August 5th, 2025 – Hamilton, Bermuda

OnRe’s yield-bearing asset, ONyc, is now accepted as collateral within Solana’s decentralized finance (DeFi) ecosystem.

This development enables the integration of real-world yield sources into DeFi applications. Incentive programs from USDG and Ethena have launched to reduce borrowing costs, enhance yield opportunities, and support the use of real-world collateral onchain.

Onchain Yield Coin (ONyc), a yield-bearing, stablecoin-backed asset issued by OnRe, is now live on Kamino, Solana’s largest DeFi money market. This integration marks the first time reinsurance-backed yield is being used as onchain collateral in Solana DeFi, opening access to real-world risk through a composable, liquid, and resilient asset. 

A New Form of Yield in DeFi

Kamino secures over $700M in stablecoin TVL and underpins liquidity and capital strategies across the Solana ecosystem. With ONyc now live on Kamino, users can:

• Leverage ONyc as collateral for borrowing, lending, or looping strategies
• Earn ~14%+ base yield uncorrelated to crypto volatility
• Enter or exit positions 24/7 with onchain liquidity
• Track NAV in real time through verifiable pricing data

Together, these capabilities make ONyc a powerful tool for capital deployment across market conditions. By enabling lending, borrowing, and looping in a fully composable way, ONyc brings real-world yield into active use across Solana’s DeFi ecosystem.

The integration is powered by Chainlink’s Onchain NAV solution, which sources ONyc’s net asset value from OnRe and delivers it in real time via Chainlink Data Streams. This ensures tamper-resistant pricing and enables secure collateralization, supporting reinsurance-backed strategies with verifiable, onchain fund valuations.

“ONyc’s launch on Kamino marks a broader shift in DeFi, bringing real-world yield to Solana with the transparency, liquidity, and composability the ecosystem was built for,” said Dan Roberts, Co-Founder and CEO of OnRe. “It introduces a new class of collateral designed to perform through market cycles and support sustained DeFi activity. Solana has become a hub for capital innovation, and Kamino continues to set the standard for how real-world assets should operate onchain.”

Incentives Designed for Early Participation

To encourage early adoption, OnRe is launching incentive programs in collaboration with Kamino, Global Dollar Network, and Ethena:

Borrowing Incentives

A $200K rewards pool is available to lower borrowing costs for users who deposit ONyc as collateral to borrow USDG on Kamino. This reduces costs and creates room for more favorable yield spreads.

“This marks one of the first fully permissionless implementations of real-world yield distributed directly onchain through DeFi,” said Nick Robnett at Paxos, on behalf of Global Dollar Network. “We are proud to support ONyc’s launch on Solana and Kamino, leveraging USDG to advance OnRe’s vision of bringing real-world assets with intrinsic value onchain and making them accessible to a global user base.”

Looping Strategies

Participants can also redeploy borrowed USDG to acquire additional ONyc or other assets, increasing exposure and unlocking higher returns. Incentives apply on up to $20M in total borrowing volume.

Ethena Points Multiplier

In addition, OnRe is offering a 5x Ethena Points multiplier to ONyc holders on qualifying sUSDe deposits, unlocking additional rewards for those providing real-world yield collateral.

Integration of Real-World Yield Mechanisms in DeFi

ONyc integrates premium-backed yield from real-world assets with decentralized finance (DeFi) infrastructure, enabling an onchain structure designed to support scalability and diversification beyond traditional financial instruments.

“One of the most exciting things for Kamino’s users is onboarding high quality collateral assets, and ONyc is a great example of that. Access to credit and leverage for ONyc holders, powered by Kamino, is a great example of bringing DeFi utility to tokenize real-world investments,” said Mark Hull, a Kamino contributor.

With base yields above 14% and expanding utility across Solana, ONyc gives users a high-performing alternative to traditional DeFi strategies. Mint directly on the OnRe app or swap instantly using Kamino Swap in the OnRe Market.

About Kamino

Kamino Finance is the largest money market on Solana, with over $4B in assets deployed across its suite of credit, leverage, and liquidity products. Through products like automated liquidity vaults, the K-Lend lending market, and tools for advanced trading strategies, Kamino helps users and institutions deploy capital efficiently. Kamino is the go-to platform for funds, market makers, and stablecoin issuers operating at scale on Solana.

About Global Dollar Network

Global Dollar Network is the world’s fastest growing stablecoin network with unmatched economic upside. Powered by Global Dollar (USDG), a US dollar-backed stablecoin issued by Paxos Digital Singapore and Paxos Issuance Europe, Global Dollar Network offers a transparent and equitable economic model that rewards partners for their contributions. Global Dollar Network partners include industry leaders such as Anchorage Digital, Bullish, Kraken, OKX, Paxos, Robinhood, Worldpay, and more. Note: USDG is available on Solana, Ink, and Ethereum.

About Chainlink

Chainlink is the backbone of the blockchain industry, the global standard for connecting blockchains to real-world data, other blockchains, governments, and enterprise systems. Chainlink has enabled tens of trillions in transaction value across the blockchain economy, powering critical use cases across DeFi, banking, tokenized real-world assets (RWAs), cross-chain, and more. Users can learn more by visiting chain.link.

About OnRe

OnRe bridges the reliability of the $750B global reinsurance market with the transformative power of blockchain. Licensed to deploy digital assets as insurance collateral, OnRe provides a new class of investors with direct access to consistent real-world yield through structured products designed to perform across market cycles. With a focus on transparency, scalability, and capital efficiency, OnRe is transforming how capital is deployed, bringing opportunity to a system that has historically been out of reach.

Disclaimer: This announcement is for informational purposes only and does not constitute an offer to sell or a solicitation to buy any securities or digital assets. ONyc may be accessible via decentralised protocols such as Kamino, but OnRe does not operate or control any secondary market for the token. Secondary trading occurs independently of OnRe. Capital is at risk. Redemption with OnRe is only available to qualified investors. Access may be restricted in certain jurisdictions.

Contact

Head of Operations
Sarah George
OnRe
sarah@onre.finance

Cake Wallet added the decentralized stablecoin dEURO to its offerings on Tuesday, expanding its stable of euro-denominated digital assets for users.

The decentralized stablecoin is overcollateralized by other digital assets, including Bitcoin (BTC), Ether (ETH) and Monero (XMR), meaning that to mint the dEURO stablecoin, users must first deposit other cryptocurrencies as collateral.

Overcollateralizing, or depositing cryptocurrency worth more than the value of the asset being borrowed, acts as a shield against de-pegging events, the dEURO team told Cointelegraph. The dEURO offering also features automatic liquidations, which occur when loan-to-value ratios drop below a certain threshold.

Cake Wallet says users can earn 10% yield from crypto holdings backing the stablecoin, without giving up custody of their funds. The yield is generated from stability fees paid by depositors minting the stablecoin and deposited into an equity reserve pool, a dEURO spokesperson told Cointelegraph.

This helps maintain the stability of the stablecoin and adds liquidity to the user’s crypto holdings, allowing them to generate a euro-pegged token without selling their crypto, the spokesperson said.

Decentralized and algorithmic stablecoins are promising use cases consistent with the early cypherpunk ethos of the crypto community. However, critics of algorithmic and decentralized stable tokens argue that these assets carry substantial risk, pointing to a history of de-pegging events and token collapses.

Algorithmic and decentralized stablecoins have a habit of de-pegging

Perhaps the most high-profile algorithmic token collapse was the implosion of the Terra-LUNA ecosystem and the de-pegging of UST, the ecosystem’s stablecoin, in May 2022.

The algorithmic stablecoin relied on a mint-and-burn mechanism, where users would burn approximately $1 in LUNA tokens to mint roughly $1 in UST.

This approach encouraged arbitragers to take advantage of price discrepancies between LUNA and UST, which was supposed to keep the price of the token pegged to the US dollar.

Despite the theoretical protection provided by arbitrageurs stepping in and correcting price discrepancies in UST, a significant portion of demand for UST came from the lending platform Anchor Protocol, which offered users a 20% yield on UST deposits.

Mass withdrawals from Anchor triggered a cascade of events that caused UST to drop to $0.67 in May 2022, before collapsing entirely to just $0.01.

UST did not feature any collateral backing, unlike other decentralized alternatives such as DAI (DAI) and dEURO, which require users to deposit excess collateral against their loans.

However, backing algorithmic and decentralized stablecoins with excess reserves has not proven to be a panacea for de-pegging events.

Moreover, collateral backing has not been enough to fully protect traditional fiat stablecoins, backed by US debt instruments and bank deposits, from losing their currency pegs.

DAI, the decentralized stablecoin of Sky, formerly MakerDAO, de-pegged in March 2023 after Circle’s USD Coin (USDC), which was used as collateral backing for DAI, briefly lost its dollar-peg.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

]]> https://earlybirdsinvest.com/cake-wallet-onboards-deuro-decentralized-stablecoin-offers-10-yield-on-collateral/feed/ 0 45409 https://earlybirdsinvest.com/ethereum-foundation-embraces-defi-borrowing-2m-in-stablecoins-on-aave-using-eth-collateral/ https://earlybirdsinvest.com/ethereum-foundation-embraces-defi-borrowing-2m-in-stablecoins-on-aave-using-eth-collateral/#respond Thu, 29 May 2025 15:24:15 +0000 https://earlybirdsinvest.com/ethereum-foundation-embraces-defi-borrowing-2m-in-stablecoins-on-aave-using-eth-collateral/

The Ethereum Foundation (EF) has quietly taken a tactical step into DeFi by borrowing $2 million in GHO stablecoins using wrapped ETH (wETH) as collateral on the Aave protocol.

Marc Zeller, founder of the Aavechan Initiative, shared the development on May 29, noting that the Foundation’s use of GHO aligns with Aave’s core value proposition, enabling ETH holders to unlock liquidity without exiting their positions.

He said:

“They didn’t have to sell a single ETH to fund their objectives. Aave is designed for holders with conviction.”

Stani Kulechov, founder of Aave Protocol, echoed this sentiment. He highlighted that the EF is supplying ETH and borrowing on Aave, calling it a demonstration of DeFi’s complete utility cycle.

The Ethereum Foundation has not officially commented on the transaction as of press time.

However, the crypto community has broadly supported the strategy, viewing it as a prudent approach to treasury management and long-term sustainability.

Maksym Blazhkun, the co-founder of WeNode, said:

“Borrowing without selling — that’s DeFi conviction in action. Ethereum Foundation playing it smart with Aave.”

According to DeFillama data, Aave is Ethereum’s dominant DeFi lending protocol, with over $43 billion in total value locked (TVL). GHO is Aave’s native overcollateralized stablecoin and currently has a circulating supply of $249 million.

According to blockchain analytics firm Token Terminal, active lending and GHO issuance are critical metrics that correlate directly with Aave DAO’s ability to generate revenue.

Ethereum Foundation’s revamp

Meanwhile, this loan move follows EF’s recent efforts to reshape its treasury strategy after extended community complaints.

Earlier this year, the Foundation deployed 50,000 ETH across multiple DeFi platforms. That included a February deposit of 30,800 ETH into Aave, split between its core market and Aave Prime. Additional allocations included 10,000 ETH to MakerDAO’s Spark and 4,200 ETH to Compound.

The borrowing reflects a strategic shift away from liquidating ETH to finance operations. Instead, EF is now tapping into DeFi lending to maintain its holdings while generating yield.

This approach also distances the Foundation from the criticism it faced in January, when it sold 300 ETH worth nearly $1 million.

Mentioned in this article

We’re committed to providing traders with greater flexibility and control, and are excited to announce a significant expansion in our margin collateral opportunities for Kraken Pro traders. 

With this update, the number of collateral currencies you can use for margin trading increased to 44, plus substantial collateral haircut reductions on 23 other margin collateral assets.

What is a Collateral Currency?

A collateral currency can be fiat, crypto or stablecoin you can use for trading on margin. Unlike standard spot trading, margin trading allows you to open long or short positions by borrowing funds directly from Kraken.

When you trade on margin, Kraken’s margin pool is used for the purchase or sale of the cryptocurrency, while your collateral secures the extensions of margin. The collateral currency you use does not need to match the trading pair of the order book you’re trading on, allowing for greater flexibility to go long or short in any margin enabled trading pair.

Note: Both unstaked and Kraken Rewards assets can be used as margin collateral. However, assets held in Kraken Pro on-chain staking are ineligible to use as margin collateral.

Maximizing the Benefits of Margin Trading

Expanding the range of collateral currencies may empowers traders in several ways:

Tax Advantages: In some jurisdictions, using digital assets as collateral rather than selling them outright can defer taxable events. By leveraging collateral currencies for margin trading, traders can potentially reduce immediate tax liabilities while maintaining exposure to their holdings.

Diversification of Collateral: By using multiple collateral currencies, you can better manage risk and reduce exposure to volatility in any single asset. This is particularly valuable for traders seeking to safeguard their positions in unpredictable markets.

Improved Liquidity: With more assets eligible as collateral, you can free up funds for other trading opportunities while maintaining robust positions on margin. This ensures your portfolio remains active and responsive to market changes.

Strategic Flexibility: The ability to combine assets with different haircuts enables fine-tuned margin strategies tailored to your risk tolerance and market outlook. Whether you prefer conservative or aggressive trading, expanded collateral options provide the adaptability you need.

Hedging and Short Selling Opportunities: With access to margin trading and a diverse range of collateral currencies, traders can hedge their existing positions or take advantage of downward market movements through short selling. This opens up opportunities for profit regardless of market direction.

Leverage and Capital Efficiency: Margin trading can amplify your buying power, allowing you to take larger positions than your available capital. This capital efficiency is further enhanced by the ability to use a broader range of collateral currencies, enabling you to maximize potential returns while optimizing resource allocation.

New Collateral Currency Choices 

Here’s the list of the 9 new assets being added to Kraken’s margin collateral lineup, bringing the total to 44 options.

Asset	Haircut
Arbitrum (ARB)	10%
Filecoin (FIL)	20%
The Graph (GRT)	20%
Injective (INJ)	20%
Kaspa (KAS)	20%
Kusama (KSM)	20%
Mina (MINA)	20%
Sei (SEI)	10%
Celestia (TIA)	10%

Collateral Currency Haircut Changes

The following 23 assets have had margin collateral haircut improvements: 

Asset	Old Haircut	New Haircut
LTC	30%	7.5%
AVAX	30%	10%
LINK	30%	10%
TRX	30%	10%
ATOM	30%	10%
DOGE	20%	7.5%
RENDER	30%	20%
NEAR	30%	20%
STX	30%	20%
SHIB	30%	20%
RUNE	30%	20%
PEPE	30%	20%
WIF	30%	20%
MANA	30%	20%
TAO	30%	20%
XTZ	30%	20%
SUI	30%	20%
USDT	10%	0.5%
XRP	10%	5.0%
SOL	10%	7.5%
DOT	10%	7.5%
ADA	10%	7.5%
PAXG	5%	3%

The following assets have had collateral haircut extensions: 

Asset	Old Haircut	New Haircut
BTC	0%	1%
ETH	0%	1%
USDC	0%	0.5%

In addition to the above JPY and MATIC have been discontinued as margin collateral assets.

Understanding Haircuts

When using a currency as collateral, Kraken applies a “haircut” to determine its effective value. This haircut reflects the percentage reduction applied to the asset’s value to account for potential price volatility. For instance, if you hold $1,000 worth of an asset with a 20% haircut, its collateral value is calculated at $800. This approach ensures greater stability and reduces the risk associated with using volatile assets as margin collateral.

What to Keep in Mind

It’s important to note that collateral assets used to open margin positions cannot be exchanged for other currencies or withdrawn while the position is open. These assets remain reserved as collateral and are visible in your account balance, but they are restricted from trading or withdrawals. You can check the availability of your collateral assets at any time through the Funding tab in your Kraken account.

Ready to trade but don’t have a Kraken account yet? Sign up today! 

Availability of margin trading services is subject to certain limitations and eligibility criteria. Trading using margin involves an element of risk and may not be suitable for everyone. Read Kraken’s Margin Disclosure Statement to learn more.

Trade with caution. There is no guarantee that a limit order will execute. There is no guarantee of margin pool availability at all times. There is also no guarantee of a market order executing at a certain price. The availability and liquidity of the particular digital asset will impact these types of orders.

These materials are for general information purposes only and are not investment advice or a recommendation or solicitation to buy, sell, stake or hold any cryptoasset or to engage in any specific trading strategy. Kraken does not and will not work to increase or decrease the price of any particular cryptoasset it makes available. Some crypto products and markets are regulated and others are unregulated; regardless, Kraken may or may not be required to be registered or otherwise authorised to provide specific products and services in each market, and you may not be protected by government compensation and/or regulatory protection schemes. The unpredictable nature of the cryptoasset markets can lead to loss of funds. Tax may be payable on any return and/or on any increase in the value of your cryptoassets and you should seek independent advice on your taxation position. Geographic restrictions may apply. See Legal Disclosures for each jurisdiction here.

Derivatives is expanding its multi-chorale trading suite with new collateral currencies, updated haircuts and significant changes to existing assets. These updates will allow Kraken Pro traders to have more flexibility in managing their positions and hedge risks in dynamic markets. Read what’s new, how collateral from Kraken Pro Derivatives works, and what it means to you.

At a glance:

• AAVE, CAD, DAI, Near, Mana, Render, Rune, STX, Sui, Tao, XLM, and XTZ are now available as collateral that can be moved to derivative wallets.
• BTC and ETH haircuts are declining. Others are currently tailored to spot margin levels, providing a consistent trading experience and making collateral easier to manage across both products (see here).
• PYUSD is scheduled to be delisted as collateral.
• AUD and CAD expand the number of Fiat currencies available with 0% haircuts.

Summary: “Haircuts” and multifaceted derivative trading

We will support Multicoratal Derivative trading means that a variety of assets can be deposited as collateral in a “driver wallet.” Apply a specific “haircut” (reduced effective value) to a specific crypto-secured asset based on the volatile profile. Essentially, if you want to use a crypto assurance as collateral, a small portion of its value is considered unavailable in the margin, but this does not affect the actual value of the asset or cover the fee. Haircuts also apply to unrealized profits/losses and funds, helping to maintain the safety margins of your trading system.

learn more:

New collateral assets

The 12 Fiat assets and crypto assets listed here have significantly expanded collateral options along with haircuts.

Changes to haircuts

We also updated haircuts for many existing assets. A lower haircut generally means that more of the value of the asset can be used as collateral, while a higher haircut shows a more conservative rating.

Reduce haircuts

The next asset included collateral haircut reductions.

Haircut extensions

The next asset was a collateral haircut extension.

What should you keep in mind?

It is important to note that collateral assets transferred to derivative wallets and used to open futures positions cannot be exchanged for other currencies or withdrawn while the position is open. These assets remain reserved as collateral and appear to be account balances, but are restricted from trading or withdrawing to a spot wallet until the position is closed. You can check the availability of your collateral assets at any time on the Derivatives Portfolio tab.