Kate KittyWong 🟦🟣

AFI’s Proof-of-Reserve Yield mini-app is now live on the @baseapp. This isn’t just another yield surface. It’s a shift from promised yield → provable yield, enforced by on-chain reserves. For the first time, yield comes with continuous balance-sheet truth. 🧵

There has been a lot of discussion about DeFi yields and whether products should even exist when users can go directly to protocols. It is a fair question, but it often skips over how financial systems actually scale and why most people do not interact with infrastructure directly. DeFi protocols are powerful. They create real yield by removing layers of inefficiency in traditional finance. But protocols are infrastructure, not products. Infrastructure does not onboard users on its own. Products do. Before getting into why that matters, it helps to look at the numbers plainly. The numbers Most traditional bank savings accounts today pay roughly 0.3% to 0.6% APY. On a $100,000 cash balance, that is approximately $500 per year. With DeFi Earn, USD equivalent deposits can earn between approximately 4% and up to 8% APY today, depending on the strategy selected. At the same $100,000 balance: At 5% APY, the annual return is about $5,000. At 8% APY, the annual return is about $8,000. That is a 10x to 16x difference compared to a typical bank savings account. Those numbers are not theoretical. They are available today through different DeFi strategies. The natural question is why banks cannot offer similar outcomes. The answer is structural, not philosophical. Banks fund themselves with short term liabilities like deposits that can be withdrawn immediately. They invest those funds into longer-duration assets like loans and bonds. This creates a persistent assets and liabilities mismatch and a duration mismatch. When interest rates move or liquidity tightens, the value and timing of assets and liabilities diverge. Because bank balance sheets are opaque, these risks are often hidden until confidence breaks, at which point the failure becomes sudden and systemic. This pattern is not new. It has repeated for decades precisely because opacity delays truth, and delayed truth creates panic. DeFi systems work differently. DeFi protocols are transparent by design. Assets, liabilities, collateralization ratios, and liquidity conditions are visible on chain in real time. There is no ability to quietly defer losses or mask balance sheet risk. That transparency does not eliminate risk, but it makes risk observable early and continuously. Transparency alone, however, is not enough. Someone still has to choose which protocols to use, diversify exposure across strategies, monitor utilization and liquidity, respond to smart contract upgrades or market stress, and set guardrails around concentration and duration. When individuals go directly to protocols, they take on all of that responsibility themselves. Products exist to take that burden off the user. When someone uses DeFi Earn with @krakenfx or any other provider, they are not paying for the yield itself. They are paying for risk management, protocol selection, continuous monitoring, custody and security infrastructure, operational resilience, reporting, and accountability. Those costs do not disappear in decentralized finance. They either sit with the individual or with a professional operator. For most people, the real choice is not between 5% and 8%. It is between earning close to zero in a bank, managing complex DeFi risk on their own, or earning materially more through a product that abstracts complexity and manages risk on their behalf. This is how adoption actually happens. Protocols do not onboard the next hundred million users. Products do. And products require entrepreneurs, capital, engineering, compliance, and long-term accountability. That is the role companies like Kraken are playing with DeFi Earn. Not promising magic yield, but taking transparent financial infrastructure and turning it into something real people can safely use. That is how financial systems evolve. Try it, give feedback: kraken.com/defi-earn

No complexity. No accident. 10/10 was caused by irresponsible marketing campaigns by certain companies. On October 10, tens of billions of dollars were liquidated. As CEO of OKX, we observed clearly that the crypto market’s microstructure fundamentally changed after that day. Many industry participants believe the damage was more severe than the FTX collapse. Since then, there has been extensive discussion about why it happened and how to prevent a recurrence. The root causes are not difficult to identify. ⸻ What actually happened 1.Binance launched a temporary user-acquisition campaign offering 12% APY on USDe, while allowing USDe to be used as collateral with the same treatment as USDT and USDC, and without effective limits. 2.USDe is a tokenized hedge fund product. Ethena raises capital via a so-called “stablecoin,” deploys it into index arbitrage and algorithmic trading strategies, and tokenizes the resulting fund. The token can then be deposited on exchanges to earn yield. 3.USDe is fundamentally different from products such as BlackRock BUIDL and Franklin Templeton BENJI, which are tokenized money market funds with low-risk profiles. USDe, by contrast, embeds hedge-fund-level risk. This difference is structural, not cosmetic. 4.Binance users were encouraged to convert USDT and USDC into USDe to earn attractive yields, without sufficient emphasis on the underlying risks. From a user’s perspective, trading with USDe appeared no different from trading with traditional stablecoins—while the actual risk profile was materially higher. 5.Risk escalated further as users: •converted USDT/USDC into USDe, •used USDe as collateral to borrow USDT, •converted the borrowed USDT back into USDe, •and repeated the cycle. This leverage loop produced artificial APYs of 24%, 36%, and even 70%+, widely perceived as “low risk” simply because they were offered by a major platform. Systemic risk accumulated rapidly across the global crypto market. 6.At that point, even a small market shock was sufficient to trigger a collapse. When volatility hit, USDe depegged quickly. Cascading liquidations followed, and weaknesses in risk management around assets such as WETH and BNSOL further amplified the crash. Some tokens briefly traded near zero. The damage to global users and companies—including OKX customers—was severe, and recovery will take time. ⸻ Why this matters I am discussing the root cause, not assigning blame or launching an attack on Binance. Speaking openly about systemic risks is sometimes uncomfortable, but it is necessary if the industry is to mature responsibly. I expect there may be significant misinformation and coordinated FUD directed at OKX in the near future. Even so, speaking honestly about systemic risk is the right thing to do—and we will continue to do so. As the largest global platform, Binance has outsized influence—and corresponding responsibility—as an industry leader. Long-term trust in crypto cannot be built on short-term yield games, excessive leverage, or marketing practices that obscure risk. The industry needs leaders who prioritize market stability, transparency, and responsible innovation—not a winner-take-all mentality where criticism is treated as hostility. Crypto is still early. What we choose to normalize today will determine whether this industry earns lasting trust—or repeats the same mistakes again.

🚨 Ep. 67 of @TokenizedPod: NYSE Tokenizes Markets to Go 24/7 @sytaylor & @cuysheffield are joined by: ➡️ @Houlgrave, CEO, @WalletConnect To discuss: 🏛️ Institutional adoption of crypto infrastructure by traditional capital markets 🔒 Differences in approaches to tokenized securities by DTCC, NYSE, and NASDAQ 🪙 Stablecoins and tokenized deposits for equity trades 💳 WalletConnect Pay: stablecoin checkout solution with Ingenico POS terminals 💸 Use cases for stablecoin payments: digital nomads, high inflation regions, luxury goods 🥊 QR vs NFC: Form factor challenges for stablecoin payments at checkout ✅ Privacy solutions for on-chain payments and merchant revenue visibility 🤝 Gusto and Zero Hash partnership for stablecoin payroll to global contractors ❗️ Challenges and economics of stablecoin payroll vs. traditional contractor payments *** Timestamps: 00:00 Introduction 2:45 Institutional adoption of crypto infrastructure by traditional capital markets 5:31 Differences in approaches to tokenized securities by DTCC, NYSE, and NASDAQ 8:23 Stablecoins and tokenized deposits for equity trades 10:24 WalletConnect Pay: stablecoin checkout solution with Ingenico POS terminals 14:54 Use cases for stablecoin payments: digital nomads, high inflation regions, luxury goods 18:25 QR vs NFC: Form factor challenges for stablecoin payments at checkout 21:28 Privacy solutions for on-chain payments and merchant revenue visibility 28:11 Gusto and Zero Hash partnership for stablecoin payroll to global contractors 32:14 Challenges and economics of stablecoin payroll vs. traditional contractor payments *** 👉𝘚𝘦𝘢𝘳𝘤𝘩 '𝘛𝘰𝘬𝘦𝘯𝘪𝘻𝘦𝘥 𝘗𝘰𝘥𝘤𝘢𝘴𝘵' 𝘖𝘯 𝘠𝘰𝘶𝘛𝘶𝘣𝘦. 𝘈𝘱𝘱𝘭𝘦, 𝘚𝘱𝘰𝘵𝘪𝘧𝘺 𝘰𝘳 𝘢𝘯𝘺 𝘗𝘰𝘥𝘤𝘢𝘴𝘵 𝘗𝘭𝘢𝘺𝘦𝘳! 👈

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