dai Savings Rate for passive income.

Automation features: Stop-loss to prevent liquidations, take-profit for efficient exits, auto-buy and auto-sell for Vault management, Constant Multiple to maintain predefined exposure levels.

Integration and partnerships: Support for various wallets like MetaMask and Ledger, integration with the 1inch Network for efficient token swaps, launched on Optimism layer-2 for reduced transaction costs, Ajna Protocol integration for curated borrowing and lending pools.

8. Aave

Best DeFi protocol for liquidity

Token

AAVE

Token max supply

16,000,000 AAVE

Market cap

$1.711B

TVL

$10.564B

Aave (AAVE) is a pioneering entity in the DeFi sector. The comprehensive lending platform boasts a significant Total Value Locked (TVL), which surpasses $10 billion in crypto collateral.

Aave enables users to lend and borrow a wide array of tokens across multiple ecosystems, ensuring a versatile and inclusive financial experience.

The platform’s latest iteration, Aave V3, expands its reach beyond Ethereum to include 10 different blockchain networks, further solidifying its position as a key player in DeFi by enhancing accessibility and providing a range of options for its diverse user base.

Pros

High TVL Wide range of tokens Multi-chain accessibility Flash loans availability Governance via AAVE token Cons

Complexity for beginners High gas fees on Ethereum Risk of liquidation Trade features: Flash loans, real-time interest accrual, stable and variable interest rates, Ethereum network integration, multi-asset collateral support.

Earning features: aTokens for deposit interest, decentralized lending and borrowing, yield optimization strategies, liquidity mining.

Security features: Over-collateralization of loans, smart contract audits, safety module for risk mitigation, bug bounties for platform integrity.

Platform and ecosystem features: Governance via AAVE tokens, layer-2 solutions for reduced fees, decentralized autonomous organization (DAO) structure, no KYC requirements, multi-chain accessibility.

9. MakerDAO

Best DeFi protocol for generating a stablecoin

Token

MKR

Token max supply

1,005,577 MKR

Market cap

$2.686B

TVL

$7B

MakerDAO is a pioneering DeFi platform that has revolutionized the way users engage with digital assets. The platform provides a decentralized borrowing and lending system with its stablecoin, DAI, at the core.

Built on the Ethereum blockchain, it allows users to leverage a variety of cryptocurrencies as collateral to generate DAI, maintaining stability through rigorous governance by MKR token holders.

The platform distinguishes itself with features like over-collateralization to ensure loan security, and a dual-rate model offering users the choice between stable and variable interest rates. However, users must navigate complexities such as liquidation risks and market volatility.

As MakerDAO evolves, it continues to solidify its status as a cornerstone of the DeFi landscape with the introduction of upgrades like V3 and the addition of the GHO stablecoin — balancing user empowerment with the intricate dynamics of decentralized finance.

Pros

Decentralized lending DAI stability Ethereum-based Governance by MKR Over-collateralization Variable interest rates Cons

Complexity High gas fees Liquidation risks Trade features: Flash loans, stable and variable interest rates, real-time aTokens, multi-currency collateral, governance-driven updates.

Earning features: Interest on deposits, participation in governance, yield farming opportunities, dynamic interest rates.

Security features: Over-collateralization, liquidation mechanisms, community governance for risk management, security modules for asset protection.

Platform and ecosystem features: Decentralized borrowing and lending, Ethereum-based, MKR token for governance, integration with multiple crypto assets, open-source development, Maker Vaults for asset management.

10. Compound Finance

Best DeFi protocol for staking

Token

COMP

Token max supply

10,000,000 COMP

Market cap

$487.27M

TVL

$2.668B

Compound Finance is a prominent decentralized lending platform operating on the Ethereum blockchain, known for pioneering the DeFi lending space.

Established by Robert Leshner and Geoffrey Hayes in 2018, Compound simplifies the process of borrowing and lending cryptocurrencies without intermediaries, allowing over $2 billion in assets to be locked on its platform.

Unique for its innovations, such as yield farming and governance through COMP tokens, the platform aims to provide financial inclusion, eliminating traditional transaction minimums and credit checks.

While offering competitive returns through real-time interest rates, users engaging with Compound and its governance token, COMP, must be cautious of market volatility and conduct in-depth research prior to investment.

Pros

Decentralized borrowing and lending No transaction minimums User-friendly interface Supports multiple ERC-20 assets Yield farming opportunities Cons

Market volatility risks Requires over-collateralization Complexity for new users High gas fees on Ethereum Trade features: Real-time interest rate adjustments, supports diverse ERC-20 tokens, and a user-centric lending and borrowing system.

Earning features: Yield farming with COMP tokens, competitive APR for lenders, dynamic interest rates based on market conditions.

Security features: Extensive security audits (Trail of Bits, OpenZeppelin), economic risk analysis by Gauntlet, transparent and verifiable contracts.

DeFi and ecosystem engagement: Decentralized governance with COMP tokens, financial inclusion without traditional verifications, continuous platform innovation and updates.

11. Lido

Best DeFi protocol for ETH staking

Token

LDO

Token max supply

1,000,000,000 LDO

Market cap

$2.215B

TVL

$34.445B

Lido Finance is a DeFi staking protocol offering user-friendly, semi-custodial staking services across multiple cryptocurrencies. Known for its simple interface and decentralized structure, Lido allows users to stake their assets and receive liquid staking tokens, such as stETH, which can be utilized in the broader DeFi ecosystem for yield farming.

Supported by major players in DeFi and endorsed for its reasonable fees and rewarding referral program, Lido maximizes decentralization through its governance token, LDO, allowing stakeholders to partake in decision-making. While Lido streamlines the staking process, users should consider the semi-custodial nature, the staking rewards fees, and potential tax implications associated with rewards.

Pros

User-friendly interface Liquid staking tokens Decentralized governance Supported by DeFi leaders Cons

Semi-custodial service Staking rewards fees Potential tax implications Staking features: Easy and unrestricted staking, maximized earning potential, liquid staking tokens for yield farming.

Earning features: Daily staking rewards, assets used as collateral for lending and yield farming, participation in governance for reward optimization.

Security features: Smart contracts audited by Quantstamp and Sigma Prime, semi-custodial nature maintains user control.

DeFi and ecosystem engagement: Governance via LDO tokens, broad DeFi integration, supports multiple blockchains including Ethereum.

DeFi protocols comparedProtocolTypeTVLTokenNo. of blockchains supportedPancakeSwapDEX$2.224BCAKE9UniswapDEX$5.543BUNI8CurveDEX$2.486BCRV14BalancerDEX$1.242BBAL8Summer.fiDEX$5.345bsummer.fi4AaveLending$10.564BAAVE12MakerDAOLending$7BMKR1CompoundLending$2.668BCOMP4dYdXDEX$401.81MdYdX1LidoStaking$34.445BLDO5De.FiTracker and walletn/aDEFI15What are DeFi protocols?DeFi protocols are sets of rules, procedures, and codes that govern decentralized finance (DeFi) systems, enabling users to engage in activities such as trading, lending, and staking tokens within blockchain ecosystems. 

DeFi represents a paradigm shift leveraging blockchain technology, primarily Ethereum, to cultivate an open, permissionless, and borderless financial ecosystem. Unlike traditional systems, developers write smart contracts to deploy DeFi protocols that enable peer-to-peer interactions without intermediaries. By adhering to the same set of rules, DeFi protocols ensure a standardized experience for all participants. 

An example of a DeFi protocol is MakerDAO. The popular DeFi lending platform allows users to borrow against their crypto assets by locking them in exchange for a stablecoin, DAI, thus offering more predictable repayment terms despite the volatility of crypto markets. 

Other protocols allow you to earn a passive income by generating yield from your staked assets. One popular example is the Lido protocol, which allows you to earn on stETH.  Platforms like Lido aim to offer the highest APY on crypto staking, allowing users to maximize returns on their staked assets within the Ethereum ecosystem.

The total value locked (TVL) is often used as a metric to gauge a protocol’s adoption and utility, with MakerDAO being one of the largest by TVL, highlighting its significant role in DeFi.

In 2026, new and more efficient technologies are being developed. For instance, some protocols incorporate asynchronous smart contracts, which allow transactions and agreements to be executed without needing all parties to be present or online simultaneously. This helps streamline operations within networks like Ethereum.

According to DeFiLlama, the top protocol categories are lending, DEXs, bridges, CDP (protocols that mint their own stablecoin using collateralized lending), and restaking. 

Protocol categories: DeFiLlamaWhy do you need DeFi protocols?DeFi allows decentralized apps (DApps) and platforms to provide services like crypto lending and crypto yield earning through staking. Users can participate in AMM (automated market maker) systems to improve liquidity. 

These features offer a fertile ground for startups to innovate beyond conventional financial products, fostering rapid experimentation and potential disruption. The global accessibility facilitated by DeFi platforms makes them a significant tool for financial inclusion, allowing startups to reach a worldwide audience. 

The interoperability among various DeFi protocols enhances this further, enabling seamless integration of services like web3 gaming and metaverse tokens, broadening the scope of what blockchain startups can achieve.

The total value locked (TVL) in DeFi platforms serves as a metric of trust and utility, indicating the number of cryptocurrencies staked, lent, or committed to liquidity pools, highlighting the ecosystem’s growth and stability.

By eliminating intermediaries, DeFi significantly lowers transaction costs, making it an attractive model for startups, especially in crypto lending and yield generation. Instead of being worried about your credit score, you can apply for a crypto loan with fewer restrictions than in TradFi. This reduction in costs, combined with the potential for high crypto yield through mechanisms like staking, positions DeFi as an increasingly popular option for both entrepreneurs and investors in the crypto market.

How do DeFi protocols work?DeFi protocols function by leveraging blockchain technology. While most of them are based on Ethereum, some may also support other networks. At the heart of these services are smart contracts, self-executing contracts with the terms of the agreement directly written into code, which facilitate, verify, and enforce the negotiation or performance of a contract.

DeFi, however, requires thorough research and understanding of several factors, including security, liquidity, and the platform’s governance structure. It’s important to assess the user experience, the degree of interoperability with other DApps and blockchain systems, and the level of community involvement in decision-making processes.

1. Decentralized apps (DApps)Users can engage with various DeFi platforms or DApps to access a wide range of financial services. 

One common way to participate is through crypto lending on platforms. Protocols such as Aave or Compound allow you to deposit cryptocurrencies to earn interest. The earnings are measured as Annual Percentage Yield (APY), which is a volatile percentage that corresponds to the market’s demands.

2. Liquidity miningAnother popular DeFi activity is liquidity mining. You can provide liquidity to decentralized exchanges (DEXs) by depositing your assets into liquidity pools. This deposit is usually made for a pair of assets, such as ETH-USDT, but it can be anything else.

In return, you earn rewards, often in the platform’s native tokens. This process is critical for ensuring there is enough market liquidity for trading and is facilitated by AMMs, algorithms used by DEXs to determine the price of tokens and facilitate trades.

3. Swaps (trading)Trading on DEXs is another key function of DeFi protocols. These platforms allow users to trade cryptocurrencies directly with others in a more private and accessible manner than on centralized exchanges. 

This not only supports the decentralized ethos of blockchain but also contributes to the Total Value Locked (TVL).

Should you use DeFi protocols?Pros  Earn money: You can make your crypto work for you. Put your assets in DeFi platforms to earn interest or rewards. Trade easily: Swap cryptocurrencies directly with others. No need for a middleman. More control: You’re in charge of your money. No bank or institution can block your transactions. Open to everyone: Anyone with an internet connection can join. It’s global and inclusive. Transparent: Everything is recorded on the blockchain. You can see all transactions. New opportunities: Explore new financial services like crypto lending or web3 gaming. Cons  Risky: Crypto values can change fast. Your investments can shrink quickly. Complicated: Some DeFi stuff is hard to understand. It’s not always beginner-friendly. Security issues: Hacks happen. If a DeFi platform gets attacked, you might lose your money. No customer support: If you have a problem, there’s no customer service to call. Research needed: You need to do your homework before investing. Not all platforms are safe. High fees: Sometimes, you’ll pay a lot to make transactions, especially when the network is busy. Could DeFi replace traditional finance?Decentralized finance has the potential to usurp traditional institutions, specifically TradFi. Decentralized finance enables users to transact securely, anonymously, and efficiently and is thus likely to gain popularity as web3 and crypto adoption grows. From crypto lending to staking to market makers, DeFi is exciting but also risky.

Do not interact with any DeFi protocols until you have developed a solid plan and are entirely comfortable with the mechanisms of the platform. Always be aware of the potential for losses, and never invest more than you can afford to lose.

Frequently asked questions What is the most popular DeFi protocol? The most popular DeFi protocol is often considered to be MakerDAO. It frequently leads in terms of Total Value Locked (TVL) and has a wide usage across the DeFi ecosystem. MakerDAO’s platform revolves around the generation of DAI, a stablecoin pegged to the U.S. dollar, and enables decentralized borrowing and saving. Its popularity stems from its innovative approach to maintaining currency stability and providing a decentralized credit service.

What are the top five DeFi tokens? The top five DeFi tokens typically include Maker (MKR), Aave (AAVE), Compound (COMP), Uniswap (UNI), and PancakeSwap (CAKE), based on their market capitalization and impact on the DeFi space. These tokens facilitate governance of their respective platforms, offering holders voting rights on decisions and upgrades. They are integral to the operations of these platforms, from lending and borrowing to providing liquidity and facilitating decentralized trading.

What is TVL in DeFi protocols? Total Value Locked (TVL) in DeFi protocols refers to the total amount of assets currently being staked, lent, or deposited within a DeFi protocol’s smart contracts. It serves as a metric to gauge the overall health and growth of the DeFi market, indicating how much money is actively used in these decentralized financial services. A higher TVL suggests greater user trust and utility of the DeFi ecosystem.

How many DeFi protocols are there? The number of DeFi protocols is constantly growing as the space evolves and new projects are launched. There are hundreds of DeFi protocols across various blockchains, catering to different aspects of decentralized finance such as lending, borrowing, trading, and liquidity provision. The exact number can vary daily due to the dynamic nature of the crypto and DeFi industries.

How many DeFi protocols are there? The number of DeFi protocols is constantly growing as the space evolves and new projects are launched. There are hundreds of DeFi protocols across various blockchains, catering to different aspects of decentralized finance such as lending, borrowing, trading, and liquidity provision. The exact number can vary daily due to the dynamic nature of the crypto and DeFi industries.

Is TVL a good metric? TVL is a good metric for understanding the scale and usage of a DeFi protocol, as it reflects the total capital committed by users. However, it should not be the sole metric for assessing a protocol’s value or success, as it does not account for risks, decentralization level, or liquidity. It’s best used in combination with other factors like user growth, transaction volume, and protocol governance for a comprehensive evaluation.

What is a good FDV TVL ratio? A good FDV (Fully Diluted Valuation) to TVL (Total Value Locked) ratio for a DeFi project is typically below one, indicating that the project’s market valuation is not excessively higher than the value of assets locked in the protocol. Lower FDV/TVL ratios suggest that the protocol is undervalued or efficiently using its capital, which can be attractive to investors. However, this ratio should be considered alongside other metrics and project fundamentals for a complete analysis.

What is the TVL formula? The TVL formula in DeFi protocols calculates the total value of all assets deposited in the protocol’s smart contracts, which can include cryptocurrencies, stablecoins, and other tokens. It aggregates the value of these assets, often converting them to a common currency like USD for a standardized measure. The formula is the sum of the value of each type of asset multiplied by its current market price.

How to calculate FDV? The Fully Diluted Valuation (FDV) is calculated by taking the total supply of a token (both circulating and non-circulating) and multiplying it by the current price of the token. This gives an idea of what the market cap would be if all tokens were in circulation and trading at the current price. It’s an important metric for understanding the potential market size and investment risk of a cryptocurrency or DeFi project.

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Borrowing rates for USDC, one of the most liquid dollar-pegged stablecoin, remain high on Aave and Compound v2, two of the world’s top decentralized protocols. According to Kaiko, a blockchain analytics platform, rates have ranged from 4% to 15% on Aave and around 13% on Compound.

It should be noted that this surge is when the crypto and decentralized finance (DeFi) scene is recovering after an extended “winter” that froze participation.

USDC borrowing rates on Aave and Compound | Source: Kaiko on X Kaiko notes that the utilization rate for USDC on Aave has remained close to optimal levels, indicating steady demand for the stablecoin among borrowers, mainly in the second half of November. Looking at trends, it is evident that borrowing rates in Aave v2 have been stabilizing between 4% and 15% over the past week.

AAVE prices trending sideways on the daily chart | Source: AAVEUSDT on Binance, TradingView Meanwhile, on Compound v2, borrowing USDC has been more expensive than others, including USDT and DAI. The USDC borrowing rate is around 13%, much higher than borrowing Ethereum-based DAI or Tether Holding’s USDT.

There is no precise reason to explain this divergence. However, the reason why demand is varying could be multifaceted. One of the key reasons is that after depressed activity in the better part of 2022 and 2023, activity is expanding as total value locked (TVL) not only in Ethereum but in other chains, including Solana, shows.

DeFiLlama says the total TVL is around $47 billion, up from approximately $38 billion registered in mid-October. Subsequently, with rising demand, USDC holders will likely want more yield from willing borrowers. 

DeFi TVL rising | Source: DeFiLlama Beyond this, increasing borrowing rates could be due to users averse to using centralized exchanges opting to secure a stablecoin that’s fully audited, publishing attestation statements regularly.

In the case of USDC, these attestations are independent audits that verify whether Circle, the issuer, holds sufficient reserves to back every token in circulation.

Are Bulls Ready To Lift Crypto Prices Higher? While the high borrowing rates for USDC may make it less attractive for some borrowers, it also highlights the strong demand for stablecoins and their growing importance in DeFi. In the crypto market, the demand for stablecoins, such as USDC, can indicate the start of a bull run. 

Stablecoins provide a gateway into crypto. When there is a higher demand for these tokens, the chances of the crypto market rising also increase. As the crypto and DeFi scene matures, stablecoins like DAI and USDT are expected to play a critical role.

Feature image from Canva, chart from TradingView

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Dalmas is an experienced journalist with over a decade in Forex, general finance, technology, and blockchain developments. He is currently a crypto reporter for Bitcoinist, where he covers DeFi, blockchain, DeFi, and latest industry news. His work and that of his partners have been featured in top news outlets, including Forbes, investing.com, CoinTelegraph, and Entrepreneur, among others. He is passionate about technology and politics and is always on the lookout for the latest trends in these fields. He also loves spending time with his family and friends, exploring nature, and traveling to new places. Connect on X: @Dalmas_Ngetich, or message him directly on Telegram here: @Dalmas_Ngetich.

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