Weekly DeFi Index

This week, the market cap and volume indices increased by +10.22% and +26.42%, respectively, while the volatility index dropped by -32.15%.

• Hyperliquid (HYPE)’s price reached $45 as trading volumes soared. HIP-3 permissionless markets enabled commodity perpetuals, like crude oil, to generate over $870 million in 24-hour volume at the time of writing.
• World Liberty Financial (WLFI) reportedly borrowed $75 million in stablecoins against its own WLFI token on the Dolomite protocol, leading to liquidity concerns. Additionally, the protocol minted 25 milllion USD1 stablecoins and burned 3 million, shortly after claiming to repay $25 million in DeFi loans.
• Aave DAO (AAVE) voted to consolidate protocol revenue under the Aave token, to streamline the treasury and align token value more closely with protocol growth.
• Morpho (MORPHO) unveiled “Morpho Midnight,” a new protocol dedicated to fixed-rate lending and providing users with more predictable financial outcomes compared to standard variable-rate DeFi models.
• Kamino Finance (KMNO) introduced contract-level security controls for its lending vaults, designed to mitigate exploit risks and provide more granular protection for user deposits.
• Pyth Network islaunching the Pyth Data Marketplace to provide institutional-grade data, challenging centralized data providers while reducing costs and increasing transparency for high-frequency financial data in DeFi.

Chart of the Week

Driven by oil market volatility, decentralized perpetual exchange Hyperliquid saw commodity perpetuals trading volume surpass all cryptocurrencies, except for Bitcoin, last week. Commodity volume hit $14.6 billion, compared to $16.5 billion for Bitcoin and $14.4 billion for altcoins. Total real-world asset (RWA) trading reached $20.6 billion. This shift highlights a rising DeFi appetite for RWAs, effectively integrating traditional assets to offer diversification, hedging, and exposure to distinct macroeconomic drivers.

News Highlights

• The Ethereum Foundation unveiled a $1 million Audit Subsidy Program to lower audit costs for builders and improve the overall safety of the Ethereum ecosystem.
• Visa launched a validator node on Stripe's Tempo blockchain to support real-time stablecoin settlements as part of its broader infrastructure expansion.
• HSBC successfully completed a tokenized deposit pilot on the Canton Network, marking a significant step in the integrating traditional banking assets with blockchain-based settlement systems.
• Polygon, Frax, and Curve launched on-chain FX liquidity pools to deepen FX liquidity in DeFi and expand the utility of non-USD stablecoins.
• Polygon launched its native liquid staking token, sPOL, allowing users to earn staking rewards while maintaining the liquidity of their assets for use in other DeFi applications.
• USDT issuer Tether introduced a new crypto wallet to facilitate direct Bitcoin and stablecoin payments, expanding the company's ecosystem toward retail-facing payment services.
• Ethereum Layer-2 (L2) Scroll moved to dissolve its Security Council and reduce DAO members, shifting toward leaner governance to navigate operational challenges.
• An attacker exploited the cross-chain bridge protocol Hyperbridge to mint 1 billion bridged Polkadot (DOT) tokens on Ethereum, netting approximately $237,000 and prompting the protocol to pause operations for emergency upgrades.

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