Key Takeaways
The problem with DeFi today isn’t a lack of innovation; it’s too much of the wrong kind of innovation.
We’re rich with tokens that have been spread thin across myriad platforms, the result being the creation of relatively inefficient markets despite crypto’s multi trillion-dollar global valuation.
Every new chain launches with dozens of competing protocols, further fragmenting liquidity until no single pool has enough depth to matter. The result is high slippage, volatile rates, and yields propped up by inflationary token rewards that inevitably collapse.
Yet institutional capital needs yield to justify the operational complexity of utilizing DeFi. With traditional finance currently offering 4-5% returns on Treasury bills, DeFi must provide compelling risk-adjusted returns to attract the trillions in institutional assets waiting on the sidelines.
+81
Bitcoin
Ethereum
Tether
Build'N'Build
USD Coin
Solana
Ripple
Dogecoin
Cardano
Toncoin
Shiba Inu
Avalanche
TRON
Chainlink
Polkadot
Wrapped Bitcoin
Litecoin
Dai
NEAR Protocol
Bitcoin Cash
Monero
Stellar
Cosmos
Filecoin
Ethereum Classic
Aptos
Immutable
Unstoppable Ecosystem Token
Arbitrum
The Sandbox
Decentraland
Axie Infinity
Injective Protocol
Render Token
The Graph
Aave
Chiliz
Helium
PAX Gold
Compound
Lido DAO Token
THORChain
Stacks
Arweave
Sui
Uniswap
Pepe
Ondo
Mantle
Bittensor
Kaspa
Celestia
Artificial Superintelligence Alliance
Jupiter
Quant
Worldcoin
PayPal USD
Bonk
Flare
Sei
JITO
JasmyCoin
PancakeSwap
Floki Inu
Ethereum Name Service
SushiSwap
Kava.io
1inch Network
Tezos
Algorand
Flow
Curve DAO Token
MultiversX
Zcash
Basic Attention Token
Enjin Coin
Ethena
Hedera Hashgraph
VeChain
Conflux Network
XDC Network
Tether Gold
Bitget Token
Polygon Ecosystem Token
Pi Network
OKB
+76
Bitcoin
Ethereum
Tether
USD Coin
Solana
Ripple
Dogecoin
Cardano
Toncoin
Shiba Inu
Avalanche
TRON
Chainlink
Polygon Matic
Polkadot
Wrapped Bitcoin
Litecoin
Dai
NEAR Protocol
Bitcoin Cash
Stellar
Cosmos
Filecoin
Ethereum Classic
Aptos
Hedera Hashgraph
Immutable
Optimism
Arbitrum
VeChain
The Sandbox
Decentraland
Axie Infinity
Injective Protocol
Render
The Graph
Aave
Chiliz
Helium
PAX Gold
Compound
Lido DAO Token
Sui
Conflux Network
Lido Staked ETH
OKB
Uniswap
Pepe
Ondo
Mantle
First Digital USD
XDC Network
Artificial Superintelligence Alliance
Jupiter
Quant
Worldcoin
Bonk
Tether Gold
JITO
JasmyCoin
Core
Floki Inu
Ethereum Name Service
SushiSwap
1inch Network
Tezos
Algorand
Flow
Trust Wallet Token
Curve DAO Token
MultiversX
Basic Attention Token
Enjin Coin
Ethena
Ethena Staked USDe
Build'N'Build
Kava.io
Celestia
Sei
IOTA
Frax
+217
Bitcoin
Ethereum
Tether
Build'N'Build
USD Coin
Solana
Ripple
Dogecoin
Cardano
Toncoin
Shiba Inu
Avalanche
TRON
Chainlink
Polkadot
Polygon Matic
Wrapped Bitcoin
Litecoin
Dai
NEAR Protocol
Bitcoin Cash
Monero
Stellar
Cosmos
Filecoin
Ethereum Classic
Aptos
Hedera Hashgraph
Immutable
Optimism
Arbitrum
VeChain
The Sandbox
Decentraland
Axie Infinity
Injective Protocol
Render Token
The Graph
Maker
Aave
Chiliz
Helium
PAX Gold
Compound
Lido DAO Token
THORChain
Stacks
Arweave
Sui
Conflux Network
Lido Staked ETH
Bitget Token
Wrapped Ethereum
OKB
Uniswap
Pepe
Ondo
Mantle
First Digital USD
Bittensor
Kaspa
Celestia
XDC Network
Artificial Superintelligence Alliance
Jupiter
Quant
Worldcoin
PayPal USD
Bonk
Flare
Tether Gold
Sei
JITO
JasmyCoin
PancakeSwap
Core
Floki Inu
Ethereum Name Service
SushiSwap
Kava.io
1inch Network
Tezos
Algorand
Flow
Trust Wallet Token
Curve DAO Token
KuCoin Token
MultiversX
Gitcoin
Zcash
IOTA
Basic Attention Token
Frax
Ethena
Ethena USDe
Fasttoken
Pi Network
SATS
Adventure Gold
Audius
Alchemy Pay
Arkham
API3
Bounce Token
Altlayer
Aergo
Amp
Aevo
ARPA Chain
Astar
Ark
Ankr
AirSwap
Alpaca Finance
Blur
Badger DAO
Bancor
BakeryToken
Biconomy
Chromia
Celer Network
Celo
Shentu
Civic
Convex Finance
Cartesi
Cyber
COTI
DigiByte
DIA
ether.fi
FUNToken
FLUX
Firo
Ampleforth
Golem
GMX
Gnosis
Moonbeam
Holo
IoTex
ICON
Illuvium
JUST
Kadena
Liquity
Livepeer
Lisk
Memecoin
Manta Network
Treasure
Mask Network
MetisDAO
Origin Protocol
ORDI
Ontology
Osmosis
Powerledger
Phala Network
Pendle
Portal
Pyth Network
ConstitutionDAO
Polkastarter
Qtum
iExec RLC
Rocket Pool
Reserve Rights
Ronin
Ravencoin
Starknet
Storj
Status
Spell Token
Sun (New)
SuperVerse
Toko Token
Theta Fuel
Tellor
Tensor
LayerZero
Usual
Eigenlayer
Hamster Kombat
Catizen
Berachain
KAITO
Pudgy Penguins
Solayer
Bio Protocol
ChainGPT
Cookie DAO
Solv Protocol
Alchemix
Bitcoin SV
Movement
DeXe
Binance Staked SOL
Nexo
Wrapped eETH
Hyperliquid
Casper
Zilliqa
Secret
Nervos Network
TrueUSD
BitTorrent
Mina
Dash
STEPN
Gemini Dollar
UNUS SED LEO
Synthetix
APEcoin
Gala
Theta Network
Fantom
Cronos
Internet Computer
Binance USD
The U.S.’s GENIUS Act has drawn a clear line that regulated stablecoin issuers can’t pay interest directly to users. This means no more savings-like accounts or yield products built into the stablecoin wrapper—at least, not in the traditional way. This regulatory clarity is actually a feature, not a bug, however.
It preserves stablecoins’ core promise—stable, reliable, dollar-pegged assets for payments and settlement—while preventing the kind of yield-chasing behavior that turned previous “stable” assets into speculative instruments.
It would be a mistake to view this rule as a restriction when we have the ability to rebuild yield rails from first principles in a way that draws from the ethos of crypto: transparent, modular, and compliant with regulatory frameworks.
The infrastructure wars have resulted in a horizontally diverse ecosystem of custom chains and numerous technical improvements.
We now see fintech companies launching their own chains, traditional financial institutions exploring blockchain rails, and a proliferation of bridges and interoperability protocols connecting traditional finance with Ethereum’s DeFi ecosystem.
This explosion of infrastructure has created the pipes—now we need to figure out what flows through them.
Despite the rise of high-speed alt L1s, Ethereum remains the most robust and battle-tested source of organic yield in the DeFi ecosystem.
This is evidenced by Ethereum’s 60% market share in total value locked (TVL) across all chains as of July 2025 as well as the role of decentralized exchanges (DEXes) in generating real economic activity through trading fees and liquidity provision rewards.
Deep liquidity and institutional participation give Ethereum unmatched yield stability and composability. Put simply: when it comes to real, sustainable, and transparent DeFi yield—Ethereum is still king.
So are the infrastructure wars over? Not quite. We still need the most important part—a compliant way to connect Ethereum’s yield engine to the broader ecosystem of chains where users actually transact.
The missing link is infrastructure that treats yield as a primitive that can be routed, managed, and distributed across chains while maintaining regulatory compliance.
We can build this by creating a modular layer to source yield from Ethereum-native ERC-4626 vaults and route that yield to other chains. This approach leverages zero-knowledge technology to ensure secure, verifiable cross-chain yield distribution without compromising on decentralization.
This new modular layer helps stablecoin issuers and other protocols that want to offer DeFi yield to their users in multiple ways.
Capital flows from users or issuers into blue-chip Ethereum vaults with established track records and conservative risk parameters. These are institutional-grade lending markets with proven security and sustainable returns.
The infrastructure captures this yield and enables seamless streaming across chains through cryptographically secure channels. Zero-knowledge proofs ensure that the yield distribution is verifiable and tamper-proof while maintaining the privacy and efficiency users expect.
On the destination chain, that yield becomes available to any application that integrates with the system. This creates a composable yield layer where developers can build innovative products without taking on the complexity of cross-chain infrastructure or regulatory compliance.
The connecting protocol operates under proper licensing and regulatory frameworks and takes a transparent fee for the service based on a clear business model that aligns incentives across the ecosystem.
Finally, issuers and platforms can offer “opt-in” yield products that are compliant, transparent, and regulator-friendly. Users make an active choice to access yield, maintaining the separation between basic stablecoin functionality and yield-generating activities.
This infrastructure enables stablecoin issuers and application developers to build real-world products that connect the best of DeFi with institutional requirements.
Now, combine this with a ZK-based interoperability protocol that connects all EVM chains to Ethereum. This creates a seamless liquidity and data environment where the yield-providing bridge pulls returns from Ethereum’s deep liquidity pools and streams them to any connected chain.
Applications and wallets can then build experiences like “USDC+”, “Savings Wallets”, or “Programmatic Yield Accounts” across chains—all while maintaining the regulatory separation between stablecoins and yield products.
The result is a scalable yield distribution without compromising on security, regulation, or user experience.
What would all this look like in practice?
Let’s say Circle wants to launch a USDC Yield+ product. Instead of violating the interest clause of the GENIUS Act, Circle can route deposits via the bridge to Ethereum yield vaults, stream that yield to connected rollups, and build a compliant front-end where users opt-in to get yield exposure.
All data remains transparent, contract-audited, and regulator-friendly. And this yield is not interest from the issuer—it’s funds that are routed from DeFi through infrastructure designed for compliance.
With Ethereum sourcing trusted yield and connected chains routing and distributing it, this yield-providing bridge infrastructure becomes a new financial primitive.
Stablecoins get yield utility without direct interest exposure, connected chains become the UX layer for financial applications, and Ethereum remains the backend of global yield, all of which lead to growing institutional use of DeFi.
What it unlocks is bigger than yield. This architecture doesn’t just comply with regulation; it redefines the infrastructure of decentralized finance.
By separating stable assets from yield mechanics and making Ethereum’s trusted returns accessible across ecosystems, we unlock a compliant, composable, and scalable foundation for the next decade of institutional DeFi.
Aishwary Gupta is Global Head of Payments at Polygon Labs. Aishwary oversees Polygon’s initiatives in stablecoins, fintech integrations, and real-world asset tokenization. With a background in traditional finance and crypto infrastructure, he works closely with partners across payments, banking, and capital markets to build scalable blockchain rails for real-world money movement. Aishwary is a leading voice on how stablecoins and tokenized assets will transform global finance.
You’re All Set!
Thanks for signing up. We’ll be in touch soon with the latest insights.
