DeFi | Crypto

Europe narrows crypto tax gaps, US lawmakers revisit market structure, and institutions push DeFi into compliance territory. The European Union’s new crypto tax reporting regime under DAC8 is intentionally focused on enforceable targets, leaving decentralized finance (DeFi) outside its scope for now. Colby Mangels, a former adviser to the Organisation for Economic Co-operation and Development (OECD) and now Taxbit’s global head of government solutions, said the rules prioritize identifiable intermediaries such as custodians and exchanges, which will be required to collect and report standardized user activity data under the OECD’s Crypto Asset Reporting Framework (CARF). However, the DeFi carve-out may not last. Mangels said tax authorities are increasingly drawing on Anti-Money Laundering (AML) frameworks to define accountability in crypto markets, and regulators are closely watching whether DeFi platforms can be classified as virtual asset service providers. Read more

Washington is edging closer to a landmark crypto framework, though disputes over DeFi and stablecoin rewards risk pushing final passage beyond 2026.

DeFi's composability creates cascading exploit risks while protocols handle risk idiosyncratically. Institutional adoption demands TradFi-style standardized frameworks. Opinion by: Robert Schmitt, founder and co-CEO at Cork DeFi has entered its institutional phase. As large investors dip their toes into crypto ETFs and digital asset treasuries (DATs), the ecosystem is gradually evolving into an institutional-grade financial system in its own right, with the introduction of new financial instruments and digital counterparts of well-established ones. ​DeFi’s current growth exposes mounting risks that could lead to trust roadblocks. For institutions to confidently onboard, the ecosystem must implement stronger risk guardrails and resilient infrastructure.  Read more

DeFi is still out of scope for DAC8 and CARF, but AML enforcement trends suggest that may not last, according to Taxbit’s Colby Mangels. The European Union’s new cryptocurrency tax reporting framework is built around what governments can immediately enforce, leaving decentralized finance (DeFi) outside its scope for now. A former Organization for Economic Co-operation and Development (OECD) official who worked on the Crypto Asset Reporting Framework (CARF) said that this gap is a deliberate focus and not a blind spot. “It doesn’t make sense to go to your grandma and ask her to give you all the tax reporting on crypto just because you happened to work with her over a certain period,” Colby Mangels, Taxbit’s global head of government solutions and a former OECD adviser, told Cointelegraph. “You really have to go to the intermediaries that are doing this as a business.” Read more

Aave now controls 51.5% of the DeFi lending market share, the first time any protocol has crossed the 50% threshold since 2020. The milestone arrives not through competitor collapse but through steady accumulation: Aave's $33.37 billion in total value locked sits atop a $64.83 billion lending category that has consolidated around a single liquidity hub. […] The post How Aave’s DeFi monopoly created a risky feedback loop with only a $460M backstop appeared first on CryptoSlate.

US lawmakers pause the CLARITY Act as DeFi leaders warn the bill still risks developers, DAOs rethink governance and regulators face mounting pressure. United States lawmakers postponed a planned markup of the Digital Asset Market Clarity Act (CLARITY), delaying progress on a bill intended to define how cryptocurrencies and decentralized finance (DeFi) platforms are regulated and prompting renewed pushback from DeFi leaders who say the bill still fails to adequately protect developers.  Industry groups and crypto venture firms warned that proposed amendments could impose requirements that are not suitable for decentralized systems. Representatives from Paradigm and Variant said the current draft leaves unresolved ambiguity over whether DeFi developers and infrastructure providers could be forced to implement Know Your Customer (KYC), register with financial regulators or comply with rules designed for centralized platforms. The delay follows mounting criticism from across the crypto sector, including public o...

Bitcoin, DeFi, and tokenized assets are emerging as functional parts of global capital markets, ARK Invest wrote, though challenges persist.

Two new filings to the SEC Crypto Task Force call for clear rules on self-custody and DeFi trading as Congress debates federal crypto legislation amid delays in CLARITY Act. The post SEC Crypto Task Force Pressed on Self-Custody Rights and DeFi ‘Dealer’ Rules in New Filings appeared first on Cryptonews.

The submissions add to mounting pressure on regulators as Coinbase CEO Brian Armstrong calls for compromise to pass market structure legislation. The US Securities and Exchange Commission’s (SEC) Crypto Task Force “Written Input” page added two new submissions on Tuesday that focus on self‑custody rights and how proprietary trading in tokenized and decentralized finance (DeFi) markets should be regulated.  One submission comes from “DK Willard,” centered on Louisiana retail users, and the other from the Blockchain Association Trading Firm Working Group on dealer rules for tokenized equity markets. The Louisiana submission cites state law HB 488, which affirms residents’ right to self-custody digital assets, and argues that upcoming federal crypto market structure legislation should preserve strong registration, transparency and anti‑fraud and anti‑manipulation requirements.  Read more

Mask Network will lead consumer-facing product execution on Lens, while Aave steps back to an advisory role focused on protocol infrastructure. Decentralized finance (DeFi) protocol Aave transferred stewardship of the social infrastructure protocol Lens to Mask Network, shifting responsibility for advancing consumer-facing social applications while retaining Lens as open-source infrastructure. Statements from both Lens and Aave founder Stani Kulechov confirmed the transition. On Tuesday, Kulechov said in an X post that Aave’s role will narrow to technical advisory support as it refocuses on DeFi.  He added that Mask Network, a Web3 company focused on integrating blockchain features into social and messaging platforms, will be leading the next phase of development for Lens, particularly at the application and product layer. Read more

Pendle will begin to slowly phase out its governance token vePENDLE and replace it with sPENDLE this month, offering a more flexible model it hopes will boost adoption. DeFi protocol Pendle will begin phasing out its vePENDLE governance token this month, replacing it with a new liquid staking token called sPENDLE as part of a broader overhaul aimed at boosting adoption. The yield-trading platform said the long lock-ups, complexity and lack of interoperability baked into vePENDLE had become “significant barriers” for most users, despite strong growth in the underlying protocol. In an announcement via X on Monday, Pendle unveiled sPENDLE, a new liquid governance and fee token that will replace vePENDLE as the protocol’s primary governance asset. Read more

Many in the industry expect it could be weeks before lawmakers on the Senate Banking Committee return to consider a markup for the CLARITY Act. With a markup of the Digital Asset Market Clarity Act (CLARITY) in the US Senate Banking Committee postponed indefinitely, leaders in decentralized finance are using the delay to press lawmakers on concerns with the bill. Before Republican leaders on the Banking Committee moved late Wednesday to postpone the markup, crypto industry groups had raised concerns about provisions related to tokenized equities, stablecoin rewards and their potential impact on DeFi platforms. The DeFi Education Fund said on Wednesday that some proposed amendments could “seriously harm DeFi technology and/or make market structure legislation worse for software developers.” Crypto venture capital companies said the legislation would need revisions to address concerns around DeFi and developer protections. Read more

A growing amount of the blockchain industry’s fees are captured by DeFi protocols rather than the underlying networks, signaling a potential investor shift to front-end facing applications. Revenue in the crypto industry is increasingly flowing to user-facing applications rather than the underlying blockchain networks, according to recent data, signaling a potential shift in where investors and developers focus their attention. Decentralized finance (DeFi) applications now capture five times the fees generated by blockchains, according to data shared by Jamies Coutts, chief crypto analyst at crypto intelligence platform Real Vision. The trend suggests that more of the industry’s fees will be captured by DeFi applications like wallets, decentralized exchanges (DEXs) and other protocols, while the underlying networks will attract a smaller share of revenue. Read more

The integration marks a key step in the crypto exchange's second-phase rollout, bringing Uniswap’s markets directly to its layer-2 network. Uniswap has launched on X Layer, a layer-2 blockchain built by crypto exchange OKX, becoming the chain’s preferred decentralized exchange as OKX expands its decentralized finance footprint. The integration gives X Layer users access to Uniswap’s markets, including crypto token pairs and liquidity pools, with swaps executed at layer-2 costs and no fees charged by Uniswap Labs, the protocol told Cointelegraph. Launched in 2024, X Layer is OKX's Ethereum Virtual Machine-compatible network, serving as core infrastructure for its DeFi applications. The network is integrated with OKX’s wallet and exchange, allowing users to move assets into the layer-2 network. Read more

The latest push to establish a comprehensive U.S. crypto market structure framework hit a snag this week, but leaders in DeFi don’t seem alarmed by the collapse.

Vitalik Buterin argues DeFi still lacks resilient decentralized stablecoins, highlighting benchmark risk, oracle design flaws and staking-driven incentives. A decentralized stablecoin aims to maintain a stable value while being issued and managed onchain, without relying on a single company to mint or redeem dollars. Stablecoins are already central to decentralized finance (DeFi). Because fiat money is not native to blockchains, stablecoins perform the day-to-day role of moving value between protocols and acting as collateral. Read more

The eight-figure investment in Genius Trading highlights how execution-focused tools are gaining relevance as crypto trading activity spreads across blockchains. YZi Labs, an independent investment firm led by Binance founder Changpeng Zhao, has invested in onchain trading terminal Genius Trading, highlighting growing investor attention on cross-chain trading infrastructure. While financial terms were not disclosed, YZi Labs said Tuesday that it made an eight-figure investment in the company. Zhao is also joining Genius Trading as an advisor, according to the announcement. The investment suggests that cross-chain trading terminals are increasingly being viewed as core market infrastructure rather than purely user-facing tools, as activity continues to spread across multiple blockchains and liquidity venues.  Read more

Following a rejected governance vote, Stani Kulechov laid out a plan to expand beyond DeFi lending and reshape how tokenholders capture value. Aave founder and CEO Stani Kulechov has outlined a broader strategic vision for the protocol following a contentious governance vote that rejected a proposal to transfer control of Aave’s brand assets and intellectual property to its decentralized autonomous organization (DAO). The failed vote has prompted renewed debate within the Aave community over the protocol’s long-term direction and governance structure, an issue Kulechov addressed directly. In a post published Friday on the Aave governance forum, Kulechov argued that the protocol must evolve beyond its core decentralized finance (DeFi) lending business to pursue opportunities in real-world assets (RWAs), institutional lending and consumer-facing financial products.  Read more

Lighter’s LIT token launch sparked debate over insider ownership, while prediction markets and whale trades revealed divided expectations regarding valuation. Lighter, one of the fastest-growing perpetual decentralized exchanges (DEXs), drew mixed reactions in the decentralized finance (DeFi) community after unveiling the tokenomics of its new Lighter Infrastructure Token (LIT). Under its structure, 50% of LIT’s supply is reserved for the ecosystem, while the remaining 50% is allocated to the team and investors, with a one-year cliff and a multi-year vesting schedule. As part of the rollout, Lighter said it had already distributed 25% of LIT’s total supply through an airdrop tied to its first two points seasons, which ran throughout 2025. Read more

RWA protocols have overtaken decentralized exchanges by total value locked, as tokenized Treasurys, private credit and commodities become core onchain building blocks. Real-world asset (RWA) protocols are one of decentralized finance’s (DeFi’s) winners in 2025, overtaking decentralized exchanges (DEXs) to become the fifth-largest category by total value locked (TVL), according to DefiLlama.  RWAs now account for about $17 billion in TVL, up from $12 billion in Q4 2024, highlighting how quickly tokenized Treasurys, private credit and other real-world claims have moved from niche experiments to core DeFi plumbing. As DefiLlama noted, “At the start of this year, they weren’t even in the top 10 categories.”  Vincent Liu, chief investment officer at Kronos Research, told Cointelegraph that RWA growth is being driven by “balance-sheet incentives rather than experimentation,” with higher-for-longer rates making tokenized Treasurys and private credit attractive as onchain, yield-bearing assets, amid improving regulat...