📢Sponsor | 💡Telegram | 📰Past Editions
Good Morning,
DeFi just discovered the bailout. Aave's proposed 25,000 ETH contribution to plug the Kelp DAO exploit hole is the latest in a coordinated relief effort that has stacked roughly $161M in pledges from Lido, Ether.fi, Mantle, and individual backers, effectively socializing the losses across the ecosystem.
Check out our latest podcast episode!
In Today's Email:
What Matters: Aave Proposes 25K ETH for Kelp Bailout 👻
Product of the Week: Morgan Stanley Launches Stablecoin Reserve Fund 👀
Charts: Polymarket Accuracy Driven by 3% of Traders, Crypto Funds Pull $1.2B 📊
You read and share. We listen and improve. Send us feedback at [email protected].
TOGETHER WITH
Dexu AI: Get the Signal First
Dexu AI is an AI-powered Web3 analytics platform that quantifies the attention economy across major social media platforms and market metrics.
It helps traders, VCs, founders, and analysts spot emerging trends and narratives early, turning noise into actionable alpha.
—————
Ready to front-run the next big move?
Use our exclusive promo code LAUNCHY at dexu.ai for 20% off Dexu Pro and unlock premium trend intelligence today. Don’t chase hype. Get the signal first.
WHAT MATTERS
Aave Proposes 25K ETH for Kelp Bailout
Source: Defi United
State of play: Aave service providers proposed contributing 25,000 ETH (~$58M) to DeFi United, a coordinated relief effort to plug the bad debt hole left by last week's Kelp DAO exploit.
The exploit involved an attacker minting unbacked rsETH through a compromised LayerZero bridge and using it as Aave collateral to borrow real assets.
DeFi United now sits at roughly 69,534 ETH (~$161M) including pledges from Lido (2,500 ETH), Ether.fi (5,000 ETH), and founder Stani Kulechov (5,000 ETH).
Mantle separately proposed a low-interest credit facility of up to 30,000 ETH, and combined with 30,700 ETH frozen on Arbitrum post-attack, the shortfall is effectively covered if proposals pass.
Why it matters: DeFi TVL is down 27% YTD to $80B, JPMorgan flagged repeated exploits as a drag on institutional interest, and the industry is now self-funding bailouts to stop the bleed.
Our take: Socializing losses through coordinated DAO contributions is a sign of mature ecosystem mechanics, but it is also DeFi quietly adopting the same too-big-to-fail backstop logic it was supposed to render obsolete.
For builders and investors: Bridge security is the recurring single point of failure in these incidents, and any protocol accepting LRTs as collateral without independent mint verification is one compromised bridge away from being the next Aave.
PRODUCT OF THE WEEK
Morgan Stanley Launches Stablecoin Reserve Fund
Source: TradingView
Morgan Stanley Investment Management launched the Stablecoin Reserves Portfolio (MSNXX), a government money market fund built specifically for stablecoin issuers to hold reserves in line with GENIUS Act requirements.
The fund maintains a stable $1 NAV and invests exclusively in cash, US Treasury bills, notes, and bonds with maturities of 93 days or less, plus overnight repos collateralized by Treasuries.
MSNXX sits inside the Morgan Stanley Institutional Liquidity Funds trust and is primarily aimed at payment stablecoin issuers, though non-issuers can also hold shares.
The launch follows MSIM's Bitcoin Trust (MSBT) debut earlier this month, which has pulled in over $172M in net inflows, as the firm's $1.9T AUM digital assets unit builds out its issuer-facing infrastructure.
Other cool products:
Catalysis launched on mainnet.
Zest Protocol is launching mainnet soon.
Decibel launched its native stablecoin usDCBL.
Upshift partnered with Securitize Fund Services.
MegaETH has set its MEGA token launch for April 30.
Base announced its first independent network upgrade.
Arkham launched decentralized trading on its platform.
Polymarket is rolling out its CTF Exchange V2 upgrade.
Jupiter launched a Telegram-based prediction market bot.
Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇
CHARTS OF THE WEEK
Polymarket Accuracy Driven by 3% of Traders
State of play: A London Business School and Yale paper analyzing every Polymarket trade from 2023-2025 finds 3.14% of accounts generate most of the platform's price discovery, undercutting the "wisdom of the crowd" pitch.
Skilled winners and market makers capture over 30% of all gains while making up under 3.5% of accounts, with 67% of users absorbing the entire aggregate loss pool.
Skill is highly persistent: 44% of accounts flagged as skilled stayed skilled in held-out samples, vs. 10% in a parallel test on active mutual funds.
Researchers flagged 1,950 suspected insider accounts that move prices 7-12x more per dollar than skilled traders, including three that cleared $630K+ betting on Maduro's ouster pre-raid.
Our take: 97% of users are effectively funding the gains of an informed minority and a smaller pool of insiders, which is less wisdom of crowds and more redistribution toward whoever has better information.
Crypto Funds Pull $1.2B in Fourth Straight Week
State of play: Global crypto investment products drew $1.2B in weekly inflows according to CoinShares, marking a fourth straight positive week as bitcoin traded near its highest level since early February.
Bitcoin products did the heavy lifting with $932.5M in inflows, pushing YTD BTC fund flows to ~$4B, while ether funds added $192.4M for a third consecutive week above $190M.
BlackRock's iShares dominated issuer flows at $952M, followed by ARK 21Shares ($50M) and Fidelity ($36M), while Grayscale shed $50M and US-domiciled funds captured $1.088B of the global total.
Total AUM across global crypto investment products climbed to $155.3B, the highest since Feb. 1 but still well below the October 2025 peak of $263B.
Our take: Four positive weeks is a trend, but AUM still sitting 41% below October's peak means this is recovery flow, not new conviction, and the FOMC outcome will decide whether the rebuild continues or stalls.
QUICK BITES
Aave proposes 25K ETH for Kelp bailout.
Western Union to launch stablecoin next month.
Trump defends crypto legislation at private event.
CFTC sues New York over prediction market crackdown.
Bitcoin leads $1.2B weekly haul for global crypto funds.
EF unstakes 17K ETH after nearing 70K staked ETH milestone.
JPMorgan says tokenization will drive change across entire funds industry.
Litecoin rewrites 3 hours of history to undo its first major privacy-layer exploit.
Skilled Polymarket traders are a minority, and everyone else funds their gains.
NOTEWORTHY READS & MEME
If you enjoy reading this issue, please consider subscribing. It takes 1 minute of your time, but it would mean the world to us 🙇
Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.
