Weekly DeFi Index

This week, the market capitalisation and volume indices dropped by -9.61% and -15.78%, respectively, while the volatility index increased by +82.77%.

• Aave Labs launched the Aave V4 testnet and made the codebase available for public review. The update introduces a new Hub and Spoke architecture, which improves liquidity efficiency and allows for easier upgrades. Aave Pro, a new interface for advanced users, is also in beta.

Chart of the Week

Kohaku is a new Ethereum privacy toolkit and wallet framework introduced by Ethereum co-founder Vitalik Buterin at Devcon to make ‘default but compliant’ on-chain privacy usable at the wallet layer.

Kohaku is an open‑source, modular stack for building Ethereum wallets with built‑in privacy and stronger safety guarantees, rather than relying on separate ‘privacy dapps’ that only power users touch. It is being developed under the Ethereum Foundation’s privacy initiative as the practical ‘last mile’ that turns years of research on stealth addresses, ZK proofs, and privacy pools into something that normal wallet users can actually toggle on. Kohaku aims to allow any Ethereum-connected wallet to offer:

• Optional/Default ‘private mode’ for shielded transfers that still allow unshielding and legitimacy proofs.
• Improved UX for seed management, recovery, and transactions, eliminating the need for extra seeds, separate wallets, or cumbersome broadcast steps that drive users to centralised exchanges.

News Highlights

• Aztec launched its Ignition mainnet, positioning itself as one of the fully decentralised Ethereum L2 solutions with no centralised operators. The network currently operates with a block time of 72 seconds and aims to reduce this to 3-4 seconds by the end of 2026. Community staking was also live, allowing token holders to participate in consensus, earn rewards, and influence governance.
• Monad, an EVM-compatible L1, launched its mainnet and native token MON, with a total supply of 100 billion, on 24 November.
• Hyperliquid launched HIP-3 growth mode, a feature that allows anyone to permissionlessly deploy new trading markets with drastically reduced fees — slashing taker fees by over 90% from 0.045% to as low as 0.0045-0.009%. The upgrade aims to boost liquidity and attract new market makers by lowering barriers to entry.
• HSBC will expand tokenised deposits to the US and UAE in the first half of 2026, following successful launches in Hong Kong, Singapore, the UK, and Luxembourg.
• U.S. Bank, the nation's fifth-largest commercial bank, is testing the issuance of custom stablecoins on the Stellar blockchain.
• 21Shares, a major crypto ETF provider, expanded its offerings in Europe by listing six new crypto ETPs on Nasdaq Stockholm, including products for Aave, Cardano, Chainlink, and Polkadot.
• Anchorage Digital, a federally chartered crypto bank, is set to launch a rewards programme for holders of USDtb and USDe tokens, designed to comply with the US GENIUS Act, which prohibits paying interest on stablecoins. The rewards are distributed through a separate entity to avoid violating regulations, while offering yield-like incentives to token holders.
• DeFi lending platform Spark paused its plans to launch a mobile app, choosing instead to focus on institutional infrastructure and liquidity solutions, such as its $1 billion investment in PayPal's PYUSD stablecoin.
• MegaETH scrapped its $1 billion pre-deposit plan after technical failures during the pre-deposit phase caused the raise to exceed its $250 million limit. Issues included configuration errors, rate-limit problems with the KYC system, and an early execution of a multisig transaction, allowing unintended deposits. The team froze deposits at $500 million and announced plans for a retro and withdrawal option.
• Cardano experienced a temporary chain split on 21 November after a ’malformed’ delegation transaction exploited an old code bug, causing node disagreement and a network partition. The incident raised concerns about orphaned transactions and potential ADA double-spends.

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