Aave’s founder is doubling down on Ethereum

10 Years In, Here's Why Aave's Founder Isn’t Done Betting on Ethereum

On Ethereum’s 10th anniversary, Aave founder Stani Kulechov says the “DeFi mullet” is the future of finance.

Ethereum just turned 10, and Stani Kulechov, founder of Aave, one of the earliest and most influential lending protocols in DeFi, is more bullish on the OG layer 1 blockchain than ever. 

In this wide-ranging interview, he reflects on Ethereum’s resilience, explains why Aave is still laser-focused on it despite the rise of competitors like Solana, and gives us a preview of Aave v4 and its institutional play, Horizon. 

If you want to understand where DeFi is going, you’ll want to hear what Stani has to say.

Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform.

Now, let’s get into this week’s news! In today’s edition:

• 📜 White House drops a massive crypto report — 168 pages of rules and signals

• 🛠️ SEC kicks off “Project Crypto” to bring markets onchain

• 🏠 New bill says crypto could help you qualify for a mortgage

• 📈 Coinbase goes all-in: tokenized stocks, predictions, early token sales

• ⚖️ DOJ backs off Dragonfly charges in Tornado Cash trial twist

• 🔁 SEC approves in-kind redemptions — ETFs now closer to crypto-native

• 💳 JPMorgan links Chase cards to Coinbase for crypto buys

• 🪙 Stablecoins heat up: PayPal, Plasma, and Interactive Brokers make moves

• ⚖️ OpenSea insider conviction overturned — court cites bad instructions

• 📊 Base tops Solana in token launches — Zora drives the surge

• ⚙️ Polygon stalls for an hour after validator exits suddenly

White House Unveils Comprehensive Crypto Policy Blueprint

The White House has released a 168-page crypto policy report, offering sweeping  recommendations to shape the future of digital asset regulation in the United States. Compiled by President Trump’s Working Group on Digital Asset Markets, the document proposes reforms spanning tax policy, regulatory jurisdiction, and digital asset custody.

The report urges the SEC and CFTC to collaborate on clarifying rules for custody, trading, and record-keeping of cryptocurrencies. It also recommends giving the CFTC authority to oversee spot markets for non-security digital assets, while advocating self-custody rights for individuals.

On taxation, the group backs a Crypto-Asset Reporting Framework that would require U.S. residents to report foreign-held digital asset sales to the IRS. The Treasury and IRS are also encouraged to issue new guidance covering wrapping transactions and de minimis crypto receipts.

“There is a lot to get done but this is a fantastic roadmap on what's next for true regulatory clarity for crypto in the US,” wrote crypto lawyer Rebeca Rettig on X.

That said, it offered little new information on the U.S. strategic crypto reserve.

SEC Launches ‘Project Crypto’ to Bring U.S. Markets Onchain

SEC Chairman Paul Atkins has unveiled “Project Crypto,” a regulatory initiative aimed at updating securities rules to accommodate onchain technologies. Announced just one day after the White House’s comprehensive crypto policy report, the project directs SEC staff to modernize guidelines around custody, trading, and digital asset classification.

“Project Crypto will help ensure that the United States remains the best place in the world to start a business, develop cutting-edge technologies, and participate in capital markets,” Atkins said.

The initiative includes collaboration with Commissioner Hester Peirce’s Crypto Task Force and seeks to implement the President’s Working Group recommendations. A key goal is to classify digital assets into categories such as stablecoins, digital collectibles, and digital commodities.

Atkins also highlighted future rule proposals for tokenized securities and decentralized finance platforms, stating, “Decentralized finance and other on-chain systems will be part of our securities markets, not drowned out by unnecessary regulation.”

Lummis Bill Seeks to Let Crypto Count Toward U.S. Mortgages

Senator Cynthia Lummis has introduced the 21st Century Mortgage Act, a bill that would allow long-held crypto assets to be considered in mortgage underwriting. The proposal aims to support borrowers, especially younger Americans, by including certain digital holdings in their financial profiles without requiring conversion to U.S. dollars.

The legislation codifies a directive already underway from Federal Housing Finance Agency (FHFA) Director William Pulte. In June, Pulte instructed Fannie Mae and Freddie Mac to explore incorporating qualified crypto reserves into mortgage risk assessments.

Under Lummis’s bill, digital assets held in a qualified custodial arrangement for at least two years could count as borrower reserves. “This legislation embraces an innovative path to wealth-building,” Lummis said, emphasizing the digital shift among younger homebuyers.

Winklevoss Twins Raise Red Flags Over CFTC Nominee’s Kalshi Ties

Tyler and Cameron Winklevoss are urging the White House to reconsider Brian Quintenz’s nomination to chair the U.S. Commodity Futures Trading Commission, citing potential conflicts of interest linked to his role at prediction market Kalshi.

The Senate Agriculture Committee recently postponed a vote on Quintenz’s confirmation following the release of internal emails obtained through a FOIA request. These emails revealed that while still on Kalshi’s board, members of Quintenz’s incoming staff sought confidential CFTC information—raising ethical concerns given Kalshi is regulated by the agency.

“His stated positions are not aligned with President Trump and the Administration’s stated goals,” Tyler Winklevoss told the New York Post, adding that Quintenz’s regulatory outlook contradicts the administration’s deregulatory stance.

Coinbase to Launch Tokenized Stocks and Prediction Markets in U.S. Expansion

Coinbase is preparing to roll out a broad expansion of its platform, introducing tokenized stocks, prediction markets, and early-stage token sales to U.S. users in the coming months. The move is part of the company’s push to become an “everything exchange,” integrating both crypto-native and traditional assets into a single onchain platform.

“We’re bringing all assets onchain — stocks, prediction markets, and more,” said Max Branzburg, Coinbase’s vice president of product, in a statement to CNBC.

The upcoming features will position Coinbase alongside competitors like Kalshi and Polymarket in the prediction markets space, and rival global tokenized stock offerings from Robinhood, Gemini, and Kraken. However, Coinbase’s new services will be available to U.S. customers first, with plans for international expansion pending regulatory approvals.

DOJ Walks Back Potential Charges Against Dragonfly Over Tornado Cash Ties

The U.S. Department of Justice has clarified that crypto venture firm Dragonfly is not a target in its criminal investigation into Tornado Cash, reversing earlier suggestions made in court. The update followed a hearing in the trial of Tornado Cash co-founder Roman Storm, where prosecutors had initially indicated that Dragonfly executives could face charges related to their 2020 investment in the privacy-focused crypto mixer.

At the time, internal emails between Dragonfly partners Tom Schmidt and Haseeb Qureshi and Tornado Cash developers were presented, including discussions about potentially adding KYC features. Schmidt, called as a defense witness, declined to testify by invoking the Fifth Amendment.

Following the hearing, Qureshi stated the government’s comments were aimed at limiting defense testimony. “The DOJ has now backtracked,” he posted on X, adding that Dragonfly has been cooperating since receiving a subpoena in 2023 and intends to defend itself if necessary.

SEC Approves In-Kind Redemptions for Crypto ETFs, Opens Door to ETH Staking

The U.S. Securities and Exchange Commission has authorized in-kind redemptions for all spot Bitcoin and Ethereum exchange-traded funds, aligning crypto ETFs with traditional commodity products. Previously restricted to cash-only structures, ETF issuers can now redeem and create shares directly with BTC or ETH. This shift is expected to reduce trading friction, tighten spreads, and improve tax efficiency.

Authorized participants—typically large financial institutions—will be able to exchange ETF shares for the underlying crypto assets rather than fiat, a model long requested by asset managers. The move is seen as a milestone in ETF market infrastructure, reflecting growing regulatory acceptance.

In a parallel development, the SEC acknowledged a Nasdaq proposal to enable staking for BlackRock’s iShares Ethereum Trust (ETHA). If approved, the ETF could generate yield by staking ETH while distributing rewards to shareholders. The application now enters a regulatory review window that could last up to 90 days.

In related news, a new plan from Cboe could fast-track crypto ETFs like Solana and XRP by bypassing individual SEC approvals, potentially opening the door to multiple listings as early as October.

JPMorgan and Coinbase Partner to Bring Crypto Access to Chase Customers

JPMorgan Chase and Coinbase have announced a strategic partnership that will enable Chase credit card holders to purchase cryptocurrency directly through Coinbase, beginning in fall 2025. The collaboration marks a major step in integrating digital assets into traditional banking services.

Starting in 2026, Chase customers will also be able to redeem their Ultimate Rewards points for USDC, a dollar-pegged stablecoin issued by Circle. This reward redemption will take place on Base, Coinbase’s Ethereum Layer 2 network, and represents the first time a major credit card program will allow points to convert into crypto.

The agreement includes additional features, such as the ability for users to directly link Chase bank accounts to Coinbase, streamlining fiat-to-crypto transactions. Coinbase noted that credit card purchases may be treated as cash advances under existing terms.

Stablecoin Momentum Grows as PayPal, Interactive Brokers, and Plasma Expand Usage

Stablecoins are taking center stage in the latest wave of crypto innovation, with major firms and projects pushing forward new use cases and infrastructure.

PayPal has launched “Pay with Crypto,” a service enabling U.S. merchants to accept over 100 digital assets at checkout. Customers pay in crypto, while merchants receive U.S. dollars or PayPal’s native stablecoin, PYUSD. The platform touts potential savings of up to 90% on cross-border transactions compared to traditional credit cards. Merchants can also hold PYUSD and earn yield on balances.

Meanwhile, Interactive Brokers is considering launching its own stablecoin to offer 24/7 account funding and faster crypto transfers. The $110 billion brokerage is also evaluating broader integration of third-party stablecoins to enhance its digital asset services.

Adding to the momentum, Bitcoin sidechain Plasma concluded a public sale of its token XPL, raising $373 million. The project claims it will launch with $1 billion in stablecoin total value locked, setting a record for mainnet adoption speed.

Appeals Court Overturns Conviction in OpenSea Insider Trading Case

A U.S. appeals court has overturned the conviction of former OpenSea product manager Nathanial Chastain, who was previously found guilty of wire fraud and money laundering in connection with NFT trades made using confidential company information.

Chastain was originally charged in 2022 for allegedly purchasing NFTs ahead of their promotion on OpenSea’s homepage, then reselling them at profits of two to five times the purchase price. He was convicted in 2023 and sentenced to three months in prison.

However, the Second Circuit Court ruled Thursday that the jury was incorrectly instructed. The court agreed with Chastain’s argument that using confidential business information does not constitute property theft unless it involves a recognized property interest. “We cannot say that the jury would have reached the same verdict if it had been properly instructed,” the judges wrote.

The ruling also referenced Chastain’s claim that OpenSea’s cofounder engaged in similar conduct.

Base Surpasses Solana in Daily Token Launches as Zora Activity Surges

Coinbase’s layer 2 network Base has overtaken Solana in daily token launches, marking a shift in crypto activity not seen since early 2023. The spike is largely driven by Zora, a social media protocol that automatically mints a token for every user post.

On July 27, Zora set a record with over 54,000 tokens launched in a single day, significantly outpacing Solana platforms Pump.fun and LetsBonk combined. According to analytics firm SeaLaunch, “DEX volume of Zora Coins has also spiked,” as both creators and referrers earn a share of trading fees.

Despite Base’s rising numbers, Solana still holds a much larger overall market cap in launchpad tokens, with $5.9 billion compared to Base’s $422 million. “It’s a different model,” noted Helius Labs CEO Mert Mumtaz, who emphasized that Zora’s token creation is tied to social content rather than traditional memecoin speculation.

Polygon Validators Trigger Hour-Long Disruption After Consensus Bug

Polygon experienced a temporary disruption on Wednesday when its Heimdall consensus layer halted for roughly one hour due to a validator unexpectedly exiting the network. The issue followed a recent upgrade to Heimdall V2, described by Polygon as its “most technically complex” hard fork since 2020.

While Heimdall handles coordination among validators and communicates with Ethereum, the outage did not affect the Bor layer, which continued to process transactions normally. This meant that core user activity, such as sending and receiving tokens, remained uninterrupted.

Some developers and users, however, faced difficulties accessing services, with RPC endpoints and block explorers like Polygonscan showing no new blocks during the disruption. RPCs serve as the connection points that wallets and applications use to interact with the network.

Polygon stated that “the PoS chain has remained live,” but acknowledged degraded performance during the outage. A patch was issued, and most RPC providers were restored within hours.

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