Weekly Crypto Market News: DeFi Infrastructure, Regulation & Capital Flows

December 22 - 28, 2025

Executive Summary

  • Deal flow was dominated by Erebor’s $350M raise, with smaller rounds spanning perps infrastructure, stablecoin payment rails, and onchain trading products. M&A activity focused on regulated onchain prediction markets and cross chain ecosystem consolidation.
  • This week saw Solana roll out gasless transactions, Uniswap approve protocol fee activation, GMX deploy on Ethereum, Gnosis Chain execute a recovery hard fork, and Resolv launch delta neutral altcoin markets.
  • Compromised Trust Wallet Chrome extension update led to USD 7 million in losses, triggered over 2,600 user claims, and forced Binance to step in with reimbursement and security upgrades.
  • USX traded as low as $0.74 on Solana DEXs due to thin onchain liquidity and a permissioned redemption model, while an out of cycle proof of solvency snapshot indicated that the system remained over 100% collateralized.

Venture Capital & M&A Pulse

Headline: 9 projects raised $396M total.

Top Raises

  • Erebor ($350M) - Tech and digital asset banking startup co-founded by Palmer Luckey
  • Architect ($35M Series A) - CEX for perpetual futures on traditional asset classes
  • Coinbax ($4.2M Seed) - Programmable trust layer for stablecoin payments
  • easy.fun ($2M Seed) - Onchain trading arena built on Hyperliquid
  • Rocket ($1.5M Pre-Seed) - Prediction market built on MegaETH

M&A Highlights

Emerging Themes

  • No dominant theme identified.

Activity spans banking, perps, stablecoin payments, prediction markets, and Bitcoin-native ecosystems, but does not converge into a single, defensible theme.

DeFi Launch Radar

Protocol & Chain Releases

Solana introduced gasless transactions, enabling apps to sponsor fees and abstract UX friction for end users.

BNB Chain announced plans to launch a native stablecoin to support payments, DeFi liquidity, and onchain settlement.

A Movement based blockchain migrated from an L2 to a standalone Move based Layer 1 with a dedicated validator set, native MOVE staking, and support for Move 2.0, targeting 10k plus TPS.

New Feature Rollout

Governance approved protocol fee activation with a 100M UNI burn; interface fees to be captured by Uniswap Labs, LP economics unchanged.

Added Anchorage Digital as a USDe custodian, increasing regulatory oversight and custody diversification.

GMX went live on Ethereum mainnet, enabling perp trading, spot swaps, and liquidity provision without bridging.

Reduced perp funding rates by applying a 0.5 scaling factor to Hyperliquid’s funding formula, lowering baseline funding to ~5.5 percent annualized.

Ecosystem Expansions

Assistance Fund HYPE formally recognized as burned following validator vote, reducing circulating and total supply.

Executed a hard fork to recover funds from the Balancer exploit, removing assets from attacker control.

Launched a delta neutral Altcoin Cluster starting with HYPE and SOL, fully hedged via Binance and Hyperliquid and targeting 10-15 percent neutral yields.

Token Launches

  • **Solstice | **SLX

Token sale raised $923K for 5% of supply, falling short of target amid high FDV and weak holiday demand.

Token Unlocks & Airdrops

Token Unlocks

According to [Tokenomist](https://tokenomist.ai/" \t "_blank):

  • Large cliff unlocks (single unlocks exceeding $5 million) scheduled over the next 7 days include HYPE, SUI, EIGEN, KMNO, OP, ENA, ZORA, and SVL.
  • Large linear unlocks (daily unlocks exceeding $1 million) over the same period include RAIN, SOL, TRUMP, WLD, DOGE, AVAX, and ASTER.
  • The total value of tokens set to be unlocked exceeds $585 million over the next 7 days.

Airdrops

Introduced a three-point airdrop framework tied to lending activity, protocol usage, and community engagement, with 15% of supply allocated to TGE rewards.

oDOLO emissions activated for suppliers across multiple assets including USDC, ETH, WBTC, and stablecoins.

Last Week Highlights

Trust Wallet Breach

Trust Wallet’s Chrome extension experienced a security failure that allowed attackers to drain roughly USD 7 million in user funds over the Christmas period. The incident was limited to desktop extension users on a compromised version, but it raised broader questions around browser wallet risk, software supply chains, and how far CeFi parents will back “self-custody” products.

Supply Chain Backdoor

The breach originated from a malicious release of Trust Wallet’s Chrome extension (v2.68), pushed via a leaked Chrome Web Store API key that let an attacker bypass normal publishing controls. Once installed, the modified code accessed users’ recovery phrases after they unlocked or imported wallets, decrypted them using the local password, and exfiltrated keys to an external server.

With seed phrases compromised, attackers could recreate wallets and systematically empty assets across chains, routing funds through exchanges and bridges to obfuscate flows. Trust Wallet responded by shipping v2.69, removing the malicious logic, adding detection banners for affected wallets, and instructing users to rotate keys and abandon exposed addresses.

User Impact

Direct user impact centers on approximately USD 7 million in stolen assets and a surge of more than 2,600 compensation claims, far above Trust Wallet’s normal support load. Affected users face forced wallet migration, operational disruption, and elevated phishing risk as attackers and impersonators target the incident’s publicity.

Binance, as Trust Wallet’s owner, has committed to reimbursing losses via its protection reserves while the wallet team operates a structured claims and verification process. The response helps contain reputational damage but also reinforces that browser extensions are a structurally weaker surface than hardware or mobile wallets, which may drive user funds toward more security-focused custody setups and raise the bar for wallet release governance across the ecosystem.

Solstice, USX Depeg, and the SLX Token Sale

USX Secondary Market Dislocation

On December 26, Solstice’s native stablecoin USX experienced a sharp dislocation in secondary markets, briefly trading as low as $0.74 on Solana DEXs including Orca and Raydium. The was driven by sell orders that materially exceeded available on-chain depth.

Price action was confined to secondary markets. There was no evidence of protocol insolvency, collateral impairment, or NAV deterioration. However, the severity of the move exposed weaknesses in the way USX’s peg defense mechanisms function under stress.

Peg Defense Design and Why It Failed

USX is designed to maintain its peg through a combination of balance sheet backing, market maker liquidity, and primary market redemptions at par. In normal conditions, discounted USX should be arbitraged back to $1 by participants buying on DEXs and redeeming through primary channels.

In practice, this mechanism failed for two reasons:

  • First, DEX liquidity was small relative to the size of sell pressure. Available liquidity on Orca and Raydium was insufficient to absorb aggressive market selling, leading to rapid price deterioration once pools were exhausted.
  • Second, primary redemptions are permissioned, not permissionless. While Solstice confirmed that 1:1 redemptions remained available, access was limited to approved counterparties. Most public market participants could not redeem USX at NAV in real time, breaking the arbitrage loop precisely when it was needed most.

As a result, USX traded purely on secondary market supply and demand during the event. Stabilization only occurred once Solstice and its market making partners injected liquidity directly into affected pools.

Solvency, Collateral, and Third-Party Verification

Despite the severity of the price dislocation, all available evidence indicates that USX remained solvent throughout the episode. Solstice stated that protocol collateral was unaffected, which was corroborated by Accountable, an independent verification provider, which published an out-of-cycle proof of solvency snapshot during the event:

  • Total USX supply was approximately $318 million
  • Total protocol reserves were approximately $320 million
  • The system remained over 100% collateralized, with a collateral ratio around 100.6%

All reserves were fully verifiable

SLX Token Sale Context

The USX volatility occurred against the backdrop of Solstice’s SLX public token sale, compounding scrutiny at an already sensitive moment.

The SLX sale was structured to distribute up to 5% of total token supply at a valuation implying roughly $130 million FDV. The stated goal was not fundraising necessity but broader distribution to long-term aligned holders, with Solstice emphasizing that the protocol is fully funded internally and supported by Deus X Capital.

Demand for the sale was weaker than expected. The allocation did not fully clear, and unsold tokens from the public allocation are expected to return to the Solstice treasury rather than being redistributed.

Following the sale, Solstice announced several changes:

  • 100% unlock at TGE for sale participants
  • A 14-day full refund window for anyone who no longer wished to participate
  • Confirmation that the SLX TGE remains targeted for Q1 2026, with listings and integrations still pending

Perception Risk

A key source of community backlash stemmed not from solvency concerns, but from asymmetric access during the depeg. During the dislocation:

  • Public holders were forced to sell at steep discounts
  • Only a limited set of approved entities could redeem at par
  • Price recovery depended on discretionary liquidity injection rather than open arbitrage

There is no disclosed evidence that Solstice or its market makers profited from buying discounted USX and redeeming at NAV. However, the structure itself allows for that outcome in theory, which is sufficient to damage trust in open markets.

This dynamic highlights a broader tension in institutional-styled stablecoins operating on public blockchains. Permissioned redemption models can function well in calm conditions, but under stress they introduce:

  • Broken arbitrage loops
  • Liquidity cliffs
  • Perceived conflicts of interest, even absent misconduct

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