🔍Fastest-growing DeFi sectors
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GM friends.
Here’s what I’ll cover today:
🔎The fastest-growing DeFi sectors
📊 Crypto chart of the week
🗞️ The latest DeFi news
🔎The fastest-growing DeFi sectors
Despite the market conditions, some DeFi apps are still doing extremely well.
I’ve been looking over the past few days at what DeFi sectors have been gaining the most traction lately, and thought it would be useful to share my findings.
Let’s get into it:
1. RWA perps
The success of Hyperliquid’s HIP-3 RWA markets certainly exceeded expectations.
It’s been 8 months since their launch, and the HIP-3 daily volume already regularly exceeds $2–3 billion, with especially strong demand for commodity perps.
I think that an underrated tailwind for this was the Trump administration's habit of making major announcements right after traditional markets closed on Fridays. With no way to hedge or open trades until Monday morning, some TradFi investors started using Hyperliquid's 24/7 RWA perps to act immediately.
Hyperliquid had the first mover advantage by being the first major protocol to offer 24/7 RWA perps, and it benefited a lot from this.
Over time, I expect the competition in the RWA perps sector to intensify.
But for now, Hyperliquid is clearly the biggest winner in this field.
2. On-chain neobanks
On-chain neobanks is the sector that I am personally most excited to see grow.
The reason why I am saying this is that, unfortunately, some banks make the crypto offramping process a nightmare.
On-chain neobanks solve this, letting you spend your crypto easily without dealing with a traditional bank. And they have gotten drastically better over the past few months in terms of user experience.
So far, the on-chain neobank I’ve used the most is EtherFi Cash.
What I like is that it offers a wide range of features, including up to 3% cashback, support for bank transfers, an Earn product, and a borrowing mode that lets you spend cash by borrowing against your crypto.
But there are also many other cool on-chain neobanks, such as UR, Avici, Holyheld, and Gnosis Pay. Plenty of options to choose from.
3. Tokenized stocks
Tokenized stocks have always been a hot topic on CT, but only recently they have started to gain significant traction, as you can see in the chart above.
The biggest reason for this, in my opinion, is the lack of liquidity. No one wanted to buy a tokenized version of a stock when you had to pay a huge slippage to do it.
Fortunately, projects like Ondo and xStocks solved this issue.
For instance, when you buy a tokenized stock issued by Ondo on its app, the protocol uses an RFQ model in order to access TradFi liquidity and avoid AMM slippage.
In this way, Ondo can offer 200+ tokenized stocks and ETFs with very deep liquidity. And I think this is why Ondo managed to become the largest on-chain stocks issuer.
Right now, the functionality of these on-chain stocks is limited to just holding them or borrowing against some of them on apps like Morpho.
But I expect tokenized stocks to become more integrated into DeFi over time.
4. Yield-bearing stablecoins
Yield-bearing stablecoins still represent a pretty small portion of the stablecoin sector.
Yet without a doubt, they have seen tremendous growth over the past few years, and I expect them to continue to take market share from Tether and Circle.
The largest yield-bearing stablecoin app (also the fastest-growing at the moment) is Sky. The supply of its USDS stablecoin surged from $6.49B to $11.7B in Q1 2026 alone.
However, the competition in the yield-bearing stablecoin sector is fierce.
There are over 100 dApps in the stablecoin sector per DeFiLlama, and new ones like Apyx, Altura, Re, and Solstice have also been gaining traction. That’s a good thing, though, as high competition will inevitably lead to more innovation.
Pendle is one project that benefits from this, as it has established itself as the go-to place for fixed stablecoin yield.
With that said, those are all the sectors I wanted to cover.
Overall, I think these are some of the most promising areas in DeFi right now because they’re built around products people genuinely want to use.
When the market conditions finally improve, the protocols that capture the most value from these trends will probably be among the biggest winners.
Together with Altura
Earn a double-digit yield + incentives on stablecoins
A new stablecoin protocol that has been gaining traction lately is Altura.
While most DeFi yields collapsed when the bear market came, as they relied mostly on token emissions, Altura is offering 19,38% APY in real yield right now.
This yield is generated by Altura by deploying capital across four strategies: funding rate arbitrage, basis arbitrage, market making, and physical gold arbitrage.
On top of that, Altura has also recently announced some nice incentives:
AVLT holders qualify for rewards in $ALTU, Altura’s native token, by simply holding AVLT in their wallet (in addition to the base APY)
$100K in incentives (in ALTU + AVLT) is being distributed this month under its YieldRun program, rewarding ecosystem participants
USDT depositors in the AlphaUSDT Prime vault on Morpho are currently getting 6,03% in vault APY + 5.94% APY in USDC incentives from Altura
Altura is incentivizing USDT lenders in the AlphaUSDT Prime vault as it accepts AVLT as collateral. In the first 30 minutes, this vault crossed $0.5M in TVL.
If you wish to loop AVLT for a higher yield, you can also do that by borrowing USDT from this Morpho vault. Right now, the borrowing rate is 7.34%.
To provide transparency into its yield-generating strategy, its team has launched a proof of solvency dashboard on Accountable.
Furthermore, you can find a breakdown of its strategies on its Strategies page.
Chart of the week
Phantom generated $20M+ from its perps product powered by Hyperliquid
Crypto meme of the week😂
The latest developments in DeFi
Ethereum Foundation released an upgrade making on-chain transactions human-readable
Hyperliquid made USDC its primary collateral asset after reaching a revenue-sharing deal with Circle
MegaETH started doing token buybacks with its revenue from USDm usage
Aave’s proposal to allow borrowing against native BTC on Aave V4 is live
Extended enabled trading perps with wBTC and ETH as collateral
iExec introduced Confidential Vaults - active DeFi strategy vaults with built-in privacy. The product offers a selective disclosure feature for auditors.
Starknet launched strkBTC, a privacy-focused Bitcoin asset
EtherFi released the EURC Liquid vault, enabling users to earn yield on euros
Osero, a new stablecoin savings app, raised $13.5M in a funding round led by Sky Protocol and Plasma. Osero is incubated by Stableswatch
Papertrade, a new perps DEX built on Hyperliquid with 1000x leverage, 0 slippage, and no funding costs, was introduced
Kamino and Jupiter launched USDe looping strategies with 25%+ APY
Coinbase and Circle announced that they bought and staked HYPE
Solana’s Alpenglow, its biggest scalability upgrade ever, went live in a testing phase
Circle raised $222 million for building Arc, its own blockchain.
Injective launched on-chain pre-IPO stocks for OpenAI, SpaceX, and Anthropic
Solstice scheduled its token launch for May 21
That’s all for this week!
Until next time,
The DeFi Investor
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