⚡Good News: The first stablecoin federal regulation in the United States, the "GENIUS Act", has officially been implemented, marking the first federal recognition of the legal existence of stablecoins —

1️⃣ Clear Compliance: Stablecoins must have a 1:1 USD or short-term debt reserve and disclose asset composition monthly.

2️⃣ Cut off the lifeline of income-generating stablecoins: No interest is allowed, cannot make money like banks or DeFi protocols, and cannot engage in disguised income designs.

Traditional stablecoins can no longer generate yields, so what can users do if they still want returns? — They can only look for solutions on-chain.

Therefore, the revenue logic has been stripped away, which instead allows DeFi (especially native interest markets) to take on the role of a passive income source again!

✅ Positive news 👉🏻 On-chain DeFi native yield protocol

Pendle: The largest structured yield protocol, designed for stablecoins, providing on-chain yield splitting and future yield trading.

Morpho, Spark, Aave, Compound: These types of protocols provide on-chain lending rates and staking yields, making them a natural outlet for arbitrage on-chain in the future.

❌ Bearish 👉🏻 CeFi yield stablecoin & pseudo DeFi project

Projects that focus on stablecoins + annual yield to attract users, especially those without transparent reserves and legal endorsement, may be classified as illegal issuance of financial products.

Some RWA projects that use stablecoins as a vehicle to earn fixed income: If they cannot meet compliance requirements such as 1:1, auditable, etc., they may get stuck.

UST is a cautionary tale, so the "GENIUS Act" directly implements a one-size-fits-all regulation:

If you want to be the US dollar, then be honest and don't engage in interest. If you want to deal with interest, then don't wear the skin of stablecoins!

The second spring of DeFi is really coming!