Aave Advances Recovery Plan, Blackrock Launching Tokenized Money Market Funds on Ethereum, and many more...
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DeFi📈
Aave’s Phase II recovery plan is underway following the liquidation of the attacker’s eight Aave V3 positions on May 6, with both Mantle DAO and Arbitrum DAO governance proposals supporting DeFi United passing with overwhelming approval.
A US judge has authorized an on-chain Arbitrum DAO vote to transfer the immobilized 30,766 ETH (~$71M) to Aave LLC, with the North Korea creditors’ restraining order transferring alongside it and separate funds to be borrowed as a contingency in the interim.
Remaining steps include burning recovered rsETH on Arbitrum, retiring the corresponding LayerZero packet on Ethereum to neutralize the inflated supply, and restoring the rsETH lockbox backing to reopen withdrawals and normalize affected markets. This is a developing story.
Tydro, the largest lending protocol on Ink, paused all markets on May 4 after Chaos Labs flagged a suspected nation-state attack on its oracle provider. No user funds were impacted. Markets resumed on May 10 at 00:00 UTC following a migration to Chainlink price feeds, with a 4-hour liquidation grace period for borrowers to manage positions. Borrowers with a Health Factor near 1 should act accordingly.
Lido’s EarnETH vault will resume once Kelp is unpaused, with all user losses fully covered by its first-loss mechanism following a successful governance vote. Lido’s 2,500 stETH contribution to DeFi United has been transferred and the attacker’s Aave positions have been liquidated.
Zest Protocol launches Bitcoin Collateral Vaults, letting users borrow stablecoins on EVM chains using BTC that remains self-custodied on Bitcoin with no wrapping or bridging. The product launches in two phases, starting with pre-signed transaction constraints before transitioning to full BitVM verification.
MegaETH completed its first MEGA token buyback on May 7, using all net rewards accrued from the USDm stablecoin issuer through end of April,
OpenCover, a vault risk insurance protocol, has cut the premium on its Covered yoUSD vault by over 50%, dropping from 3.96% to 1.75%, bringing the current covered yield to 9.8% APY.
Stablecoins/RWA🪙
Liminal has launched limUSD, a yield-bearing stablecoin that automatically allocates across Hyperliquid’s native yield sources for 8% APY. Which includes funding rates, staking, and money markets.
Yuzu Money launches Yuzu Prime on Monad, a fixed-income structured product combining tokenized T-bills, AAA-rated CLOs, and overcollateralized lending with on-chain leverage. Restricted to accredited and institutional investors.
Prediction Markets🔮
Predictefy has integrated Hyperliquid’s HIP-4 outcome markets into its prediction market trading terminal, now live for trading.
Arkham launched a prediction markets analytics tool on its Intel platform, offering live market data and trader profiles including profit-loss records and win rates, drawing from a database of over 3.5 billion labeled on-chain addresses.
Airdrops🪂
Saturn is allocating 5% of their initial token supply may be allocated to Season 1 Gravity Points participants, distributed pro rata at season close on August 8 or when program capacity is reached.
Spark has updated its Season 4 points program, reducing the rate for holding Savings ETH from 50,000 to 11,500 points per ETH, with the adjustment made to reflect current ETH prices and maintain a consistent effective boost rate.
Hibachi has concluded its Regular Season points program after 28 weeks, distributing 18.5M points across 12,000+ traders and vault depositors. The Playoffs phase is up next.
Lombard has replaced its Lux points system with BARD tokens, now distributed via Merkl and claimable every 8 hours with no lock-up.
Issues⚠️
TrustedVolumes, An independent 1inch market maker was exploited for $5.8M via flaws in its RFQ implementation, draining WETH, USDT, WBTC, and USDC. 1inch confirmed no impact on its own systems or user funds. This is a developing story.
Renegade Finance, a dark pool protocol on Arbitrum, was exploited for approximately $209K, after an attacker to inject malicious logic and drain 27 ERC-20 tokens. The whitehat has already returned ~$190k, and all affected users will be made whole.
DeepBook Protocol on Sui accrued $239,700 in bad debt from an undercollateralization vulnerability in DeepBook's USDC margin pool, fully covered by its Insurance Fund. Deposits and withdrawals have resumed though margin trading remains paused.
Ekubo Protocol has confirmed an active security incident on its swap router contracts on EVM chains draining $1.4M so far, affecting Ethereum and Arbitrum deployments. Users are urged to immediately revoke approvals for the affected contract addresses via revoke.cash. Liquidity providers and Starknet are unaffected. The team then executed a complex whitehat to prevent further losses from users, up to $284,000.
RAAC’s pmUSD stablecoin, backed by Gold and other RWA assets, temporarily depegged to $0.4 following social media posts questioning its collateral. RAAC confirmed the protocol is solvent with a reported 15.7x net coverage ratio, though community members have flagged the illiquidity of its mineral title lien collateral as a legitimate concern. This is a developing story.
Origin Protocol reported a flash loan attack on the OETH Morpho market, where the attacker captured about 0.148 OETH in yield; no user funds were lost.
Drift Protocol will issue recovery tokens at a 1:1 ratio to verified losses following the April 1 exploit, redeemable from a pool seeded with $3.8M in remaining assets and supplemented by quarterly revenue and up to $127.5M in matched Tether capital. Redemption opens once the pool exceeds $5M, but early redeemers forfeit their remaining claim.
Community members have criticized the timeline, noting full recovery could take approximately eight years based on 2025 revenue figures.
The exchange relaunches in Q2 2026 with new contracts and rotated keys. This is a developing story.
Farms👩🌾
Saturn’s srUSDat and jrUSDat tranches, backed by STRC, are now live on Pendle, offering 16% and 10% implied APY respectively, maturing on August 26, 2026. Pendle LP and YT positions also earn Saturn Season 1 Gravity Points.
Royco’s jrRoyAPYUSD from Apyx is now live on Pendle at 19.35% implied APY, maturing on November 5, 2026.
Citrea’s ctUSD Pre-Deposit Vault is now open for public deposits. Users deposit USDC on Ethereum with a two-month lock-up and receive 0.6% of CTR token supply at unlock, curated by Rockaway X on Upshift Finance.
Raises 💰:
Kalshi has raised $1B in a Series F at a $22B valuation, led by Coatue with participation from Sequoia, a16z, Paradigm, IVP, Morgan Stanley, and ARK Invest.
OnRe, an onchain reinsurance protocol, has raised $5M in a Series A co-led by Forward and Rockaway X, with up to $25M in additional deployment capital from Forward as the protocol enters its scaling phase.
Exponent, a Solana-based interest rate swap exchange and yield portfolio platform, has raised $5M in a seed round led by Multicoin Capital, bringing total funding to $7M. The round supports the public rollout of Exponent v2 in May.
Coinbase has made a strategic investment in Centrifuge, a real-world asset tokenization protocol, and designated it as a Preferred Tokenization Infrastructure, bringing institutional tokenized assets to Base.
Ekiden, an on-chain high-frequency trading infrastructure protocol, has raised $2M in a seed round backed by Aptos, Pyth, GSR, Keyrock, Flowdesk, and others, with angel investors including CEOs from LayerZero, EigenLayer, and Kronos Research.
Elastics, an AI agent platform for prediction markets, has raised $2M in a pre-seed round led by FRST VC, with angels from ElevenLabs, XBTO, RedStone, and a16z. The protocol is building an AI-native trading interface where users trade with natural language and agents automate execution.
News🗞️
Strategy’s Michael Saylor has indicated the firm may sell a portion of its Bitcoin holdings to meet dividend obligations, framing the move as a market signal rather than a shift in conviction. The firm holds over 818,000 BTC acquired at an average price above $75,000, reported a $12.54 billion net loss in Q1 2026, and faces approximately $1.5 billion in dividend obligations with limited reserve coverage.
BlackRock has filed to launch two tokenized money-market funds on Ethereum, including a digital share class for its $6.1 billion Select Treasury Based Liquidity Fund and a second fund targeting stablecoin users. Shares would be issued as permissioned ERC-20 tokens with wallet whitelisting controls.
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