DeFi is loosening up—broker rule repealed, CAKE governance under attack, sUSD continues to depeg. Here are recent reflections on DeFi:

1/ sUSD Continues to Depeg: Why No Fix Yet?

Since the beginning of the year and the passing of proposal SIP-420, sUSD has experienced depegging, recently dropping below $0.9 in a severe divergence. The proposal introduced a key change—the “Delegated Pool.” This mechanism encourages users to mint sUSD via this new design, offering benefits such as:

• 200% collateral ratio (originally designed at 500%+)
• Debt can be linearly transferred to the protocol
• Once fully transferred, users are exempt from repayment
• The protocol mitigates debt through profits and $SNX appreciation

The advantages are clear—improved minting efficiency for SNX and elimination of liquidation risk for borrowers. If the market has strong confidence in SNX, this could create a positive cycle.

However, issues quickly emerged:

• The market still has PTSD around endogenous collateral systems like SNX - sUSD
• The increased minting efficiency led to extra sUSD entering the market, causing severe Curve Pool imbalance
• Due to the delegated design, users no longer actively manage their debt, so they can’t arbitrage by buying discounted sUSD to repay

The key concern is whether the peg can be restored. This largely depends on the project team, who must stimulate sUSD demand or create new incentives. @synthetix_io is well aware of this, but whether the market will accept an algorithmic stablecoin backed by endogenous collateral remains unknown. The trauma from LUNA still runs deep. However, from a design perspective, Synthetix’s model remains advanced—it might have thrived in the earlier “wild west” phase of stablecoins.

(Note: This is not financial advice. It is a factual analysis intended for research and learning.)

2/ veCAKE Governance Attack, Cakepie Faces Expulsion

Ironically, the ve model was created to prevent governance attacks—yet veCAKE was shut down via centralized sanctions.

Skipping the detailed timeline, the main dispute lies in PancakeSwap’s accusation that @Cakepiexyz_io leveraged governance power to direct CAKE emissions into inefficient liquidity pools—a “parasitic” behavior deemed harmful to PancakeSwap.

However, this outcome does not violate the ve mechanism’s design. CAKE emissions were directed by vlCKP, Cakepie’s governance token, which represents governance power and enables a bribery market. This is the very purpose of protocols like Cakepie and Convex.

The Pancake - Cakepie dynamic mirrors Curve - Convex. Frax and Convex benefitted from accumulating veCRV votes. The ve model design doesn’t directly link fees and emissions. The issue raised against Cakepie—inefficient emission targeting—is really a symptom of weak competition for governance power. Typically, this would be resolved by fostering a more competitive market. If intervention is necessary, there are better regulatory alternatives, like setting emission caps per pool or encouraging broader veCAKE vote competition.

3/ Following Up on veCAKE Attack: Curve Founder @newmichwill’s Quantitative Method

• Measure the amount of CAKE locked into veCAKE via Cakepie (this CAKE is permanently locked)
• Compare to a hypothetical scenario where the same veCAKE votes supported “high-quality pools,” and all yield was used to buy and burn CAKE—how much CAKE would be burned?
• This comparison assesses whether Cakepie’s behavior is more efficient than a direct burn

According to Michael’s experience, on Curve, the veToken model reduces token circulation about 3x more efficiently than direct burns.

4/ BUIDL Growth Continues, Up 24% in 7 Days

(1) The last time we focused on breaking through 2 billion, we are now close to breaking through 2.5 billion.

(2) The latest increase of US$500 million did not come from Ethena

(3) May attract new investor groups

(4) Traces on the chain may come from Spark, a lending protocol owned by Sky (MakerDAO)

The RWA (real-world assets) sector continues to grow but hasn’t integrated well into the DeFi mainstream. Currently, it feels disconnected from the broader market and retail users.

5/ U.S. Repeals IRS DeFi Broker Rule

On April 11, President Trump signed legislation officially repealing the IRS’s DeFi broker rules.

The DeFi market saw moderate gains—not dramatic. Still, I believe this represents a major positive shift. Regulators are loosening their grip on DeFi, potentially opening the door for more innovation and applications.

6/ Unichain Launches Liquidity Mining: $5M in $UNI Rewards Across 12 Pools

Tokens involved: USDC, ETH, COMP, USDT0, WBTC, UNI, wstETH, weETH, rsETH, ezETH

Uniswap’s last liquidity mining event was five years ago, coinciding with the launch of the UNI token in 2020. This time, the goal is to channel liquidity into Unichain. Expect many to join—it’s a low-cost opportunity to earn UNI.

7/ Euler Expands to Avalanche, Enters Top 10 Lending Protocols by TVL

(1) TVL has grown 50% in a month

(2) Most of the growth is incentive-driven, mainly from Sonic, Avalanche, and EUL

8/ Cosmos IBC Eureka Officially Launches

(1) Built on IBC v2

(2) Each transaction burns $ATOM as gas

(3) Enables cross-chain between Cosmos and EVM

(4) Currently supports Ethereum mainnet and major Cosmos assets; not yet extended to L2s

(5) In the past week, Cosmos Hub saw $1.1B in cross-chain inflows

This gives $ATOM strong utility. Any chain within Cosmos that draws in significant capital can now drive ATOM’s value, potentially avoiding the disconnect seen during the LUNA boom.

Despite recent inflows, long-term fundamental change for ATOM depends on sustainability.

9/ Buybacks

(1) AaveDAO has begun formal token buybacks

(2) Pendle has proposed listing PT tokens on Aave

10/ Berachain Farming

(1) Updated POL (Protocol-Owned Liquidity) reward allocation rules—30% cap per Reward Vault

(2) Governance update introduces a new Guardian Council to review and approve RFRVs

(3) OlympusDAO plans to shift part of its POL to adapt to the new rules and maintain high $OHM incentives

(4) Yearn’s $yBGT is now live on Berachain

After a golden March, Berachain’s price and TVL entered a correction. The team addressed incentive misallocations with new restrictions. Despite significant TVL outflows in recent weeks, it remains one of the most DeFi-native chains. Keep watching for more protocol integrations and TVL trends.

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