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Ethena’s USDe TVL Falls 50% as Leverage Unwinds Despite Rising Usage

Ethena’s USDe stablecoin has seen TVL drop from $14.8 billion to $7.6 billion, a nearly 50 percent drawdown driven largely by the unwinding of leveraged looping strategies rather than a loss of real usage. USDe maintains its peg by pairing spot crypto collateral with short perpetual positions and currently yields about 5.1 percent, down from double digits earlier this year as funding rates compressed. As yields fell below USDC borrowing costs on Aave, highly leveraged carry trades became unprofitable and began to unwind quickly. Despite the TVL contraction, USDe processed over $50 billion in onchain volume last month, showing strong underlying demand. The episode highlights how leverage can accelerate both parabolic growth and sharp reversals in yield-bearing stablecoins.

Source: DefiLlama, The Block

Klarna to Launch KlarnaUSD Stablecoin on Tempo as Payments Shift Onchain

Klarna is launching its own stablecoin, KlarnaUSD, on the Tempo layer-1 network next year in partnership with Stripe’s Bridge platform as part of a push to lower payment costs and challenge legacy rails. The move marks a reversal for CEO Sebastian Siemiatkowski, who was once openly skeptical of crypto but now says the tech is finally fast, cheap, and scalable enough for global payments. Klarna joins a rapidly growing stablecoin sector that already processes an estimated $27 trillion annually, according to McKinsey. KlarnaUSD is currently live only on Tempo’s testnet, with more crypto-related announcements expected in the coming weeks.

Polygon Payments Hit New Highs as Stablecoin Activity Surges Worldwide

Polygon’s payments ecosystem saw record growth in November, with local-currency stablecoins like XSGD, BRZ, and JPYC surpassing $10 billion in lifetime volume and overall payment app activity hitting a new $1 billion monthly high. Apps such as Avenia Pay, Paxos, and Revolut drove the surge, while Stripe alone routed $64 million in USDC payments on Polygon this year, nearly matching Ethereum. Small retail payments between $10 and $100 made up half of all transactions, showing rising everyday usage. Payment infrastructure providers including Avenia, Paxos, and Coinflow processed nearly $900 million in November, up 4.7x since January. The data highlights Polygon’s expanding role as a global settlement layer for stablecoin payments across consumer apps, remittances, B2B flows, and on/off-ramps.

Source: Dune

Regulation

CFTC Greenlights Polymarket’s U.S. Return as Prediction Markets Hit Record Highs

The CFTC has approved Polymarket’s full return to the U.S., granting an Amended Order of Designation that allows it to operate as a regulated intermediated exchange after acquiring QCX to meet compliance requirements. The decision follows a breakout year marked by major partnerships with Google Finance and the NHL, plus investment from ICE, as the firm targets a reported $12–15 billion valuation and teases a POLY token. Trading volume across Polymarket and Kalshi has hit all-time highs in recent months, reflecting surging demand for regulated prediction markets. The approval also signals a broader regulatory shift after Kalshi’s legal win over election markets pushed the CFTC toward a more permissive stance.

Source: The Block, Kalshi

Upbit Halts Solana Token Transfers After $36.8M Hack

Upbit, South Korea’s largest crypto exchange, suspended all deposits and withdrawals after detecting abnormal outflows in a range of Solana-based tokens and later confirmed a $36.8 million theft. Stolen assets included SOL, BONK, JTO, JUP, ORCA, PYTH, RAY, TRUMP, USDC, and others, prompting the exchange to move remaining funds into cold storage and freeze $8.2 million in LAYER. Upbit said it will work with projects and authorities to recover additional funds and promised to fully reimburse affected customers from its own reserves. The exchange has not yet disclosed how attackers breached its systems. At the same time, parent company Dunamu, which is set to be acquired by tech giant Naver, reaffirmed plans for a $6.8 billion push into AI and blockchain-based financial infrastructure. Later, Upbit stated an emergency audit of $30M hack uncovered internal wallet flaw that could let attackers derive private keys.

Nexus Mutual Proves Its Value After Stream Finance Fallout Triggers Payouts

Nexus Mutual, the DAO-run onchain insurance protocol, has underwritten over $6.3 billion in cover since 2019 and paid out more than $18 million in claims, including a recent round tied to the Stream Finance collapse. When Stream disclosed a $93 million loss and its xUSD token depegged, lending markets failed to liquidate positions in time, triggering the exact onchain liquidation failures Nexus insures. Users across integrated vaults on Beefy, Harvest, Euler, and Treevee filed over $95,000 in claims and received payouts within a week through community assessor votes. The incident highlights how onchain insurance can absorb shocks across interconnected DeFi systems and why protection layers are becoming essential as institutional capital enters the space. Aave’s move to subsidize up to $1 million in smart contract coverage further signals DeFi’s shift toward built-in safety infrastructure.

Source: Dune

Other Domestic Regulation Updates

• Grayscale and Franklin XRP ETFs each clock over $60 million in day one inflows as group outshines BTC, ETH, and SOL funds
• Robinhood to launch new derivatives exchange for prediction markets push
• SpaceX transfers $105 million in bitcoin to unmarked wallets

Other International Regulation Updates

• Binance 'knowingly facilitated' Hamas terrorist group, new lawsuit claims
• Grayscale files with the SEC to launch first-ever Zcash ETF
• Do Kwon requests 5-year prison term cap in $40 billion Terra fraud case
• Sam Altman’s World ordered to delete 1.2 million iris scans in Thailand
• UK Budget Confirms New Crypto Reporting Rules from January 1

Pain & Gain

Pain

• The crypto Fear and Greed Index has plunged back into extreme fear territory
• JPMorgan Chase closes Strike CEO Jack Mallers' accounts, spurring renewed crypto debanking concerns
• Stablecoins Could 'Pose Stability Risks,' ECB Says in Latest Warning
• OpenAI Confirms Data Breach—Here's Who Is Impacted

Gain

• Monad launches on mainnet
• Kraken Launches Bitcoin Rewards Debit Mastercard Ahead of Planned IPO
• Balancer Outlines Reimbursement Plan Following $128M Exploit
• Monad’s Highly Anticipated Mainnet And Airdrop