Onchain privacy has been ‘almost here’ so many times that the claim stopped landing. This year, against all precedent, it might actually arrive.
In the past few months, the pieces have started falling into place. Zama and Aztec hit mainnet. Vitalik made privacy a top strategic priority for Ethereum. And for networks like Canton and Tempo, confidentiality has become a major selling point.
This week added two more entries:
Base launched Base Privacy, letting enterprises hold balances and move funds on private ledgers, hidden from public explorers.
And Zama shipped its first DeFi integration: a way to deposit USDC into Steakhouse’s USDC Prime vault on Morpho without revealing how much you put in.
The second one is particularly interesting.
Until now, onchain privacy came with a tax: you either bootstrapped liquidity in a walled-off ecosystem or swallowed brutal UX. Zama's vault avoids both by plugging into one of Ethereum's deepest vaults, using a simple trick: batching.
Rather than depositing your confidential USDC straight into the public vault, which would print your amount onchain, you join a temporary pool with other users. The system deposits the group's combined total, then splits the shares back out privately. Your position earns yield like any other, and the chain only ever sees that you joined the batch, not how much you brought.
It opens June 23, and it likely isn't the privacy endgame. Zama says so itself: batching shields you from passive observers, not from a well-funded adversary willing to flood a single batch.
Still, the direction is hard to miss. Between this and the momentum across RWAs, stablecoins, and lending, it's getting hard not to be excited about DeFi again. In private, of course.
In today’s Briefing:
Ethena partners with Janus Henderson and Coinbase
Binance set to lose access to European market
HIGH SIGNAL NEWS
Coinbase introduces new product updates. At the firm's System Update event, the exchange announced several initiatives, including pre-IPO perpetuals, tokenized stocks on Base, and Coinbase Advisor, an SEC-registered, AI-powered investment advisor. 🔵
Binance set to lose access to the European market. According to Reuters, Greece’s market regulator is expected to reject the crypto exchange’s MiCA license application, leaving Binance without authorization to serve European customers. ❌
State Street targets stablecoin issuers with new fund. Dubbed the “State Street Stablecoin Reserves Money Market Fund,” the fund is designed for stablecoin issuers operating under the framework established by the GENIUS Act. With the launch, State Street joins JPMorgan, Morgan Stanley, and BlackRock, which have introduced similar products in recent months. 💸
Keyrock secures MiCA license. The license was secured through the group’s French entity, Keyrock FR SAS, allowing the firm to expand its products and services across the EU. 🇪🇺
TOP STORY
Ethena Bridges DeFi Yield and Wall Street Credit
Announcement spree: Over the past two weeks, leading DeFi protocol Ethena has announced major partnerships with Coinbase, asset manager Janus Henderson, and tokenization platform Securitize. Together, the initiatives diversify the reserve backing of Ethena’s synthetic dollar, USDe, while expanding its distribution across both retail and institutional investors.
Why it matters: The flurry of activity marks the execution of a strategic expansion Ethena first outlined two months ago. As Blockstories covered at the time, the fifth-largest stablecoin issuer set out to broaden USDe’s collateral mix beyond crypto-native yield sources such as DeFi lending into new asset classes, including institutional lending and real-world credit. That broader collateral mix is meant to lift the underlying yield of staked USDe and reverse a sharp contraction in supply, with USDe’s outstanding supply down nearly 70% since October 2025.
Top-5 stablecoins, their current market caps, and supply change since October 1, 2025
From T-Bills to CLOs: The first asset category Ethena has now added to USDe’s backing is AAA-rated collateralized loan obligations (CLOs), structured debt products backed by pools of corporate loans. According to the team, the appeal of these instruments lies in their deep liquidity, zero default history, and low duration risk.
“Every RWA is evaluated against four strict criteria: liquidity, credit quality, drawdown profile, and pricing transparency. AAA CLOs clear them. They sit at the top of the CLO capital stack, the tranches are floating-rate, so the positions carry effectively no duration risk, the asset class has a zero default rate at the AAA level across the entire history of modern CLO issuance, and the U.S. AAA CLO market is one of the most liquid in finance, around $500 to $600 billion outstanding,” Ethena told Blockstories.
First allocations: That CLO exposure has flowed into two products: STAC, issued by tokenization firm Securitize, and JAAA, managed by $480 billion asset manager Janus Henderson. Together, the two allocations have brought the RWA-backed share of USDe’s reserves from 0% to 11%.
Institutional backing: The partnership with Janus Henderson, however, goes beyond reserve allocations. The asset manager will also allocate to USDe for treasury cash management and explore distributing USDe to its client base through exchange-traded products, alongside a strategic investment in Ethena’s ENA token.
Retail distribution via Coinbase: While Janus Henderson opens up the institutional channel, the Coinbase partnership widens the retail one. Coinbase has launched a new High Yield USDC Vault on its exchange, curated by Steakhouse Financial, that lets Coinbase users earn yield on their USDC. The vault generates that yield by lending USDC to borrowers who post Ethena-powered assets as collateral, which typically pay a premium over loans secured by blue-chip crypto like BTC and ETH. It sits alongside Coinbase’s existing Prime USDC Vault as a higher-yielding alternative for users willing to take on additional risk.
Outlook: According to the Ethena team, the focus for the next 6 to 12 months is twofold: first, to grow AUM through additional distribution partnerships; second, to broaden USDe’s exposure to high-quality fixed income categories with risk profiles distinct from CLOs.
"These may include, but are not limited to, investment-grade corporate bond funds, diversified short-duration credit funds, and structured credit products with strong liquidity," the Ethena team added.
Victor Child-Jauvert is Head of DeFi at Spiko, a Paris-based RWA issuer with $1.8 billion in assets under management.
What do partnerships like Ethena’s deal with Janus Henderson offer each side, and who holds the stronger hand in negotiations?
The benefits for both sides are relatively clear. For Janus Henderson, Ethena offers access to DeFi distribution and a billion-dollar balance sheet that can direct large tickets into its products, helping accelerate AUM growth for its tokenized funds.
For Ethena, the partnership addresses a different need: yield that is decorrelated from the crypto cycle. Their exposure has largely been built on crypto-carry strategies, so the priority now is diversification with credible, institutional-grade sources that can support it at scale. Few issuers and strategies meet those criteria, and on top of that, Janus Henderson brings brand recognition and institutional credibility.
This is why I would not frame these negotiations as one side clearly holding leverage over the other. And the relationship is better understood as mutually reinforcing rather than purely transactional.
As Ethena diversifies its backing and improves the resilience of its yield sources, it can become more attractive to users and grow its reserves. That growth creates more capital to allocate into RWAs, which in turn supports issuer AUM growth and may encourage further product innovation. Over time, this broadens the RWA backing universe for protocols like Ethena, making the reinforcing loop between DeFi protocols and traditional issuers likely to persist.
Matt Fiebach is Co-Founder at Entropy Advisors, a consulting and protocol strategy agency working exclusively with the Arbitrum DAO. The firm also operates one of the most comprehensive data dashboards on Ethena and USDe.
What is the rationale for a player like Coinbase to partner with Ethena on an earn product?
Given the timing, the partnership is largely about the market structure created by the GENIUS Act. If compliant stablecoin issuers cannot pay yield directly on idle balances, both issuers and distribution platforms need other ways to make stablecoins more attractive to users.
Earn products are one way to do this. Platforms such as Coinbase can let users deploy stablecoins into lending vaults, where those assets are lent out against collateral such as USDe or sUSDe. The yield is then passed back to users, but generated through lending activity rather than paid by the stablecoin issuer directly.
This creates a clear incentive for platforms and issuers. Platforms such as Coinbase can make stablecoin balances stickier, which is especially relevant when they earn interest on reserves tied to stablecoins held on their platform. At the same time, compliant issuers can turn their stablecoins into the funding asset for yield strategies, supporting demand without paying yield directly.
The result is a market structure in which yield-bearing stablecoins become key infrastructure for compliant stablecoin growth. And Ethena is well positioned here because it has the scale, liquidity, distribution, and track record needed to support meaningful flows and attract new issuers entering the space.
Aave Labs: Head of Risk, London 🇬🇧
Bitpanda: Lead, Product Manager, Vienna 🇦🇹
Galaxy: Head of Market Data, London 🇬🇧
Kaiko: Research Analyst, Paris 🇫🇷
Kraken: Sr Product Manager - Onchain, Switzerland 🇨🇭
Morpho: Chief of Staff, France 🇫🇷
Robinhood Markets: Crypto Product Compliance Lead, London 🇬🇧
Taurus: Product Manager, Switzerland 🇨🇭
Trace Finance | $32 million | Series A : Infrastructure provider for cross-border banking and payments.
El Dorado | $9 million | Series A : Latin American cross-border payment app.
What do you think of today's briefing?
Disclaimer: The information provided in the Crypto Briefing by Blockstories does not constitute investment advice. Accordingly, we assume no liability for any investment decisions made based on the content presented herein.
