Latest web3 developments out of Coinbase, Meta, Tether, and more.

 has rolled out tokenised stock trading to all US users, allowing customers to trade stocks and ETFs 24/5.

Alongside, Coinbase has partnered with Yahoo Finance to enable users to move directly from researching an asset on Yahoo Finance to executing a trade on Coinbase, while also providing integrated tools within Yahoo Finance for asset discovery and tracking.

 is reportedly planning to integrate stablecoin payments into its apps later this year, aiming to start in the early part of the second half of 2026, according to people familiar with the plans.

The idea is to partner with a third-party vendor to run dollar-pegged token payments and launch a new wallet, rather than building the full stack internally.

 claimed that Aave Horizon is now the largest market for real-world-asset (RWA)-backed loans on 

, and said it’s the only RWA market offering instant, 24/7 liquidity while still meeting issuer compliance requirements.

 Foundation has begun staking part of its treasury, following the Treasury Policy it announced in June 2025.

The initiative starts with a 2,016 ETH deposit and targets around 70,000 ETH staked in total, with rewards flowing back into the EF treasury.

 digital asset treasury Bitmine Immersion Technologies (NYSE: BMNR) announced its latest acquisition of 51,162 ETH over the past week.

This brings its crypto, total cash, and “moonshots” holdings to $9.6B, including 4,422,659 ETH valued at $1,958 per ETH, representing 3.66% of the total ETH supply (over 73% toward its “Alchemy of 5%” goal), 193 BTC, $691M in cash, a $200M stake in Beast Industries, and a $17M stake in Eightco Holdings.

As of February 22, 2026, Bitmine has staked 3,040,483 ETH worth $6.0B, generating $171M in annualized staking revenue, and is on track to launch its MAVAN staking solution in Q1 2026.

6) The Financial Times reports that the Trump-led “Board of Peace” is considering a US dollar-pegged stablecoin intended to help people in Gaza make digital payments, citing five people familiar with the early discussions.

7) Tether has announced it will discontinue support for CNH₮, citing low demand and limited sustained community adoption relative to its other stablecoin products.

The transition will happen in two stages: new CNH₮ issuance will stop immediately (no more tokens will be minted), and redemptions will remain available for one year, after which Tether will end redemption support, with a reminder notice to follow closer to the deadline.

8) Nasdaq-listed bitcoin miner, Bitdeer Technologies (BTDR), has sold its entire 

after selling its remaining 943 BT3C in a single week. The company also sold the 189.8 BTC it mined during the same period.

The move follows a $325M convertible notes offering and a $43.5M equity raise, suggesting the liquidation may be aimed at boosting cash as it expands data centers and pivots toward AI.

9) CME Group has announced the launch of 24/7 trading for cryptocurrency futures and options beginning Friday, May 29, at 4:00 pm CT, subject to regulatory review.

Trading will run continuously on CME Globex, with a minimum two-hour maintenance window each weekend, and any positions traded from Friday evening through Sunday evening will be dated and processed on the next business day for clearing, settlement, and regulatory reporting.

10) As digital asset treasury companies come under the spotlight, Metaplanet CEO Simon Gerovich has posted a statement on X, rejecting claims from “anonymous accounts” that the firm misled investors about its 

 purchases, derivatives strategy, and BTC-backed borrowing disclosures.

He said all major transactions were announced promptly, arguing critics are misreading financial statements and misunderstanding accounting-driven losses.

11) OpenAI and Paradigm have partnered to launch EVMbench, a new benchmark designed to evaluate how effectively AI agents can identify, exploit, and fix critical smart contract vulnerabilities.

EVMbench draws on 120 curated vulnerabilities from 40 audits, including sponsored open-code audit competitions and security reviews for Tempo, the Layer 1 blockchain co-developed by Paradigm and Stripe, and tests AI agents’ capability modes like vulnerability detection, contract modification, exploit mitigation, and end-to-end fund-draining attacks in a sandboxed blockchain environment.

12) Coinbase has expanded its onchain lending product, powered by DeFi protocol Morpho, to let eligible U.S. customers use 

 as collateral to borrow up to $100,000 in USDC without selling their crypto.

This is an expansion to their previous offering, which only allowed 

 as collateral, allowing loans of up to $5M and $1M, respectively.

13) The Hyper Foundation is unstaking and allocating 1M 

to help launch the Hyperliquid Policy Center (HPC), a nonprofit focused on research and advocacy for decentralized finance in the US.

The goal is to give the Hyperliquid community a presence in Washington and push for clearer, more workable regulations for DeFi, particularly around perpetual derivatives and decentralized markets via research, policy engagement, and direct outreach to lawmakers, serving as a resource for informed policymaking.

14) XRPL has activated the XLS-81 “Permissioned DEX” amendment yesterday, introducing members-only, on-ledger trading venues built on the same mechanics as the network’s native DEX.

The key change is access control, which is now a “permissioned domain” that allows the venue operator to define which approved entities can place orders and which can fill them, enabling participation to be linked to KYC/AML and other compliance requirements.

The feature is designed for regulated institutions, such as banks and brokers, that want on-chain settlement and liquidity but cannot interact with fully open DeFi markets.

 is the native cryptocurrency of the Fabric Foundation, an initiative established by OpenMind. 

The project describes itself as infrastructure for coordinating intelligent machines and robotics in a way that can be shared across many participants, with rules that are transparent and enforceable. The underlying premise, as stated in its public materials, is that as autonomous systems become economically active in the real world, coordination problems expand into identity, permissions, accountability, settlement, and incentive alignment between humans, organisations, and machines.

Fabric is designed as a blockchain network. It relies on an on-chain ledger and smart-contract rules so participants can share the same system of record for coordination and settlement without a single central operator. In practical terms, the chain is meant to be where network state is recorded and where economic activity is settled, so that permissions, transactions, and incentive flows are all handled in one consistent framework.

On the technical side, the architecture is described as a base layer that provides settlement and security, with the option to run more specialised execution environments on top of it, framed as robot sub-networks in an L2-style model. The idea is that robotics-related activity can run in environments tailored to those needs, while still anchoring outcomes to a common settlement layer.

Within that design, ROBO is positioned as the economic unit of the network. It is intended to be used for fees and settlement, and it is also tied to incentive mechanisms such as staking, delegation, and bond-like structures that are meant to coordinate participants and align behaviour over time.

The main differences compared to other tokens that are close to the AI narrative are that Fabric places the emphasis more directly on machines acting in the physical world, which naturally shifts attention toward settlement, accountability, and governance around actions that have real-world consequences. It also sits close to DePIN and the broader “machine economy” theme, where blockchains are used to coordinate real-world devices and services with token incentives. The difference here is that the focus is not mainly on getting device data on-chain, but on setting up a wider set of rules and payments for how autonomous machines interact and get coordinated, potentially across several environments that still settle back to the same base layer.

Beginner

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27 Feb 2026: What's New in DeFi?

Bitcoin's wild swings this week have produced mixed signals across crypto derivatives.

While BTC previously traded in a tight range, the low level of realized volatility broke this week when the price briefly fell to $62K. 

The move coincided with a weakening in risk appetite across broader markets, and options pricing responded quickly with a strong increase in demand for downside protection. 

However, a sharp correction back to the $68K levels at the time of writing, after a brief stint at the $70k handle, lost in the sell-off has not seen the same response in volatility markets. 

While the skew of volatility smiles towards OTM puts has recovered, the snap back higher did not see ATM implied volatility levels jump to the same extremes. While traders are now pricing in larger near-term moves, with one-week implied volatility jumping, the front end of the volatility curve is only mildly inverted.

The bearish tone is not limited to options markets.

Block Scholes’ Risk Appetite Index measures the level of euphoria (above 1) or panic (below -1) in the spot market. Momentum in this index shows a strong relationship to spot returns.

The past two weeks of sideways consolidation were sharply interrupted this week as BTC fell to $62K. Risk appetite dampened across both crypto markets and broader macro asset classes, after President Trump vowed not to let the Supreme Court’s ruling on tariffs affect his signature economic policy. However, the last 24 hours have seen BTC recover to around the $68K level that it last held in a single-minded rally higher.

While the initial sharp breakout to the downside in spot price resulted in options traders pricing optionality higher, the recovery of the lost spot levels has not. BTC’s term structure of volatility is still in a mild inversion after 7-day ATM IV jumped a full 10 percentage points to 60%, coinciding with a nearly 10-point jump in 7-day delivered volatility, but short-dated optionality is still far lower on the way up in spot than it was on the way down.

That quick repricing in implied volatility was largely driven by traders willing to pay a higher premium for insurance against further downside risk. 

While options prices have not yet fallen to their previous levels, the correction to the upside has not spiked options pricing in the same way.

In short, options prices remain lower than during the height of the sell-off.

The impact of the recovery rally is more obvious in its impact on the skew of volatility smiles. In response to the sell-off on Feb 23, 2026, the relative preference for put options rather than call options fell back to the lows Feb 6 selloff, when BTC last traded at its 2026 lower bound. 

However, since the recovery of the $68K level, put options no longer trade with as much of an extreme premium as they did.

This does not mean that options markets are now bullish – far from it. 

Derivatives markets are still (in aggregate) looking for protection against a further selloff. 

But while this slightly heavier positioning in short positions is bearish, it could see some traders caught offside and forced to close bearish positions in the case that the current rally in spot continues.

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Perp Open Interest Backs Recent BTC Rebound, But Options Still Bearish

Get caught up on the newest web3 developments, despite recently lacklustre spot prices of major cryptos.

Even as spot prices of major cryptos have been lacklustre of late, the web3 world is still churning out major developments.

Here's a quick snapshot to help you catch up:

 has launched the Hyperliquid Policy Center in Washington, D.C., led by crypto lawyer Jake Chervinsky, to push a clearer U.S. regulatory path for DeFi.

A key focus is building a legal framework for perpetual derivatives, a major global crypto product still largely shut out of U.S. markets.

 has listed the Canary Staked SUI ETF (SUIS) on Nasdaq, offering U.S. investors spot exposure to 

The fund is designed to track SUI’s price while participating in the network’s proof-of-stake process, with net staking rewards incorporated into the ETF’s NAV.

The listing adds to the growing range of crypto ETFs moving beyond BTC and ETH. It also comes as Grayscale’s Sui Staking ETF (GSUI) begins trading on NYSE Arca.

 has taken a significant step toward launching a yield-generating 

 fund in the US, according to an amended S-1 registration statement filed on Tuesday.

The iShares Staked Ethereum Trust, expected to trade as ETHB, was seeded with $100,000 and plans to stake the majority of its ether, typically 70% to 95%, with an estimated average staking yield of around 3% based on early 2026 benchmarks, not guaranteed.

, a crypto social platform closely associated with Ethereum layer-2 Base, announced that it is launching a new product on Solana called "Attention Markets".

The feature lets users speculate on which topics, memes and narratives will gain traction online, effectively enabling SocialFi traders to take long or short exposure to social-media virality.

 Open Development Lab, or ZODL, has announced a new chapter for the ZCash project’s development, with the former Electric Coin Company team continuing its work under a revamped structure.

announced the launch of institutional OTC execution for tokenised gold, offering 

 trading versus USDT, USDC, fiat and major crypto assets.

The firm says demand is rising as gold hovers near record highs, with tokenised rails enabling 24/7 liquidity, faster settlement, real-time hedging and more flexible collateral use.

 announced that it has launched a Model Context Protocol server, enabling AI agents and developer tools such as Claude, Cursor and Copilot to execute swaps, bridging and multi-step onchain flows across EVM chains and Solana.

 (NASDAQ: HSDT)'s share prices jumped about 14.5% last Friday (Feb 13) after the firm announced a new structure that lets institutions borrow against natively staked 

The Nasdaq-listed company partnered with Anchorage Digital and Solana lending protocol Kamino to enable loans backed by SOL that remain staked and held in segregated custody accounts at Anchorage, allowing holders to unlock liquidity without unstaking or selling and while still earning staking rewards.

is escalating as members of the Senate Banking Committee, Elizabeth Warren and Andy Kim have asked Treasury Secretary Scott Bessent to assess whether the Committee on Foreign Investment in the United States (CFIUS) should review a reported 49% stake in WLF held by a UAE-backed entity, setting a March 5 deadline for a response.

Their request follows a separate House inquiry led by Rep. Ro Khanna, intensifying congressional scrutiny of the venture and its foreign ties.

 a major DeFi lending protocol, has proposed the “Aave Will Win” framework to align the ecosystem around a token-first model that routes 100% of Aave-branded product revenue into the Aave DAO treasury (the community-controlled pool of funds).

, a new programme has been launched to buy back and burn INJ tokens.

The INJ Community BuyBack is gaining traction, combining accelerated token burns with a revenue-share mechanism for eligible participants.

Users commit INJ onchain, receive a pro-rata share of ecosystem revenue, and the committed tokens are permanently burned.

 has been burned to date, with the initiative designed to further increase burn.

 a strategic platform for asset tokenisation, as the platform provider for its Digital Gilt Instrument (DIGIT) pilot, a programme testing the issuance of a digitally native, short-dated gilt using distributed ledger technology within the UK’s Digital Securities Sandbox,

The pilot is designed to assess how tokenised sovereign debt could improve market infrastructure, including faster settlement and more efficient post-trade processes, while remaining separate from the government’s core debt management programme.

The Treasury is also engaging additional suppliers to support delivery of the required functionality, including on-chain settlement.

 has launched Agentic Wallets, a wallet infrastructure built for autonomous AI agents, allowing bots to hold funds, send payments, trade, and transact on-chain within user-defined controls and limits.

The product builds on Coinbase’s x402 protocol for automated crypto payments and complements its earlier AgentKit by offering a plug-and-play way to “give any agent a wallet.”

Decentralised perp exchange Aster is preparing to launch the

is intended to strengthen its on-chain infrastructure, offering dedicated support for its products, builder tools, and integrated fiat on- and off-ramps, following a testnet phase that drew more than 50,000 participants.

ESP is the native token of Espresso Network, launched as part of the project’s transition toward a permissionless proof-of-stake blockchain designed specifically to serve Ethereum rollups. 

Espresso is positioned as infrastructure for the rollup ecosystem: rather than competing as an execution layer, it focuses on improving how Ethereum layer-2 networks coordinate, share security, and interoperate. Its core function is to provide fast, decentralised confirmations and transaction ordering that multiple rollups can rely on, helping reduce dependence on centralised sequencers and enabling smoother cross-rollup composability.

A central part of Espresso’s value proposition is faster finality for rollups: through its PoS validator set and HotShot BFT consensus, it can provide rollups with confirmations within seconds, rather than waiting for Ethereum’s 12+ minute finality.

At launch, Espresso Network set the total supply at 3.59B ESP and allocated 10% of this supply to a fully unlocked community airdrop. The airdrop was intended to reward early ecosystem participants and users of Espresso-integrated rollups, broaden token ownership, and decentralise governance from the outset.

It targeted over 1M eligible addresses and applied anti-Sybil checks to limit farming and wallet-splitting. These checks are designed to identify and filter clusters of wallets controlled by the same entity to prevent a single participant from claiming multiple allocations through duplicate or coordinated accounts. Beyond the community airdrop, the remaining supply was allocated to contributors and investors with multi-year vesting schedules, as well as to future airdrops, grants, ecosystem incentives, and foundation operations.

The Espresso Foundation also introduced a “Holder Score” framework. This model evaluates user engagement across more than 30 qualifying activities and prioritises sustained participation - particularly longer-term holding and staking - over short-term speculative behaviour. The objective is to mitigate typical launch volatility and encourage a more stable, conviction-driven ownership base that supports network security and ecosystem growth over time.

Espresso reported that it was finalising rollup blocks in roughly six seconds on average, compared with Ethereum’s 12-minute-plus finality window, and argued this gap had become a structural bottleneck as applications and liquidity spread across multiple rollups rather than remaining concentrated on a single chain.

20 Feb 2026: What's New in DeFi?

Download the full report for more on the BTC "Hash Crash", and the latest in TradFi-DeFi.

With spot prices now in a consolidation phase following the sharp and violent selloff in early February, traders in options markets are showing a lack of interest. 

 has spent the past two weeks rangebound between $65K and $70K, while 

ATM implied volatility levels have plunged off from their extreme 2022-esque highs, with traders anticipating far less volatility in the short-to-mid term, compared to only two weeks ago. The term structure of volatility for all three majors, BTC, ETH and SOL, is flat and compressed, while (as expected in a ~50% drawdown from all-time highs), volatility smiles are still skewed towards put options.

The lack of drivers to move spot price has taken its toll on derivative markets. 

As shown below, after reaching highs last seen in 2022, short-dated BTC at-the-money implied volatility has now dropped by more than half, trading just shy of 50% for 7-day options. That’s even lower than the volatility realized by spot prices over the past 7 days, suggesting options traders were quick to give up the dramatic demand for downside protection they expressed just two weeks ago.

We see a similar decline in implied volatility beyond just BTC. 

The term structures of volatility for BTC, ETH and SOL are all currently compressed and flat, with traders pricing in minimal premiums for longer-dated options compared to near-term expiries. That significantly contrasts the positioning of two weeks ago, when short-dated volatility spiked across all assets on Feb 5, 2026, as BTC fell below $60K.

With risk-sentiment continuing to dwindle lower and spot prices close to (if not more than) 50% below their all-time high levels, it is unsurprising that volatility smiles continue to skew towards put options. 

BTC traders are still willing to pay a premium for protection against further downside spot moves, though a far smaller premium than the -30% skew towards puts that we saw earlier in the month.

Low Appetite for Risk as Crypto Searches for Next Catalyst

Watch these 3 big events before the weekend.

Risk appetite is creeping back into markets as AI enthusiasm stirs a tech rally, lifting stocks and giving Bitcoin a modest bounce. 

But don't let today's slight green candlestick fool you: 

Bitcoin is still on track for its longest losing streak since 2022.

Crypto prices are unwilling to draw too much inspiration from news that the likes of 

 long a crypto skeptic, just revealed that he now owns Bitcoin, albeit a "very, very limited" amount.

Abu Dhabi sovereign wealth fund, Mubadala Investment Co.

, has increased its exposure to the world's biggest crypto, via ETFs (exchange-traded funds) in Q4 2025.

But spot Bitcoin prices apparently didn't get the memo, at least not yet.

Why Crypto Isn't Following Risk-On Moves?

US-listed crypto ETFs saw about US$ 360 million withdrawn last week - marking a 4th straight week of net outflows.

According to a new report from crypto investment firm and market maker Keyrock, Treasury bill issuance is the primary liquidity metric that impacts Bitcoin's price.

Every 1% change in global liquidity levels impacts BTC's price by 7.6% the following business quarter, with Treasury bill issuances having an 80% correlation with Bitcoin prices.

In short, if liquidity isn't flowing, Bitcoin isn't pumping.

The global oil benchmark surged 4.1% yesterday (Wed, Feb 18) following news reports of looming US military action against Iran. 

Such a conflict may threaten global oil prices, sending prices higher.

At the time of writing, the global oil benchmark is embarking on its 3rd attempt to test the 

The US dollar strengthened after the latest 

 were released yesterday (Wed, Feb 18) - 

The minutes from the late-January FOMC meeting suggested that the Fed may have to contemplate 

Talk of US rate hikes is a surprise shift from the Fed rate cuts that have long dominated market expectations.

 (British Pound vs. US dollar) tumbling below our 

against the "buck" so far in February 2026 (GBPUSD+ down 1.4% month-to-date).

NOTE: A currency tends to strengthen at the idea of its country's interest going up/staying higher.

A daily close above the 50-day SMA could see the SP500 re-test the 7,000 psychological level for resistance once more.

There's cautious optimism in stock markets as AI overspending fears fade, but crypto remains under pressure from persistent outflows and a lack of liquidity.

What Could Rock Markets Before the Weekend?

before US markets open today (Thursday, Feb 19)

when US markets open today (following Walmart's latest quarterly earnings).

A 6% post-earnings move is the updated figure, bigger than the 5% number cited in our 

2) US Supreme Court ruling on Trump tariffs: 

SCOTUS has returned from a four-week recess, and is set to issue opinions on President Trump's trade tariffs on Feb 20th, 24th, and 25th.

If the Supreme Court rules against Trump, that could alleviate US economic pressures as tariffs are estimated to cost importers over US$ 16 billion per month.

, even though markets are aware that the White House may have other legal tools at its disposal to reinstate trade tariffs.

The US Personal Consumption Expenditure index is the Federal Reserve's preferred way to measure 

Here's what economists predict for this top-tier economic data release:

Gold, stock indices, and cryptos may move 

 if sluggish US economic growth, along with still-stubborn inflation, prevents the Fed from lowering US interest rates this year.

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Bitcoin set for 5th weekly decline, but stocks are rising. Can these upcoming events flip the script for cryptos?

Discover Bybit's latest listing, and new developments with TON, Stripe, BlackRock, Solana, and more.

 an SDK for Telegram Mini Apps that supports crypto checkout using 

It’s intended to simplify payments integration for developers by standardising the checkout flow and handling on-chain settlement via TON.

The initial rollout is limited to Mini Apps, with planned additions such as subscriptions and gasless transactions over time.

a crypto exchange founded by former FTX employees, is seeking to prevent dilution for retail holders of its forthcoming utility token through a tokenomics structure that progressively unlocks supply as key metrics and milestones are met, according to a plan disclosed on Monday.

At the token generation event, 25% of the 1B supply will be distributed – including a 240M token airdrop to Backpack Points users and 1M tokens earmarked for Mad Lads NFT holders.

The remaining supply is split into two equal 37.5% tranches labelled pre- and post-IPO, with the pre-IPO allocation set to unlock progressively as the exchange hits “growth triggers” such as regulatory approvals, new region launches, and product rollouts.

 a hardware-secured, self-custody wallet, which will soon allow users to swap tokens onchain while retaining full control of their assets.

Each transaction is signed directly on a Ledger device, combining decentralised exchange access with hardware-level security.

The integration supports major networks including Ethereum and leading L2s, with OKX DEX aggregating liquidity across hundreds of venues to deliver competitive pricing.

 has launched a public testnet for Robinhood Chain, an Ethereum-compatible Layer 2 built using Arbitrum Orbit, positioning it as purpose-built infrastructure for RWAs such as stocks and ETFs.

The testnet gives developers an EVM environment with test assets and tooling to prototype regulated, onchain trading and DeFi integrations, while Robinhood frames the chain as a bridge between traditional market access and Ethereum liquidity.

 has introduced a preview of machine payments, integrating the x402 protocol to let developers charge autonomous agents directly in USDC on Base.

Jeff Weinstein, Stripe’s product lead, said on X on Tuesday that the rollout is expected to expand over time to additional protocols, currencies and blockchains.

The system is built on Stripe’s PaymentIntents API, enabling businesses to programmatically charge AI agents for API usage, Model Context Protocol calls and HTTP requests.

In parallel, CoinGecko activated x402 for parts of its API on Tuesday, allowing agents to pay $0.01 in USDC per request for data across multiple networks, turning market data access into a simple pay-per-use utility.

 will make its Treasury-backed tokenised fund BUIDL available for on-chain trading via UniswapX, in partnership with Securitize through 

Access at launch will be limited to whitelisted institutional participants, with Securitize managing eligibility and onboarding market makers to support liquidity.

 memecoin launchpad Pump.fun has acquired trading execution terminal Vyper, with its infrastructure expected to be migrated to Pump.fun's "Terminal".

The deal follows Pump.fun’s earlier move into trading tools, including its October 2025 acquisition of Padre, which it later rebranded as "Terminal", with the team saying the addition of Vyper will improve EVM trading support, including on Base.

 have unveiled a proof of concept for Strium, a purpose-built Layer 1 blockchain aimed at tokenised securities and real-world assets onchain with a particular focus as a foundational exchange layer for Asia’s onchain securities markets.

The development builds on Startale Group and SBI Holdings’ August 2025 partnership announcement to jointly launch an onchain trading platform focused on tokenized equities and real-world assets.

9) As digital asset treasuries look to boost yields on their holdings, Hyperliquid-based treasury firm 

 (NASDAQ: HYPD) announced plans to use its HYPE tokens as collateral for onchain options strategies to earn premium.

The company is working with the Rysk protocol to launch an onchain options vault on Hyperliquid, with plans to eventually open the structure to other institutional HYPE holders

Aztec is a privacy-focused Ethereum Layer 2 that uses zero-knowledge proofs (zkSNARKs) to verify transactions and smart-contract execution without revealing sensitive details. 

 is the network’s native token, intended to support core protocol functions and align incentives for participants, including governance as the network evolves.

A key part of Aztec’s design is its “ZK² Rollup” approach: each private transaction is proven with its own zkSNARK, then many of those proofs are aggregated into a single proof that gets posted to 

. This compression reduces the amount of data that needs to go on-chain and helps lower costs, while maintaining strong privacy guarantees.

 the listing of AZTEC on its Spot trading platform on Thursday, Feb 12, 2026.

13 Feb 2026: What's New in DeFi?

Market cap and token performance show a clear winner. But it's different with revenue-generating prowess.

 originated in 2016, referring to the idea that crypto protocols and base layer networks such as Ethereum and Solana would be valued higher than the application layer built on top of them — i.e., the decentralized applications built on those networks. 

The thesis brought forward the notion that the crypto sector consisted of “fat” protocols and “thin” applications. That compared to the internet stack which was composed of “thin” protocols and “fat” applications, with value concentrated in the latter (leading to high valuations of large US tech companies such as the Magnificent-7).

Decomposing the crypto market structure today, we see that the ‘Fat Protocol’ thesis still holds.

Among the top 20 crypto assets by market capitalization, nine are layer-1 blockchains (excluding BTC). Those nine L1 networks have consistently accounted for 50-60% of the total crypto market-cap when removing BTC.

 as the portion of fees that accrue to the tokenholder, including the portion of network transaction fees that are passed to holders via token burns - supply reduction which benefits holders passively - and fees paid to validators and stakers), those same 

base layer protocols have underperformed 

relative to the applications built on top of them. 

Major decentralized applications on the Solana network (such as Pump.fun, Meteora and Jupiter) now collectively generate more revenue than the Solana network as a whole.

We see a similar trend between the Ethereum network and some of its major applications. 

The Ethereum network still generates more revenues than lending protocol Aave, but since Aave’s launch, revenues have grown from $12K to over $250K, while revenues on Ethereum have drifted lower from a peak of $46M down to $400K. 

Therefore, despite the application layer making up a fraction of total crypto market capitalization, it is trending towards matching (and potentially exceeding) base layer protocols in terms of revenue generation.

Despite this trend towards revenue outperformance, crypto traders have historically been far better off holding the native token of the network, and not the native token of the application itself.

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