Weekly DeFi Index

This week, the market cap and volume indices increased +0.61% and +2.11%, respectively, while the volatility index dropped -4.85%.

• Ondo Finance (ONDO) partnered with major Japanese financial firm SBI Group to tokenize local assets, with distribution planned through SBI's ecosystem and settlement via the JPYSC yen stablecoin.
• Hyperliquid (HYPE) plans to introduce permissionless prediction markets under the HIP-4 proposal, requiring developers to stake 500,000 HYPE tokens (approximately $30.4 million) to deploy a market. This capital requirement, along with a validator-slashing mechanism, is designed to improve market credibility and severely deter poorly defined or unregulated markets.

Chart of the Week

At the start of July, trading volume in U.S. equities declined across both TradFi and DeFi markets. However, a recent divergence has emerged: while notional volume for Cboe U.S. equities has increased, trading volume for tokenized stocks has fallen, pushing their share of total volume to an eight-month low of 0.01%.

Several factors contributed to the decline in tokenized stock trading. The market currently lacks major new catalysts after the SpaceX IPO. In addition, tokenized stock volume was bolstered by June's hype cycle, while the broader crypto market's cooling has dampened DeFi activity and narrowed the addressable market for tokenized equity products. Meanwhile, amid fluctuating equity-market volatility, institutional volume is consolidating into deeply liquid traditional venues such as derivatives, which offer better execution and capital netting.

News Highlights

• Cronos App, a mobile-first trading app that unifies stocks, crypto, and prediction markets into one account, rolled out its beta.
• Cardano developer Input Output plans to transfer control of core blockchain infrastructure development, including the Haskell node and Plutus platform, to specialized independent teams. This major transition is a key step in the network's Voltaire governance era, aimed at reducing reliance on a single corporate entity and revitalizing network growth amid declining market activity.
• Cardano successfully activated the community-approved van Rossem hard fork on its mainnet, upgrading the network to Protocol Version 11. This upgrade lowers smart contract execution costs, introduces new cryptographic capabilities, and lays the technical groundwork for the upcoming Ouroboros Leios scalability phase.
• Michael Saylor published a comprehensive 110-point essay opposing Bitcoin's proposed BIP-110 anti-spam soft fork, arguing that restricting arbitrary data threatens the network's neutrality. The intervention from Bitcoin's largest corporate holder escalates a developer-centric technical debate into a broader governance dispute over preserving permissionless principles. 
• Consensys temporarily suspended MetaMask product releases after discovering that a third-party contractor linked to North Korea had accessed the wallet's code repository for approximately a month. Although an investigation found no compromised user data, stolen assets, or deployed malicious code, the incident exposes severe supply-chain vulnerabilities and the need for stringent hiring audits in crypto development.
• Layer-1 blockchain Zilliqa requested exchanges to temporarily halt ZIL token deposits and withdrawals while investigating a suspected security breach involving an exchange partner's cold wallet. 
• Decentralized perpetuals exchange Ostium suffered an estimated $18 million exploit after a compromised private key in its price-oracle system allowed an attacker to manipulate trades, leading to a platform-wide trading halt.
• Allbridge paused its cross-chain bridge protocol, Allbridge Core, following a reported $1.65 million flash-loan exploit.

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