🔮 The Falling Impact, The Hype of Being Liquid, New Fed, Tether's Rise

Top Stories

Solana’s Validator Shakeout

Solana’s daily validator count has dropped below 800, down more than 65% from its early-2023 peak, as declining support from programs like the Solana Foundation Delegation Program and rising vote and infrastructure costs make smaller validators economically unviable. The contraction is showing up directly in network vote transactions, which have fallen sharply alongside validator participation. Notably, user activity has held up, with non-vote transactions staying near 100 million per day, suggesting Solana’s memecoin-era demand remains strong even as the network’s validator set consolidates.

Source: The Block, Dune

From ICO to ICU

Trove’s token launch unraveled almost instantly, with TROVE collapsing over 95% within minutes and now down nearly 98% amid thin liquidity and a sub-$500K FDV. Beyond the price action, backlash has centered on last-minute changes to the project’s roadmap, including a surprise pivot to Solana after raising over $10M from a sale marketed around Hyperliquid and EVM tooling. Confusion around claims, allegations of fund mismanagement, and unanswered questions flagged by onchain investigators have eroded trust, turning what was pitched as an infrastructure play into a cautionary tale about hype, shifting narratives, and execution risk in public token sales.

Hyperliquid Hits Record Share, Token Lags

Hyperliquid processed over $208 billion in perpetual futures volume in January, capturing a record 5.38% of total CEX perp volume despite centralized venues posting a relatively flat $3.88 trillion for the month. The gain suggests structural migration of speculative flow toward onchain derivatives rather than broad market expansion. Yet a disconnect remains: HYPE trades more than 50% below its September highs even as market share reaches new peaks, with additional upside not fully reflected from growing HIP-3 volumes tied to commodities and equities trading.

Source: DefiLlama, The Block

The Quiet Return of DeFi Vaults

After last year’s exploits, onchain vaults are quietly regaining momentum, with deposits on Morpho and Spark rebounding to over $6 billion as confidence returns and infrastructure matures. This week’s moves by Bitwise, curating non-custodial vaults on Morpho, and Kraken, embedding vault strategies directly into its exchange via DeFi Earn, signal that vaults are shifting from niche DeFi tools into core financial infrastructure. The focus of this cycle is risk curation rather than blind yield, with professional managers setting transparent guardrails and users retaining visibility and, in some cases, self-custody. As regulation constrains yield inside stablecoins, vaults are emerging as the natural outlet for onchain returns, positioning protocols like Morpho at the center of institutional and retail DeFi alike.

Ripple Opens the Door to DeFi Perps

Ripple has integrated Hyperliquid into Ripple Prime, enabling institutional clients to access Hyperliquid’s onchain derivatives liquidity directly through its prime brokerage platform while cross-margining those positions alongside traditional markets like FX, fixed income, and OTC swaps. The move signals growing institutional comfort with DeFi-native venues, especially as Hyperliquid expands beyond crypto into commodities perps and explores prediction markets. By turning Hyperliquid into a plug-in for institutional workflows, Ripple is helping bridge DeFi’s most liquid perp venue into the same stack used for multi-asset trading and risk management.

Regulation

Prediction Markets Go Institutional

Robinhood and Susquehanna’s acquisition of a controlling stake in MIAX Derivatives Exchange brings prediction markets firmly into the regulated derivatives world, with new event-based products expected as early as Q2 2026. At the same time, SIG and other quant firms are scaling dedicated trading operations on platforms like Kalshi and Polymarket, treating prediction markets less as retail speculation and more as arbitrageable derivatives venues. As regulated exchanges, large brokers, and professional market makers enter the space, prediction markets are gaining the liquidity, reliability, and price efficiency needed to evolve into durable financial infrastructure rather than niche betting products.

Source: Dune

Tether Turns Into a Gold Whale

Tether is rapidly becoming one of the world’s largest gold holders, adding roughly 1–2 tons per week and bringing its total reserves to around 140 tons, worth about $24 billion at current prices. Much of that gold backs both USDT reserves and the fast-growing Tether Gold token, XAUT, which has recently outpaced USDT’s growth and climbed into the top 50 cryptocurrencies by market cap. Stored in a former Swiss nuclear bunker and accumulated as gold hits fresh all-time highs, the strategy underscores how Tether is quietly evolving from a dollar stablecoin issuer into a major player in global hard-asset markets, even as scrutiny over its reserve composition continues.

Markets Jolt as Trump Taps a New Fed Chair

President Trump nominated former Fed governor Kevin Warsh to succeed Jerome Powell, a move that landed as crypto markets sold off and investors reassessed the path of interest rates. Bitcoin slid sharply alongside broader risk assets as Warsh’s reputation as a more hawkish policymaker revived uncertainty around future easing, even as Trump framed the pick as a reset after years of public conflict with Powell. While Warsh has historically criticized cryptocurrencies and voiced support for a central bank digital currency, he has more recently softened his stance on Bitcoin, leaving markets weighing whether tighter monetary instincts in the short term could ultimately reinforce Bitcoin’s longer-term hedge narrative.

Tether Goes Fully U.S.-Native

Tether launched USA₮ (USAT) on January 27, a GENIUS Act-compliant, dollar-backed stablecoin issued through Anchorage Digital Bank and designed specifically for the U.S. market. Unlike global USD₮, USAT pairs federal regulatory coverage with institutional-grade custody and distribution, with early activity showing a controlled rollout concentrated among larger wallets. The launch signals a major strategic shift as Tether now operates a dual-track model: a dominant offshore stablecoin for global markets and a U.S.-native version built to compete directly for banks, fintechs, and enterprise adoption where compliance and custody are non-negotiable.

Source: Dune

Other Domestic Regulation Updates

• White House Fires Back At Coinbase Over Market Structure Bill Theatre
• Grayscale files with SEC to convert NEAR Trust into spot ETF
• Chainlink Brings The $80 Trillion U.S. Stock Market Onchain With 24/5 Equities Data
• Gold Is the Real Bubble, Says Ark Invest's Cathie Wood—Not AI
• Crypto.com launched OG, a standalone prediction markets platform offering CFTC-regulated sports event contracts and potential margin trading capabilities
• Rep. Ro Khanna launched an investigation into World Liberty Financial (WLFI) regarding a reported $500 million investment from a UAE royal family entity

Other International Regulation Updates

• Polymarket Banned in Portugal, Hungary as Prediction Market Pushback Grows
• BitGo prices US IPO above marketed range, eyeing $212.8 million raise
• Gemini Space Station Inc. is exiting the U.K., European Union, and Australia markets, focusing operations solely on the U.S. and Singapore businesses

Pain & Gain

Pain

• Bitcoin Slips On Trade War Fears, Sparks $865M in Liquidations
• Bitcoin Price Crashes to Zero on Paradex Exchange as Glitch Fuels Mass Liquidations
• What’s Next for Zcash After Electric Coin Company Exodus and New CEO?
• RALPH Crashes After Geoffrey Huntley’s $300K Sale
• BTC faces the risk of its fourth consecutive monthly loss, a streak not observed since 2018
• Crypto Crash: Liquidations Top $2.5 Billion as Bitcoin, Ethereum and XRP Prices Plummet
• ZachXBT alleges $40M government crypto theft linked to custody contractor's son

Gain

• Bitcoin utility blockchain VerifiedX debuts ‘Venmo-for crypto’ payment app Butterfly
• Tether and Bitqik Collaborate to Promote Stablecoin Education in Laos
• Steak ‘n Shake to Pay Hourly Workers in Bitcoin Starting March
• Blockchain infrastructure firm Zerohash is currently in discussions to raise $250 million at a $1.5 billion valuation
• Kraken launched "DeFi Earn," an in-app vault offering up to 8% APY on USDC deposits via onchain lending
• 'The DAO is back!': Ethereum dev Griff Green to use unclaimed hack funds for new security effort