The current Bitcoin (BTC) market cycle is “dramatically” weaker than the three previous cycles, according to Alex Thorn, the head of firmwide research at investment firm Galaxy.
Thorn compared price action since the April 2024 Bitcoin halving to cycles triggered in 2012, 2016 and 2020; the current cycle shows significantly dampened volatility and lower upside. The all-time high above $125,000 on Oct. 5, 2025 was only 97% above the 2024 halving price around $63,000.
BTC’s price increased by about 9,294% during the 2012 halving cycle, reaching a high of about $1,163, and climbed by about 2,950% during the 2016 halving cycle, reaching a high of about $19,891. The 2020 halving saw a price increase of about 761%.
A comparison of Bitcoin’s price action in previous halving cycles. Source: Alex Thorn
“Cycle four is dramatically underperforming prior cycles,” Thorn said in an X post, asking, “Is this the new normal, or is it the new normal until it isn’t?”
The decreasing volatility in each successive BTC halving cycle suggests that traditional market dynamics are changing and that BTC’s price may start to be influenced more by other factors, rather than the halving or the four-year cycle market theory.
The 30-day Bitcoin Volatility Index, which spiked to 9.64% on April 2, 2020, has not been above 3.11% in the current cycle, a reading last tipped on Aug. 24, 2024. At last look, the latest 30-day estimate for that volatility gauge is 1.75%, according to Bitbo data.
Related: Bitcoin bull run ‘still too early’ to call as demand lags exiting capital: Analyst
Critics say current cycle performance ignores the premature all-time high before 2024’s halving
BTC reached what was then the all-time high above the $70,000 level in March 2024 — one month before the April 2024 halving.
The approval of spot Bitcoin exchange-traded funds (ETFs) in the United States in January 2024 was the primary catalyst for the price pump.
The price of BTC hit an all-time high before the April 2024 halving. Source: TradingView
This historic anomaly of BTC hitting a new all-time high before the halving skewed the current cycle’s price performance, critics of Thorn’s analysis said.
Bitcoin drawdowns have also become less severe, as volatility has declined, according to Fidelity Digital Assets.
Previous Bitcoin bear markets have seen declines between 80% and 90%, according to Zack Wainwright, a Fidelity Digital Assets research analyst.
However, Bitcoin’s crash to $60,000 from the all-time high above $125,000 represents a decline just north of 50%, Fidelity’s analysis noted.
In March, Jan van Eck, CEO of asset management company VanEck, said that BTC is close to bottoming out and that he expects the price to begin gradually rising again in 2026.
At last look, the biggest crypto was trading at about $74,703, up almost 5% in the last seven days, according to TradingView data.
Magazine: Bitcoin will not hit $1M by 2030, says veteran trader Peter Brandt
Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy
Circle CEO Jeremy Allaire said China could launch a yuan stablecoin within three to five years, and that kind of sovereign entry would reshape every corner of crypto. SOL trades near $86 and XRP holds at $1.4, but neither sits at the entry point where one event changes everything. With more than $9 million raised during market fear and a confirmed Binance listing ahead, Pepeto is what the best crypto to buy now search keeps landing on.
Circle CEO Says China Yuan Stablecoin Could Arrive Within Years and the Best Crypto to Buy Now Shifts
Circle CEO Jeremy Allaire told CoinDesk that China is actively exploring a yuan denominated stablecoin and could deploy one within three to five years, according to CoinDesk. The statement signals that sovereign nations are moving closer to blockchain adoption at the currency level. Global stablecoin settlement volumes tripled in March to $584 million year over year, according to The Block. That trend confirms the best crypto to buy now is the entry positioned before institutional demand meets listing day.
Tokens Positioned to Deliver the Biggest Returns Right Now
Pepeto
SOL and XRP are among the most active tokens right now because both recovered alongside the broader market. According to analysts, the momentum could continue if BTC holds above $74,100 and risk appetite stays strong.
More than $9 million raised during fear proves the wallets inside already calculated the outcome. Early holders in coins like DOGE and SHIB all say they were uncertain and almost missed it, and all of them wish they had put in more. The same signal is flashing now with verified products behind it.
At its core, Pepeto runs a network with three finished tools working together. The risk scorer checks contracts and warns holders about problems before they commit capital, keeping money safe on every entry. The cross chain bridge transfers tokens across networks without charging fees, so every dollar of value stays intact during the move.
All three tools already function live, not as promises on a roadmap but as products buyers use right now. The Binance listing is confirmed, and staking at 181% APY adds to every position while the listing date draws closer. Given those tools and the $9 million already inside, analysts project 100x from the current entry, making Pepeto the best crypto to buy now for anyone who wants the return the listing creates.
SOL
SOL trades near $86 after recovering from $80 in March, according to CoinGecko. The chain processes high volume daily and hosts a growing DeFi system, but SOL sits 72% below its $295 all time high. A full recovery means about 3.4x over years, and the strongest presale entry for faster returns is where one listing creates the move.
XRP
XRP holds near $1.4 with spot ETF inflows near $1.26 billion year to date, according to CoinGecko. Rakuten added XRP payments for 44 million users across Japan. But from $1.4 a return to the $3.40 all time high means roughly 2.3x, and that gap cannot compare to what a presale holder collects when a Binance listing opens trading for the first time.
Conclusion
Most holders stack SOL and XRP hoping the recovery pushes them closer to past peaks. But the best crypto to buy now is the entry where $9 million raised during fear proves smart money already calculated what comes next.
Early holders in DOGE turned $500 into fortunes and every one of them says they almost missed it and wishes they went bigger. The same whale signal is flashing around Pepeto right now, and this time verified tools and a SolidProof audit sit behind the entry. The Pepeto official website has every tool running and verified, and following those wallets into the presale before the Binance listing arrives is how the best crypto to buy now becomes the position that delivered instead of the headline that passed by.
Click To Visit Pepeto Website To Enter The Presale
FAQs
What makes Pepeto the best crypto to buy now before the listing?
Pepeto raised $9 million during market fear with a confirmed Binance listing and live tools behind it. That combination of demand, products, and timing is what separates the strongest entry from speculation.
How does the Circle yuan stablecoin news affect the best crypto to buy now?
Sovereign stablecoin adoption pushes more capital into crypto at every level. Presale entries with confirmed exchange listings gain the most because new demand meets the first trading event at the same time.
Should SOL and XRP holders diversify into presale entries?
Diversifying into presale tokens with live products and confirmed listings is how the biggest returns get made. The Pepeto official website shows a working network, and analysts project 100x from the current presale price.
A roughly $292 million exploit over the weekend has rattled the crypto industry, exposing vulnerabilities in decentralized finance (DeFi) infrastructure and raising concerns about knock-on effects across lending protocols.
While investigations are still ongoing, early analysis suggests the attack centered on Kelp’s rsETH token — a yield-bearing version of ether (ETH) — and the mechanism used to move assets between blockchains.
The attacker appears to have manipulated that system to create large amounts of tokens without proper backing, then quickly used them as collateral to borrow and drain real assets from lending markets, mostly from Aave AAVE$90.47, the largest decentralized crypto lender.
The incident is the latest blow to DeFi, happening only a couple weeks after the $285 million exploit of Solana-based protocol Drift, further denting investor trust in the nearly $90 billion crypto sector.
How the attack worked
At a high level, the exploit targeted a LayerZero bridge component — a piece of infrastructure that enables assets to move across different blockchains, Charles Guillemet, CTO of hardware wallet maker Ledger, told CoinDesk in a note.
Bridges typically work by locking assets on one chain and minting equivalent tokens on another. That process depends on a trusted entity — often called an oracle or validator — to confirm deposits.
In this case, Kelp effectively acted as that verifier. According to Guillemet, the system relied on a single-signer setup, meaning just one entity could approve any transactions.
“It seems the attacker was able to sign a message … allowing him to mint large amount of rsETH,” he said. He added that it remains unclear how that access was obtained.
Michael Egorov, founder of Curve Finance, pointed to the same weakness in the system’s configuration.
“Things can happen when you trust one single party — whoever that would be.”
That setup allowed the attacker to effectively create unbacked tokens, even though no corresponding assets were locked on the source chain.
Once minted, the tokens were quickly deployed. The attacker “immediately deposited them in lending protocols mostly Aave to borrow real ETH against,” Guillemet explained.
That maneuver shifted the problem from a single exploit into a broader market issue. DeFi lending platforms are now left holding collateral that may be difficult to unwind, while valuable and liquid assets are already drained.
“Aave was left with rsETH which cannot be really sold and maxborrowed [sic] ETH, so no one can withdraw ETH,” Curve’s Egorov said.
As a result, Aave and other lending protocols may be sitting on hundreds of millions of dollars in questionable collateral and bad debt, he warned, raising concerns of a potential “bank run” dynamic as users rush to withdraw funds.
Aave saw about a $6 billion drop in assets on the protocol as users yanked their assets following the incident. The token associated with the protocol was down about 15% over the past 24 hours’ trading.
What we still don’t know
Key questions remain around how the validator was compromised. The system relied on LayerZero’s official node, raising uncertainty over whether it was hacked, misconfigured or misled.
“Was it hacked? Was it fooled? We don’t know,” Egorov said.
The attacker’s identity is also unknown, though Guillemet said the scale of the attack suggests a sophisticated actor.
“Clearly not some script kiddies,” he said.
Big blow for trust in DeFi
Beyond the immediate losses, the exploit the episode serves as another reminder that as DeFi grows more interconnected, failures in one layer can quickly cascade across the system.
Egorov argued that non-isolated lending models, where assets share risk across pools, amplify the impact of such events.
He also pointed to shortcomings in how new assets are onboarded to lending platforms, saying configurations like Kelp’s 1-of-1 verifier setup should have been flagged earlier.
However, Egorov said there’s a silver lining. “Crypto is a harsh environment which no bank would have survived — yet we are working with that,” he said. “I think DeFi will learn from this incident and become stronger than before.”
Still, even as incidents like this lead to protocol upgrades and redesigns, they also chip away investor confidence in the broader DeFi sector.
“All in all, the trust into DeFi protocols is eroded by this kind of event,” Guillemet said.
“And 2026 will most likely be the worst year in terms of hacks, again,” he added.
Read more: ‘DeFi is dead’: crypto community scrambles after this year’s biggest hack exposes contagion risks
Attacker minted unbacked rsETH through Kelp’s LayerZero bridge, then borrowed WETH on Aave V3 and V4 before markets could freeze.
In 46 minutes on Saturday evening, DeFi lost more money than it had in any single event this year, and left Aave to face its biggest challenge yet. The mechanics took roughly one transaction.
At 17:35 UTC on April 18, an attacker sent a crafted message to Kelp DAO’s LayerZero-powered cross-chain bridge. The bridge accepted it as legitimate and released 116,500 rsETH, worth about $293 million and roughly 18% of the token’s entire circulating supply, to a wallet that had been funded through Tornado Cash ten hours earlier. No ETH ever changed hands on the other side, which means rsETH was effectively spun out of thin air.
The attacker did not try to sell it. They deposited it into Aave V3 as collateral and borrowed real wrapped ether against it, then repeated the trick on Aave V4. By the time Kelp’s emergency multisig froze the protocol’s core contracts 46 minutes later, the WETH was gone.
Two follow-up attempts at 18:26 and 18:28 UTC, each trying to drain another 40,000 rsETH, reverted into the pause, but the first hit was already reverberating across DeFi.
Twenty-four hours later, Aave is carrying between $177 million and $236 million in bad debt, its TVL has dropped by roughly $6 billion, according to DeFiLlama, its WETH market is pinned at 100% utilization, and the AAVE token is down more than 18%.
SparkLend, Fluid, and Upshift have all paused or frozen rsETH. rsETH on more than 20 chains is of uncertain backing. Ethereum itself has barely moved.
It is now, by size, the largest DeFi exploit of 2026.
How it happened
rsETH is Kelp’s liquid restaking token. Every rsETH is supposed to represent a real claim on ETH deposited into Kelp and restaked across EigenLayer operators. That one-to-roughly-one relationship is why some money markets have been willing to treat rsETH as ETH-correlated collateral.
rsETH lives on more than 20 networks and moves between them through a LayerZero messaging layer. When a user locks rsETH on one chain, the bridge on the destination chain is supposed to mint or release an equivalent amount only after it verifies a valid message from the source.
The attacker found a way to make that verification accept a message that corresponded to no real deposit, so that 116,500 rsETH were released without the corresponding ETH being locked anywhere. Kelp’s vault reserves did not move, but its liability, denominated in rsETH, grew by 18%.
How Aave became the exit door
This is where the story gets uncomfortable for Aave.
Kelp’s bridge is the proximate cause of the mint. But the reason this turned into $200 million of hard damage rather than a localized, recoverable incident is that Aave had, by design, made rsETH one of the most capital-efficient collateral types in DeFi.
Supply caps were large enough to accommodate an entire $292M deposit. Borrow caps on WETH were sized such that a single attacker could withdraw well over $200M of real ether in a handful of transactions. Liquidation thresholds assumed rsETH would trade at or near peg.
The listing reviews and parameter tuning by Chaos Labs, Block Analitica, and LlamaRisk treated rsETH as what it had been in practice: a conservatively collateralized liquid re-staking token (LRT) with a boring price history.
That’s why the attacker was able to use a single forged message on a bridge to drain real assets out of the largest lender in DeFi.
Billions of WETH left Aave
After the attacker borrowed WETH against unbacked rsETH, WETH suppliers started to withdraw their own funds, likely on speculation that first-movers would be made whole while last-movers would eat the residual loss. By Sunday morning, $5.4 billion of ETH and WETH had left Aave.
WETH pool utilization hit 100%, which means WETH depositors can no longer withdraw.
The borrow positions are effectively unliquidatable. The collateral cannot be redeemed at Kelp and will not trade near peg once the scale of unbacked supply is fully digested. No profitable liquidation path exists.
Aave Labs said on X that Aave’s contracts were not compromised. But “no bug” doesn’t necessarily mean “no problem.”
Aave’s Umbrella insurance fund holds about $50 million. Aave-specific bad debt is roughly $196 million concentrated in the rsETH / WETH pair on Ethereum. The gap is where the next few weeks of governance will happen.
The waterfall, in order: aWETH Umbrella stakers absorb the first slice via automatic slashing; WETH suppliers take a pro-rata haircut on their deposits; stkAAVE holders are next if governance activates a deeper slash; and the DAO treasury could fund a repayment proposal.
Aave’s Guardian froze rsETH and wrsETH across every deployment. Aave V4’s Security Council disabled supply and borrow on both the Core Hub and the Kelp E-Spoke. A Risk Stewards proposal to reduce the WETH Slope1 is already live, aimed at pulling new supply back in.
Contagion spreads
SparkLend, Fluid, and Upshift froze rsETH within hours. The exception is Morpho: CEO Paul Frambot said exposure is about $1 million across two isolated markets, with other vaults entirely unaffected. Morpho’s architecture isolates each market so bad debt in one pair cannot propagate.
rsETH itself now has a backing problem across 20-plus chains until Kelp publishes a clean reconciliation of reserves against outstanding supply. Any protocol that accepts wrsETH as collateral is exposed until that accounting is public.
LayerZero’s messaging layer will also take scrutiny as the path manipulated in Kelp’s bridge is not unique to Kelp.
Kelp follows the $285 million Drift hack on April 1, the $80M Resolv Labs exploit in March, and a string of infrastructure-level compromises. Cumulative DeFi losses for 2026 are between $450 and $482 million across roughly 45 protocols.
The impact of stablecoins on the banking sector appears “limited” at the current phase of the adoption cycle, but banks could face increasing competition and an erosion of market share as the stablecoin sector and tokenized real-world assets (RWAs) grow in market capitalization.
“So far, the use of stablecoins remains limited, but their market capitalization exceeded $300 billion at the end of last year,” Abhi Srivastava, associate vice president of Moody’s Investors Service Digital Economy Group, told Cointelegraph.
The stablecoin market cap has surged past $300 billion. Source: RWA.xyz
The role of stablecoins in payments, cross-border commerce and onchain finance is “expanding,” despite their currently limited role, Srivastava said, adding that existing payment systems in the US are already “fast, low-cost and trusted.” He said:
“For the banking sector, at this stage, disruption risk appears limited. In the near term, US rules that prohibit stablecoins from paying yield mean they are unlikely to replace traditional deposits at scale domestically.”
However, over time, growing adoption of stablecoins and tokenized RWAs, traditional or physical financial assets represented on a blockchain by a token, could place “pressure” on the banking sector, leading to deposit outflows and reduced lending capacity, he said.
Stablecoin regulatory policy has become a hot-button issue among crypto industry executives and those in the banking sector, with fears that yield-bearing stablecoins could erode banking market share proving to be a stumbling block for the CLARITY crypto market structure bill in Congress.
Related: Stablecoins behave like FX markets as liquidity splits: Eco CEO
CLARITY Act stalled, as banks fight yield-bearing stablecoins
The Digital Asset Market Clarity Act of 2025, also known as the CLARITY Act, is a comprehensive crypto market regulatory framework that establishes an asset taxonomy, regulatory jurisdiction and oversight over the crypto markets.
The CLARITY crypto market structure bill. Source: US Congress
It is now stalled in Congress after a group of crypto industry companies, led by cryptocurrency exchange Coinbase, publicly stated opposition to earlier drafts of the bill.
A lack of legal protections for open-source software developers and a prohibition on yield-bearing stablecoins were among some of the most contentious issues cited by crypto industry opponents of the legislation.
Several attempts have been made by US lawmakers and the White House to negotiate a bill acceptable to both the crypto industry and the bank lobby.
Earlier this month, North Carolina Senator Thom Tillis said he plans to release an updated draft bill proposal that would be acceptable to both sides; however, the bill has reportedly received pushback, according to Politico, and has yet to be publicly released.
However, other crypto industry executives and market analysts have warned that if the CLARITY Act fails to pass, it could open the crypto industry up to future regulatory crackdowns by hostile lawmakers and officials.
Magazine: Stablecoins will see explosive growth in 2025 as world embraces asset class
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Iran’s Foreign Ministry came out swinging on Sunday, accusing the United States of committing war crimes through what it described as an unlawful naval blockade — a charge that landed just hours after US President Donald Trump accused Tehran of firing in the Strait of Hormuz and breaking the terms of an active ceasefire.
Both Sides Point Fingers
Spokesperson Esmail Baghaei posted the accusation directly on X, arguing the US blockade of Iranian ports and coastline violated not just the ceasefire brokered by Pakistan, but international law.
He cited Article 2(4) of the UN Charter and referenced a 1974 UN General Assembly resolution that explicitly defines a naval blockade as an act of aggression.
The United States’ so-called “blockade” of Iran’s ports or coastline is not only a violation of Pakistani-mediated ceasefire but also both unlawful and criminal. It violates Article 2(4) of the UN Charter; it constitutes an act of aggression under Article 3(c) of the UN General…
Baghaei went further, saying the blockade amounted to collective punishment of Iranian civilians — language that under international law falls under war crimes and crimes against humanity.
Trump, for his part, told reporters that Iran fired shots in the Strait of Hormuz, calling it a serious breach of the ceasefire set to expire Wednesday, April 22.
President Trump tells me Iran has committed a “serious violation” of the ceasefire but he still thinks he can get a peace deal:
“It will happen. One way or another. The nice way or the hard way. It’s going to happen. You can quote me.”
He still expressed confidence a deal could be reached. “It will happen,” he said, as quoted by an ABC News correspondent. “One way or another. The nice way or the hard way.”
The exchange set up a direct public contradiction between two governments, each claiming the other fired first — diplomatically speaking.
Iran Vs. US: A Market Already On Edge
Bitcoin felt the pressure almost immediately. The price slid from a session high of $76,250 to $75,400 Sunday as news of the flare-up spread. The drop was modest but telling, reflecting how tightly crypto markets have tracked this conflict in recent weeks.
BTCUSD now trading at $75,830. Chart: TradingView
Earlier this month, Bitcoin climbed past $78,000 after Trump announced that Iran had agreed to suspend its nuclear program. That rally reversed sharply when Tehran denied the claim, triggering a fresh round of volatility across crypto markets.
The pattern has repeated itself: optimism on a deal pushes prices up, and any sign of collapse pulls them back down.
Image: Coinflip
The Strait Of Hormuz Remains The Flashpoint
The Strait of Hormuz sits at the center of this standoff. One of the world’s most critical shipping lanes, it has been opened and closed at various points during the conflict.
Reports indicate Iran had previously reopened the strait following a ceasefire between Israel and Lebanon, only to close it again this week.
Trump has threatened harder action if negotiations fall apart entirely. Whether that pressure holds or collapses the talks remains the question that global markets — and crypto traders — are watching most closely right now.
Featured image from BESA, chart from TradingView
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The $292 million exploit of Kelp DAO has set off a wave of reactions across the crypto industry, with developers and traders warning that the incident exposed deeper flaws in how decentralized finance (DeFi) is built.
Data shared by market participants shows the immediate fallout spread far beyond the hacked protocol.
“The rsETH hack is leading to withdrawals across all lending protocols, even on solana and unaffected protocols,” 0xngmi said in one post on Sunday, pointing to steep outflows including “Aave: -6,200m (-23%) net inflows” and smaller but notable declines across Morpho, Sky and JupLend. rsETH is liquid restaking protocol Kelp DAO’s restaked ether and is a Liquid Restaking Token (LRT) that allows users to earn ether staking and restaking rewards while keeping their assets liquid, even when they are locked in staking.
That pressure quickly turned into something more severe. One widely circulated post by Josu San Martin described cascading liquidity stress inside lending markets: “ETH depositors cannot withdraw the ETH so they are borrowing stables to ‘withdraw’ funds… This is a full on run on AAVE.”
While Stani Kulechov, Aave’s founder, said the exploit was external and that the protocol’s contracts were not compromised, the depositors panicked. The total value locked (or deposits) dropped from $26.4 billion on April 18 to nearly $20 billion in U.S. morning hours on Sunday, per DefiLlama. The AAVE token also fell more than 18% as depositors scrambled to withdraw their money through the weekend.
Aave token price (CoinDesk)
A ‘case study’
The exploit itself has become a focal point for engineers and developers.
Several developers pushed back on early assumptions that the issue stemmed from core infrastructure. “The KelpDAO exploit (~$290M, is NOT a LayerZero protocol bug. It’s a configuration issue and a case study every project with a cross-chain token needs to look at today,” one technical breakdown by cryptogoblin read.
The thread detailed how a single verification point enabled the attack. “One signature and 116,500 rsETH materialized out of thin air on Ethereum,” the post said, describing a system where “the [smart] contracts weren’t broken. The verification layer was,” the post claimed.
Others argued the problem runs deeper than a single setup choice.
One critique, who goes by Fishy Catfish on X, framed it as a design flaw, alleging that: “there is no security floor… A configuration can be a 1/1 DVN and the DVN you chose can be a single node ran by a single entity.” A DVN (Decentralized Verifier Network) in DeFi, specifically within LayerZero V2, is an independent entity responsible for validating and attesting to the authenticity of messages sent across different blockchain networks. Essentially, DVNs verify message hashes between a source chain and a destination chain.
To make the point clearer, the author drew a real-world comparison: “imagine if a roller coaster manufacturer allowed amusement parks to individually decide what the minimum safety specs were.” Essentially, the author is simply saying that flexibility without guardrails can create hidden risks.
The post went so far as to claim that the setup was the problem within the design. “I personally think this is a flawed design. Modular security is a worthwhile design space, however, the range of security should have a native security floor that is quite strong, and then allow *additional* layering of security on top of that for more high-value use-cases.”
‘DeFi is dead’
It’s not just the amount and complexity of the exploit that drew the harsh, panicked criticism. The scale of the exploit has heightened concerns.
Roughly 116,500 rsETH, about 18% of supply, was affected. The attacker tricked LayerZero’s cross-chain messaging layer into believing a valid instruction had arrived from another network, which triggered Kelp’s bridge to release 116,500 rsETH to an attacker-controlled address.
Protocols responded by freezing markets and pausing features. Aave halted rsETH activity. Lido paused deposits tied to the asset. Other projects took similar steps to limit exposure as the situation unfolded.
Beyond the technical debate, sentiment across crypto turned sharply negative. One post perhaps captured the mood shift in blunt terms: “DeFi is dead… ‘just use aave’ is dead,” while adding that “The age of crypto is over” and asking, “If you’re reading this – why are you still in crypto?”
While the response may sound like an overreaction, that kind of ‘knee-jerk’ reaction is not unusual after large exploits, but the breadth of this event stands out.
The attack affected cross-chain infrastructure, restaking models and lending markets simultaneously. It also follows a string of recent incidents. The hack lands in an unusually hostile stretch for DeFi, particularly this month. Solana-based perpetuals protocol Drift was drained of about $285 million on April 1 in an attack later linked to North Korea-affiliated actors, and at least a dozen smaller protocols have been exploited in the weeks since, including CoW Swap, Zerion, Rhea Finance and Silo Finance.
‘Check your configs’
Despite all the explanations, there are still more questions than answers. For example, how did this happen, and how deep does this contagion run?
It seems like everyone else, even LayerZero, is still trying to figure out the full details of the exploit.
“We’re fully aware of the rsETH exploit and have been in active remediation with the @KelpDAO team since the incident and continue to monitor. All other applications remain safe,” LayerZero said in a post on X. “We are still identifying the root cause alongside @_SEAL_Org and others. We will publish a complete post-mortem with @KelpDAO as soon as we have all information.”
KelpDAO echoed this sentiment. “Earlier today we identified suspicious cross-chain activity involving rsETH. We have paused rsETH contracts across mainnet and several L2s while we investigate. We are working with @LayerZero_Core, @unichain, our auditors and top security experts on RCA. We will keep you posted as we learn more about this situation.”
The responses just go to show how complex the situation is and how widespread this might be.
Even Justin Sun chimed in to stop the contagion. “OK — Kelpdao hacker, how much you want? Let’s just talk. With KelpDAO’s help, of course. It’s simply not worth it to sacrifice both Aave and KelpDAO and let them go down over this hack. You can’t spend $300 million anyway,” he said in a post on X.
Still, some developers see a clearer lesson in the chaos.
The exploit did not rely on breaking encryption or bypassing smart contracts. Instead, it exposed how fragile systems can become when they depend on layered assumptions.
In simple terms, the tools worked as designed. The way they were configured did not.
That distinction may shape what comes next. Builders are now urging projects to review their setups, especially those relying on cross-chain messaging.
As cryptogoblin put it bluntly: “Check your configs. Stay safe out there.”
Read more: DeFi yields are crashing so hard that they can’t compete with a traditional savings account
The average Web3 VC pitch sounds like ours did three years ago. “We have deep relationships across the ecosystem.” “We add value beyond capital.” “Our network is our edge.” It’s not that any of these statements is a lie; it’s that everyone says them, which makes them effectively meaningless.
Liquidity providers (LPs) have heard this pitch so many times that the words have lost all shape. And yet somehow, the industry just keeps photocopying the same deck. Impressive logo slide. Vague thesis. Three bullet points about “value add.” A track record that, for most emerging managers, doesn’t yet exist. Repeat until funded, or not.
My colleagues and I at TBV spent a lot of time asking ourselves what we actually had that no one else did. The answer, eventually, was humbling: not much. So we built something different.
Here’s the thing that the data keeps trying to tell the industry and the industry keeps ignoring: emerging managers actually outperform. Studies consistently show they reach top-quartile performance more often than established funds and deliver materially higher returns on average. The upside is real. The problem is entirely structural — emerging managers can’t communicate a clear reason to clients to back them over others, so capital flows to brands rather than potential.
When we built TBV, we decided the pitch had to be a product, not a promise. The question we kept returning to was: what does a fund actually own? Not who it knows. Connections are not defensible. What has it built, what data has it generated, and what platform value does it create for founders? That’s defensible.
The answer we landed on was events. We weren’t looking for just a networking play or branding exercise. We wanted to develop a people-centric deal engine. Web3 runs on conferences. Everyone already knows this. Founders travel thousands of miles to shake hands at side events. VCs pay enormous sponsorship fees for access to people they could probably have reached by email. The ROI calculus has always been fuzzy at best. What we wanted to do was flip the model: instead of paying for access, build the environment. Own the data. Create the relationships at scale and feed them directly back into sourcing, diligence and value for everyone involved.
In 2025, our event series drew over 43,000 attendees and more than 100 partners. That didn’t happen by accident, and it wasn’t just a marketing stunt. It was deliberate infrastructure. Every interaction, every connection, every emerging trend spotted in those rooms feeds into TBX, our AI-driven deal engine. The events and the fund are the same flywheel.
“We’re not the only ones rethinking this. What’s interesting is how different the approaches are and how few of them look anything like a traditional fund.”
Another VC firm, Outlier Ventures, figured this out from a different angle. They leaned into the accelerator model — building a genuine platform of support around early-stage founders rather than just writing checks and showing up for board meetings. The result is a fund with over 300 portfolio companies and a real reason for founders to choose them over others with just more AUM. Paradigm went in a completely different direction: they got technical. They don’t just invest in protocols; they contribute to them. That kind of depth is genuinely hard to replicate, and LPs can see it.
What these models share, and what the next generation of interesting managers will share, is that the fund itself is a product with utility beyond capital. The question isn’t “how do we tell a better story?” It’s “how do we build something that makes the story self-evident?”
The good news is there isn’t just one answer. The events model works for us. The accelerator model works for Outlier. Deep technical contribution works for Paradigm. What doesn’t work, what has never really worked, and what LPs are increasingly unwilling to pretend works, is a pitch built entirely on relationships you can’t show and value you can’t measure.
Web3 moves fast enough that the managers who build real infrastructure now will be very hard to displace later. The ones still writing decks about their networks in three years will find the room has quietly emptied out around them. I’m genuinely curious to see what other models emerge. Competition in this space, when it’s actually focused on doing something different, is the best thing that could happen to it.
NatWest Group is expanding its investment-focused Financial Foundations programme to 50,000 people in UK workplaces and community groups.
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As part of the bank’s goal to demystify investing, the workshops will be open across the UK from May 2026 to build up financial confidence and financial literacy.
The workshops will aim to support 1,000 people a week, to help 50,000 people in 2026 with free financial guidance. The guidance is available for free to workplaces and community groups nationwide.
The workshop expansion was prompted by the results of a March 2026 NatWest survey, which found that 58% of the 5,000 UK adult participants would be interested in taking part in a financial education session on investing if offered by their workplace.
The first workshop took place in Newark, Nottinghamshire for digital transformation specialists in Barcode Warehouse. At the launch, NatWest CEO Paul Thwaite stated:
“A strong economy needs financial confidence and capability – the knowledge and skills that help people and families budget, save, invest and plan for the future. This is a vital part of our economic infrastructure and is often overlooked. Household saving and investment decisions play a critical role in the economy, yet too many people still feel uncertain or excluded from the knowledge and tools required to successfully make those decisions as part of their long term financial planning.
“Building a stronger culture of financial confidence across the full spectrum, from everyday budgeting and on to saving and investing, starts with education, whether in schools, workplaces or at key life moments.”
As part of the expansion, NatWest is training 300 employees to become facilitators of the workshops, joining the 400 facilitators already working in the programme.
The workshops have been running since 2024. In 2025, 1,500 Financial Foundations workshops took place with over 31,000 participants. Both Financial Foundations and NatWest Thrive, its partner programme for young people, reached one million people.
Alpesh Khakhar, CFO, The Barcode Warehouse, said: “Our colleagues found the Financial Foundations investment workshop extremely beneficial. Even for those with some experience of investing or a good understanding of managing money, the opportunity to have open conversations and receive simple, impartial guidance helped to break down barriers that can exist. We’re looking forward to more of our colleagues across the UK having the chance to take part in future sessions.”
The announcement is part of NatWest Group’s ‘Growing Together’ initiative to support innovators and boost financial confidence through education across the UK.
NatWest also offers confidential Worksite Financial Health Checks to employees of business customers for free. The Checks connect an employee with a trained personal banker to set financial goals, ask questions, and build their financial confidence.
In March 2026, NatWest went live with the digital mortgage platform Pexa.
As readers of this newsletter may be aware, Congress has spent the past few months debating market structure legislation, but crypto policy discussions encompass so many more issues than just the one: taxes, decentralized finance regulations, the midterm election, states and so much more. CoinDesk’s Consensus Miami conference next month is going to examine each of these issues in depth.
You’re reading State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. Click here to sign up for future editions.
This newsletter has noted in the past how significant policy changes around digital assets have become. Last year saw U.S. President Donald Trump sign the first significant crypto-specific piece of legislation. Regulators have completely changed their approach to enforcement actions. Congress has spent the past few months debating not the broad contours of what a market structure bill could look like nor whether we’ll even have a bill, but the finer details of issues like the treatment of stablecoin yield.
In other words: Crypto’s made it.
This was true last year, to be fair. The crypto industry, fresh off of its electoral wins in 2024, took a victory lap as bitcoin’s BTC$74,834.93 price soared to over $120,000 and legislation seemed imminent. Things have soured a little bit this year; crypto prices have been largely stagnant amid broader economic stresses and time is running out for Congress to pass market structure legislation in its current form. It’s not all bad news: regulators have begun proposing rules for stablecoin companies based on last year’s GENIUS Act, lawmakers are seriously considering reforms to U.S. crypto tax policy and it really does seem that this industry has cemented itself to the point where it cannot be dismissed.
So what’s next? The industry’s still seeking tax reform, with a de minimis exemption for crypto transactions, hoping the market structure bill will become law without overly burdening the industry and — of course — looking ahead to November, when the U.S. will pick the next Congress.
We’ll be picking up these threads next month at Consensus Miami, our annual shindig bringing together basically everyone.
You’ll hear from leading lawmakers like Senators Kirsten Gillibrand and Ashley Moody, regulators like CFTC Chairman Mike Selig and the White House point man on crypto Patrick Witt, and Congressional staffers across the three-day conference. Congressman Steven Horsford (D-Nev.), who recently introduced a new version of the Parity Act to address crypto taxations, will participate in a discussion about the bill. We’ll also host a meetup for folks interested in chatting about the election or just generally about the policy landscape.
And we are bringing back the Policy & Regulation Summit: an entire day, and an entire stage, dedicated to exploring key policy and regulatory issues in-depth.
The policy summit is designed to explore some of the biggest questions lawmakers, regulators, compliance officers and/or builders have to answer right now, including whether or how decentralized finance can comply with anti-money laundering rules, how to deal with taxes in the new 1099-DA era, what the deal is with the Clarity Act and how states are approaching this sector.
We’ll have an entire series of sessions focused on the 2026 midterm election, including how the crypto industry is engaging with the election and what we can expect next year when the new Congress takes over.
Along the way, we’ll hear from folks deeply embedded in the policymaking process, such as SEC Crypto Task Force chief Taylor Lindman, former IRS officials Seth Wilks and Raj Mukherjee and the National Futures Association’s Lucy Hynes, among so many others.
We’re going to close the Policy Summit — and all of Consensus really — with a debate on one of the biggest topics in the country right now: prediction markets. Are they just gambling? Or are prediction markets a novel financial instrument? And who should regulate these products?
These questions are likely to wind up before the U.S. Supreme Court, but we’re going to preview the arguments for you on May 7. Come on through (discount code in the link) and say hi.
Tuesday
14:00 UTC (10:00 a.m. ET) The Senate Banking Committee will hold the nomination hearing for Kevin Warsh, Donald Trump’s pick to helm the Federal Reserve.
If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at nik@coindesk.com or find me on Bluesky @nikhileshde.bsky.social.
You can also join the group conversation on Telegram.
