OVERVIEW

DeFi United: Aave Passes Around The Hat 🎩

Here’s What’s Happening 👇️

The only big mover out of the top 25 is $ZEC ( ▲ 6.39% ) , +12%. The two closest after Zcash are $ADA ( ▲ 1.57% ) and $DOGE ( ▲ 1.96% ) , both at +2%.

And the losers look like yesterday’s losers: not down much, mostly flat. The worst of the bunch out of the top 25 is $XLM ( ▼ 1.52% ) and it’s only down -1.5%.

Before we dive in, here’s today’s crypto crypto’s total market and altcoin market cap charts:

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DEFI
DeFi United: Aave Passes Around The Hat 🎩

Quick follow-up to the KelpDAO bridge attack from last weekend - the $292M Lazarus Group job that left Aave staring down $124-230M in modeled bad debt and froze the ETH/WETH pool at 100% utilization. 🤦 

Here's where things stand now.

Enter "DeFi United"

Yesterday, $AAVE ( ▼ 0.22% ) formalized the branding on X: coordinated industry relief to restore rsETH backing and keep the deficit off Umbrella and stkAAVE holders.

There is no manifesto, no landing page, no signatory site, no GitHub. It's a hashtag attached to a live bailout being run across the Aave governance forum.

Who's Writing Checks ($101ish million pledged)

• Aave founder Stani Kulechov (personal): 5,000 ETH

• $MNT ( ▲ 0.75% ) : up to 30,000 ETH credit facility, Lido rate + 1%, 36-month tenor

• $ETHFI ( ▼ 0.74% ) Foundation: 5,000 ETH

• $LDO ( ▼ 0.7% ) DAO: up to 2,500 stETH

• $GNT ( ▲ 0.46% ) Foundation + Factory: 1,000 ETH combined

• Ethena, Frax, LayerZero, Tydro, Ink Foundation: participating, amounts undisclosed

• $ARB ( ▲ 1.83% ) Security Council: froze 30,766 ETH tied to the exploiter at law-enforcement request

Who's Not

• Sky / Spark: no pledge. SparkLend absorbed $1B+ in fleeing Aave deposits instead

• Uniswap, Compound, Morpho, Curve, EigenLayer: silent

• Solana Foundation's Seraphim Czecker: publicly called it "DeFi's Lehman moment"

What It Is

Three things at once:

• A real operational rescue. $101M in a week, on-chain governance votes in motion across five DAOs.

• A narrative counterweight to the "DeFi is dead" chorus. Aave needs the optics loud for Horizon, V4, and institutional counterparty trust.

• The first live fire test of Umbrella, Aave's replacement safety module. If the final deficit clears Umbrella's $80-100M reserve, stkAAVE faces up to 20% slashing.

It all reads and sounds mostly like deposit insurance with extra steps, branded as solidarity. The industry is reinventing the FDIC one press release at a time - just with worse ad copy and more hashtags.

That said, $101M on the table in a week without a central regulator forcing anyone's hand is a genuine datapoint. The question is whether this crystallizes into a standing facility or disappears the second rsETH re-pegs.

More deets on governance.aave.com. 👈️ 

TECHNICAL ANALYSIS
I Don’t Like Being That Guy… 😤

Nobody likes bad news or even the idea of bad news. But I do try to be realistic. And I’ll keep it short. 🤏 

The whole crypto market is still in a bear flag. There. I said it. So now you know. 🐻 

NEWS
'Thank God He Went YES,' Says Every Federal Prosecutor In America 😌

Army Private Gannon Ken Van Dyke, 38, was charged this week with using classified intelligence about the operation to capture Nicolás Maduro to place bets on Polymarket. 👏 

He wagered roughly $33,000 across 13 contracts, all YES on outcomes like "Maduro out by January 31," and cleared approximately $409,881 when the operation succeeded on January 3.

"The defendant allegedly violated the trust placed in him by the United States Government by using classified information about a sensitive military operation to place bets on the timing and outcome of that very operation, all to turn a profit," said U.S. Attorney Jay Clayton.

Seems kind of… weird? A Fort Bragg soldier bets $33K on an operation he helped in, and the SDNY, the FBI, and the National Security Division arrive at his door within weeks. Meanwhile, lawmakers from both parties have posted trading records that look like front-run Pentagon and Fed press releases for years.

Those people are mostly still at brunch. 😠 

NEWS
Morgan Stanley Builds the First Money Market Fund Designed for Stablecoin Reserves 🏗️

$MS ( ▼ 0.31% ) just launched a money market fund built specifically for stablecoin issuers. 🪙 

The fund is called the Stablecoin Reserves Portfolio, ticker MSNXX. It sits inside Morgan Stanley's Institutional Liquidity Funds trust, and it does exactly one thing - hold the cash, T-bills, and overnight repo that issuers like Circle, Paxos, and anyone else minting dollars on a blockchain are now legally required to hold under the GENIUS Act.

Short maturities only. 93 days or less on the paper. Overnight repo collateralized by Treasuries or cash. A stable $1 NAV. Super exciting stuffs.

So why are they doing this? The GENIUS Act put says what can back a payment stablecoin, and the list is tight: cash, short Treasuries, repo against Treasuries. Morgan Stanley read the statute and built the product.

It’s like the old money making idea about the gold rush in the 1800s: the people who made the most money wasn’t the gold prospectors, it was the people selling the picks and shovels.

Morgan Stanley is not betting on which stablecoin wins. They are selling picks and shovels to all of them. ⚒️

NEWS IN THREE SENTENCES
AI, Stablecoins, & Privacy News 🕵️

Database Engineer Writes Love Letter To Postgres Maintenance Window

Paxos senior engineer Brent Perreault published a retrospective this week on how Aurora Blue-Green upgrades cut Postgres downtime from 30 minutes to one minute, a breakthrough described internally as "50X improvement". Perreault also documented the moment he discovered that HashiCorp Vault's CREATE ROLE statements broke every upgrade attempt, a realization he characterized as "painful." Paxos.

Distributed GPU Network Celebrates Being Listed On Website

Theta Labs announced Wednesday that its EdgeCloud GPU service is now available on GPUFinder.dev, a directory site, joining previous listings on GetDeploying.com and GPUs.io. The company characterized the listing as "minor housekeeping" before writing about why it actually matters a great deal, citing AWS's 29 percent market share, 12-month GPU lead times, and a projected $1 trillion AI infrastructure market. Theta's pricing is 50 to 70 percent lower than hyperscalers. Theta.

NEWS IN THREE SENTENCES
Real World Asset Tokenization (RWA) News 🪙

Crypto Firm Proudly Announces It Did Not Get Hacked This Month

After six months in which rival protocols lost over $625 million to North Korean hackers, Ondo Finance released a 3,400-word blog post explaining in excruciating detail why they, specifically, were smarter than everyone else. "Paranoia is a practice," the company declared, before itemizing five philosophical principles, four layers of bridge defense, and three types of oracle validation. Ondo Finance.

NEWS IN THREE SENTENCES
Metaverse, NFT, & Gaming News 🎮️

Game Studio Excited To Announce You Can Lose Your Town Every Month But Keep The NFT You Paid For

Kepithor Studios unveiled Enjium this week, a browser-based strategy game where towns, maps, and progress are wiped clean every thirty days, while Champion NFTs purchased through the Mint Portal remain permanently yours. "A fresh start only works when there is still a reason to come back," the studio explained, between mentions of Garrisons, Mint Passes, Tavern systems, and leaderboards. Enjin.

NEWS IN THREE SENTENCES
DeFi, DEX, & Lending News 🏦

Tezos Solves Staking Problem It Already Solved Twice

Tezos developers this week proposed a third staking mechanism, sTEZ, to sit alongside the existing delegation and staking systems, neither of which was described as broken. The new "enshrined liquid staking token" will let users stake tez, receive a token representing staked tez, and then use that token instead of tez. Tezos.

NEWS IN THREE SENTENCES
Protocol News 🏦

Crypto Project Cites De Tocqueville, Rousseau, And The Oxford Union To Justify Faster Block Times

Kaspa commentator Chad Ballantyne released a 1,900-word essay this week invoking 19th-century French political philosophy, the Prisoner's Dilemma, and an Oxford Union keynote to explain why parallel block creation matters. "The stag stands in the clearing," Ballantyne wrote, repeatedly. Kaspa.

Two Blockchains You've Never Heard Of Partner To Connect 16 Other Blockchains You've Never Heard Of

Cross-network execution infrastructure SODAX and former Aleo bridge Veru Fi announced a partnership Thursday allowing users to trade across Ethereum, Arbitrum, Base, Avalanche, Polygon, Solana, Sui, Stellar, and eight other networks from a single interface. The integration "eliminates manual bridging, wrapped tokens, and app-hopping between tabs," replacing them with a Solver, an SDK, and a unified liquidity coordinator. SODAX.

OLD NEWS
Crypto Stuff That Happened Today, But A Long Time Ago 📜

Here’s what was happening in the newsletter a year ago today:

• XRP got a real institutional-looking moment - CME futures were set to launch on May 19.

• Bitcoin kept disappearing from exchanges - exchange supply hit a 7-year low.

• Paul Atkins signaled a very different SEC tone.

• Liquidations were still busy - about 111,755 traders got wiped for roughly $260.5M.

Here’s what was happening in the newsletter two years ago today:

• HBAR had a full-blown misinformation pump hangover - traders ran with the idea that BlackRock was “on Hedera,” then the market remembered reading matters.

• Hedge funds were sniffing around memecoins.

• Prosecutors wanted 3 years for CZ.

• Jupiter was making a mobile push on Solana.

OLD NEWS
Other Stuff That Happened Today, But A Long Ass Time Ago ⌛️

April 24

• 1184 B.C. - Greeks use a wooden horse to enter Troy.

• 1800 - The Library of Congress is established.

• 1877 - Russia declares war on the Ottoman Empire.

• 1889 - Edison General Electric Company is organized.

• 1898 - Spain declares war on the US.

• 1915 - The Armenian Genocide began.

• 1918 - The first tank-vs-tank battle takes place at the Second Battle of Villers-Bretonneux.

• 1967 - Soyuz 1 crash. Cosmonaut Vladimir Komarov is the first person to die during a space mission.

• 1981 - The IBM Personal Computer is available.

• 1990 - The Hubble Space Telescope launched.

• 1990 - Gruinard Island in Scotland declared safe after 48-years under quarantine. For anthrax.

• 2018 - The Golden State Killer, Joseph James DeAngelo, is arrested.

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Author Disclosure: The author of this newsletter holds positions in AVAX, ADA, PUDGY, WLD, NEAR, INJ, LTC, LINK, ZEC, XLM, and FET. 📋