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Markets turned volatile, with BTC falling below $86,000, underperforming both gold and gold after a busy financial week. Despite the market decline, there were small pockets of success, with AAVE pushing the Lending and Ethereum Eco indices higher.
We also look at the recent rise in crypto M&A businesses, which often ignore token holders, and ask whether today’s bullish trend reflects the continued need for on-chain or borrowed funds.
Signs
The markets stopped the risk while the crypto economy was not doing well. Gold closed the afternoon, while BTC (-2.01%) fell in line with currencies, the S&P 500 (-0.26%) and Nasdaq 100 (-0.57%) both fell as investors turned defensive.
On the large side, investors are carefully placed in front of the financial information during the full annual trading week of stocks. Both October and November earnings are due today, as the October report was delayed by the US government shutdown earlier this quarter.
Meanwhile, speculation about Powell’s successor has intensified in recent days before the end of May 2026. While Kevin Hassett appeared to be the clear leader of the Fed chair at the beginning of this month, Kevin Warsh is now leading by a small margin, emphasizing that the race is still fluid. Either way, investors expect a tighter Fed under the new administration, which could lead to higher rates next year.
In terms of the performance of the different sectors, lending (+ 2.8%) and Ethereum Eco (+ 2.6%) showed similar strength in the fall of the market. AAVE (+3.0%) was the best performer of all indices, with the founder of Aave, Stani Kulechov. exchange about $10 million of ETH wrapped in AAVE to demonstrate “unification with the token” following the DAO vs. Labs.
Market changes
The defining theme of crypto in 2026 will be consolidation, sectors will converge around a few players. Crypto M&A activity has skyrocketed over the past year, meaning we’ve already seen the beginnings of this trend. According to RootData, there have been 143 crypto M&A deals so far in 2025, although only 21 have disclosed their volume, and the most prominent is Dunamu. Earning $ 10.3 billion and Naver.
While the merger shows a mature industry, several M&A trends in the past two months have shown what is perhaps the most important thing in crypto today: Tokens are broken, and most of them are unaccountable.
What was the theme of Pump’s acquisition of Padre, Coinbase’s acquisition of Vector, and Circle’s find about Axelar’s main group and related IP? Both ignored token holders, Pump only accepted PADRE holders after backtracking.
At the risk of sounding like broken history, this is the problem that MetaDAO is trying to fix, and why “proprietary funds” have won the crypto market over the past few months. Although there are many legal issues that are still unknown, MetaDAO puts the security of the system into tokens, which have the potential to suggest a Treasury clawback as a last resort. The release of mtnCapital showed this in action, when the owners redeemed MTN for USDC in the treasury when it became clear that the attempt had failed.
Although we have talked a lot about MetaDAO in the past few months, there are other projects that are approaching the same problem from a different angle. What if instead of trying to fix tokens, we bring in the input and create an initial coin on the chain? Superstate’s Opening Bell platform allows peer issuers like Galaxy (GLXY) to move shares seamlessly between traditional markets and display their shares on Ethereum and Solana.
Last week, Superstate launched Direct Release Software improving traditional salary structures. Superstate’s infrastructure enables SEC-registered issuers to receive stablecoins directly into their wallets from KYC-verified investors, then issue tokenized shares immediately to the investor’s wallet and update the company’s owner register in real time.
In the end, I don’t think investors should care if they are buying a token or token, as long as they know that the instrument provides guidance on the flow of money, assets and legitimate strategies. All of these strategies will coexist and play an important role in 2026 and beyond as onchain markets grow.
Top of mind: Is the demand strong?
Promotions, airdrops and point farming have remained a regular feature of crypto users. For users, it can be beneficial. Additional fees or charges to participate in the new investment. For projects, token incentives provide a non-cash investment for customers, which helps to achieve a high level of investment or scale to overcome the cold start problem. But, in the end, the budget of “community gifts” for the distribution of tokens will be eliminated, leaving the market to determine the possibility of financial transactions in the absence of incentives.
Looking back on the USDe market at Pendle on the growth of Sep. 25, this market collected 70x sats boost. Although there is not much yield on the instrument, the yield offered in this market increased to 16%, adding a total of $3 billion.
This was a thick, sleeping pitch. Users can collect fixed yields of 10-15% on USDe-linked PTs and invest them on Aave with a borrowing cost of 5-7%, all with billions of dollars in liquidity. Meanwhile, ENA’s motivations were spreading. Between the USDe and sUSDe markets on Pendle, the system drove USDe from $5 billion to $15 billion. After the maturity in September of more than $ 5 billion in instruments related to USDe and the end of Athena’s Season 4 points campaign, together with Black Friday (Oct. 10 liquidation) and the decrease in cash flow, the supply of USDe returned to $ 6.8 billion.
Although the ENA example makes a great study, there are many such cases. Recently, Kinetiq’s kHYPE raised a lot of money ahead of the Kinetiq airdrop. The Pendle Market of kHYPE sold yields of up to 15%, for an average price of only 2-3%. This market accounted for 40% of all kHYPE products, growing to become Pendle’s second largest listing.
As an example of USDe, HYPE bulls can buy kHYPE PT at ~10% fixed yield and rotate HYPE against it on HyperLend or Felix with a 2-3% borrowing cost, keeping the HYPE delta. However, after the November TGE and the end of this hot Pendle maturity, the kHYPE offering has contracted by 40%.
Next is a lesson that may not be closed. USD.AIwhich brings together onchain stablecoin vendors to lend money to GPU-based blockchains, has raised $600 million in funding recently. When running a policy campaign with closed deposits, the contact with the airdrop has become so important that the participants are blocked from deposits because of the cap they ordered stablecoin above the peg with $ 0.04. Is the harvest really good?
Indeed, the USD.AI markets on Pendle have been bringing the best stablecoin yields in the boring stablecoin farming market. Looking at the USD.AI market on Pendle at the maturity of March, the yield started at about 30%, and has fallen to 10%, where the yield pays nothing. More than 80% of USDai’s assets have been spent on Pendle.
Is this yield sustainable? When the stimulus ends and TGE comes in, sUSDai will be left paying yields from its loan book, which is currently less than $1 million. The growth of its loans, about 200x, the initial APY may not be able to maintain the request that more than $ 600 million is currently being saved.
Although beneficial to users and effective in solving their non-startup problem, incentives are short-term and not sustainable in any economy. Although the cultivation of points is an ever-present part of the onchain economy, the capital will always revolve around the most recent and most flexible returns.
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