Aave governance is turning into a case study of what happens when the team holds enough tokens to push through whatever they want.
A major contributor just walked after "Aave Will Win," a bundled proposal the community begged to split up. The team's response? Push it to vote anyway.
Here's the short summary of the situation:
Here's what we got today:
Insider trading at Axiom. Everything about ZachXBT's latest exposé.
Binance lists Tokenized Stocks. And the potential of onchain stonks.
Around the web. BGD Labs left Aave DAO, Lighter was under attack, Aptos tokenomics update, and more.
Today's email is brought to you by Katana — the DeFi optimised chain.
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News
Axion Exposé: From the Hype to Hate
What does an onchain detective have in common with a WWE wrestler? Apparently, the art of the dramatic tease. Since Monday, Crypto Twitter has been glued to one account: @zachxbt. He's the blockchain's own Sherlock Holmes. An investigator who's taken down countless scammers. And he'd been hyping a "major investigation on one of crypto's most profitable businesses."
There was even a prediction market on it with ~$39.6 million in volume!
What happened? ZachXBT exposed Axiom Exchange and its employees. Axiom is a trading platform with a profitable Telegram bot, primarily for memecoins.
What are the accusations against them?
They didn't have proper access controls on sensitive user data.
Multiple employees leveraged it to track private wallets and insider trade based on it.
Here's the 80/20: KOLs had side wallets where they bought tokens before shilling them to followers. Axiom employees used insider tools to identify those wallets—then front-ran the shills. Profitable? Yes. Exact numbers? Unknown.
But… The reaction was underwhelming. In an industry filled with nine-figure hacks and rug pulls, this felt like a parking ticket. The line between "copytrading KOL wallets" and "insider trading" is blurry.
So CT turned on Zach.
Zach had said that he was paid to do this investigation (which probably included publicizing the results from his account). Most are speculating that PumpFun paid Zach to do this.
Why? PumpFun had acquired an axiom competitor, and this was seen as a way to take down the competition.
The big reason for hate on Zach is cuz he teased the investigation three days before he published. This attracted much more attention to the topic than it would have gotten otherwise. It also led to people losing money.
As I said before, there was even a prediction market with ~$39.6M in volume.
Most people had thought Meteora would be accused, so many people bet on it and lost money. They then went on to hate Zack on CT.
But the prediction also gave the insider trader & Zach's sponsor to profit from this prediction market. In fact, Bubblemaps found a wallet connected to the Axiom insider trader that made $400k from this Polymarket.
In previous newsletters, I've already shared why it's Katana:
#1. Architectural optimizations to increase the liquidity and yield in the Katana ecosystem. VaultBridge and Chain-Owned-Liquidity are the primary examples.
#2. $vKAT tokenomics system is a chain-wide ve(3,3) variation to create a virtuous cycle of activity and fees in the ecosystem. You can learn more about it here.
#3. Katana app is the one-stop DeFi command center for the ecosystem. It has all major DeFi facilities like swapping, staking, farming, and even portfolio management.
(Right now, there's a quest program as well.)
That's all cool. Now, where are the actual opportunities in the ecosystem?
Levrex Finance is a leverage farming protocol on Katana. Right now, its vaults are showing really high APY.
Levrex Finance Vaults screenshot
More interestingly, Levrex allows users to leverage farm with upto 7x multiplier. At that leverage, the APY will be around ~10,000%!
There are some caveats tho.
The TVL of the vaults is very low. As the TVL increases, the yields should compress.
A huge portion of the yield will be in $KAT tokens. So the real yield will be lower than what's shown.
It's a very new protocol. But since it's publicly and explicitly associated with Polygon and Katana, I'm trusting it.
If you want a safer, but still high-yielding, check out the Katana App.
What's the big narrative all big players are betting on?
Tokenized stocks. There have been many updates in the sector.
Firstly, Binance is relaunching tokenized stock trading. It has added 10 of Ondo's tokenized U.S. stocks and exchange-traded funds to Binance Alpha and Binance Wallet. We're talking tech companies like Apple and Invesco's Nasdaq-tracking QQQ ETF.
Quick context: Binance Alpha is basically their pre-listing staging ground for tokens that might graduate to the main exchange.
Usually it's early-stage crypto projects. The fact they're slotting in tokenized equities? That tells you where the wind's blowing.
Ondo Finance launched these stock tokens through Ondo Global Markets back in September 2025. The numbers since: $550m+ in total value locked, $11B in cumulative volume.
Who else is piling in?
Kraken, Bybit, Gemini — all rolled out their own tokenized equities trading
Robinhood — jumped in through their brokerage arm
Coinbase — launched stock trading for US users (traditional stocks for now, but their tokenized stocks ambitions are obvious)
Nasdaq and DTCC — the TradFi giants are building their own tokenization infrastructure
Why this matters The US stock market is ~$72 trillion. Tokenized stocks? Still under $1 billion. That's a lot of room to run. The regulatory tailwinds are real: Genius Act for stablecoins is live, Clarity Act for market structure passed the House. And when BlackRock's singing tokenization's praises, you know institutional money is paying attention. Here's the thing about traditional stock trading: it's wildly inefficient. Brokerages, clearinghouses, settlement institutions — layers upon layers of middlemen. Crypto rails? Instant settlement. This article breaks down why the efficient system eventually wins.
Not all tokenization is equal
Source: @100y_eth
There are four main approaches to tokenizing stocks, each with different architectures and tradeoffs. This report covers the approaches and global regulatory landscape — solid starting point if you're trying to get ahead of this. Similar to how Tether and Circle won the stablecoin game, there'll be new winners in tokenization. Identifying them early requires actually understanding the sector. This report is where I'd start.
🚀 DeFi Catalysts
BGD Labs is a major Aave service provider that drove its v3 development. They announced they're leaving Aave.
Aave Chan Initiative also published an audit of Aave Labs' contributions to the AAVE DAO. It argued the Labs' contributions didn't match what they were given.
Aptos introduced a tokenomics update. They're transitioning to performance-driven tokenomics designed to align supply mechanics with network utilization.
USD.ai is now conducting its ICO for $CHIP tokens. It's only for Allo Game participants and will run until February 27th.
Uniswap has started voting on Protocol Fee Expansion. They're switching it on many chains except Unichain.
Fluid is discussing the establishment of Fluid Foundation. It'll move Fluid Protocol and its IP rights toward full community ownership.
Zcash tokenholders are apparently against ZSAs, the token standard for fully private tokens on Zcash. Read for more results from a poll.
Perpl, an onchain perp dex on top of Monad, has gone live. We still have to see if it can carve out a niche among competitors like HL & Lighter.
Jupiter has passed a new proposal that'll reduce net emissions of $JUP to effectively zero. It'll pause scheduled unlocks.
Lighter was attacked by a trader who sought to exploit LLP Strategies. But the system worked as designed and caused the attacker to lose ~$8.2M.
EtherFi is migrating away from the Linea chain to the OP Mainnet. This is a big win for Optimism.
Azura introduced itself. It's an onchain, cross-chain trading platform without gas, or bridging, or trading fees.
📰 Industry News
Jane Street is accused of being a major catalyst for the 2022 crypto winter. Apparently, they played a huge role in depegging Terra.
Meta, the holding company of Facebook, Instagram, & Whatsapp, is reportedly planning a stablecoin comeback in the second half of 2026.
Netherlands Gambling Authority has ordered Polymarket to cease operations in the country. This is a problem for the prediction market sector.
Ethereum Foundation introduced Strawmap. It's a website for technical people to follow Ethereum's long-term roadmap.
L2beat, the Ethereum ecosystem monitoring platform, introduced a new section on Interoperability. It lets users track value flow between L2 chains.
DISCLAIMER: I'm NOT a financial advisor. This content is for education and information purposes only. Crypto and DeFi are risky and speculative. Please do your research before investing.
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