Weekly DeFi Index

This week, the market cap dropped by -2.93%, while the volume and volatility indices increased by +26.87% and +35.05%, respectively.

• Depository Trust & Clearing Corporation (DTCC) announced its tokenization service timeline, and Ondo Finance (ONDO) joined an industry working group with BlackRock, Goldman Sachs, JPMorgan, and Citadel Securities.
• Jito Foundation (JITO) is collaborating with regional partners to expand institutional Solana infrastructure across APAC, aiming to bolster validator performance and support demand for enterprise-grade DeFi in Asian markets.
• Kelp DAO burned 117,132 rsETH tokens (approximately $278 million) held by the exploiter following the April hack. The platform has outlined a two-week plan to replenish the supply using funds from the Aave (AAVE) Recovery Guardian multisig wallet, managed by the DeFi United recovery group and Kelp’s own recovery safe.
• A New York Court delayed a decision on Aave’s emergency bid to unfreeze $71 million in ETH recovered following Kelp DAO’s hack. However, Arbitrum governance approved the release of the frozen funds despite legal complexities and potential seizure risks from U.S. authorities.

Chart of the Week

Assets under management (AUM) for tokenized stock provider xStocks surpassed $400 million in May, reaching $438 million at the time of writing. This represents a 102% YTD growth, primarily driven by Strategy’s stocks and major indices like the S&P 500 and Nasdaq 100.

Among the top-performing assets, Strategy Variable Rate Perpetual Stretch Preferred Shares (STRC) led growth with an 83x surge. STRC is a "digital credit" product designed to bridge traditional equity markets with the Strategy’s (formerly MicroStrategy) Bitcoin-heavy balance sheet. The stock is engineered to trade near a $100 par value and pays a variable annual dividend of approximately 11.5%, distributed monthly. Strategy Inc. (MSTR) and the S&P 500 index (SPY) followed with over 140% growth each.

News Highlights

• Crypto.com’s UAE entity, Foris DAX Middle East FZE, was granted a Stored Value Facilities (SVF) license by the Central Bank of the UAE (CBUAE), the first such approval for a VASP in the UAE. This milestone enables Crypto.com to activate its partnership with the Dubai Department of Finance, allowing UAE residents to pay government fees using virtual assets. Transactions will settle in dirhams or CBUAE-approved dirham-backed stablecoins under the SVF framework, aligning with the Dubai Cashless Strategy.
• SEC Chair Paul Atkins signaled a shift toward new regulatory frameworks for on-chain markets and AI-driven finance, aiming to modernize oversight for decentralized technologies.
• Société Générale expanded its digital asset operations by integrating with the Canton Network to facilitate tokenized collateral and stablecoin transactions, a major move toward institutional interoperability and the modernization of traditional financial settlement layers.
• Fidelity International partnered with Chainlink and Sygnum to tokenize its Fidelity USD Digital Liquidity Fund (FILQ) money market fund, using decentralized oracles to provide real-time transparency and cross-chain accessibility for institutional-grade investment products.
• The Ethereum Foundation unveiled a "Clear Signing" standard to make smart contract interactions human-readable. The standard is intended to reduce the risk of users inadvertently approving malicious transactions by providing greater transparency at the wallet level.
• Circle introduced Agent Stack, a developer toolset enabling autonomous AI agents to perform USDC transactions. This initiative aims to bridge the gap between AI and DeFi, facilitating automated on-chain commerce.
• Ronin, the gaming-focused blockchain behind Axie Infinity, transitioned from an independent sidechain to an Ethereum L2 network. This shift improves the network's security profile and aligns its scaling roadmap more closely with the broader Ethereum ecosystem.
• Zcash is set to roll out quantum-recoverable wallets within a month, targeting full quantum-proofing by 2027. This proactive approach aims to safeguard privacy-centric assets against future quantum advancements.
• LayerZero Labs admitted fault for the $292 million Kelp DAO exploit in April, reversing its initial claim that blamed victim misconfiguration. The company acknowledged it "made a mistake" by allowing its Decentralized Verifier Network (DVN) to operate in a vulnerable "1-of-1" configuration, creating a single point of failure.
• TrustedVolumes, a market maker and resolver used by 1inch Fusion and other protocols, confirmed a security breach resulting in the loss of approximately $6.7 million in digital assets on Ethereum network.

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