News linked to both this project and an event.
Odaily News: Andre Cronje, founder of DeFi platform Flying Tulip and creator of Fantom Network, stated that most DeFi protocols are no longer truly decentralized, with only a few niche areas still qualifying as DeFi. He believes DeFi has evolved into "on-chain finance" or "open finance." He pointed out that true DeFi should possess characteristics such as decentralization, immutability, and the absence of intermediaries, whereas the intermediaries in most current protocols have become corporations, taking on traditional financial institution roles such as decision-makers and risk committees. Cronje noted that this does not mean true DeFi has completely disappeared, as some protocols are still innovating. Data from DefiLlama shows that the total value locked (TVL) in DeFi has dropped from $167 billion in early October 2025 to $75 billion at the time of the original report over the past 10 months, a decline of more than half. In a working paper published in March, the European Central Bank (ECB) analyzed Aave, MakerDAO, Ampleforth, and Uniswap, finding that based on holding snapshots from November 2022 and May 2023, the top 100 addresses holding governance tokens in these protocols each controlled over 80% of the token supply. The ECB consequently questioned the level of decentralization of these DAOs and whether they should continue to be regarded as "fully decentralized" services exempt from the Markets in Crypto-Assets Regulation (MiCA). (Cointelegraph)
Odaily News - Ethereum Improvement Proposal EIP-8363 ("Tapered Issuance Burn") has triggered strong backlash from the community, becoming one of the most contentious debates over Ethereum's economic model since The Merge. The proposal, put forward by Ethereum Foundation researcher Justin Drake, ETHCC co-founder Jerome de Tychey, and others, aims to gradually reduce validator rewards as the ETH staking ratio rises, ultimately bringing new issuance down to zero when staked ETH reaches 50% of the total supply.However, the proposal has drawn opposition from DeFi developers, staking service providers, and institutional investors alike. Critics argue that lowering staking yields could weaken the network's decentralization, disrupt Ethereum's DeFi ecosystem, and heighten market uncertainty around ETH's monetary policy. Opponents believe market mechanisms can already naturally regulate staking demand. Berryman noted that as yields decline to around 2%, new staking demand may naturally taper off, without the need for protocol-level changes to issuance policy.Ether.fi founder Mike Silagadze stated that the proposal is "detrimental to decentralization, Ethereum adoption, and the network's reputation." Bitwise Ethereum business lead Steve Berryman also pointed out that institutional investors require policy certainty, and adjusting the issuance mechanism could introduce additional uncertainty. Greg Koumoutsos, technical research lead at the Lido Labs Foundation, noted that Ethereum pays not only in "slashable ETH" but also in decentralization, node diversity, censorship resistance, and network resilience. Aave founder Stani Kulechov also warned that reducing ETH staking yields could impact the DeFi ecosystem, as a large volume of staking derivatives has become an integral part of lending and yield strategies.Additionally, the community is concerned that lowering staking rewards could paradoxically intensify centralization. Since individual validators lack economies of scale, declining yields may drive smaller nodes to exit, while large exchanges and institutional staking providers—backed by greater business demand—could continue expanding their market share.Currently, EIP-8363 involves not only staking reward adjustments but has also sparked broad discussions over Ethereum's long-term monetary policy, governance stability, and institutional confidence. The community believes that such a significant change to the economic model requires more thorough debate and a longer evaluation period. (Cointelegraph)
Odaily News: Aave founder Stani Kulechov published a lengthy post stating that Ethereum's EIP-8361 progressive issuance burn proposal has systemic issues. The proposal aims to gradually burn consensus layer issuance rewards, reducing the net staking yield to zero when the total amount of staked ETH reaches 60.25 million, approximately 50% of the total supply. Stani Kulechov believes that the second-order ripple effects of this proposal have not been fully modeled and could damage the foundations of the Ethereum ecosystem across multiple dimensions. He stated that a zero-yield mechanism may exacerbate staking centralization, with home validators being the first to exit due to fixed costs such as hardware and electricity, while non-yield-driven entities like ETF issuers, exchanges, and corporate treasury funds will remain. MEV rewards, which are unaffected by the proposal, would also expand the advantages of top professional operators. He also noted that individual stakers could face tax and operational risks. If tax authorities calculate taxes based on the full issuance amount and classify the burned portion as a capital loss, home node operators could experience after-tax losses. With penalty standards for faults remaining unchanged, the node recovery period after a fault could be extended by up to 14 times as net yields decline. Stani Kulechov stated that staking yields serve as the pricing benchmark for on-chain ETH interest rates. A decline in yields could cause DeFi lending and fixed-income markets to lose their pricing anchor, potentially driving on-chain capital toward stablecoins offering 4% to 5% annual returns. For institutional investors, predictable yields are a core competitive advantage of ETH relative to BTC. If yields fall to zero while volatility increases, ETH's differentiation in the store-of-value track would diminish. He also pointed out that after the proposal is implemented, MEV's share of total validator revenue could rise from the current 7% to nearly 30%, potentially incentivizing operators to prioritize relay nodes that support censorship, thereby weakening Ethereum's credible neutrality. If an MEV burn mechanism is subsequently added, validator revenue could be nearly eliminated. Stani Kulechov suggested that the proposal's authors release after-tax yield assessments for individual node operators, tax opinions from major jurisdictions, and cascade risk models for the DeFi ecosystem, while setting a non-zero net yield floor. He believes that staking centralization should be addressed directly with targeted measures, rather than by suppressing validator yields across the board.
Aave founder Stani Kulechov posted on platform X, stating that now more than ever, the industry needs to build consensus and do everything possible to ensure the smooth passage of the U.S. CLARITY Act.Stani stated that although the CLARITY Act is not perfect and many details still need to be formulated by regulatory agencies in the future, the bill will become the first regulatory legislation involving decentralized finance (DeFi). It will provide a clear legal framework and regulatory certainty for institutions, fintech companies, and banks to participate in on-chain finance. Once the CLARITY Act is officially passed, its driving effect on the on-chain finance ecosystem is expected to be similar to the development opportunities the GENIUS Act previously brought to the stablecoin industry, attracting more investment and institutional capital into the on-chain space.Stani added that over the past year, and especially in recent weeks and days, the Aave team has been in close communication with relevant policymakers in Washington, D.C., USA. He stated that they have now entered the "last mile" of pushing for the bill's enactment, a phase that is critically important.
Ripple is advancing the addition of a lending infrastructure layer on the XRP Ledger (XRPL), enabling institutions to raise funds using on-chain tokenized assets as collateral. The protocol will automatically execute loan terms, while credit evaluation and lending decisions remain handled by off-chain institutions.According to disclosures, the proposal is named the XRPL Lending Protocol (corresponding to XLS-65 and XLS-66 standards). It is currently in the technical draft stage and will require approval through validator voting before launching on the mainnet, but developer testing has already been opened on the test network.The protocol’s design splits the lending process into two parts: on-chain management of liquidity pools, interest calculation, repayment execution, and default handling; while borrower credit assessment and loan term setting remain with traditional financial institutions to meet compliance requirements across different jurisdictions.Ripple states that the mechanism is primarily aimed at institutional short-term liquidity needs. For example, in cross-border payment scenarios, temporary financing through stablecoins or collateral assets can be obtained before settlement is completed, thereby improving capital efficiency.Analysts believe that while the plan attempts to introduce a “rule-enforced lending infrastructure” similar to traditional finance while maintaining XRPL's open network attributes, it will still face competition from established on-chain lending protocols such as Aave, Compound, and Maple. (CoinDesk)
Aave has published a post-mortem of the April 18 rsETH incident, stating that the rsETH LayerZero V2 cross-chain bridge of liquid staking protocol Kelp accepted a forged message during a cross-chain transfer from Unichain to Ethereum. This caused the adapter on the Ethereum side to release 116,500 rsETH without a corresponding burn on the Unichain side. Aave stated that the attack occurred on a third-party cross-chain bridge infrastructure. However, the attacker deposited the stolen rsETH into 8 Aave V3 positions, borrowing 82,650 WETH and 821 wstETH, which impacted the Aave market.Aave stated that the attacker's rsETH on Arbitrum has now been burned. The LayerZero OFT adapter has replenished 116,131.72 rsETH in 5 batches, and the asset backing for rsETH has been fully restored. The affected WETH and rsETH markets have returned to normal.
Aave Labs has published an ARFC proposal recommending the introduction of a standardized technical asset listing framework for Aave V3, Aave V4, and Horizon—covering new asset onboarding, ongoing review of already-listed assets, and significant parameter expansions. The framework aims to unify technical assessment and monitoring baselines, addressing ERC-20 compliance, oracles, access control, minting and burning, pausing and blacklisting, upgradability, yield mechanisms, token architecture, cross-chain bridge risks, audit history, and external dependencies. The proposal also suggests integrating the assessment process into governance, including pre-screening, technical review, risk coordination, remediation tracking, and annual refreshes.
: VanEck's tokenized U.S. Treasury fund, VBILL, has officially launched on the DeFi lending protocol Euler. The fund is issued and tokenized by Securitize. Investors can now use tokenized Treasury bonds as collateral for on-chain lending and liquidity operations, while meeting compliance restrictions.This move reflects that DeFi protocols are accelerating their transition towards institutionalization and compliance to attract traditional financial capital into the on-chain market. Data shows that the market size of tokenized U.S. Treasury bonds has surpassed $15 billion, growing approximately 150% over the past year. Traditional asset management giants such as BlackRock, Franklin Templeton, and Janus Henderson have all launched on-chain treasury or money market products.Euler has previously integrated Securitize's DS Protocol to support the inclusion of tokenized securities with investor qualification restrictions and transfer rules into its lending market. DeFi protocols like Aave are also expanding into institutional-grade RWA businesses.Institutions estimate that the market size for asset tokenization could reach $18.9 trillion by 2033. A Securitize executive stated that as traditional financial institutions enter the crypto space, DeFi protocols must find a balance between openness and compliance requirements. (CoinDesk)
According to an official Aave tweet, Push Labs Ltd. (registration number: 1031720) and Push Virtual Assets Ltd. (registration number: 1031721), UK subsidiaries of Aave Labs, have been approved by the UK’s Financial Conduct Authority (FCA) and officially registered as cryptoasset service providers.
MoonPay has announced the launch of a new platform, MoonPay Trade, designed for banks, fintech companies, and enterprise clients. It provides unified access to tokenized assets, decentralized finance (DeFi) protocols, and stablecoin liquidity across over 200 blockchain networks.The platform is powered by Decent.xyz, a cross-chain routing infrastructure company recently acquired by MoonPay for a reported "high eight-figure USD amount." MoonPay stated that this product will serve as the core execution layer for its institutional business, MoonPay Institutional, which is led by former Acting Chairman of the U.S. Commodity Futures Trading Commission (CFTC), Caroline Pham.MoonPay Trade will support subscriptions for tokenized funds, collateral transfers, and integrations with DeFi protocols such as Aave, Morpho, and Maple Finance, enabling institutions to conduct lending and yield generation operations directly on-chain.Industry data shows that the current scale of tokenized real-world assets (RWA) has exceeded $33 billion, growing threefold within a year. Traditional financial institutions, including BlackRock, Franklin Templeton, and JPMorgan, have successively launched tokenized fund products, accelerating the influx of institutional capital into on-chain finance.MoonPay stated that as institutions continue to advance their tokenized asset strategies, its goal is to provide traditional financial institutions with the infrastructure capabilities for compliant access to on-chain markets through a unified interface. (CoinDesk)
OdailyOdaily reports that Standard Chartered expects the market capitalization of tokenized on-chain assets to reach $4 trillion by the end of 2028, split evenly between stablecoins and real-world assets.Geoffrey Kendrick, Global Head of Digital Assets Research at Standard Chartered, stated that established DeFi protocols with strong risk metrics will be the primary beneficiaries. The composability of DeFi is a core advantage, citing BlackRock's BUIDL fund, which has approximately $2.85 billion in assets under management, as an example. BUIDL allows investors to earn yield while using the fund as collateral and maintaining liquidity. The passage of the Clarity Act is seen as a near-term catalyst accelerating the shift from traditional channels to DeFi.Data shows that Aave, the largest DeFi lending protocol, once ranked 38th among US banks in terms of asset size. Daily on-chain stablecoin lending volume stands between $1.5 billion and $2 billion. The lending product offered by Coinbase in partnership with Morpho has reached a loan size of $1.75 billion. (The Block)
in April 2026, two major DeFi attacks on Drift Protocol and Kelp DAO resulted in losses of nearly $600 million, triggering approximately $9 billion in capital outflows from protocols like Aave. TRM Labs investigator Nick Carlsen stated that a hacker group suspected to be linked to North Korea has allegedly used AI to assist in target selection and attack path design. Failsafe CEO Aneirin Flynn said that AI has compressed the time for discovering blockchain vulnerabilities from months to days or even hours. The report noted that Anthropic has not fully opened its AI model Mythos due to cybersecurity risks, claiming the model has the capability to discover large-scale zero-day vulnerabilities. Its research indicates that over half of blockchain attacks in 2025 could theoretically be completed autonomously by AI. (Bloomberg)
Aave announced that its bug bounty program has been updated to better align rewards with the risk profile of each component within the ecosystem and to streamline the review process. The reward cap for critical vulnerability fixes in Aave V4 and Core Aave V3 has now been increased fivefold.
Linda Jeng, Chief Legal and Policy Officer at Aave Labs, stated during Consensus Miami 2026 that Aave's previous risk framework overly focused on financial risks and price volatility. Looking ahead, the protocol will incorporate assessments of cross-chain interoperability, cybersecurity vulnerabilities, and underlying asset architecture.This reform directly stems from the rsETH incident that occurred in April. At that time, an attacker exploited a vulnerability in the KelpDAO cross-chain bridge to mint approximately 116,500 unbacked rsETH (valued at around $293 million), deposited it as collateral into Aave, and borrowed real WETH, leading to significant bad debt risks for the protocol.Jeng revealed that Aave will also release a formal "listing standards handbook" for asset issuers in the future, and will begin evaluating the correlation between DeFi protocols from a systemic risk perspective, rather than analyzing individual pools in isolation.Additionally, a "DeFi United" bailout plan involving Lido Finance, EtherFi, Ethena, and others has been launched to cover collateral shortfalls and prevent further proliferation of bad debt. (CoinDesk)
Odaily News: Sonic Labs co-founder and Flying Tulip founder Andre Cronje posted on platform X, stating that his team is continuing to investigate the L0/rsETH incident. Preliminary reports indicate that approximately $200 million worth of rsETH was stolen, possibly due to a private key leak or configuration error. The related assets were subsequently deposited into Aave as collateral to borrow ETH (due to insufficient rsETH liquidity).Andre Cronje pointed out that the affected positions are technically still overcollateralized. However, if bad debt occurs, Aave's token mechanism and Safety Module will serve as the first line of defense to absorb the risk. Nevertheless, Aave has no mechanism to subsidize user losses, as doing so could trigger a bank run. Currently, Aave holds approximately $7 billion in ETH with an outstanding borrowing amount of around $100 million, so the overall impact of this incident is limited. Furthermore, prioritizing user liquidity, Flying Tulip has withdrawn all its ETH from Aave to its fund management wrapper contract. This action was taken because Aave's available liquidity had fallen below its set minimum threshold.
Regarding the KelpDAO hack, Aave tweeted that the rsETH markets on Aave V3 and Aave V4 have been frozen. Aave stated that its contracts were not exploited and that this incident is related to the exploit of Kelp DAO’s rsETH cross-chain bridge. The freeze will prevent new rsETH deposits and rsETH-backed lending. Aave is currently reviewing lending activity involving rsETH on the platform following the exploit and has indicated that, should the protocol accumulate bad debt as a result, it will explore options to cover the deficit. Earlier reports indicated that Kelp DAO’s cross-chain bridge was hacked, resulting in the theft of approximately $292 million worth of rsETH, exposing Aave V3 to bad debt risk.
According to CoinDesk, Kelp DAO’s LayerZero-based cross-chain bridge was attacked, with the attacker withdrawing 116,500 rsETH—worth approximately $292 million at current prices, or roughly 18% of its circulating supply. This incident has become the largest DeFi attack of 2026 to date. In response, Aave, SparkLend, and Fluid have frozen rsETH-related markets, and Lido Finance has suspended new deposits into its earnETH product. Kelp DAO stated it is jointly investigating the incident with LayerZero, auditing firms, and external security experts.
According to an official announcement, Aave Labs has launched Aave Checkpoint—a governance security system powered by AI—to conduct structured, multi-layered reviews of governance proposals and payloads before they are executed on-chain. The system has been operational since March 2026 and has covered all governance proposals during that period. Aave Checkpoint combines automated analysis with mandatory manual review: it fetches on-chain payload data, proposal source code, and IPFS-hosted text, then cross-references Seatbelt simulation results to examine execution paths, state changes, and potential risks—generating audit reports accordingly. Each AI-generated report must be signed off by at least two independent reviewers before the review is finalized. Currently, the system supports Aave V3, V4, GHO, and Aptos-v3.