Solana (SOL) is back in the spotlight after whale investors injected more than $1 billion into DeFi protocols, sparking a dramatic 500% surge in transaction activity across the network.

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Data from CoinShares shows that inflows in Q3 2025 reached $177 million, pushing year-to-date totals above $1.2 billion. This sharp rise has positioned Solana as one of the most liquid ecosystems for staking, lending, and DEX activity.

One notable whale moved 20,000 SOL from Kraken into Kamino Finance, later borrowing $3 million in USDC for leveraged positions on OKX. This reflects how institutional-scale players are increasingly using Solana’s DeFi ecosystem without selling off their core holdings, adding both liquidity and credibility to the market.

SOL's price trends to the upside on the daily chart. Source: SOLUSD on Tradingview

Why Transactions Are Surging

Analysts point to multiple factors behind Solana’s record-breaking DeFi inflows and transaction growth. A key driver is the Alpenglow consensus protocol upgrade, which gained 99% validator approval. The upgrade slashes transaction finality to just 150 milliseconds, making Solana one of the fastest public blockchains.

This speed advantage has already lured investors away from Ethereum, where congestion remains a problem. One whale address, previously known for high-value Hyperliquid trades, shifted $7.6 million from ETH into SOL, citing throughput efficiency as the decisive factor.

Beyond technical upgrades, Solana has also attracted institutional interest through ETFs and tokenization initiatives, further strengthening its role as a preferred option for DeFi growth in 2025.

What This Means for Solana’s Future

With whales fueling inflows and Solana’s ecosystem achieving record adoption, market confidence in SOL’s long-term trajectory is strengthening. Transaction surges of this scale often precede deeper liquidity growth and sustained developer activity, two pillars of a healthy DeFi network.

However, analysts caution that network activity needs to translate into consistent user adoption to maintain momentum. While speculative capital is accelerating short-term gains, the broader test for Solana will be sustaining real-world use cases beyond whale-led inflows.

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Currently, Solana stands out as one of the fastest-growing ecosystems in crypto, backed by institutional confidence, whale capital, and groundbreaking technical upgrades. If these trends continue, analysts believe Solana could be at the path of the much anticipated $1000 mark.

Cover image from ChatGPT, SOLUSD chart from Tradingview

The Federal Reserve Board announced on Sept. 3 that it will host a payments innovation conference on Oct. 21, where it will discuss stablecoins, DeFi, and tokenization.

The conference will feature panel discussions on the convergence of traditional and decentralized finance, emerging stablecoin use cases and business models, artificial intelligence applications in payments, and tokenization of financial products and services.

Federal Reserve Governor Christopher Waller emphasized the conference’s focus on technological advancement, stating that innovation has been a constant in payments to meet the changing needs of consumers and businesses.

Waller noted his anticipation for examining opportunities and challenges presented by new technologies while gathering ideas to improve payment system safety and efficiency.

Building on recent stablecoin focus

The conference follows extensive Federal Open Market Committee discussions on stablecoins during the July 29-30 meeting, where officials analyzed potential financial system impacts following passage of the GENIUS Act.

The comprehensive federal stablecoin framework, signed into law on July 18, established regulatory clarity that FOMC members cited as a driver for projected growth in stablecoin usage.

Fed minutes revealed officials’ recognition of stablecoins’ potential benefits, particularly for payment system efficiency and increased demand for Treasury securities used as collateral.

However, participants expressed concerns about broader banking system implications and emphasized the need for close monitoring of stablecoin backing assets.

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The central bank’s proactive approach reflects a growing acknowledgment of the relevance of digital payment systems to its monetary policy and financial stability responsibilities.

Supportive stance

Governor Waller has consistently supported blockchain-based payment innovation, recently declaring “there is nothing scary” about DeFi operations at the Wyoming Blockchain Symposium.

He compared DeFi transactions to conventional debit card purchases, framing smart contracts and distributed ledgers as natural technological evolution rather than disruptive threats.

Waller credited stablecoin development with extending dollar accessibility globally, particularly benefiting high-inflation countries lacking affordable banking services.

He highlighted their potential to “maintain and extend the role of the dollar internationally” through 24/7 availability and rapid transferability.

The October conference represents the Fed’s commitment to understanding how emerging payment technologies might integrate with existing monetary infrastructure while addressing regulatory challenges and opportunities in the evolving digital payments landscape.

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MEXC, one of the world’s fastest-growing cryptocurrency exchanges, reported record growth in the second quarter of 2025 after rolling out a zero-fee campaign on high-demand futures pairs.

The bold strategy, designed to reduce barriers to entry and capture market momentum, comes as the broader digital asset market continues to embrace stablecoins amid broader crypto adoption.

Zero-Fee Push Aligns with Market Focus

According to the CoinGecko Q2 2025 Crypto Industry Report, the total cryptocurrency market capitalization rose 24% quarter-on-quarter, while the stablecoin market hit an all-time high of $243.1B. $USDC expanded by $1.4B in circulation, highlighting investor appetite for compliant, dollar-backed assets.

MEXC seized on the trend by eliminating trading fees on selected $USDC-margined futures pairs. The initiative gave traders cost-free access to fast-growing markets while positioning the exchange at the center of the industry’s shifting narrative.

By zeroing in on where the liquidity was flowing and removing cost friction, MEXC amplified user participation and market depth across key pairs.

Winners Among Trading Pairs

The exchange’s campaign produced notable winners across both mainstream and emerging assets:

• $TON/$USDC captured 42% market share in its category.
• $ETH/$USDT, the flagship mainstream trading pair, secured a 33% share.
• $ONDO/$USDC and $POPCAT/$USDC each posted more than 5% market share gains.

The results underscored how MEXC’s mix of blue-chip tokens, infrastructure plays, and high-risk meme coins allowed the platform to serve a broad spectrum of trading appetites.

$ETH and $TON attracted institutional-minded investors, while $POPCAT drew in speculative retail traders and meme coin degens chasing volatility.

From Meme Frenzy to Mainstream Focus

The strong quarterly performance also reflected a broader pivot in market psychology. In the first quarter, the meme coin market profited from tokens like Dogwifhat, Brett, and Book of Meme surging in popularity.

But as US regulators passed crypto-friendly rules and fostered a more welcoming blockchain framework, investors redirected their attention to infrastructure upgrades, DeFi applications, and regulatory-friendly assets in Q2.

MEXC’s zero-fee campaign mirrored this change in sentiment. By offering cost-free access to sectors aligned with the new narrative, the exchange effectively turned user preference into trading volume.

Building a Foundation for Long-Term Growth

The zero-fee initiative not only lowered trading costs but also created a feedback loop of higher participation, deeper liquidity, and growing market share.

The campaign laid the groundwork for the exchange’s next phase of expansion, particularly in futures markets where competition among global platforms remains fierce.

With over 40M users spanning 170 countries, MEXC has built a reputation as one of the industry’s most accessible exchanges. The platform frequently lists trending tokens, provides promotional airdrops, and maintains one of the lowest fee structures in the sector.

Its focus on simplicity – under the motto ‘Your Easiest Way to Crypto’ – has helped it build a strong following among both retail traders and more seasoned investors.

Industry Context: Stablecoins and DeFi in the Spotlight

The emphasis on $USDC-margined pairs comes at a time when stablecoins are increasingly viewed as the backbone of the crypto economy. Beyond functioning as a liquidity layer, stablecoins are now integral to payment rails, cross-border settlement, and decentralized finance platforms.

The $243.1 billion stablecoin market cap milestone in Q2 reflects both resilience and evolution.

The sector is expanding not just in raw numbers but also in diversity, with compliant tokens like $USDC gaining traction alongside algorithmic and yield-bearing alternatives.

MEXC’s decision to highlight $ONDO/$USDC as part of its zero-fee campaign reflects how exchanges are now competing not just on volume but also on narrative alignment with emerging sectors.

DeFi has also continued to capture institutional interest, with projects like Ondo Finance ($ONDO) demonstrating new ways to bridge traditional financial instruments with blockchain technology.

MEXC Looks to the Future

The strong quarterly showing cements MEXC’s status as one of the most competitive exchanges in the futures market.

The zero-fee futures initiative may prove to be more than just a short-term promotional boost. By positioning itself as the go-to platform for traders chasing the most relevant narratives, the exchange has built a strategic foundation that could sustain growth well into 2026 and beyond.

As always, do your own research. This isn’t financial advice.

Authored by Bogdan Patru, Bitcoinist – https://bitcoinist.com/mexcs-zero-fee-futures-drive-q2-growth-stablecoins-defi

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.

The following is a guest post and analysis from Vincent Maliepaard, Marketing Director at Sentora.

2025 has marked a turning point for XRP, combining explosive price gains with transformative shifts in its core narrative. In July, the token hit an all-time high of $3.58, propelled in part by decisive legal victories. Beyond price action, Ripple’s launch of the RLUSD stablecoin has gained significant traction, and the network is now doubling down on expanding XRP’s footprint in the DeFi ecosystem.

The foundation of XRP’s breakout was laid when the SEC dropped its lawsuit against Ripple, removing a significant regulatory overhang that had suppressed institutional interest for years. This legal resolution as well as the Trump administration’s crypto-friendly policy framework, including the GENIUS Act, catalyzed a broader bull market across digital assets.

The token has also benefited from a strategic revaluation as institutional investors engaged in speculative rotation toward under-owned large-cap cryptocurrencies, recognizing XRP as a legitimate capital layer rather than a speculative trading vehicle.

This thesis was reinforced by Ripple’s launch of the RLUSD stablecoin in late 2024, which quickly scaled to a $600 million market cap and demonstrated real-world utility in driving adoption momentum. The ecosystem expansion has continued with the launch of the XRPL EVM sidechain, enhancing interoperability and smart contract functionality, while anticipation builds around the potential approval of an XRP ETF that could further accelerate institutional adoption.

Let’s dive in for a breakdown of XRP’s growth and momentum, new players in the ecosystem and XRP’s breakthrough in DeFi.

XRP’s Growth and Momentum

XRP’s concentration dynamics reveal a mature institutional ownership structure that mirrors traditional financial assets, with the top 10 wallets controlling approximately 41% of circulating supply, expanding to 50% among the top 20 holders and over 70% within the top 100. This concentration pattern indicates institutional capital allocation rather than retail speculation, which supports XRP’s evolution into an institutional asset class.

The token’s transformation from a previous cycle laggard to a favorite gained significant validation through Coinbase’s integration. In July, the exchange launched cbXRP, a wrapped token backed 1:1 by XRP specifically designed for cross-chain functionality. This infrastructure development immediately unlocked new use cases, with Moonwell becoming the first major DeFi protocol to support cbXRP, enabling community members to lend and borrow the wrapped token within the platform’s DeFi ecosystem.

Growth of cbXRP on Moonwell has been steady, gradually growing to over $1.2 million in liquidity since its launch in June. While this may be far from XRPs typical multi-billion dollar headlines, it marks an important milestone in XRP’s DeFi journey.

These developments signal a fundamental shift in how traditional exchanges and DeFi protocols are positioning XRP, moving beyond simple trading solutions. The combination of concentrated institutional ownership, enhanced technical infrastructure through wrapped tokens, and expanding lending markets demonstrates that XRP is experiencing adoption momentum as capital flows increasingly recognize its utility as a cross-border settlement layer and institutional-grade digital asset.

Expanding into DeFi

The expansion of XRP into decentralized finance represents a natural progression for what Gabriel Halm of Sentora describes as a blockchain that has “successfully established itself as a digital payment network,” with DeFi development being “an intuitive next step in creating a comprehensive finance ecosystem for XRP.” This evolution addresses a critical gap in XRP’s utility, as the token historically lacked the fundamental DeFi primitives.

Flare Network has emerged as one such infrastructure provider for XRPFi, through the introduction of FAssets—which upon launch, enables XRP holders to convert their tokens into FXRP, a wrapped version of XRP. This operates in a non-custodial, trust-minimized framework which uses smart contracts for cross-chain verification.

Upcoming Yield Opportunities for XRP in DeFi

While users can currently earn a modest yield (around 0.1% currently) by supplying cbXRP on Moonwell, significantly higher returns may be on the horizon with the upcoming launch of the Firelight Protocol on Flare.

Firelight aims to bring economic security and yield generation to the XRP ecosystem, much like how EigenLayer has unlocked additional staking yield for Ether. By leveraging staked XRP for economic security, Firelight’s architecture could enable innovative DeFi applications—such as on-chain insurance—that were previously not feasible.

As Hugo Philion, Co-Founder of Flare Network, explains:

“Firelight offers on-chain XRP yield opportunities, both for institutions and retail holders, improving capital efficiency for XRP and further bolstering its utility.”

Looking Ahead

XRP’s growth story is shifting from short-term price cycles to long-term structural evolution. The convergence of regulatory clarity, institutional adoption, and DeFi expansion, driven by platforms like Base, Moonwell, Flare, and Firelight, broadens XRP’s utility and potentially establishes it as a yield-bearing asset.

While it may not yet be a dominant force in DeFi, these developments could strengthen XRP’s role as a bridge between traditional finance and emerging on-chain opportunities.

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The following is a guest post and opinion from Slavik Baranov, CEO at STON.fi Dev.

From Gaming Phenomenon to Financial Ambition

In 2024, the TON blockchain became one of the most talked-about ecosystems in crypto — not because of a groundbreaking DeFi protocol, but thanks to the meteoric rise of viral tap-to-earn games on Telegram. Titles like Hamster Kombat and Notcoin drew millions virtually overnight, pushing daily active wallets to nearly 2 million by September.

The surge proved TON can onboard users at a pace few blockchains can match. But it also exposed the fragility of hype-driven adoption: many players came for quick rewards and left when incentives ended. Speculative capital — fluid and opportunistic by nature — followed the same path.

Games showed TON’s reach. But they were never meant to be the foundation of a financial revolution.

The Lasting Impact of the Hype Cycle

The post-game cooldown wasn’t a collapse; it was a reset. In January 2024, before the gaming boom, TON averaged 26,000 daily active wallets. After the dust settled, activity stabilized at 100,000–200,000 — a multiple of its pre-hype base.

Even more importantly, developer and user inflows seeded growth across the ecosystem. The number of DeFi protocols on TON rose from 35 to 67 in 2024 — a 91% increase. This expansion reflects a gradual shift in focus from short-lived promotions to enduring financial infrastructure.

Building TON’s DeFi Landscape

TON’s DeFi sector now spans token swaps, staking, and lending. In early 2024, EVAA launched as the first lending protocol. By late summer, AMM protocol STON.fi had reached nearly $400 million in liquidity. Today, the leaders by total value locked (TVL) are the liquid staking protocol Tonstakers and the swap protocol STON.fi, reflecting user preference for core, high-liquidity services.

Fueled by gaming-related excitement, total value locked (TVL) across the network peaked at $1.1 billion in July 2024. But as incentive programs ended, TVL declined to around $600 million by early 2025 and now stands near $400 million.

These movements suggest that part of TON’s liquidity was influenced by short-term market dynamics. Funds tended to flow in during periods of attractive yields and gradually taper off as those opportunities diminished.

By the end of 2024, TON had nearly 38 million addresses, yet new wallet creation fell sharply — from 724,000 daily in autumn to just 33,000 in early 2025. Meanwhile, staking emerged as a safe haven: around 790 million TON are currently staked, concentrating liquidity in lower-risk, base-layer protocols.

Why the Revolution Hasn’t Happened Yet

Compared with Ethereum or Solana, TON’s liquidity depth and range of products are still developing. Part of this difference stems from its underlying design. TON’s architecture was created with massive scalability in mind, leading to technically elegant but more complex infrastructure for developers.

Smart contracts on TON use a low-level language, and many core components require building from the ground up, which may have contributed to a more gradual pace of DeFi development in its early years.

The trade-off? Low-level development can produce more efficient, resilient solutions over time. TON’s core team is actively reducing friction for builders, paving the way for faster growth.

Another factor is ecosystem dependence on Telegram. On one hand, this integration gives TON direct access to over 1 billion users and tangible utility — since 2024, Telegram channel owners have been able to receive ad revenue payouts in TON. On the other hand, it creates a single point of exposure: any disruption in Telegram instantly impacts TON.

For now, many average users still see Telegram mini-apps as casual games rather than financial tools. Without broadening beyond entertainment use cases, TON’s appeal to institutional capital remains constrained.

Unlocking TON’s DeFi Potential

The path forward is clear: expand beyond hype cycles and deliver mass-market financial services seamlessly integrated into the Telegram experience.

This could mean:

• Frictionless payments — sending crypto in a Telegram chat as easily as a text message.
• Everyday utility — paying for goods, services, or restaurant bills in TON-based tokens.
• Accessible lending — offering microloans and credit solutions in regions underserved by banks.

If executed well, these use cases could transform TON from a viral gaming phenomenon into a primary interface for global crypto adoption.

Signals of Institutional Confidence

Institutional investment is already validating TON’s potential. In March 2024, major players including Sequoia Capital, Draper Associates, Kingsway, CoinFund, Ribbit, and Skybridge invested in Toncoin.

In January 2025, Zodia Custody (a subsidiary of Standard Chartered) announced support for TON’s Jetton token standard, enabling banks and large investors to securely hold and manage TON assets. And in July 2025, The Open Platform — a developer of Telegram-based protocols and apps built on TON — secured $28.5 million at a $1 billion valuation from leading funds Ribbit Capital and Pantera Capital.

Conclusion: From Potential to Reality

The explosive growth of 2024 proved that pairing Telegram’s reach with blockchain’s capabilities can move markets. But true transformation will come only when TON evolves from a hype-fueled onramp into a robust financial ecosystem.

The fundamentals are in place: a growing developer base, improving infrastructure, and unprecedented distribution through Telegram. If TON’s DeFi sector can simplify the user experience and deliver essential, in-demand services where users already are, it won’t just participate in the future of digital finance — it could help define it.

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A Solana treasury is becoming one of the fastest-growing crypto treasuries among big corporations, which sees the network’s robust performance and potential to revolutionize the blockchain sector. Presently, the idea is getting a major push from DeFi Development Corp, which has purchased a notable amount of SOL into its crypto treasury. 

Solana Treasury Companies Are Not Slowing Down

In a bullish development, DeFi Development Corp is doubling down on Solana, as the company constantly acquires the leading altcoin. Recent reports reveal that the firm has made another strategic buy to bolster its SOL treasury, pushing its aim to become the largest company holding the altcoin.

According to the report shared on the social media platform X, DeFi Dev Corp purchased 407,247 SOL at an average price of $188.68, resulting in a total value of approximately $ 76.8 million at the current price. Following this massive accumulation, the company’s treasury now holds 1,831,011 SOL, worth around $371 million. 

The action demonstrates DeFi Dev Corp’s steadfast conviction in Solana’s capacity for long-term growth and its growing significance in the dynamic DeFi market. In addition to strengthening its bank sheet, DeFi Dev Corp is putting itself at the forefront of Solana’s developing ecosystem, where developer activity and institutional interest are only growing stronger, by gradually expanding its assets.

Since the firm’s last purchase on August 15, 2025, its holdings have experienced an increase of more than 29%. The latest buy comes after DeFi Dev Corp’s recent announcement to raise about $125 million in equity to expand its SOL treasury. 

The initiative strengthens liquidity, expands network sustainability, and establishes Solana as a more robust participant in the developing blockchain market. “This raise allows us to add a significant amount of SOL to our balance sheet while still driving NAV/share accretion,” Chief Executive Officer (CEO) of DeFi Development Corp, Joseph Onorati.

SOL’s DeFi TVL At Its Highest Point

With institutional adoption rising sharply, Solana is experiencing a notable uptick in its network performance and engagement. SolanaFloor on X has reported that SOL’s Decentralized Finance (DeFi) ecosystem is experiencing an upswing, with Total-Value Locked (TVL) increasing to new levels.

On Thursday, data shows that SOL’s DeFi TVL spiked to a staggering $11.56 billion, marking its highest point since January 2025. The sharp uptick in TVL represents improving investor confidence, increased liquidity, and a wave of fresh activity across SOL-based protocols. 

Solana has also witnessed a notable uptick in Decentralized Exchange (DEX) volume. The report shows that SOL has reclaimed its top rank among all chains, recording approximately $4.604 billion, with Ethereum coming in second position.

Presently, SOL has turned bullish as the altcoin pushes forward to the $213 price mark, indicating a nearly 15% increase in the last 7 days. CoinMarketCap data shows that SOL’s trading volume is slowly turning bearish, falling by over 2% in the past day.

Featured image from iStock, chart from Tradingview.com

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.

Crypto exchange-traded fund (ETF) issuers are likely to partner with centralized staking providers following approval, but will eventually pivot to decentralized protocols as regulatory frameworks mature.

The Securities and Exchange Commission’s (SEC) Aug. 5 statement that liquid staking activities and staking receipt tokens do not constitute securities offerings removed the final regulatory hurdle for staking-enabled crypto ETFs.

As a result, VanEck and Jito filed for a Solana liquid staking ETF on Aug. 22, representing months of regulatory outreach that began with SEC meetings in February.

The partnership joins Canary Capital and Marinade among issuers partnering directly with liquid staking protocols, while Canary amended its Solana ETF filing in May to name Marinade Select as its staking provider. However, these two might be the exception.

Max Shannon, senior research associate at Bitwise, expects most issuers will start with centralized providers due to clearer compliance frameworks and legal accountability structures.

In a note, he said:

“DeFi partnerships are still possible, but probably through intermediaries that handle the regulatory layer while routing funds into protocols.”

However, Shannon anticipates a gradual shift toward hybrid or direct DeFi integrations as regulatory environments mature.

Sid Powell, CEO and co-founder at Maple Finance, echoed Shannon’s remarks. He predicted that ETF issuers would initially work with established custodians like Coinbase or Fidelity for operational simplicity, but he stressed that these custodians are building bridges into DeFi protocols.

Powell assessed via a note:

“The regulatory clarity creates a clear path that benefits the ecosystem across CeFi and DeFi: institutional capital flows to trusted custodians who then safely allocate into high-performing staking infrastructure.”

Misha Putiatin, co-founder of Symbiotic, views the distinction between centralized and decentralized as less critical than revenue diversification opportunities.

According to a note shared by Putiatin:

“The key is that each asset can now generate multiple revenue streams, and ETFs will diversify their offerings around these.”

He cited strong decentralized options that already compete effectively in compliance, traditional finance integration, and performance metrics.

Impact on DeFi

Powell expects institutional validation to transform liquid staking protocols from experimental DeFi infrastructure into core financial architecture:

“ETF and DAT [digital asset treasuries] structures will channel billions through qualified custodians into liquid staking protocols, potentially increasing current AUM by orders of magnitude.”

Yet, Shannon warns that concentration risk could emerge if flows concentrate in one or two protocols, potentially attracting closer regulatory oversight.

Nevertheless, he expects even small ETF allocations could massively boost total value locked, strengthening liquidity and utility of liquid staking tokens.

Lastly, Putiatin believes that the interaction between ETF issuers and DeFi protocols could reshape yield structures. He noted that this movement opens the door to more active strategies that demand crypto native expertise far beyond traditional capital allocation.

The regulatory clarity is positioning staking ETFs as a vehicle to capture institutional capital that has waited on the sidelines while preserving compliance requirements through established custodial relationships.

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The following is a guest post and analysis from Shane Neagle, Editor In Chief from The Tokenist.

Although the Terra (LUNA) collapse pricked the crypto bubble in May 2022, it took the FTX exchange catastrophe to firmly pop it at the year’s end. Ever since, the blockchain narrative has been supplanted by the AI hype. Moreover, during the Biden administration, the crypto space entered a vulnerable state of constant harassment and debanking.

This was at a time when digital assets needed to shore up, evolve, and recover from the overleveraged string of busts during 2022. Fortunately, the crypto-friendly Trump administration is now presenting a real path to recovery — to a blockchain-based decentralized finance (DeFi). This is already evident by the rise in capital across dApps.

Now at $156 billion DeFi total value locked (TVL), this marks a return to the first half of 2022. Likewise, Ethereum (ETH) price drastically outperformed Bitcoin (BTC) over the last month, at +53% vs. -1%, respectively. This is a clear sign that an altcoin season is ramping up — but which primary Layer-1 chains should crypto enthusiasts consider for long-term exposure?

Ethereum (ETH)

As the second-largest blockchain network and the DeFi vanguard, Ethereum is an obvious choice. Yet, it should not be overlooked merely for that reason, albeit within some caveats. There are two key aspects to Ethereum that are attractive as the primary exposure to the DeFi narrative.

Ethereum has the first-mover advantage, which generated the highest developer activity, ecosystem momentum, and scaling through Layer-2 networks such as Base, Polygon, Unichain, Optimism, Arbitrum, and others.

After introducing the token-burning mechanism with EIP 1559, Ethereum’s inflation rate is on par with Bitcoin (post-4th halving) at around 0.75%. Although Bitcoin’s inflation rate will continue to drop with more successive halvings, ETH could be considered sound money compared to the dollar with its 2% target inflation rate.

In other words, despite having an elastic token supply — generated by staking — compared to Bitcoin’s fixed supply, it is self-adjusting. As dApp activity rises on the mainnet, more ETH is burned. And after the Pectra upgrade, which made L2 networks more efficient with Blob Space, the burn rate has doubled.

Together with account abstraction and further Ethereum scaling with sharding, Ethereum is future-proofing itself to handle DeFi traffic while keeping transaction fees low. In turn, this ties in with the ongoing stablecoin push with the GENIUS Act.

Ethereum has the most diversified stablecoin ecosystem, holding $138.6 billion in stablecoins. This is half of the total $272.6 billion stablecoin market cap, according to DeFiLlama. As the bridging currency that brings the familiarity of the dollar in tokenized form, stablecoins are the first interaction for most people, leading to wider DeFi exposure.

Moreover, when Circle announced the launch of its ARC blockchain for stablecoin traffic, one should note it is an EVM-compatible L1 network.

Superficially, this may seem bearish for Ethereum as stablecoin transactions could shift away from Ethereum. In reality, it is bullish because it signals Ethereum’s integration into enterprise-grade liquidity through cross-chains and Ethereum’s L2 ecosystem.

All of these factors are now driving up Ether accumulation across treasuries. According to the Strategic ETH Reserve tracker, they have accumulated 3.57 million ETH worth around $16.58 billion. Effectively, Ether treasuries are likely to have the same effect on ETH price that spot-traded Bitcoin ETFs had on the BTC price.

But does that mean investors should go all in on ETH? For existing ETH holders, they should consider locking in profits in the following few months. Historically, when Ethereum’s Market Value to Realized Value ratio (MVRV) is above 3.0, it signals a peak before a selloff.

After the Fed’s likely interest rate cut in September, Ethereum’s MVRV ratio should start rising to that level. Following the market correction, this is when new investors should gain ETH exposure. According to a recent FundStrat forecast, ETH price is likely to reach $10,000 by the year’s end.

Avalanche (AVAX)

Since its launch in 2020, this L1 network has caught attention with its novel approach to blockchain architecture design. Namely, Avalanche divides workload through X-Chain for asset exchange, C-Chain to execute EVM-compatible smart contracts, and P-Chain for managing subnets, validators, and staking.

The implication of this design results in an effortless export of Ethereum dApps in addition to customized subnets. If an organization values financial privacy, it could create unique governance and consensus rules for its subnet. This opens the door to a wide range of use cases in banking, healthcare, supply chains, and private funds.

Case in point, FIFA picked Avalanche in May for its NFT deployment. Most recently, the Avalanche Foundation launched its $50 million accelerator program to fund blockchain gaming.

In terms of tokenomics, 90% of AVAX token supply is unlocked out of a total supply of 458.1 million, from the initial mining of 360 million AVAX. In Q2 2025, the annualized inflation rate remained at 3.8%, following a dynamic schedule driven by the amount of AVAX staked and the staking period.

Although this makes AVAX inflationary compared to Ethereum or Bitcoin, the AVAX token still has a hard cap of 720 million.

AVAX token price is likely to go up as more services are launched. To name a few: lending service Euler Finance, Nexpace (MapleStory N), VanEck’s VBILL treasury fund, Watr’s commodity trading, and Dinari’s tokenized securities.

This burst of activity increased average daily active addresses by 210% on a quarterly basis, according to Messari data. Over the last month, AVAX is up 18%, currently priced at $25 per token. The potential for gains is high, as AVAX reached multiple $50 peaks during 2024. Reminder: this was still during the crypto-hostile Biden administration.

Cardano (ADA)

Following an academic approach to blockchain development, Cardano is closely tied to Ethereum’s origins, as its co-founder Charles Hoskinson founded Cardano due to differences in how Ethereum should be organizationally set up. Over the years, Cardano gained a perception as the “left-behind” chain, with Solana (SOL) gaining prominence as Ethereum’s competitor.

Nonetheless, Cardano’s roadmap is progressing, and its ecosystem is slowly building up. In early 2024, Cardano gained its own USDM stablecoin, issued by fully compliant Moneta, even meeting Europe’s strict MiCA standard. Likewise, the Norwegian Block Exchange (NBX) onboarded USDM.

In the scaling department, Cardano advanced Hydra Layer-2 scaling for off-chain transactions and launched Mithril for lightweight node synchronization. By the year’s end, Ouroboros Peras is set to drastically reduce transaction settlement times. Together with Ouroboros Leios, Cardano is likely to be as performant in transaction throughput as Solana.

Zero-knowledge (ZK) smart contracts are also set for mainnet launch in late 2025, bringing privacy, scalability, and interoperability to the Cardano table. In addition to the privacy-focused Midnight project, Cardano is surrounded by positive narratives.

Another positive narrative from a sound money-wise perspective is that Cardano’s inflation rate is on par with Ethereum. In Q1, it was at 0.7% annually, while trending downward owing to the interplay between 5-day 0.3% expansion epochs, the hard cap of 45 billion ADA, transaction fees, and staking participation.

Year-to-date, ADA is up 2.5%, still under the dollar per token. In September 2021, ADA reached its all-time high price of $3.10. This makes it one of the cheapest blockchain exposures. And because Cardano has been dismissed so many times, its upside potential is amplified if its roadmap delivers as planned. In the stock market, dividend growth investing follows a similar principle of patience and compounding returns.

Mentioned in this article

The US Treasury is exploring whether identity checks should be built directly into decentralized finance (DeFi) smart contracts, a move critics warn could rewrite the very foundations of permissionless finance.

Last week, the agency opened a consultation under the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act), which was signed into law in July. The Act directs the Treasury to evaluate new compliance tools to fight illicit finance in crypto markets.

One idea was embedding identity credentials directly into smart contracts. In practice, this would mean a DeFi protocol could automatically verify a user’s government ID, biometric credential, or digital wallet certificate before allowing a transaction to proceed.

Supporters argue that building Know Your Customer (KYC) and Anti-Money Laundering (AML) checks into blockchain infrastructure could streamline compliance and keep criminals out of DeFi.

Fraser Mitchell, Chief Product Officer at AML provider SmartSearch, told Cointelegraph that such tools could “unmask the anonymous transactions that make these networks so attractive to criminals.”

“Real-time monitoring for suspicious activity can make it easier for platforms to mitigate risk, detect and ultimately prevent money launderers from using their networks to wash the proceeds from some of the world’s worst crimes,” Mitchell said.

Related: GENIUS Act to spark wave of ‘killer apps’ and new payment services: Sygnum

DeFi ID checks: protect data or risk surveillance?

Mitchell acknowledged the privacy tradeoff but argued that solutions exist. “Only the necessary data required for monitoring or regulatory audits should be stored, with everything else deleted. Any data that is held should be encrypted at row level, reducing the risk of a major breach.”

However, critics say the proposal risks hollowing out the core of DeFi. Mamadou Kwidjim Toure, CEO of Ubuntu Tribe, compared the plan to “putting cameras in every living room.”

“On paper, it looks like a neat compliance shortcut. But you turn a neutral, permissionless infrastructure into one where access is gated by government-approved identity credentials. That fundamentally changes what DeFi is meant to be,” Toure told Cointelegraph.

He warned that if biometric or government IDs are tied to blockchain wallets, “every transaction risks becoming permanently traceable to a real-world person. You lose pseudonymity and, by extension, the ability to transact without surveillance.”

For Toure, the stakes go beyond compliance. “Financial freedom relies on the right to a private economic life. Embedding ID at the protocol level erodes that and creates dangerous precedents. Governments could censor transactions, blacklist wallets, or even automate tax collection directly through smart contracts.”

Related: GENIUS Act yield ban may push trillions into tokenized assets — ex-bank exec

Who gets left behind?

Another concern is exclusion. Billions of people globally still lack formal identification. If DeFi protocols require government-issued credentials, entire communities, migrants, refugees and the unbanked risk being locked out.

“It may restrict access for users who prefer anonymity or cannot meet ID requirements, limiting DeFi’s democratic nature,” Toure said.

Data security is also a flashpoint. Linking biometric databases to financial activity could make hacks more catastrophic, exposing both money and personal identity in a single breach.

Critics stress that the choice isn’t binary between crime havens and mass surveillance. Privacy-preserving tools like zero-knowledge proofs (ZKPs) and decentralized identity (DID) standards offer ways to verify eligibility without exposing full identity.

With ZKPs, users can prove they are not on a sanctions list or over 18 without revealing who they are. DID frameworks allow users to hold verifiable credentials and selectively disclose them. “Instead of static government IDs, users hold verifiable credentials they selectively disclose,” Toure said.

Magazine: Scottie Pippen says Michael Saylor warned him about Satoshi chatter

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