July was dominated by the question of whether regulation will come about anytime soon. The Clarity Act came within days of a Senate vote before being put off for now, the SEC signalled it stands ready to write crypto rules itself if the legislation flounders, and the sector's remaining disputes hardened into litigation, from New York's $36 billion suit against Kalshi to CME's fight with the CFTC over perpetual futures. Lastly, Vitalik Buterin laid out a rebuild plan of Ethereum that he places on par with the Merge in terms of importance.
The Clarity Act came closer to a Senate vote than ever before, and then stalled. Mid-month, President Trump agreed to an ethics provision that had been the key sticking point, clearing the way for the Senate to release its latest draft: a version that added protections for software developers and an ethics section limiting how presidents, vice presidents and members of Congress can profit from digital assets while in office. The concession came with a catch, as the ethics section carries a sunset clause stripping it of any force from noon on January 20, 2029. Democrats pushed back, arguing the guardrails were too weak to address the president's own crypto interests (which he has publicly and significantly benefited from), and with the chamber needing to vote by the first week of August, the Senate put the bill off to focus its limited bandwidth elsewhere. The delay came just as institutional support peaked: BlackRock, Fidelity, Franklin Templeton, Goldman Sachs and SoFi publicly backed the legislation on market-certainty and competitiveness grounds, though all five stayed silent on the contested ethics provision, with Goldman's David Solomon acknowledging the bill's imperfections while urging passage regardless. SEC Chair Paul Atkins responded to the impasse by saying the agency stands ready to provide crypto rules itself if the Act flounders, a reminder that the regulatory map will be drawn with or without Congress. Separately, federal regulators missed the GENIUS Act's one-year deadline for finalising stablecoin rules, leaving the sector's most consequential legislation of last year without its implementing framework.
The dispute between CME and the CFTC over on-chain perpetual futures carried on through the month, with CME holding to its position that the products the agency approved as futures are legally swaps and should be regulated as such. The Hyperliquid Policy Center and Phantom entered the debate from the other side, urging the CFTC to stop treating on-chain protocols like traditional brokers and exchanges.
The legal conflict for prediction markets continued in the month of July. The state of New York sued Kalshi over illegal gambling claims, seeking $36 billion in damages. The industry scored a countervailing win in Minnesota, where a federal judge blocked the state's prediction-market ban, at least temporarily. Not just in the USA, but also in Europe, France blocked Polymarket as an information source, a move the platform said surprised it and that it plans to challenge in court. Polymarket is also facing pressure from its own users, with two traders suing the company over a market on whether Strategy would sell bitcoin by the end of May: Strategy disclosed selling 32 BTC inside the window, but the market resolved to No on the grounds that the sale was not publicly confirmed in time, which the plaintiffs call a retroactive rule change, a scandal which largely populated the public discussion when it happened and which underlined that how these venues resolve contested outcomes is becoming as much a legal question as a technical one. On the product side, Coinbase's prediction market volumes doubled in the second quarter alongside record trading market share. Coinbase has always been known for being a compliant player in the space. The fact that Coinbase is also adopting prediction markets while the legal battles are ongoing is worth keeping in mind as the legal discourse progresses. One of the largest wallets, Phantom launched a Solana-based prediction market app inside its wallet, which also received CFTC’s approval to act as a frontend for Hyperliquid trading. Hyperliquid announced that its version of prediction markets, HIP-4 outcome markets, will open to permissionless deployment in a future upgrade: validators will vote on standardised outcome templates enforced on-chain, deployers will stake 500.000 HYPE that can be slashed for poorly defined markets or failure to settle within a week, and each deployer will initially receive an allocation of 100 outcomes with fees of up to 50% on their markets, though Hyperliquid stressed the details remain preliminary and subject to community feedback. The design extends the playbook that built Hyperliquid's permissionless perpetuals into the fastest-growing corner of the market.
Robinhood Chain launched on mainnet, built for real-world assets and carrying tokenised stocks that trade around the clock. Uniswap deployed a dedicated AMM as the chain's primary public liquidity venue, eligible users in selected jurisdictions gained access to perpetual futures through the Ethereum-based exchange Lighter, and Robinhood Earn lets users lend the USDG stablecoin from a self-custody wallet at an estimated 7% yield, with lending infrastructure powered by Morpho and insurance arranged through Lloyd's of London. The traction was immediate: within two weeks the chain was drawing an estimated $3 billion in weekly DEX volume, already among the top five chains. Most of the volume has come from memecoin trading from existing crypto users, something which was ironically largely frowned upon previously by Vladimir Tenev, CEO of Robinhood. Robinhood has always made it clear the main appeal for them was the potential of RWAs and tokenization. We are yet to see now if they will be successful in preserving activity at the same scale, coming from their non-crypto users and beyond memecoins, as they look towards tokenized products. The space of tokenized products still progresses as Securitize, one of the largest tokenization providers, began trading on the NYSE as its tokenised shares landed on Solana and Avalanche. New York Life's asset-management arm made its first tokenised move, launching a high-yield corporate bond strategy with Centrifuge that settles subscriptions and redemptions in USDC. Ondo launched a new execution network it describes as an evolution of Ondo Chain. And on Hyperliquid, trading volume in tokenised stocks overtook the platform's crypto markets for the first time, which can also be attributed to the shrinking crypto trading volumes akin to the ones in a bear market. Jito joined the venue buildout with JTX, a self-custodial platform for professional traders on Solana that spans spot crypto and tokenised real-world assets such as equities and exchange-traded funds.
DeFi's front end is consolidating around packaged yield. Aave Labs released Stable Vaults, an infrastructure that lets fintechs, wallets and exchanges embed predictable stablecoin earnings into their products. Uniswap launched Earn with Morpho to put idle assets to work, while its governance moved to final votes on activating v4 protocol fees and extending fees to Robinhood Chain, both routing revenue into the UNI burn. Galaxy introduced GOFR, a fully managed borrowing product that blends the variable rates of Aave, Morpho, Spark and Kamino into a single continuously rebalanced rate, with Galaxy as sole counterparty, up to $100 million of its own capital as first-loss protection and a $1 million minimum loan. Morpho itself launched Midnight, a fixed-rate lending protocol on Base whose positions share maturities and remain fungible, allowing early exit and late entry without fragmenting liquidity.
The SEC noticed. Commissioner Hester Peirce issued a statement warning that on-chain vaults and lending strategies may implicate federal securities laws in several ways: vaults can represent a common enterprise under the Howey test, may drift into investment-company territory if they hold or allocate into securities, and on-chain loans can bear the hallmarks of notes that are securities. She stressed the agency will treat these vehicles case by case rather than imposing a blanket ban, but the message to vault builders was unambiguous, and it lands squarely on the product wave described above. Still, the SEC has remained rather fair in its judgement of blockchain technology. If specific products are truly permissionless, they will not be hindered. The message has been clear so far: crypto and DeFi offer genuinely unique products, but they may not be used as a mask for what is otherwise a clearly identifiable, regulated product.
Vitalik Buterin published his takeaways from Ethereum's updated long-term roadmap, describing the multi-year Lean Ethereum effort as the third major iteration of the network, on par with the Merge, in which almost every major piece of the protocol will be replaced over three to four years without breaking existing applications. The most disruptive change is to storage: Ethereum today keeps all state data in a single, expensive-to-maintain format, and the plan would preserve that system for complex applications while adding a cheaper tier for simpler ones. Quantum safety has moved sharply up the priority list, with the most urgent work a quantum-safe design for blobs, the temporary data layer that keeps Layer 2 fees low. Privacy is now framed as a first-class goal rather than an afterthought, and network capacity is set to keep rising steadily over roughly the next five years through a large gas limit increase.
The institutional side of the ecosystem kept organising itself. The Ethereum Foundation's privacy team spun out as EthSystems, a for-profit company backed by Joe Lubin and the ETH treasury firms BitMine and SharpLink, the same group that stood behind Ethlabs's launch in June. The company builds confidential systems that let banks and asset managers transact on Ethereum without exposing positions or client identities, likely using zero-knowledge cryptography, extending the push to give institutions a production-ready path onto the network.
Quantum preparation, meanwhile, is spreading beyond Ethereum: BlackRock, Coinbase and Strategy joined a group pledging $15 million to a new Bitcoin Security Consortium preparing Bitcoin for quantum threats. What was a research concern a year ago is now a funded workstream on both major chains.
Axis opened its Origin Vault to public deposits at the end of the month and filled the initial $50 million cap within 22 hours. The speed of the capacity being filled reflects what is being built underneath. Axis is a quantitative asset management protocol constructing on-chain liquidity infrastructure for the tokenised finance era: at its core is USDx, a yield-bearing stablecoin backed by a diversified engine of delta-neutral arbitrage strategies that runs across venues, leaning on the basis trade alongside CEX-DEX arbitrage, cross-exchange spot arbitrage and cross-currency spreads, reallocating between them in real time, with sUSDx passing that blended yield through to holders. The high-yielding product is the entry point, but the longer-term ambition is infrastructure: an engine that extends outwards into pricing, execution and liquidity provisioning for the tokenised assets still arriving on-chain, in a market where liquidity remains fragmented across chains, venues and jurisdictions. The team behind Axis comes from Alphanonce, with a hedge fund track record that peaked at $400 million in AUM.
In the prediction market space, Gondor unveiled v1 of its lending platform for prediction markets, moving from loans against individual Polymarket positions to cross-margining across a user's entire portfolio. Individual positions are extremely hard to price as collateral while keeping borrowing rates attractive because of their jump-risk property: prediction markets can resolve to 0 or 1 very quickly, and the moves are often fuelled by informed flow. This cross-margin model extends more credit at lower rates, supports a wider range of markets and lets borrowers hold positions through resolution, mirroring how prime brokers extend credit against diversified books. Private testing was set to begin in late summer, ahead of a public launch expected in September, timed well for a prediction-market sector whose volumes keep setting records.
Thea raised $8 million to expand its predictive AI infrastructure and build a coordination layer. Plenty of companies collect behavioural data; it is what someone does with the data that defines its value. Transferring data into desired outcomes is a hard-to-reach skill, especially in high-paced and highly-volatile economic environments where user behaviour and risk change by the minute. Thea has managed to do so with behavioural models trained on more than 35 billion real-world decisions for the past 10 years, and already serves over 3.000 enterprise customers across more than 30 jurisdictions; the upcoming THEA Network will coordinate inference requests, accounting and settlement for AI-native services on-chain.
