Alpha Recap #18: Yield-Bearing Stablecoins, Paradex TGE and ACI’s Departure from Aave

The Alpha Recap aims to present the most important crypto market Alphas of the week. Every Friday, we provide a condensed overview of the most valuable insights from our Alpha Feed.

Reserved for OAK Premium members, the Alpha Feed gathers insights, yield and airdrop strategies, as well as key information about the market. In other words, it reflects the core DNA of OAK Research: delivering curated content that goes beyond market noise.

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A look at yield-bearing stablecoins: $1.35B distributed so far

Popularized by Ethena’s sUSDe, yield-bearing stablecoins represent one of the most significant recent evolutions in DeFi. In less than a year, their supply has grown by 200% to reach $11.3B and, over the longer term, JPMorgan estimates they could capture up to 50% of the stablecoin market by 2030.

After the first experiments backed by US Treasury bills, the model has gradually evolved. Computing power for USDai, delta-neutral strategies for sUSDe, and soon gold for thUSD, among others.

In short, yield generation methods are becoming increasingly diverse, and with them, a growing spectrum of risk profiles available to investors.

What makes this evolution structurally important is what it implies for the broader stablecoin market. While Circle and Tether retain the entirety of the revenues generated by their reserves, YBS issuers have already redistributed more than $1.34B to their holders.

What makes these assets even more interesting is that beyond offering native yield, they benefit from strong composability within DeFi. HyENA is a good example with its productive collateral thesis. Strata, with its risk tranches, has also found significant demand among investors. Naturally, they can also be used in more or less complex strategies to multiply yields on lending protocols such as Aave or Morpho.

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Paradex TGE and airdrop: a surprising failure?

Yesterday, Paradex completed its TGE and, without much surprise, the launch turned out to be a failure. Introduced at $0.15, the DIME token quickly dropped to $0.04. Its FDV currently stands at around $40 million, far below the valuations observed among some competitors in the sector such as Lighter, ApeX or Avantis.

This outcome is not particularly surprising. A significant portion of the community had already expressed frustration over the length of Paradex’s campaigns as well as repeated delays to the TGE.

Since the snapshot, activity on Paradex has contracted significantly, with a sharp decline in both trading volume and TVL.

The explanation is relatively straightforward. Even though Paradex offers a decent trading experience, this is no longer enough to retain users over the long term.

Capital will inevitably continue to move either toward the platform combining liquidity and efficiency, namely Hyperliquid, or toward other perpetual DEXs that continue to offer incentive campaigns.

Ultimately, without a truly differentiating factor, it is clear that other perp DEXs may eventually follow a similar trajectory.

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Aave: The Aave Chan Initiative (ACI) steps down

The Aave Chan Initiative, one of Aave’s historical Service Providers and one of the most influential voices within the DAO through Marc Zeller, has announced the end of its activities for July.

This decision comes only weeks after the departure of BGD Labs, another major contributor to the protocol, and is based on a similar grievance: a governance environment increasingly marked, according to them, by Aave Labs’ lack of transparency.

In the case of the ACI, this also stems from the direct interference of addresses linked to Stani Kulechov and Aave Labs in the governance voting process, particularly during the Temp Check of the recently introduced “Aave Will Win” proposal.

Following the ACI’s announcement, the market reaction was immediate. The AAVE token fell by another 8%, extending a correction that now totals nearly 65% over the past six months.

At the same time, Morpho, its main competitor, has seen its token rise by 40% over the past 30 days. The shift in capital is also visible in active loans, a metric down nearly 20% on Aave and up 7.5% on Morpho over the same period.

Aave remains the largest lending protocol in the ecosystem, but the DAO that once served as one of its main pillars of legitimacy has just lost two of its historical contributors.

The question now is whether the protocol’s governance will manage to rebalance itself, or whether this episode marks the beginning of a more explicit centralization that could open new opportunities for Aave Labs and its new products such as the Aave App. But this shift has clearly come at a cost.

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