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Lending

Lending protocols form the backbone of the decentralized money market, allowing users to lend or borrow digital assets without intermediaries. Using smart contracts, platforms like Aave and Morpho automate interest rates based on supply and demand while requiring over-collateralization for security. The 2026 lending landscape features advanced permissionless vaults and institutional-grade credit lines. This tag covers the evolution of capital efficiency, liquidations, and the integration of diverse collateral types, including LSTs and tokenized RWAs.

15435 Articles
Created: 2026/02/02 18:52
Updated: 2026/02/02 18:52
Japan’s FSA declares support for stablecoin backed by the country’s major banks

Japan’s FSA declares support for stablecoin backed by the country’s major banks

The post Japan’s FSA declares support for stablecoin backed by the country’s major banks appeared on BitcoinEthereumNews.com. Japan’s FSA said it will support a stablecoin project backed by three banking arms of the country’s major financial groups. Finance Minister Satsuki Katayama stated on November 7 that there is momentum to support digital payments in a country where credit cards and cash remain popular.  FSA’s Katayama disclosed after a regular cabinet meeting that the banking arms of Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMFG), and Mizuho Financial Group (MFG) will jointly issue stablecoins. He pointed out that the stablecoins will be tested for cross-border payments after the FSA’s assessment and approval. The agency wants to confirm whether the service can be carried out legally and in an appropriate manner.   The three megabanks, which reportedly have over 300,000 major business partners, unveiled their stablecoin ambition almost three weeks ago. They emphasized that the collaboration will help popularize stablecoins in Japan and create a common standard for cross-border payments and corporate clients. The Mitsubishi Corporation will pilot the first application.   Megabanks prepare for yen-pegged stablecoin launch The three major banks have announced that they will soon launch a Japanese yen-backed stablecoin. The megabanks also disclosed that the stablecoin will maintain a 1:1 value redemption ratio. Meanwhile, they are considering a U.S. dollar-backed stablecoin to help streamline international transactions. Japan recently revised its Payment Services Act, allowing licensed banks and trust companies to issue stablecoins fully backed by fiat currency.  MUFG is expected to utilize its Progmat platform as the foundational building block for the issuance and management of the proposed stablecoin. Progmat was developed to support tokenized securities, but has since been enhanced to include stablecoin issuance features that align with Japan’s tight compliance standards.  “Each country makes its own financial system resilient for its own sake…it is also in every country’s interest for other financial systems…

Author: BitcoinEthereumNews

2025/11/07

Japan’s FSA To Tighten Crypto Lending Rules, Proposes Limits For IEOs

Japan’s FSA To Tighten Crypto Lending Rules, Proposes Limits For IEOs

The post Japan’s FSA To Tighten Crypto Lending Rules, Proposes Limits For IEOs appeared first on Coinpedia Fintech News Japan’s crypto space is evolving fast as regulators step up efforts to tighten the rules.  Regulators are working to keep investors safe by adding more strong protections while also supporting major projects. This shows that Japan’s crypto market is moving into a more structured and closely watched phase. FSA Tightens Crypto Lending Rules Japan’s Financial …

Author: CoinPedia

2025/11/07

Elixir Winds Down deUSD Following Stream Finance Fallout

Elixir Winds Down deUSD Following Stream Finance Fallout

The post Elixir Winds Down deUSD Following Stream Finance Fallout appeared on BitcoinEthereumNews.com. Elixir, a decentralized finance liquidity provider, has announced that it will wind down its deUSD synthetic dollar stablecoin. The decision follows Stream Finance’s disclosure of a major loss that triggered ripple effects across the DeFi ecosystem. Sponsored Sponsored What Happened Between Elixir and Stream Finance? Earlier this week, Stream Finance announced a significant loss of around $93 million in assets managed by an external fund manager. “Yesterday, an external fund manager overseeing Stream funds disclosed the loss of approximately $93 million in Stream fund assets,” Stream posted on November 4. Following the incident, the platform suspended all withdrawals and deposits, stating that any pending deposits would not be processed until further notice. The company also stated that it is withdrawing all remaining liquid assets, a process it anticipates completing in the near term. But why did this impact Elixir’s synthetic stablecoin? According to Nansen, “Elixir parked 65% of deUSD’s collateral with Stream. Stream then lost $93 million using its own stablecoin (xUSD) as collateral. When xUSD dropped 77%, deUSD’s entire backing basically vanished. That set off a chain reaction: Stream froze withdrawals → redemptions halted → panic selling hit Curve. $30 million+ dumped onchain as holders raced to exit.” Elixir responded by sunsetting its synthetic stablecoin. In a post on X (formerly Twitter), the network highlighted that it had processed redemptions for 80% of all deUSD holders. Sponsored Sponsored “All remaining holders of deUSD and sdeUSD will be able to redeem for a dollar,” the team wrote. Furthermore, the network revealed that it had taken a snapshot of all remaining holder balances. It also launched a claim page for users to redeem their assets in USDC. “deUSD holds no value and the stablecoin has been sunset. Please do not buy or make investments into deUSD, including through AMMs,” Elixir added.…

Author: BitcoinEthereumNews

2025/11/07

This $0.035 Altcoin Aims To replicate Ripple’s (XRP) 2017 Vibes, Is it The Next Crypto To Explode

This $0.035 Altcoin Aims To replicate Ripple’s (XRP) 2017 Vibes, Is it The Next Crypto To Explode

In 2017, the XRP token of Ripple sparked an explosive rise with prices going from just $0.0063 to a high of $3.40, yielding more than 53,800% for early adopters. Quick cross-border payment solutions drove adoption. Today, Mutuum Finance (MUTM) at $0.035 mirrors exactly the above-mentioned sentiment with its organized DeFi lending strategy to attract 17,790 […]

Author: Cryptopolitan

2025/11/07

Compound Temporarily Pauses Key Lending Markets Amid Liquidity Issues

Compound Temporarily Pauses Key Lending Markets Amid Liquidity Issues

The post Compound Temporarily Pauses Key Lending Markets Amid Liquidity Issues appeared on BitcoinEthereumNews.com. Key Points: Compound temporarily halts key lending markets after liquidity crisis. USDC, USDS markets resume withdrawals November 6. Stream Finance reports $93 million loss linked to Elixir. Compound Finance, under advisement from Gauntlet, initiated an emergency pause on Ethereum lending markets (USDC, USDS, USDT) following a liquidity crisis affecting Elixir’s stablecoins, impacting key stakeholders. The move addresses substantial risks, including a $93 million loss disclosed by Stream Finance, as markets gradually restore safety and liquidity post-crisis with ongoing governance oversight. Gauntlet’s Strategic Move Amid $93 Million Loss Impact Gauntlet advised Compound to temporarily pause key stablecoin markets on Ethereum due to liquidity concerns related to Elixir’s deUSD and sdeUSD. The pause, which was approved, affected USDC, USDS, and USDT lending activities. Following this pause, withdrawals for USDC and USDS resumed on November 6. Compound aims to gradually restore services, prioritizing system safety as liquidity issues are resolved. Elixir’s stablecoin exposure, notably at the center of this suspension, caused a significant market impact as mentioned in governance updates. Gauntlet recommends a temporary emergency pause in the following comets: Ethereum USDC, Ethereum USDS, Ethereum USDT. Due to concerns surrounding Elixir, Gauntlet has observed a liquidity crunch in both deUSD and sdeUSD. […] Until this proposal passes, Gauntlet recommends pausing withdraw on the affected comets. Gauntlet Team, DeFi Risk Management Firm, Gauntlet DeFi’s Resilience Tested: Challenges and Market Stability Did you know? Gauntlet’s intervention is not unprecedented; similar actions have historically stabilized DeFi markets during liquidity disruptions, reflecting the ongoing need for agile risk management. According to CoinMarketCap, USDC remains stable at $1.00, with a market dominance of 2.24%. The market cap holds at approximately formatNumber(75449734212, 2), while recent price fluctuations remain minimal, illustrating a consistent performance despite broader market volatility. USDC(USDC), daily chart, screenshot on CoinMarketCap at 10:47 UTC on November 7,…

Author: BitcoinEthereumNews

2025/11/07

Japan's Financial Services Agency is considering strengthening regulations on cryptocurrency lending and setting investment caps for IEOs.

Japan's Financial Services Agency is considering strengthening regulations on cryptocurrency lending and setting investment caps for IEOs.

PANews reported on November 7 that, according to Coinpost, Japan's Financial Services Agency held its fifth meeting of the "Crypto Asset Regulatory Working Group" of the Financial Services Council today. The group proposed to include crypto asset lending businesses under the regulatory scope of the Financial Instruments and Exchange Act and to consider setting an investment cap for IEOs (Initial Exchange Offerings). Current regulatory loopholes allow lending platforms to operate without registration, placing credit and price volatility risks on users while exempting platforms from obligations such as asset segregation and storage. The new regulations will require platforms to establish robust risk management systems for re-lenders and collateral nodes, strengthen asset security management, and disclose customer risks; however, inter-institutional transactions will remain unrestricted. Regarding IEO regulation, the meeting proposed setting investment limits similar to equity crowdfunding rules (e.g., investments exceeding 500,000 yen cannot exceed 5% of annual income). However, some committee members pointed out that since IEOs immediately enter the secondary market after issuance, restricting primary market investment alone is insufficient to effectively control risk.

Author: PANews

2025/11/07

Risk-curator boom in 2025 now blamed for recent DeFi lending vault troubles

Risk-curator boom in 2025 now blamed for recent DeFi lending vault troubles

Risk curators have emerged as one of the contentious issues in DeFi, as some created high-risk vaults, leading to locked lenders with no access to liquidity.

Author: Cryptopolitan

2025/11/07

The DeFi sector had a potential $8 billion risk, but only $100 million has exploded so far?

The DeFi sector had a potential $8 billion risk, but only $100 million has exploded so far?

Fund managers, a role once trusted and then demystified in the stock market, carried the wealth dreams of countless retail investors during the A-share boom. Initially, everyone admired fund managers with prestigious university degrees and impressive resumes, believing that funds were less risky and more professional than direct stock trading. However, when the market falls, investors realize that so-called "professionalism" cannot combat systemic risks. Worse still, they receive management fees and performance bonuses, so if they make money, it's their own skill, but if they lose money, it's the investors' money. Now, the situation has become even more precarious when the role of "fund manager" has come onto the blockchain under the new name of "Curator" (external manager). They don't need to pass any qualification exams, undergo any regulatory scrutiny, or even disclose their true identities. Simply create a "vault" on a DeFi protocol and lure in hundreds of millions of dollars with outrageously high annualized returns. Investors have no idea where this money goes or what it's used for. $93 million vanished On November 3, 2025, when Stream Finance suddenly announced the suspension of all deposits and withdrawals, a storm sweeping the DeFi world was pushed to its climax. The following day, an official statement was released: an external fund manager was liquidated during the sharp market fluctuations on October 11, resulting in a loss of approximately $93 million in fund assets. Stream's internal stablecoin, xUSD, plummeted in response, crashing from $1 to a low of $0.43 within just a few hours. This storm didn't come without warning. As early as 172 days ago, Schlag, a core developer of Yearn, warned the Stream team. At the eye of the storm, he was even more outspoken: "Just one conversation with them and five minutes of browsing their Debank account is enough to realize that this is going to end badly." A conversation between Yearn Finance and Stream Finance Stream Finance is essentially a yield aggregator DeFi protocol that allows users to deposit funds into vaults managed by so-called Curators to earn yields. The protocol claims to diversify investments across various on-chain and off-chain strategies to generate returns. This scandal was caused by two main reasons: First, an external Curator used user funds to conduct opaque off-chain transactions, and its positions were liquidated on October 11. Secondly, on-chain analysts further discovered that Stream Finance also leveraged several times its capital with a small amount of real capital through recursive lending with deUSD in the Elixir protocol. This "left foot stepping on right foot to fly" model, while not the direct cause of the losses, greatly amplified the systemic risk of the protocol and laid the groundwork for the subsequent chain collapse. These two issues combined to cause a catastrophic chain reaction: $160 million in user funds were frozen, the entire ecosystem faced $285 million in systemic risk, the Euler protocol generated $137 million in bad debt, and $68 million of Elixir's deUSD, which was 65% backed by Stream assets, was hanging by a thread. So what exactly is this "Curator" model, which seasoned developers can see right through yet still attracts over $8 billion in funding? And how did it gradually push DeFi from a transparent and trustworthy ideal to today's systemic crisis? The Fatal Transformation of DeFi To understand the root of this crisis, we must go back to the origins of DeFi. The core appeal of traditional DeFi protocols like Aave and Compound lies in the principle of "Code is law." Every deposit and every loan must adhere to rules hard-coded into smart contracts, ensuring transparency and immutability. Users deposit funds into a massive public pool, while borrowers must provide substantial collateral to lend money. The entire process is algorithm-driven, with no human manager intervention. The risks are systemic and calculable, such as smart contract vulnerabilities or liquidation risks under extreme market conditions, but are by no means the human-caused risks of a particular "fund manager". However, during this period, a new generation of DeFi protocols, represented by Morpho and Euler, implemented a novel fund management approach in pursuit of higher returns. They argued that Aave's public fund pool model was inefficient, with a large amount of funds remaining idle and failing to maximize returns. Therefore, they introduced the Curator model. Instead of depositing money into a single pool, users choose individual "vaults" managed by the Curator. Users deposit money into the vaults, and the Curator is fully responsible for how to invest and generate interest on that money. The expansion speed of this model is astonishing. According to DeFiLlama data, as of now, the total value locked in the two major protocols, Morpho and Euler alone, has exceeded $8 billion, with Morpho V1 reaching $7.3 billion and Euler V2 reaching $1.1 billion. This means that more than $8 billion in real money is being managed by a large number of Curators from diverse backgrounds. This sounds wonderful: professionals doing what they do best, and users can easily obtain higher returns than Aave. But beneath the glamorous facade of "on-chain finance," its core is actually very similar to P2P lending. The core risk of P2P lending used to be that ordinary users, as investors, could not judge the true credit and repayment ability of the borrowers on the other end, and the high interest rates promised by the platforms were backed by unfathomable default risks. The Curator model perfectly replicates this. The protocol itself is just a matchmaking platform. Users' money seems to be invested in professional Curators, but in reality, it is invested in a black box. For example, on Morpho, users can see various vaults set up by different Curators on its website, each boasting an attractive APY (annualized yield) and a brief strategy description. For example, "Gauntlet" and "Steakhouse" in this picture are the curators for the corresponding vaults. Users can deposit their USDC and other assets simply by clicking "deposit." But that's precisely the problem: aside from the vague strategy description and the constantly fluctuating historical return rates, users often know nothing about the inner workings of the vault. The core information regarding the vault's risks is hidden in an inconspicuous "Risk" page. Even if a user manages to click on this page, they can only see the vault's specific holdings. Key information determining asset security, such as leverage ratios and risk exposure, remains nowhere to be found. The manager of the vault did not even submit a risk disclosure. Inexperienced users may find it difficult to assess the security of the interest-bearing assets at the bottom of the vault. Paul Frambot, CEO of Morpho, once said, "Aave is the bank, and Morpho is the infrastructure of the bank." But the subtext of this statement is that they only provide tools, while the real "banking business," namely risk management and capital allocation, is outsourced to these Curators. The so-called "decentralization" is limited to the moment of deposit and withdrawal, while the most important risk management link is completely in the hands of an unknown and unrestrained "manager". It can truly be described as: "Decentralized money transfer, centralized money management." The reason traditional DeFi protocols are relatively secure is precisely because they minimize the influence of human factors. However, the Curator model of DeFi protocols brings the greatest and most unpredictable risk—human beings—back to the blockchain. When trust replaces code, and transparency becomes a black box, the very foundation of DeFi security collapses. When the "manager" colludes with the agreement The Curator pattern merely opened Pandora's box; the tacit collusion between the parties to the agreement and the Curator completely unleashed the demons within. Curator's profit model typically involves charging management fees and performance-based commissions. This means they have a strong incentive to pursue high-risk, high-return strategies. After all, the principal belongs to the users, and they are not responsible for losses; however, they receive a large portion of the profits if they win. This incentive mechanism of "internalizing benefits and externalizing risks" is almost tailor-made for moral hazard. As Arthur, the founder of DeFiance Capital, criticized, under this model, Curators have the mentality: "If I mess up, it's your money. If I do well, it's my money." Even more alarming is that, instead of playing their role as regulators, the protocol providers have become accomplices in this dangerous game. To attract TVL (Total Value Locked) in the fiercely competitive market, they need to use astonishingly high APY (Annualized Yield) to attract users. And these high APYs are precisely created by Curators who employ aggressive strategies. Therefore, the parties to the agreement not only turn a blind eye to Curator's risky behavior, but also actively cooperate with or encourage them to open high-interest vaults as a marketing gimmick. Stream Finance is a prime example of this opaque operation. According to on-chain data analysis, Stream claims to have a total value locked (TVL) of up to $500 million, but according to DeFillama data, Stream's TVL peaked at only $200 million. This means that more than three-fifths of user funds have flowed to unknown off-chain strategies, operated by some mysterious proprietary traders, completely deviating from the transparency that DeFi should have. The statement released by RE7 Labs, a well-known Curator organization, after the Stream Finance scandal, exposed this entanglement of interests. They admitted that they had identified "centralized counterparty risk" in Stream's stablecoin xUSD through due diligence before listing it. However, due to "significant user and network demand," they decided to list the asset anyway and set up a separate lending pool for it. In other words, they chose to dance with risk in pursuit of traffic and buzz. When the agreement itself becomes an advocate and beneficiary of high-risk strategies, the so-called risk review becomes a mere scrap of paper. Users are no longer seeing genuine risk warnings, but rather an elaborate marketing scam. They are led to believe that the high APY (Average Returns) in the double or triple digits are the magic of DeFi, unaware that behind it lies a trap leading to the abyss. The collapse of dominoes On October 11, 2025, the cryptocurrency market experienced a bloodbath. In just 24 hours, nearly $20 billion was liquidated across the network. The liquidity crisis and deep losses brought about by this liquidation are emerging from DeFi. Analysis on Twitter generally suggests that many Curators of DeFi protocols tend to employ a high-risk off-chain strategy called "Selling Volatility" in pursuit of higher returns. The essence of this strategy is to gamble on market stability. As long as the market remains calm, they can continue to charge fees and make money. However, once the market fluctuates violently, they are prone to losing everything. The market crash on October 11th became the fuse that detonated this bombshell. Stream Finance was the first major domino to fall in this disaster. Although the official sources did not disclose the specific strategies employed by Curator that caused the losses, market analysis generally points to high-risk derivatives trading similar to "selling volatility." However, this was only the beginning of the disaster. Because Stream Finance's tokens, such as xUSD and xBTC, were widely used as collateral and assets in DeFi protocols, its collapse quickly triggered a chain reaction that affected the entire industry. According to preliminary analysis by DeFi research firm Yields and More, Stream's direct debt exposure is as high as $285 million, revealing a massive risk contagion network: the biggest victim is the Elixir protocol, one of Stream's major lenders, which lent it as much as $68 million in USDC, representing 65% of the total reserves of Elixir's stablecoin deUSD. RE7 Labs, a former partner, has now become a victim as well. Its vaults on multiple lending protocols face millions of dollars in bad debt risk because they accepted xUSD and Elixir-related assets as collateral. The wider contagion unfolds through a complex "double-collateralization" path, with Stream's tokens being staked in mainstream lending protocols such as Euler, Silo, and Morpho, which in turn are nested within other protocols. The failure of one node, through this spiderweb-like financial network, rapidly propagates throughout the entire system. The hidden risks planted by the October 11 liquidation event extend far beyond Stream Finance. As Yields and More warned, "This risk map is still incomplete, and we expect more affected liquidity pools and protocols to be exposed." Another protocol, Stables Labs, and its stablecoin USDX have recently experienced a similar situation and have been questioned by the community. Problems with protocols like Stream Finance have exposed the fatal flaws in this new Ce-DeFi (centrally governed decentralized finance) model: When the agreement lacks transparency and power is excessively concentrated in the hands of a few, the safety of users' funds depends entirely on the integrity of the fund manager, which is extremely risky without regulation and rules. You are the beneficiary. From Aave's transparent on-chain banking to Stream Finance's asset management black box, DeFi has undergone a fatal evolution in just a few years. When the ideal of "decentralization" is distorted into a frenzy of "deregulation," and when the narrative of "professional management" masks the opaque reality of fund operations, what we get is not better finance, but a worse banking industry. The most profound lesson from this crisis is that we must re-examine the core value of DeFi: transparency is far more important than the decentralized label itself. An opaque decentralized system is far more dangerous than a regulated centralized system. Because it lacks both the credibility and legal constraints of a centralized institution, and the open and verifiable checks and balances that a decentralized system should have. Matt Hougan, chief investment officer of Bitwise, once famously said to all investors in the crypto world: "There is no such thing as a risk-free double-digit return in the market." For every investor attracted by high APY, before clicking the "deposit" button again, they should ask themselves this question: Do you really understand where the returns on this investment come from? If you don't, then you are the returns.

Author: PANews

2025/11/07

This Week’s Hottest Crypto Presales: Data-Driven Growth and Buzz

This Week’s Hottest Crypto Presales: Data-Driven Growth and Buzz

Every week, the crypto market updates bring new names, new promises, and a flood of FOMO. Yet most retail traders still miss the early entries that turn small stakes into five-figure wins. This week’s surge in presale activity across leading crypto communities shows investors chasing projects that blend innovation, transparency, and strong yield potential. The […] The post This Week’s Hottest Crypto Presales: Data-Driven Growth and Buzz appeared first on Live Bitcoin News.

Author: LiveBitcoinNews

2025/11/07

This Ethereum (ETH) DeFi Crypto Could 50x by 2026

This Ethereum (ETH) DeFi Crypto Could 50x by 2026

Mutuum Finance (MUTM) surges in presale, raising $18.4M with tokens at $0.035. Built on Ethereum DeFi, analysts predict up to 50x growth potential by 2026.

Author: Blockchainreporter

2025/11/07

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