Welcome to DeFi Frontier.

Every week, I highlight the DeFi opportunities, protocols, and market themes I think are worth paying attention to.

Sometimes that means sustainable yield opportunities. Sometimes it means new protocols, best practices, risk frameworks, or broader trends shaping where capital is moving onchain.

The goal is simple: help you find what’s interesting in DeFi, understand the tradeoffs, and avoid blindly chasing the biggest APY on the screen.

Let’s get into this week’s report.

7 day benchmark stablecoin rates from Portals: 2.60%:

Here’s the top yielding stablecoin vaults (real yields) for the past 30 days:

Checking in on Stablewatch to see the 7-day TVL changes.

This week the top movers were: OpenTrade (XDFIS) +382.5%, Liquity (yBOLD) + 21.9%, Inverse (sDOLA) +14.3%:

In addition to stablewatch, this post from Portals is interesting to get an idea of where flows are going onchain in DeFi. I didn’t know they had these dashboards:

7 day benchmark ETH staking rates from Portals: 2.29%

Here’s the top yielding ETH vaults (real yields) for the past 30 days:

Targeting 10% - 20% yields

As you’re reading this the Axis Origin Pre-Deposit vault will just be going live on July 29th at 10am EST.

We don’t normally do a lot of referral codes, but the Axis team landed on a thoughtful design where both sides are rewarded. So if you check out Axis, be sure to use our referral code as you will earn more rewards. Referral code: https://axis.to/origin/EDGE

The full details on Origin can be found here. However, if you’re not a huge reader, DeFi Dad gives a nice TLDR of Origin below:

Axis is an onchain synthetic dollar backed by a delta neutral arbitrage and market making book. One thing that stood out to me from reading up on them and talking to the team is how broad the trading mandate is. They aren’t built around one narrow strategy like a basis trade. The team can move across venues, currencies, and different types of market dislocations depending on where the best opportunities are.

I asked the team for a couple comments for this writeup and they explain this in a bit more detail below:

USDx is the base synthetic dollar, while sUSDx is the yield bearing version that receives rewards generated by the trading strategy.

The team behind Axis has one of the longest crypto trading track records I’ve come across. They’ve been running these types of strategies since 2018 and trading at meaningful scale through multiple market cycles. In that time, they’ve managed to trade through/around the blow ups of Terra, 3 Arrows, BlockFi, Celsius, FTX and more. All the landmines of our rocky past.

You can find the fully doxed team here.

And here’s a few receipts showing their track record since inception in 2018:

For a more granular break down:

Axis raised from Galaxy, OKX Ventures, FalconX, GSR, Maven 11, CMS, CMT Digital and Marc Zeller:

Users mint USDx with supported assets, which Axis deploys across a delta neutral trading book. The strategy looks for price differences across venues, currencies and settlement systems, while also providing liquidity, making markets and executing OTC trades.

As mentioned above, the big differentiator is this term they call “spatial arbitrage”. Rather than relying entirely on funding rates, Axis can move capital between fragmented venues and capture price dislocations. Those opportunities can actually get better during volatile markets, when spreads widen and liquidity becomes harder to find.

USDx itself doesn’t earn yield. Users stake it into sUSDx, where distributed trading profits accrue through an increasing exchange rate. The rate is variable and depends on actual strategy performance.

Axis also publishes proof of reserves through Accountable, with third party attestations refreshing roughly every 15 minutes. The backing includes both the assets and the hedge positions supporting the delta neutral book, and USDx can be redeemed at NAV.

Axis is a new protocol, and with anything new, it’s important that everyone does their own research and due diligence. That said, they’ve put together some pretty comprehensive documentation if you want to dive in further.

Their docs also include a robust risk section that walks through many of the risks the team has identified.

Another welcome addition to their docs is a relatively thorough OpSec overview. This is something I wish I saw more teams doing.

Their contracts are audited by OpenZeppelin, Plainshift and Zellic and monitored by Hypernative.

I saw both DeFi Dad and EthanDeFi bringing up Tenor this week so I figured I should take a look too. The incentives that Ethan originally points out have compressed a bit but they’re still pretty juicy. Read his full post on this here.

I had seen Tenor go live right on the heels of Midnight release, but admittedly I didn’t know much about it.

My very smooth brain take was: “Why use Tenor? Why not just use Midnight directly?”

Looking a bit closer has made a few more things fall into place. And then a very smart chad in our Inner Edge TG said this about Tenor and it really clicked:

5 words and it instantly made a lot more sense to me. If you were to go up to someone randomly on the street and say the above, they will think you’re speaking a made up language, but in our little strange corner of the world, this makes perfect sense 😂

But to get a bit more in-depth, Tenor really feels like another bridge to TradFi for onchain lending. From their blog:

The interface:

I also thought this was a good summary of Tenor here:

My understanding from listening to more of the smarts in the Inner Edge TG is that, v1 of Midnight doesn’t have the vault adapter built out that connects Morpho Blue vaults with Midnight vaults. Once that happens there will be much deeper access to liquidity and Tenor will have a lot more opportunity to shine.

I wanted to do this early look at Tenor now because it looks very polished and interesting, but will have to come back for a closer look when its really humming.

Not a lot of people saw this, so I wanted to share it here. I found this whole post fascinating. Basically its some wild stats on long/wide LP ranges:

Here’s the post:

I put this into a table so it’s a bit easier to look at (if on your phone you might want to hold it sideways):

The results here kind of blow my mind. Wide range LPs that have seemingly printed over massively long stretches of time.

Let’s hope the next 5 year range needs to be $10k - $30K 🫡

RWA growth looks institutional, but not in the way people usually mean. The money is overwhelmingly coming from crypto native protocols, DAOs, funds and market makers rather than banks or pension funds, with just 4% of wallets accounting for roughly 93% of the capital and the biggest, stickiest checks flowing into more traditional credit products.

Read the full article below:

Franklin Templeton’s argument is that agentic AI could become crypto’s real killer use case because autonomous software will need cheap, fast, verifiable rails to pay for things like compute, data and API access. If that plays out, the biggest opportunity may not just be in AI stocks, but in the blockchains and tokens that agents actually use to transact.

Just the bullish hopium we need. Full article below:

Taking a look at the front page of Stablecoin yields and RWA yields this week on Pendle:

Stablecoins

RWA

The total TVL between STRCx (by xStocks) Saturn and APYX this week is $654.27M ($648.17M last week):

Movement since July 21: Signs of recovery…

• Saturn: $186.2M, up $4.1M. APY fell from 27.41% to 25.83% and continues to normalize lower.

• Apyx: $327.07M, completely unchanged. APY barely moved, falling from 14.86% to 14.78%.

• STRCx: $141M, up another $2M, while holding steady at 12%.

• Total TVL: $654.27M, up $6.1M.

The Apyx bleed finally stopped. Supply held dead flat at $327.07M after two weeks of steady outflows. I’ve been tracking this for many weeks so this is interesting to see.

STRCx keeps grinding higher. This was its fifth straight week adding $2M, making it easily the more consistent of the STRC derivatives.

Saturn is slowly rebuilding TVL, even as its rate keeps drifting back toward the rest of the pack.

Overall, I’m starting to see a bit of normalization in all of the STRC products. Barring another large drawdown in BTC, I’d say we may be close to a bottom here in these products.

We’ve been talking a lot about this USD duration number week after week as the most important number for Strategy. Saylor continues to boost this number, last week it was 22 months now its up to 2.1 yrs:

STRC is still responding relatively well to all of this activity. Personally, I’m not overly hopeful that this goes back to $100 anytime soon and maybe there’s some probability that it never does. But that’s my opinion, Parker from Apyx has an interesting counterpoint:

What do you think? Would love people to weigh in in the comments below.

All that said, I actually think STRC and the derivatives are starting to get more attractive, but I think Saylor still has more to do to prove he can manage all this.

Thanks for reading!

DISCLAIMER: Nothing written in The Edge Newsletter or said on The Edge Podcast is a recommendation to buy or sell tokens or securities. This content is for educational and entertainment purposes only. Nothing shared here is financial advice. Any views expressed in our content are solely the opinion of that writer, host, or guest. Always do your own research. DeFi Dad, Nomatic, and guests may have positions in the assets or other matters discussed in this content.