Welcome to another DeFi Markets Update—your no-nonsense briefing on the cryptobanking plumbing and market pulse.

Steakhouse Crosses $2bn as Morpho’s Largest Curator

• Steakhouse became the first and only Morpho curator to surpass $2bn in curated deposits, extending its lead as the largest curator on the protocol. The milestone reflects growth across both newly launched products and established Prime vaults.

• Over the past month, the newly launched Steakhouse High Yield USDC Edition attracted more than $220m in deposits following its launch on the Coinbase App, the Steakhouse USDG Morpho Vault powering Robinhood Earn grew to over $140m within 21 days from launch, and Steakhouse Confidential USDC Prime, the first lending vault supporting Zama’s confidential USDC (cUSDC), grew by over $20m in just 3 weeks.

• Steakhouse’s flagship vaults also continued to attract deposits. Steakhouse Prime USDC V2 on Base grew by approximately $100m over the past month, while Steakhouse EURCV Prime on Mainnet added more than $20m, demonstrating continued demand for our low-risk established lending strategies.

• In our most recent DeFi Markets Update, we highlighted Steakhouse’s continued growth as Morpho’s largest curator over the first half of 2026. We’re excited to see what the second half of the year brings as we continue building new products and expanding our lending ecosystem.

mGLO Launches on Morpho Base

• mGLO is now live as collateral in the mGLO/USDC Morpho market on Base, following Steakhouse’s collateral assessment of the market.

• mGLO is a USD-denominated tokenised note issued by Midas that provides economic exposure to Fasanara Capital‘s Global Diversified Alternative Debt strategy. The underlying portfolio consists primarily of short-term trade receivables, bringing institutional specialised private credit into onchain lending infrastructure.

• Holders of mGLO can deposit the token as collateral and borrow USDC while maintaining exposure to the underlying strategy. The market currently has $12m+ supplied with a 4.5% USDC borrow rate, creating new capital efficiency for private credit and expanding the use of tokenised private credit as onchain collateral.

• Steakhouse’s review covered the underlying investment strategy, liquidity framework, oracle design and market parameters. The market uses a 6% discounted oracle as a liquidator-facing buffer, with market parameters calibrated to the quality of the underlying strategy and the available liquidity routes.

AUSD Opportunities on the Steakhouse App

• The AUSD Turbo vault on Mainnet, available through the Steakhouse App, is currently earning around 10% organic APY through leveraged lending strategies powered by the Steakhouse Box infrastructure.

• Additionally, the AUSD High Yield Term vault on Mainnet currently offers over 11% incentivised 7-day average APY and manages more than $4.15m in AUSD deposits.

• The vault combines a 5–6% organic yield with an additional 5% in AUSD incentives. Like the Turbo vault, it uses Box adapters to allocate capital to fixed-maturity positions designed to be held until maturity, offering enhanced yield opportunities for depositors in Agora’s dollar stablecoin.

This memo reviews mGLO on Base as collateral in the mGLO/USDC Morpho market. Ethereum mGLOBAL references the same Fasanara strategy, but its transfer rules, lending venue and liquidity arrangements differ. mGLO and mGLOBAL are issued through legally separate compartments of the Aureum Securitisation Fund. Unless stated otherwise, the market analysis below applies only to Base mGLO.

The figures in this post reflect information reviewed through 15 July 2026. Portfolio and facility figures attributed to Midas or Fasanara are their representations and can change.

0. Preface

The motivation for enabling mGLO is practical. Holders seek credit against a short-duration collateral position, so the market must be calibrated to the quality of the underlying strategy and the path from collateral seizure to cash repayment. As utilisation changes, borrowing costs and liquidation incentives can change as well. The market therefore needs to be sized and monitored around the way collateral can convert back into cash, not around an assumption of frictionless exit.

Steakhouse’s review of the Base mGLO/USDC borrow/lend venue focuses on that full path. Its underlying receivables are granular, appear to benefit from several forms of credit enhancement, currently unlevered and approximately 90 days in duration, allowing performing assets to convert to cash as they mature.

For the shorter liquidation clock, Midas Staked Liquidity and pre-arranged institutional buyers provide finite same-day or T+1 exit capacity, with standard fund redemption as the final route. Morpho values mGLO at 94% of the last published NAV and applies a 91.5% LLTV, limiting debt to 86.01% of undiscounted NAV and leaving a marked-value margin above the stated cost of the faster exits. Monthly mint windows at 93% initial issuance also limit the amount of freshly issued collateral that can enter the market against an aging mark.

These controls do not remove the frictions of private credit. They do, however, distinguish portfolio recovery from immediate liquidation and support a market size tied to functional liquidity.

1. Executive summary

mGLO is a tokenised, USD-denominated note on Base that gives holders economic exposure to the same Fasanara reference portfolio as Ethereum mGLOBAL. The pool is built primarily from invoices sold by small and medium-sized businesses that want payment before the invoice due date. The party that owes the invoice is usually a larger corporate account debtor.

The SME supplier receives early working capital, but the primary payment obligation sits with the account debtor. Fasanara earns a spread associated with SME financing while underwriting a short-duration debtor book materially stronger than the suppliers selling the invoices. Seller fraud, invoice disputes, dilution, servicing failures and originator risk remain part of the exposure.

The portfolio is part of Fasanara Capital’s Global Diversified Alternative Debt Fund strategy. The mGLOBAL vehicle accesses that strategy through an open-ended Luxembourg SICAV-RAIF. Fasanara is authorised and regulated by the UK Financial Conduct Authority and the strategy dates to 2014. The latest public ARC report1, dated March 2026, assigned the broader GDADF strategy an a(f) fund rating with a stable outlook. Its scope is the fund. It gives no credit rating for the receivables, the 2026 mGLOBAL or mGLO vehicle.

The token represents a limited-recourse note issued through the mGLO compartment of the Aureum Securitisation Fund and administered onchain by Midas. The compartment holds shares of the Fasanara GDADF Fund, which in turn invests through the receivables strategy. Primary minting and direct redemption require KYC and AML eligibility. Base mGLO is freely transferable while transfers remain active and the receiving address is not blocked.

The official fund NAV is calculated monthly and published onchain through role-gated feeds. It is an administrator valuation rather than a standing cash bid. Primary issuance is confined to a defined window after a NAV publication, and the minting process initially delivers 93% of the expected tokens, with the balance settled after the next official NAV. These controls reduce new issuance against an aging mark. An existing mGLO holder can still borrow against circulating tokens between NAV dates.

The Base Morpho market adds a discounted oracle and liquidation threshold on top of the underlying NAV process. Its oracle values mGLO at 94% of the last published NAV before applying Morpho’s 91.5% liquidation loan-to-value threshold. The result is an effective debt threshold of 86.01% of the last published, undiscounted NAV. Faster exits are intended to come from Midas Staked Liquidity, pre-arranged institutional buyers and RFQ venues. Standard redemption through the fund cycle remains the final route.

We assign mGLO an internal Steakhouse collateral rating of BB, or medium risk, at the 86.01% effective threshold. Short tenor, portfolio granularity, administrator-calculated NAV under a documented valuation methodology, reported credit-enhancement features, compartment segregation, a layered liquidity framework, and the market haircut support the assessment. Private-credit information gaps, monthly valuation, finite fast liquidity, centralised administration and limited recourse keep the final rating at BB.

2. Underlying exposure and core of the product

2.1 Short-term invoice financing

An SME delivers goods or services to a corporate customer and receives an invoice payable in roughly 30 to 90 days. Rather than wait, the SME sells the receivable at a discount. The financier advances cash to the SME and collects from the account debtor when the invoice falls due.

The credit analysis starts with the party that owes the invoice. Fasanara reported the following internal distribution for the current debtor book:

• AA (40% of exposure)

• A (41% of exposure)

• BBB (10% of exposure)

• BB (7% of exposure)

• B (2% of exposure)

These are Fasanara’s internal grades and cannot be mapped directly to an external bond scale. The distribution does, however, show why describing the strategy only as “SME credit” is incomplete: 81% of the payment obligations fall within Fasanara’s internal AA and A bands.

Loss can also arise outside the account debtor. A valid invoice can be diluted by returns or offsets. A disputed or fraudulent invoice may miss its payment date. Cash can be commingled, an originator can fail, a servicer can perform poorly and an insurer can contest a claim. Those risks explain why a high internal debtor grade does not translate into a high collateral rating by itself.

2.2 Portfolio characteristics

• Average contractual duration is approximately 90 days. Performing assets settle into cash as invoices mature.

• The portfolio contains more than 700,000 receivables across roughly 140 originators and more than 60 countries. The average position at the time of review is approximately 0.01 basis points of NAV.

• The fund is unlevered at the time of review. The governing documents permit borrowing, so this is a current position rather than a permanent limit.

• Fasanara reported strategy assets under management of approximately US$6 billion and a target net yield of approximately 7%

• The target is not guaranteed and can change with portfolio performance, fees, market conditions and fund terms.

Position count reduces the effect of a single small invoice. It does not establish the largest obligor, originator, country, sector or servicer exposure. Those concentrations remain part of ongoing monitoring.

2.3 Credit enhancement and stress behaviour

Fasanara reports that approximately 80% of exposure benefits from at least one form of first-loss capital, overcollateralisation, credit insurance, or a government or corporate guarantee. Advance rates are commonly reported in the 85% to 90% range.

The 80% figure is not an 80% loss buffer. A retained junior tranche, an insurance policy and a corporate guarantee cover different events and attach at different points. Their value depends on the size of the protection, exclusions, counterparty strength and enforceability. They are still meaningful because the fund often holds senior exposure with another party absorbing an initial layer of loss.

The broader strategy’s historical defaults were reported below 1% in most years. In our earlier review of the higher-yielding mF-ONE vehicle2, we found a 2.19% peak in 2020 and annual recovery above 58%. According to manager data reviewed for this assessment, the historical strategy reported a positive net return that year - this historical result does not indicate future performance.

Short duration changes the response to stress. The manager can stop buying new receivables, tighten advance rates and let performing invoices convert to cash without selling a long-duration loan book. Workouts remain slower. Fraud, dispute and insolvency cases can take much longer than the contractual 60 to 90 days.

Short tenor also leaves correlation risk. Corporate payment stress and onchain stablecoin scarcity can occur at the same time. Portfolio runoff helps the fund raise cash over weeks, while caps and separately funded buyers are needed to cover liquidation on a shorter clock.

We view this issuance as a positive iteration on onchain private credit. Many of the 2022-2023 onchain experiments were with unsecured offchain credit of a materially different credit quality. In this instance, Fasanara reports a US$6 billion strategy, more than 700,000 positions, no current fund borrowing and several forms of credit enhancement.

While these mitigants do not speed up a court process or a disputed receivable workout, the reported scale, granularity, current absence of fund borrowing and credit-enhancement features make this materially different from many earlier unsecured offchain-credit pools and may reduce concentration and refinancing risk.

The underlying history is more informative than the short and smooth token price record. We therefore assess the credit through the strategy’s loss, recovery and portfolio data rather than calibrating the collateral only from observed mGLO NAV volatility.

3. Legal and structural wrapper

The legal chain reviewed by Steakhouse is:

mGLO note holder → Aureum mGLO compartment → Fasanara mGLOBAL Fund shares → GDADF receivables strategy

The holder owns a tokenised note, i.e. a security within the meaning of Art. 4 Para. 1 No. 44 and Annex I Section C MiFID II, without title to individual invoices or a direct claim on an account debtor.

3.1 Note issuer

The issuer is Aureum Securitisation Fund, a Luxembourg fonds de titrisation non réglementée established under the Luxembourg Law of 22 March 2004 on securitisation and managed by Aureum Manco S.à r.l. as a management company, acting through its dedicated mGLO compartment.

The mGLO compartment constitutes a segregated pool of assets and liabilities within Aureum. All rights and claims arising in connection with the Notes are limited to the assets allocated to the mGLO compartment, and noteholders have no recourse to assets allocated to any other compartment of Aureum or to Aureum’s general assets. Noteholders are subject to non-petition provisions and may not attach, seize or otherwise enforce against assets outside the mGLO compartment, nor initiate or support any winding-up, liquidation, bankruptcy or similar insolvency proceedings in respect of Aureum or the mGLO compartment.

The management company is held through the Midas Purpose Trust, an orphan structure with no economic interest in the underlying assets. The combination of statutory compartment segregation, contractual non-petition protections and the orphan ownership of the management company supports bankruptcy-remoteness and cross-compartment protection.z

3.2 Underlying fund

The compartment holds shares in Fasanara mGLOBAL Fund, Sub-Fund 36 of a Luxembourg SICAV-RAIF. Ascender Fund Partners is the authorised alternative investment fund manager, Fasanara Capital Limited is the investment manager, and Banque de Patrimoines Privés S.A. is the depositary.

The regulated service-provider chain sits at the fund layer. An mGLO holder reaches it through the Aureum note. Collateral outcomes therefore depend on the note terms, compartment assets, fund administration and the underlying receivables portfolio working together.

4. Onchain workflows

4.1 Subscription and minting

1. An eligible participant completes Midas KYC and AML onboarding and may submit a subscription request

2. The monthly minting window opens after publication of the relevant NAV. Minting is disabled for approximately 90% of the month.

3. The eligible participant subscribes for notes by payingUSDC. The reviewed workflow initially issues 93% of the expected mGLO at the last official NAV.

4. After the next official NAV is available, the remaining amount is calculated and minted, the average settlement (instant part and holdback) is done at the next official NAV.A lower NAV results in fewer additional tokens, effectively aligning the total subscription value with the next official NAV price.

The window and holdback reduce the amount of new collateral that can be created against an old valuation. The NAV remains monthly, and a holder of existing mGLO can still borrow during the closed minting period.

4.2 Midas instant-redemption route

1. An eligible holder requests instant redemption through the Midas redemption route and sets a minimum amount of stablecoin to receive.

2. The vault checks eligibility, pricing, limits, payment-token conditions and available liquidity.

3. Under the reviewed mGLO workflow, 93% of the value is paid immediately, net of the instant-redemption fee, and the redeemed tokens are burned.

4. The 7% holdback is settled after the underlying fund clears at the next official NAV.

   • If the next official NAV goes up, the holdback settlement is at the request-time NAV.

   • If the next official NAV goes down, the average settlement (instant part and holdback) is done at the next official NAV. This approach minimizes the risk of front run.

Midas Staked Liquidity3 advances USDC to the product compartment and waits for the underlying fund redemption to settle. It is a finite bridge facility rather than a standing secondary-market bid.

4.3 Standard redemption

1. The holder submits a redemption request before the monthly cut-off.

2. The compartment redeems the relevant underlying fund shares.

3. Subject to fund terms, dealing limits, deferral or suspension rights and operational processing, payment is expected to be made at the applicable official NAV, ordinarily around 35 days after the valuation date.

Standard redemption is a delayed contractual exit at administrator NAV. The holder retains a limited-recourse note claim while settlement is pending and bears NAV, timing and operational risk. Fund dealing limits, deferral and suspension rights can extend the wait. Under the reviewed documents, redemptions on a dealing day may be limited to 12.5% of NAV, once aggregate subscription into Sub-Fund 36 equals or exceeds USD 200,000,000..

4.4 NAV publication

The administrator determines the official month-end NAV. Midas (Aureum) reviews the data, deducts applicable fees and publishes the value through its onchain oracle process. Midas’s oracle documentation 4describes role-gated updates, deviation checks, timestamps, heartbeat controls and hard price boundaries. The preferred update path reviewed by Steakhouse limits routine changes to 1% per update and enforces a one-hour cooldown.

A separate higher-quorum path can publish a larger change. Midas (Aureum) can also pause deposits and redemptions if a reliable NAV cannot be established. Those controls are designed to reduce the risk of an erroneous update.

5. Liquidity and redemption

Base mGLO currently does not have a secondary exchange market on DEX venues. Its liquidation design is intended for several routes with different sources of capital and different failure modes.

Liquidity routes:

• Midas Staked Liquidity: instant settlement at a 0.5% fee; Midas announced5 a platform commitment of up to US$40 million across supported products.

• Institutional buyers: T+0 or T+1 sale at a 3% fee, with ~US$130 million of aggregate purchase capacity.

• Standard redemption: contractual fund route, monthly at NAV, no standard-redemption fee.

Additional RFQ venues may be available both onchain or offchain for clearing secondary markets between authorized buyers and sellers.

Ethereum mGLOBAL has a separate internal sleeve invested in Aave v3 USDC. The collateral venue for that token is Aave Horizon, a separate Aave market. The sleeve is an asset of the mGLOBAL compartment rather than a credit facility, but it remains finite and exposed to Aave v3 withdrawal conditions. mGLO is issued by a separate KO compartment without liquidity sleeve and legally independent from mGLOBAL. The Base mGLO analysis excludes it.

Base mGLO can be transferred to a non-blocked address while transfers are active. Receipt of seized collateral does not require Midas (Aureum) onboarding. Direct Midas (Aureum) redemption and the institutional purchase routes do. Liquidators that expect to use those routes should complete onboarding before a stress event.

6. Discounted Morpho oracle

The mGLO/USDC6 market reads a discounted value instead of the raw Midas NAV. Its market oracle7 consumes a dedicated wrapper feed8 that returns 94% of the upstream Midas NAV.

Market parameters:

• Collateral: mGLO

• Loan asset: USDC

• Morpho LLTV: 91.5%

• Fixed discount to Midas NAV: 6.0%

• Oracle value as a share of NAV: 94.0%

• Effective debt threshold against undiscounted NAV: 86.01%

At a US$1.00 published NAV:

Discounted oracle value = 1.00 x 94% = 0.94

Effective debt threshold = 0.94 x 91.5% = 0.8601

Morpho’s liquidation incentive factor at a 91.5% LLTV is approximately 1.0262. A liquidator repaying US$1.00 of debt receives collateral worth approximately US$1.0262 at the discounted oracle. If the last published NAV remains fully recoverable, that collateral has an undiscounted marked value of approximately US$1.0917.

The resulting 9.17% is a gross marked-value uplift over debt repaid. That margin is sized against the exit routes above: instant redemption through Midas Staked Liquidity costs 0.5% (93%*(1-0.5%) settled immediately, 7% trued up at the next NAV), the OTC / liquidator network is described as settling at a 3% discount to NAV against pre-arranged institutional purchase capacity, and the standard monthly route redeems at par. Under the assumptions above, the 6% pricing buffer is intended to provide room for the stated exit costs. Of course, actual liquidation outcomes can vary with NAV movement, liquidity availability, execution timing, eligibility, operational constraints and other market conditions.

7. Collateral rating assessment

• Instrument: mGLO on Base

• Legal issuer: Aureum Securitisation Fund, acting through its mGLO compartment

• Token administrator: Midas

• Underlying investment manager: Fasanara Capital Limited

• Token address on Base: 0xFCc9Cc1209651Ed8867332d6F664CF82743A2584

• Token type: ERC-20 mToken

• Morpho LLTV: 91.5%

• Oracle factor: 94% of the last published Midas NAV

• Effective debt threshold: 86.01% of the last published, undiscounted NAV

• Steakhouse collateral rating: BB

We assign BB to mGLO as collateral, reflecting reasonable risks across the asset issuer, the underlying credit exposure, and the smart contracts governing the token. The senior, well-enhanced nature of the short-term trade-receivables exposure is offset by the information asymmetry and originator dependence inherent to private credit, and by an issuer that operates within Luxembourg’s securitisation framework outside the scope of AIFMD. mGLO’s valuation is driven by the underlying fund NAV published on-chain through bounded, role-gated price feeds, with redemption routes that include a Midas (Aureum) instant-redemption route (subject to eligibility, fees, limits and available liquidity conditions), and a standard monthly fund route at the applicable NAV.

Rating summary

• Asset rating: BB (minimum of counterparty, credit and operations)

  • Counterparty risk: BB

  • Credit risk: BB

  • Operations risk: BB

• Platform rating: not separately assigned

• Market rating: BB (minimum of oracle, liquidity and market haircut)

  • Oracle: AA

  • Liquidity: BB

  • Market haircut: AA

• Final rating: BB (minimum of applicable asset and market ratings)

7.1 Asset rating: BB

Counterparty risk: BB

Key Drivers

• Aureum is a securitisation vehicle and by law restricted to securitisation activity. The issuer operates within a defined legal framework rather than as a licensed asset manager. The token is issued through the Aureum Securitisation Fund, a Luxembourg securitisation fund subject to the Securitisation Act 2004, with an ordinary Luxembourg S.à r.l. as its management company.
  The regulated asset-management and fund-administration functions reside with Fasanara Capital Limited (FCA-authorized investment manager) and Ascender Fund Partners (AIFMD-regulated administrator).
  In rating terms considering solely the issuer of the notes this corresponds to a recognised legal framework operated by a non-asset-manager management company. This rating does not reflect the credit quality of the issuer but the regulatory context.

• Administration is centrally controlled by Midas through role-based access control and multisig signers; the system is not decentralised.

Governance Controls (Mitigants)

• Bankruptcy-remote structure: the management company is held by the orphan Midas Purpose Trust, with statutory compartment segregation, limited recourse and non-petition under the Securitisation Act 2004.

• Role-based access control across the token and vault contracts, with privileged actions gated to Midas (Aureum) -controlled roles and multisig signers.

• Greenlisting (KYC/AML) required for primary mint and redeem.

Implication

Collateral outcomes rely on the issuer’s administration within Luxembourg’s securitisation framework, supported by statutory segregation and bankruptcy remoteness, rather than on decentralised on-chain enforcement.

Credit risk: BB

Key Drivers

• Exposure is to a diversified pool of short-term trade receivables under Fasanara’s GDADF strategy - invoices payable by large corporate debtors, originated from SMEs. The exposure is senior in nature (senior unsecured commercial credit), with approximately 80% of credit exposure enhanced by credit insurance, first-loss protection or guarantees, and conservative advance rates of 85–90%.

• The strategy carries an ARC Ratings a(f) fund rating (stable outlook); historical defaults are reported below 1% with recoveries typically above 60%.

• The seniority and enhancement of the exposure could support a higher band; the rating is held at BB because this remains private credit, subject to information asymmetry and originator risk.

Key Concentration / Structural Considerations

• Granular and diversified: approximately 700,000 receivables across ~140 originators in 60+ countries; no leverage at fund level.

Implication

Senior, well-enhanced, short-dated credit exposure, with the rating constrained by the information asymmetry and originator dependence characteristic of private credit.

Operations risk: BB

Key Drivers

• Audited code and a live bug bounty.

• Multi-year operating profile of the Midas token framework, with total value locked in the hundreds of millions

• Economic transparency: the underlying fund NAV is regularly published on-chain through dedicated price feeds, while off-chain value notarizations (via vLayer), overcollateralization attestations (via Chainlink CRE), and independent verification results (via Canary Protocol) are all pushed on-chain into the Midas Attestation Engine.

Implication

A mature operational profile with on-chain NAV publication; the pillar is held at BB on a worst-of basis by audit coverage.

7.2 Platform rating: None

7.3 Market rating: BB

Oracle: AA

Key Drivers

• The market uses the intrinsic NAV of the underlying fund, published on-chain through dedicated growth-based feeds (separate deposit-side and redemption-side feeds), reflecting net asset value rather than a market-traded price.

• NAV updates are role-gated and bounded: each update must fall within hard minimum and maximum limits, and the safe-update path enforces a maximum per-update deviation and a minimum interval between updates.

• The Morpho market prices collateral through a dedicated wrapper feed that applies a fixed 6% discount to the published NAV, a conservative, liquidator-facing buffer

Implication

A NAV-based, bounded oracle reduces exposure to market-price manipulation.

Liquidity: BB

Key Drivers

• Primary redemption is available through a standard monthly cycle at the applicable NAV. The reviewed materials also describe layered liquidity routes, including Midas Staked Liquidity and an OTC / liquidator network, that may support faster exits subject to eligibility, fees, limits, available liquidity and operational constraints.

Implication

Liquidity is structured, with both instant and monthly routes; primary redemption operates on a short-notice / monthly basis.

Credit Enhancement: AA

Key Drivers

• The credit-enhancement pillar is derived from the moderate price-fluctuation profile of the collateral against the loan asset, adjusted by the effective loan-to-value. At an effective LLTV of 86% (official Moprho Market LLTV of 91.5% adjusted by the 6% discounted oracle), the adjustment lifts the base assessment by three notches to AA.

• The 86% effective LLTV provides a moderate haircut and liquidation incentive consistent with the NAV-based pricing and the short-duration receivables underlying the strategy.

Implication

The 86% effective LLTV provides a valuation buffer against the published NAV, subject to NAV movement, liquidity availability and execution risks.

Final rating: BB

8. Operational security considerations

Steakhouse reviewed Midas’s operational setup on 14 July 2026. The review covered custody policy, privileged roles, the NAV process, mint controls, upgrade governance and planned remediation. This section describes the control design without publishing the full signer and policy map.

8.1 Deployed controls

Operational roles sit behind multi-party MPC custody policies. The reviewed default for the relevant Fordefi vaults was a 4-of-7 approval policy.

The mGLO Management Vault9 holds mint, burn and pause operator roles. Burn is policy-pinned to a designated wallet. Pause uses an expedited containment path, while unpause requires stronger approval.

The Vaults Manager10 controls fees, daily limits, accepted payment tokens, receivers and request approvals. The user deposit path is greenlist-gated, checks the payment-token price and carries a US$30 million instant daily limit in the reviewed configuration.

The Oracle Admin11 publishes NAV updates. The preferred path enforces a 1% maximum change and a one-hour cooldown. Routine updates require two core signers plus an independent transaction-screening co-signer under the reviewed policy. Larger changes use a separate higher-quorum path.

Contract upgrades pass through a 48-hour timelock12 before reaching the ProxyAdmin. The timelock is controlled by an admin Safe whose members are themselves multi-party custody systems.

These controls reduce single-key and accidental-update risk. Some approval thresholds live in custody-platform policy rather than in the token contracts, so onchain observers cannot verify every policy condition from contract state alone.

8.2 Minting and oracle residuals

User minting runs through a greenlist-gated deposit vault with contract-level bounds, a payment-token allowance and a USDC peg check. OTC minting runs through the Management Vault behind the 4-of-7 custody policy. The OTC path lacked a contract-level rate limit at the time of review.

The preferred oracle update function has tight deviation and timing controls. A separate administrative function permits a much wider value range and relies on the higher-quorum policy. That path is necessary for a genuine large down-mark, but it also leaves more discretion with the operator.

Midas described planned changes targeted for the third quarter of 2026, including contract-level rate limits across mint paths, a governance delay and alerts for OTC minting, stronger controls on the wider oracle-update path, automated monitoring and broader timelock coverage for runtime roles. These planned changes are not current controls and remain subject to implementation.

Learn More

Steakhouse Financial Ltd’s origins as a company are rooted in the culture of the crypto industry. As co-founders, we met online as contributors to an open-source decentralized stablecoin project called MakerDAO (later renamed Sky, with a stablecoin, Dai, now known as USDS). Since then, we have helped other open-source projects and, increasingly, companies work out the structural economics of building successful open financial infrastructure. In particular, our work focuses on stablecoins, a burgeoning field of finance that looks a lot like many of the early historical attempts at banking.

Why is a company helping to build transparent finance with cryptocurrency interested in bringing back a book about the history of Scottish banking?

Firstly, because we are financial history nerds. We love reading about the men who figured out ways of doing things differently rather than following the script handed down to them by experts or elders. Scottish banking has been a central text in our obsession with well-researched records of how the modern financial system came to be. We like to think that SG Checkland would have been in his element following the development of the stablecoin industry and might have written a book about it too, in time.

Secondly, the similarities between the stablecoin industry and the early history of Scottish banking are remarkable. In Scotland, the emergence of privately issued liabilities provided a much-needed boost to a struggling rural economy, allowing enterprising Scotsmen to push into fields of trade such as tobacco or textiles. In stablecoins, the emergence of a reference asset that can be relied on to exchange value between two crypto addresses has allowed for a Cambrian explosion of experiments, ranging from remittance payments for the developing world and complex financial primitives all the way to scams and cons—not unlike the early Scottish banking sector, which spawned scoundrels such as John Law.

People may be familiar with how banks work, but what are stablecoins? These are private liabilities, redeemable on demand, issued either by a company or by an automated program running on a blockchain, that promise to track the value of a reference asset. In many respects, their balance sheets resemble that of early banks, such as the ones in this book. The openness of the public blockchains has enabled the efflorescence of countless stablecoins, in particular ones tracking the US dollar, and has produced a thriving competitive ecosystem that powerfully demonstrates the potential of building on crypto.

Like many transformational innovations, blockchains are, in themselves, quite simple, combining three previous discoveries in a novel way. The essential features of a blockchain are that it is (1) an accounting ledger, or database, (2) run in a cryptographically secure way across (3) a distributed network of computers. By ‘public’ blockchain, we mean open-source software that is entirely agnostic about who the user is and relies on automated economic mechanisms to ensure that the records in the database remain true. The chief value proposition of public blockchains, such as Bitcoin or Ethereum, is that they are decentralized (i.e. run by many people in a redundant way). This gives these data-bases important qualities, such as neutrality (no one party can decide who can write to the database) and resistance to censorship (anything is allowed to be written into the database).

Financially, this means that blockchain entries can be said to face no counterparty risk with regard to their validity. Counterparty risk materializes when one party in a transaction suffers a loss and value is lost to the other without warning. In 2008, many banks were exposed to profound levels of counterparty risk, when interbank trades related to one sector of the economy—meat-and-potatoes commercial banking—nearly collapsed as a result of cascading risk in an unrelated sector of the economy—residential real estate derivatives. Though counterparty risk still exists between parties that use blockchain-mediated exchanges, the public blockchain transactions themselves don’t face this issue, provided the blockchain itself is sufficiently decentralized. In this instance, the database entry cannot be reversed by any single

party. A source of truth is created. When an entry is written into a blockchain, it remains there forever, in full and public view. The blockchain itself is less a counterparty than shared infrastructure that anyone can use, like oxygen molecules or sunlight.

Scottish banks and stablecoins both evolved in an environment of cooperation between free and consenting individuals, with no government authority involved. Although the Act of Union allowed the Crown to retain some proscriptions regarding the use of private liabilities from the Bank of Scotland, Scottish banking differed from many other early reserve bank systems, including England’s, in its independence from the obligation to meet the government’s funding needs. It is easy to forget, but central banking is a very recent phenomenon in world history. The US Federal Reserve emerged in 1913 through a controversial public–private partnership, before ascending the ranks of administrative state power to its present commanding position over the world’s largest reserve currency. The Bank of England and the Bank of Amsterdam both had a unique sanction to provide for the funding needs of their respective governments and, in particular, to assist them with fundraising for wars and other projections of geopolitical power.

The Bank of Scotland, although incorporated by Act of the Scottish Parliament, had no such obligations, and as such a vibrant ecosystem of private banks was able to emerge, bringing with it competitive pressures, sly actions (such as accumulating competitor’s notes to threaten runs) and even banking services offered by merchant companies as a way of facilitating activities halfway around the world. We like to describe the issuance of stablecoins as ‘pure banking’. As Checkland puts in this book, ‘banking in Scotland was unique in its exclusive reliance upon the business opportunities afforded by agriculture, commerce and industry; it represented banking in its purest form’.

Other curious similarities exist between the Bank of Scotland and decentralized stablecoins, such as Sky’s USDS, that are issued by a program rather than a company. Use of the Sky program and its USDS stablecoin is unrestricted. Anyone can purchase a so-called governance token (named SKY) and participate in the process of setting the parameters for a balance sheet that, at time of writing, has over $10 billion in outstanding liabilities, or stablecoins. It is run as a DAO, or decentralized autonomous organization, which is a jargonistic way of saying ‘by vote’, regulated through preset rules encoded in programs that run on a public blockchain. Although the Bank of Scotland’s statutes aimed to restrict London’s influence by requiring that more than two-thirds of its shares be held in Scotland, in any other respect it was similarly an open corporation. As a public bank it could not restrict membership or expel shareholders, and shares were purchased on the open market. Curiously, the Act describes that ‘all Forraigners who shall joyne as Partners of the Bank shall be and become naturalised Scotsmen’. Similarly, all individuals who purchase a SKY token ‘shall joyne’ the DAO and become naturalized crypto swashbucklers.

Like Sky, which was originally set up with a public good in mind (global adoption of a common infrastructure, absent a central authority or administrator that might abuse its influence), the Bank of Scotland was, by implication, an institution built to further the public interest of Scottish citizens. Sky has not shareholders but token holders; the Bank of Scotland’s Act named its shareholders ‘adventurers’. Decisions on Sky’s parameters are determined by a token holder vote recorded on the blockchain, while the Bank of Scotland relied on general meetings of adventurers to perform acts such as naming directors, issuing more capital or paying dividends. In both instances, the balance sheets really filled up when depositors began relying on notes issued as trading instruments and units of account.

Stablecoins, like the free period of Scottish banking, demonstrate that individuals are capable of self-organising into functional units that unlock productivity and allow exchanges of property rights to occur. It is telling that this period of Scottish history also produced thinkers like Adam Smith, who defined the natural notion of a free market. To these thinkers, the modern reality of tightly regulated monopolies that privatise profits and socialise losses to a coerced and overtaxed citizenry would be the antithesis of what they set out to do hundreds of years ago. Stablecoins offer renewed promise for allowing people to make their own decisions and trade with one another without the need to rely on an over-bearing authority to orchestrate every exchange.

As one reads Scottish banking, two distinct eras emerge: before and after the Bank Charter Act 1844 and Bank Notes (Scotland) Act 1845. While competition and innovation was the key to commercial success in the period when banking was actually free, it became more oligopolistic (what Checkland calls ‘the cartel of the general managers’ committee’) and less innovative following the stringent over-regulation introduced by the Acts. The number of banks dwindled from seventeen in 1850 to eight in 1914, and established banks have since learned to use regulation to secure their rarefied positions. This was not without significance for the Scottish economy as a whole; the strength of its financial sector diminished as a result, especially compared to England. Crypto is currently sitting at the same critical juncture. Today, it is free and full of innovation and promise, but it is threatened by overzealous regulators champing at the bit to establish rules, pick winners and create monopolies.

Finally, this book is an authoritative, meticulously researched and timeless history that deserves to be resurrected in its own right. We are certainly motivated by our passion for stablecoins, crypto and financial history, and our desire to share it with a broader audience. It has been a delight to collaborate to that end with SG Checkland’s daughter, Sarah Jane, and her partner, Jonathan Margolis. But, ultimately, this work merits a return to the shelves simply because it is exceptional—an exquisitely detailed celebration of the entrepreneurial spirit of an indomitable nation that bequeathed the world an enlightened tradition of individual freedom.

George Town, Cayman Islands

March 2026
Mark Phillips, Sébastien Derivaux and Adrian Cachinero Vasiljevic
Steakhouse Financial Ltd

Get the Book

Welcome to another DeFi Markets Update—your no-nonsense briefing on the cryptobanking plumbing and market pulse.

Steakhouse H1 2026 Lookback

• The first half of 2026 wasn’t an easy period for onchain lending. Events including the Resolv exploit, the rsETH bad debt event on Aave and heightened market volatility tested risk management across the ecosystem, yet Steakhouse finished the half year with zero bad debt while continuing to grow deposits on Morpho.

• The deposits increased from $1.55bn on 1 January to $1.70bn on 1 July. Throughout the period, Steakhouse remained the largest curator on Morpho, maintaining circa 2x more deposits than the second biggest curator.

• The three largest vaults (all Prime) held approximately $765m in deposits on 1 July, representing around 56% of all Steakhouse Morpho TVL. Newer vaults continued growing alongside them and expanded the range of lending strategies available to depositors.

• Furthermore, adoption of Morpho Vaults V2 continued to accelerate during the first half of 2026. Steakhouse became the first curator to surpass $1 billion in V2 deposits, representing nearly one quarter of all assets deployed across the new vault standard.

• Steakhouse also strengthened its position across Morpho’s stablecoin market, excluding incentive-driven stablecoin farms. Its share of stablecoin deposits increased from 49% in January to 52% by the end of June, meaning more than half of all stablecoin capital on Morpho is now curated by Steakhouse.

• Overall, the first half of 2026 brought several new distribution integrations across retail and institutional platforms, extending access to Steakhouse lending strategies. We head into the second half of the year with strong momentum, grateful for the trust placed in our vaults and looking forward to making even more Steak!

New Incentives for the Steakhouse USDG High Yield Vault on Kamino

• The Steakhouse USDG High Yield Vault on Kamino now earns more than 10% APY, following the launch of the new incentives campaign, combining USDG rewards with an underlying lending APY of 7% based on the 90-day average.

• Kamino and the Global Dollar Network launched this $300,000 incentive campaign for the vault, distributing USDG (the stablecoin issued by Paxos) rewards to depositors over the next three months.

• The Steakhouse USDG High Yield Vault has grown by more than $12m since the incentive campaign launched yesterday evening, with deposits now exceeding $16m and utilisation at 85%. More than half of the portfolio is currently allocated in the Main Market on Kamino, with the remainder primarily deployed to the OnRe Market alongside smaller positions in Maple, JLP and Bitcoin markets.

• The vault has generated more than $268,000 of cumulative interest while charging no management fee and a 5% performance fee.

Morpho is now the Largest Venue for USDC deposits

• Morpho has overtaken Aave to become the largest DeFi lending venue by USDC deposits. USDC supplied through Morpho has now surpassed $2.8bn, making it the largest onchain venue for USDC lending.

• More than 50% of those deposits are allocated to Steakhouse vaults. Steakhouse now manages circa $1.4bn of all USDC on Morpho.

• Looking across chains, Steakhouse is also the largest curator of USDC on Base, with approximately 65% of all USDC deposited through the platform allocated to Steakhouse vaults, equivalent to around $1bn in deposits. Around $368m of those deposits come from the Coinbase App’s USDC lending product.

• Coinbase App users can choose between the two Steakhouse USDC lending strategies on Morpho: Prime, focused on blue-chip collateral, and High Yield Edition, which targets higher returns through a broader collateral set. Recently, Coinbase has also increased the advertised High Yield APY to ~7%.

Learn More

New foreword to the book, “Scottish Banking, A History: 1695-1973” by S.G. Checkland. One of the motivations for us to bring back this book to print was to celebrate the academic work of this great economic historian, whose detailed research and passion for the subject matter makes us daydream that he might have loved the crazy world of stablecoins as much as he was passionate for the universe of Scottish banking.

He was once the pin-up of British academe. Tall, handsome, with an unruly crest of brown hair, a beguiling Canadian accent and aromantic limp resulting from his war wounds. Renowned for his effortless way of pulling seemingly disparate strands together in one heady sweep; his verbal pyrotechnics, sending students and lecturers alike scrambling for the dictionary; his insouciant way of drawing diagrams on the rotating blackboard, then sending them spinning in one seamless action. An exotic and inspirational figure in the somewhat dour and parochial city of Glasgow of the 1960s and 1970s, where most students still lived at home.

His legacy? A shelf full of weighty tomes on such subjects as the Industrial Revolution, British public policy from 1776 to 1939, the Gladstone family, and the history of Scottish banking. The first served as the go-to textbook for a generation of students and the latter two earned him prizes, all now sadly gathering dust and cobwebs. Sic transit gloria mundi, one might think. However fine a contribution my father added to the sum of human knowledge, I assumed it was always doomed to be supplanted by the efforts of academics who came later.

How wrong I was.

In August 2024, I received a message on LinkedIn from someone called Adrian, introducing himself as an economic consultant specialising in cryptocurrency. He and his colleagues at Steakhouse Financial were ‘financial history geeks’, he explained, and as such were avid admirers of Dad’s history of Scottish banking, not just because it is a phenomenal work of scholarship but because they see many parallels between the swashbuckling adventures it relates and their own adventures in crypto. Might I, as literary executor, agree to them getting it back on the shelves in refreshed form?

What? Was this a prank? A ploy to part me from my money? Surely all financial wizards are interested in is getting rich quick. Full of scepticism, my partner, Jonathan, and I agreed to meet Adrian at Soho House in Chiswick for a drink.

Adrian turned out not only to be eminently presentable—think Clark Kent meets Harry Potter—but also sane and serious. Scottish banking has been like a Bible for him and his colleagues, he said, and although they knew nothing about publishing, they were more than ready to go through all the necessary hoops—and expense—of picture research, design and reprinting to bring it back to life.

Well, if you insist.

My dad was not just a pioneer of economic history during the post-war years but the architect of one of the most substantial and prestigious university departments on the subject. Since he retired in 1982, the subject’s star has fallen; it has since been integrated into general history or economics courses, mainly along econometric lines or the statistical analysis of data that already exists. Furthermore, as universities focus on survival, rattling the begging bowl for funding and enticing foreign students in for their money, primary research is taking a back seat.

Meanwhile, the internet, AI, and the misuse of these resources has scrambled our perception of reality and, indeed, our trust in truth. Interest in history has reached a nadir unknown since the Middle Ages, with vast swathes of the population content to live in a narcissistic present. When interest in the subject is shown, all too often it is to condemn the sins of our imperialistic fathers or to find ways of punishing them retrospectively. In his book The war against the past: why the West must fight for its history, Frank Furedi, professor emeritus of sociology at the University of Kent, writes, ‘Today’s presentist zeitgeist ... dispossesses the past of its claim to truth. At best, the past is indicted as irrelevant; at worst, it is charged with causing harm to the generations that have followed.’

Could it be that the books by my father and his generation, born of painstaking primary research, low tech, and a culture of knowledge for its own sake, are about to develop a new cachet? Could they soon be regarded as a gold standard, with more reprints in the pipeline? If so, the Steakhouse founders can add another innovation to their list of achievements.

Sydney George Checkland’s personal story, of rags to if not quite riches then at least writing about them, started out in 1916, in Ottawa, a lumber town comprising shabby clapboard dwellings, dirt roads and spittoons, with some pomp and ceremony attached, thanks to Queen Victoria having granted it capital status in 1857. Both Syd’s parents were émigrés from England, his mother a former matron in children’s homes, his father a colporteur, or door-to-door Bible salesman, desperate for better remuneration and fulfilment. Together they imbued their middle son with their own homesickness for the old country while making do in a cockroach-infested apartment above a grocer’s shop. Before long, Syd was struggling to reconcile his father’s rigid belief in the truth of the Bible with empirical fact as taught by his often-expat Scottish teachers.

Leaving school at 17, Syd got a job as a ledger clerk at the Bank of Nova Scotia, and his parents rejoiced: a respectable job for life, at £200 per annum! But Syd did the math, calculating that he would never save up enough to escape Hicksville. So he studied at night school with the Canadian Bankers Association, then took up a much-better-paid job as accountant to a Chinese laundry—only to discover that its finances were even more precarious than his own.

Time to rebel against his father’s puritanism and embrace Machiavelli’s tenet that the end justifies the means. Using cunning stratagems, such as sending out cheques in the wrong envelopes as a ruse to slow creditors down, by September 1938 he had not only transformed the laundry’s fortunes but saved himself £500, enough to pay his passage to England. His mother, now suffering from breast cancer, bravely waved him off, never to see him again.

Thus began a charmed period during which Dad worked his way through university as a labourer, met my mother, Olive Anthony—the girl with the honey-coloured hair and cracked glasses seated in the front row of the lecture theatre—and obtained a first-class honours Bachelor of Commerce degree. After that, a career in politics beckoned, and he was voted in as president of the National Union of Students, then president of the International Union of Students the following year.

In 1939, Syd bought himself a bike and set off on a 3,000-mile odyssey around the continent, learning to cycle as he went. In later years he would describe how, on disembarking at Cherbourg, he wobbled his way through streets lined with locals cheering uproariously at the sight of him; he had happened upon the route for the Tour de France. The adventure soured when he reached Freiburg, in Germany, where he witnessed a Nazi parade, complete with banners and shouts of ‘Heil Hitler’. It was clear that ‘this mad machine of intoxicated people who had shed their human identity’ needed to be stopped, as he wrote later in Voices across the water: an Anglo-Canadian boyhood.

Goodbye, International Union of Students, and hello, British Army, starting with six months of training at Sandhurst, the Royal Military Academy for officers in Berkshire, at the end of which he was awarded the Belt of Honour as the best cadet of his intake. He then switched to the Canadian army because it offered a better pension in the event of his injury or death, a pressing consideration now that he was married to Olive. This shift set in motion the events by which he would nearly lose his life.

The Canadian Governor General’s Foot Guards tank regiment was a return of sorts to Hicksville, fighting alongside the local lads from his childhood, who had nothing like his level of training. To make matters worse, when the orders came in June 1944 to cross the Channel, the American master of the merchant ship carrying Syd’s battalion failed to chain down the tanks properly, so that they shifted and suffered damage. Things got worse when they reached the Falaise pocket, where mayhem ensued, during which Dad’s tank was attacked by a camouflaged German Tiger tank, killing the wireless operator and setting the tank on fire. Pushing the dead man out, Syd ran for his life, sustaining extensive shrapnel wounds before plunging into a small haystack. There, after self-administering morphine, he spent the night before being found next morning by the unit’s padre. ‘The sense of relief was overwhelming’, he wrote in the memoir about his youth. ‘The fear, the nausea, the feeling of slipping away was replaced by a soaring determination to live. I would return to England, to wife and child, as yet unborn.’

Some of the greatest medical advances have been made during warfare, and my father was now a beneficiary of such experimentation. His right leg was basically shredded and under any other circumstances would have been amputated, but instead the medics propped the leg up behind him and encased him in plaster from his chest to his toes while giving him regular injections of the then-innovative penicillin, in the hope that the ‘cabling would grow back’, as he recalled later. After six months, he left hospital in calipers, categorised as 40% disabled but with two legs. Huge effort and application had him walking again, leaning on a stick and with a crippled right foot. My mother, now nursing my infant brother John, stepped up as chauffeuse.

Still determined to become a politician, he then stood as candidate for the Common Wealth Party in the general election of July 1945 for Ecclesall, Sheffield. This was a new socialist party founded by the writer JB Priestley and the Marxist historian Tom Wintringham, standing for common ownership, morality in politics and so-called vital democracy—a system of government in which state power would be vested in the general population. It is a testimony to Dad’s energy and charisma that he ended up with 14,000 votes to the 18,000 of the winning Conservative candidate.

He would stand once more for election, but due to his disabilities this ambition gradually gave way to the pull of academia. Back he went to Birmingham, and a master’s degree, followed by his first academic appointment in 1946 as an assistant lecturer in economic science at Liverpool, where he gained his PhD in urban and business history. Then onwards to a lectureship in history at Cambridge, followed, at the age of 41, by an invitation to set up a new chair of economic history at Glasgow.

Mum was reluctant, as she liked their life in Cambridge. But Dad, who recoiled from the snobbery and privilege of the dons, was thrilled not just at the prospect of being based in the proud mercantile, shipbuilding and industrial city but also at the potential for research, while the Scottish accent and humour offered a homecoming of sorts after his predominantly Scottish education in Ottawa. Founded in 1451, the fourth-oldest university in the UK, Glasgow was also no slouch in terms of longevity.

The move also meant that Dad could build his own empire. When he first arrived, Glasgow had just one lecturer in economic history who had been there since the 1920s. By the time he left, he had a staff of fourteen, including two professors.

He and Olive moved with us five children into the first of a succession of three grand houses owned by the university, Caerleon in Ledcameroch Crescent, Bearsden. It is around this time that my own memories begin, of a magical Dad who couldn’t have been further from the stereotype of the university professor.

Dad, stripped to the waist, looking every bit the lumberjack as he chopped down trees in our vast garden. Dad, mending engines with the help of refugees from the Hungarian uprising of 1956, whom he and Mum had put up in the old stables. Dad, chasing us around the house, brandishing his crippled foot, or letting me, aged 6, ‘drive’ the new family Zephyr. Making up stories about Ball Eye the Tiger, only allowing us an occasional glimpse of the eye to maintain suspense. Introducing me to Willie Snoop, the little man who lived in the muscle of his upper arm and jumped about when spoken to. Singing the popular, deliciously politically incorrect songs from his childhood: ‘Barney Google’ (‘with the goo-goo-­-googly eyes’), ‘Puddin’ Head Jones’ and the music hall song that goes ‘Oh, Mr Gallagher? Yes, Mr Shean. Do you think that handsome ladies have no brain?’

In 1962 we moved to Westdel, on Queen’s Place in Glasgow’s West End. Built in 1889 for the university’s publisher, Robert MacLehose, it contained a bedroom designed by someone called Charles Rennie Mackintosh, whom nobody we knew had heard of but who had been a brilliantly innovative architect inspired by the art coming out of Meiji Japan in the 1890s. Our bedroom was the first he produced in pure white, although Mum painted it a fashionable orange. In the late 1960s, Dad made the bedroom his own, so that when the BBC finally woke up to Mackintosh’s merits and made a documentary on him, Dad jokingly offered to pose in the bed while they filmed.

This was a time of drinks parties straight out of Kingsley Amis’s Lucky Jim, with Dad suave, Mum la-di-dah, me and my sisters distributing the nibbles. Visitors included Lord Reith, first director-general of the BBC and rector at the University of Glasgow from 1965 to 1968, at 6’6” towering over Dad by four inches, as well as the historian RH Tawney, who dropped his pipe tobacco all over the Parker Knoll armchair. By then, Dad was working on his Gladstone book, so the sitting-room carpet had to be cleared of the Gladstone family papers for these events.

Every summer my parents took the family on long camping trips, across Canada and the US or to Spain, Italy and Turkey. At the time, we groaned at the early rises and Mum’s insistence on driving 150 km before breakfast, but today we look back with nostalgia as well as awe. At Christmas, we threw Edwardian-style parties complete with charades and carols round the piano, with my mum belting out the tunes, as well as magic shows, the most memorable of which was when Dad sawed one of my sisters in half.

Other memories include table tennis championships, in which Dad rattled his bat up and down against the shelves like a hooligan, and visits by Japanese professors amid much bowing and smiling behind hands. Dad was among the first British historians to link up with Japanese academics studying the Samurai sons who came to Scotland in the 1900s to learn our technology. Ironically, the Scots were generous with their knowledge, it never having crossed their minds that these strange visitors would ever pose a commercial threat. After Dad’s death, my mother would write several books about the cultural links between Britain and Meiji Japan.

The family’s final move was to 5, The University, one of a row of massive granite houses designed by Sir George Gilbert Scott for the professors. This was the academic equivalent to living above the shop, and Dad was in his element, striding out to his department in the Adam Smith Building and the College Club opposite, a panelled establishment muggy with cigarette smoke and the smell of overboiled cabbage. Now that they had safely delivered all five children to university, Mum turned her energies to reading and commenting on Dad’s works, before gradually starting to write herself.

During this period Dad’s taste for politics had something of a renaissance, and he successfully led a campaign to create a separate Faculty of Social Sciences and penned a master plan outlining how the university might develop closer associations with the community; the ideals of the Common Wealth Party were still intact. During the student unrest of 1970, he figured out a nifty way of escaping his department from a side door and coming home for supper, leaving the students waving their banners in the belief that he was still trapped inside. While half the university considered him a ‘pinko’, he joked, the other half saw his views as ‘somewhere to the right of Genghis Khan’.

Curiously, considering his subject, Dad never had any personal interest in either money or possessions. He never carried cash, didn’t want to own property, and pretty much camped out wherever he lay his head.

By now, he was applying his knowledge of economic history to contemporary economic and social challenges, advising the development corporation for the East Kilbride new town and visiting the notorious gangster Jimmy Boyle in prison. He also wrote The upas tree, a history of Glasgow as a declining industrial city, using it as a paradigm for Britain as a whole. ‘In Checkland’, a reviewer from Scottish Economic and Social History noted, ‘past and future are brought together in a manner glimpsed by some of the great founding fathers of economic history in the later nineteenth century, yet so rarely achieved since.’ Meanwhile, he was the driving force behind the consolidation of the Business Archives Council of Scotland, dressing his staff in boiler suits and dispatching them out in lorries to collect records of failed businesses or ones that had been taken over, thereby saving whatever lessons they held for posterity.

Scottish banking was in many ways his most ambitious book. A mammoth enterprise, it spans the history of 100 businesses and was written with full access to abundant material in the relevant archives. The book covers not just the innovations of Scottish banking during its heyday—the replacement of ‘sterile coin’ with banknotes, the use of the limited liability principle as well as the overdraft facility—but the transformation of Scotland’s fortunes from a near-subsistence economy in 1700 to the forefront of the Industrial Revolution a century later, while presenting the stories of the men involved (yes, this is very much a ‘his’ story). Lastly, the book provides a summary of the theories thrown up by the great Scottish economists generated by this economic revolution: James Steuart, David Hume and Adam Smith.

Dad’s prestige and authority continued to grow right up to his retirement in 1982 and beyond. He was made chairman of the National Register of Archives for Scotland in 1971, Fellow of the British Academy in 1977, president of the Economic History Society from 1977 to 1980, chairman of the Industry and Employment Committee from 1982 to 1984, and honorary president of the Economic and Social History Society of Scotland in 1984.

Not bad for a boy from Hicksville, Dad.

London, UK

March 2026

Sarah Jane Checkland

Get the Book

Welcome to another DeFi Markets Update—your no-nonsense briefing on the cryptobanking plumbing and market pulse.

Grove introduces the GROVE token

• Grove is capitalizing the stablecoin economy. Through institutional-grade allocation, financing, and liquidity solutions, Grove brings real-world assets and real-world use cases onchain to build the next generation of global financial markets.

• GROVE is the native token of Grove protocol, deployed on Ethereum as an ERC-20 with a supply of 10 billion. The token is expected to support protocol governance, including community participation in proposals and sentiment signaling, subject to final token design and governance documentation.

• The first token distribution went live yesterday, the 6th of July, with an early allocation that recognises participants who were part of Grove’s early community, subject to eligibility requirements. Early participants on the protocol can check their eligibility and claim GROVE at app.grove.finance

• Future GROVE distribution is administered through Sky Ecosystem-supported programs, including Sky Ecosystem Rewards where available. Eligible participants in Sky Ecosystem Rewards accrue GROVE by supplying USDS. Visit the Sky Money rewards page for more information.

• The GROVE token is also available on exchanges such as Coinbase, Bybit, KuCoin, and Bitvavo.

The Early Growth of Robinhood Earn

• Robinhood has launched Robinhood Chain alongside Robinhood Earn, allowing eligible users to earn an estimated 7% APY on USDG through a Steakhouse vault on Morpho. The launch marks Steakhouse’s second major retail lending integration, following Coinbase’s USDC lending launch in September 2025, and extends onchain lending to another large consumer financial platform.

• Early onchain activity shows users are actively moving onto Robinhood Chain. ETH bridged from Ethereum to Robinhood Chain has increased by almost 10x within days of launch, highlighting growing activity across the network.

• Moreover, deposits into the new Steakhouse USDG vault have continued to increase since launch, reaching approximately $17 million in TVL across more than 1,600 depositors within the first six days. The rollout is currently taking place in incremental stages, with access still limited to a small proportion of eligible users. The vault supplies USDG into Morpho lending markets, where borrowers generate the lending yield returned to depositors.

• Coinbase and Robinhood demonstrate how DeFi lending can be embedded directly into mainstream financial applications. While each platform offers a different user experience, both rely on Steakhouse to curate lending risk behind the scenes, giving users access to onchain yield without managing lending markets or vault allocations. Together, the two platforms manage more than $600 billion of customer assets, making this one of the largest retail distribution channels for onchain lending.

MetaMask Money Account Launches with Steakhouse Markets

• MetaMask has launched Money Account, a self-custodial account that combines stablecoin savings, spending and trading from a single balance. Users can earn up to 4% variable APY on supported stablecoins while retaining full custody of their assets. Steakhouse curates the lending markets and monitors vault’s allocations, liquidity conditions, and risk controls.

• Supported stablecoins including USDC, USDT and DAI are converted 1:1 into mUSD, MetaMask’s new stablecoin issued by Bridge and built on M0 infrastructure. Deposits flow through a Veda-managed Morpho vault on Monad, where Steakhouse curates the lending strategy using Veda’s multi-chain, multi-protocol infrastructure before capital is allocated across Morpho lending markets.

• The vault’s liquidity sleeve is held in mUSD, allowing capital to remain readily available while also supporting low borrow rates across Morpho Monad markets, including WETH/mUSD, wstETH/mUSD and WBTC/mUSD. These markets allow borrowers to post blue-chip collateral and borrow mUSD, with borrower interest forming the yield credited back to Money Account users.

• The new WETH/mUSD market on Monad already holds more than $410k in supplied mUSD with current borrow rate of 0.6%

• Money Account connects directly to the MetaMask Card, allowing users to spend from the same balance that earns yield. Monad’s sub-second finality enables purchases to settle directly from yield-generating funds, allowing deposits to continue earning until each transaction is authorised.

• The launch brings Steakhouse curated Morpho lending into one of crypto’s largest self-custodial wallets. Users access DeFi lending through a familiar wallet experience, while Steakhouse manages the lending strategy that powers yield behind the scenes.

Welcome to another DeFi Markets Update—your no-nonsense briefing on the cryptobanking plumbing and market pulse.

Robinhood Earn Launches on Morpho

• Robinhood has announced the mainnet launch of Robinhood Chain, its new network for onchain financial infrastructure. Launching alongside the chain is Robinhood Earn, which enables eligible users to access, through a non-custodial wallet, a variable yield from onchain lending markets, with no fixed lock-up period, curated by Steakhouse.

• Steakhouse designs and maintains the vault’s curation policy, defining and monitoring the parameters the vault operates within. Curation is the layer that lets an institution offer an onchain product with a defined risk framework around it.

• The Robinhood Earn vault, denominated in USDG, is launching with exposure to three collateral markets:

• Since Steakhouse launch, we have focused on making the most of the noncustodial and security features that vaults can offer to stablecoin users. This has found tremendous uptake and fit for institutional channels, in particular fintechs such as Robinhood. Steakhouse has become the partner of choice for fintechs around the world looking to offer stablecoin-based products to their users.

Liquidations vs Bad Debt Across BTC-Backed Lending Markets

• Bitcoin recently reached its lowest price in almost two years, falling to $58.2k and triggering another wave of liquidations across DeFi lending markets. Large liquidation events often raise concerns about bad debt, so we examined how BTC-backed markets on Morpho have performed through periods of elevated liquidation activity. Since November 2025, the Base cbBTC/USDC market alone has processed almost $394m of liquidations, including the most recent $9.7m liquidation event on 25 June.

• Looking across BTC-backed lending markets on Base and Ethereum Mainnet reveals a consistent pattern as despite processing more than $500m of combined liquidation volume, the major BTC/USDC markets have generated virtually no realised bad debt (see table below). These markets combine a 14% collateral buffer, strong liquidator competition and deeply liquid BTC collateral, allowing unhealthy positions to be closed before lenders take losses.

• At first glance, liquidation volume could appear to be a measure of market risk. However, liquidations and bad debt measure two different things. Liquidation volume shows how much leverage has been unwound, while bad debt only appears when the remaining collateral can no longer fully repay the outstanding loan after liquidation.

• High available liquidity across these markets provides liquidators with sufficient capital to repay unhealthy loans efficiently. The Ethereum WBTC/USDC market also uses a Chainlink SVR-enabled BTC/USD oracle feed, adding another layer of infrastructure around oracle-triggered liquidations.

• SVR (Smart Value Recapture) introduces an auction for liquidation opportunities created by oracle price updates, allowing part of the liquidation MEV to be recaptured by the protocol instead of external searchers.

• Across the major BTC-backed markets on Base and Ethereum, more than $500m of liquidation volume has been processed while realised bad debt has remained close to zero. Frequent liquidations have therefore acted as the mechanism that removes risk from the system before losses reach lenders, with more conservative lending markets consistently proving more resilient during periods of heightened BTC price volatility.

Steakhouse Vaults Added to Elwood’s Portfolio Management System

• Elwood has integrated Morpho Earn positions into its Portfolio Management System, allowing institutional clients to access Steakhouse-curated Morpho vaults without leaving their existing portfolio management workflow.

• The integration extends Morpho lending beyond native protocol interfaces into institutional portfolio management software. Vault positions can now be monitored alongside spot, derivatives, OTC, loans, and collateral, giving institutions a consolidated view of both onchain and offchain exposures.

• Users can execute deposits through MetaMask, WalletConnect, or Fireblocks while retaining full custody of assets. Elwood provides portfolio-level monitoring across Morpho positions, including APY, TVL, utilisation, liquidity, allocation breakdowns, curator risk metrics, and configurable alerts.

• Steakhouse launches as one of two supported curators alongside Gauntlet. Steakhouse currently curates approximately $1.5bn across 51 Morpho vaults, representing around 53% of Morpho’s stablecoin TVL, while Gauntlet curates around $0.7bn across 63 vaults.

• The integration is designed for crypto hedge funds, treasuries, DAOs, wealth managers, and existing Morpho depositors. Institutional clients can access the feature through Elwood’s Portfolio Management System since 23 June 2026.

Overview

Robinhood has announced the mainnet launch of Robinhood Chain, its new network for onchain financial infrastructure. The chain extends Robinhood’s mission of widening access to global financial markets, giving users and developers blockchain tooling to move, access, and manage digital assets from anywhere, without intermediaries or platform lock-in.

Launching alongside the chain is Robinhood Earn, which enables eligible users to access, through a non-custodial wallet, a variable yield from onchain lending markets, with no fixed lock-up period.

How it works

On the front end, Robinhood Earn is accessible through the Robinhood app that users are already familiar with, offering access to onchain products through an embedded self-custody wallet with Privy, while removing the complexity that has historically been a barrier to blockchain adoption. On the backend, the product leverages Morpho infrastructure, with vaults exclusively curated by Steakhouse Financial.

Morpho is a decentralized, non-custodial protocol for lending and borrowing tokenized assets. Vault users obtain exposure to multiple lending markets, held as a single diversified position. Each vault is built on Morpho Blue, the protocol’s base layer, where isolated lending markets are defined by their own set of rules. Lenders earn interest paid by borrowers, who post collateral and draw against it. Interest rates adjust algorithmically with supply and demand in each market.

The protocol itself stays neutral and permissionless. Steakhouse designs and maintains the vault’s curation policy, defining and monitoring the parameters the vault operates within. Curation is the layer that lets an institution offer an onchain product with a defined risk framework around it.

The Robinhood Earn vault, denominated in USDG, is launching with exposure to three collateral markets:

• spUSDG, powered by Spark, an institutional onchain savings protocol within the Sky Ecosystem with a multi-billion-dollar track record.

• USDe, Ethena’s digital dollar.

• SyrupUSDG, from Maple finance, earns returns from overcollateralized lending to vetted institutions, on Global Dollar (USDG).

Other collateral types may be onboarded in the future on the basis of demand and consistent with our published risk management framework: https://steakhouse.financial/docs.

Ecosystem

Robinhood Earn is a simple user experience that is supported by an ecosystem of partners. The table below outlines each partner and their role:

Looking ahead

We launched the Steakhouse vaults product line as a day-0 partner with Morpho back in January 2024. Since then, we have focused on making the most of the noncustodial and security features that vaults can offer to stablecoin users. This has found tremendous uptake and fit for institutional channels, in particular fintechs such as Robinhood. Steakhouse has become the partner of choice for fintechs around the world looking to offer stablecoin-based products to their users.

As more financial institutions evaluate onchain infrastructure, our focus is on helping them build successful stablecoin products with built-in transparency and operated through our published risk management frameworks.

Subscribe to Steakhouse Financial Insights for more on the infrastructure behind the stablecoin economy.

Onchain Lending Risks: Lending carries risk, one that cannot be removed but can be intentionally assessed, sized, and monitored, which is the role of a curator. The clearest risk is bad debt. If a borrower’s collateral falls below what they owe and liquidating it would not cover the loan, the shortfall stays in the market, the pool available to lenders shrinks, and a user’s balance can fall with it. The second is liquidity. The markets run at high utilization, so in stressed conditions a user may not be able to withdraw the instant they want. And each collateral carries its own risk-profile. Steakhouse reviews each asset and its market through quantitative modeling, including secondary-liquidity modeling, and sets exposure deliberately rather than evenly. For more on how Steakhouse evaluates collateral and monitors risk, see the Risk Framework and Information Hub at steakhouse.financial/docs.

Disclaimers: Robinhood Earn is a product offered by Robinhood, available to eligible users subject to Robinhood’s applicable product terms. Steakhouse Financial acts solely as curator of the vault behind Robinhood Earn and provides curation and risk frameworks across multiple vault infrastructures. Steakhouse does not offer the product, hold user accounts, take custody of user funds, or act as an investment adviser, manager, or fiduciary to any user. For more on how Steakhouse evaluates infrastructure and monitors risk, visit steakhouse.financial. This content is for informational purposes only. It is not an offer, solicitation, or recommendation to buy, sell, or hold any security, token, or financial product, and it does not constitute financial, investment, tax, or legal advice. It is not directed at any person in any jurisdiction where its publication or availability would be unlawful, and product availability is subject to geographic restrictions and eligibility requirements. Robinhood Earn is not a bank account or savings account. Yield is variable and not guaranteed, and is generated through third-party DeFi protocols, which carry risks including smart-contract, protocol, collateral, and liquidity risk that in extreme cases could result in partial or total loss. Withdrawals and redemptions are subject to available liquidity and applicable product terms. Current and past performance and yield are not indicative of future results. Statements about future plans or developments are forward-looking and subject to change.

Review the applicable product terms, eligibility requirements, and risk disclosures before participating.

Disclaimers → steakhouse.financial/disclaimers

The MetaMask Money Account is a self-custodial account inside MetaMask where a stablecoin balance can earn, spend, and trade from one place. Users can find the Money Account inside the MetaMask wallet, and Steakhouse curates the vault that produces the yield, monitoring the risk behind it.

Stablecoins are now a $320 billion market that settled $33 trillion in transactions in 2025. Yet most of that balance earns nothing, sitting idle in the wallets that hold it. The Money Account changes that by bringing earning, spending, and trading together under one experience inside MetaMask, the most widely used self-custodial wallet. The layers that make those deposits productive move into the background, requiring no actions from the user, where Steakhouse and the rest of the infrastructure handle them.

Earn, automatically

Users add funds to the Money Account directly in the wallet app, without leaving the app. Deposited stablecoins convert to mUSD, MetaMask’s dollar-denominated stablecoin and the unit the account runs on. Once using the Money Account, the balance earns up to 4%* variable APY, shown net of fees, so the rate is what holders actually receive. Only funds inside the Money Account earn: a stablecoin sitting elsewhere in the wallet does not.

Onchain lending markets are what power the Money Account. A user’s mUSD is lent into lending markets, where borrowers pay interest, and that interest generates the yield. It flows back into the mUSD balance and shows up as APY, with nothing to claim or reinvest. The balance updates in real time, and the rate moves as borrowing demand changes.

One balance, everything in one place

Funding Metamask Money Account is a single tap at 1:1 parity with no conversion fee, from USDC, USDT, and DAI, with Aave-wrapped versions of these stablecoins also accepted. mUSD can also be purchased directly with a debit or credit card or Apple Pay. Once the balance is in mUSD, the same funds can be used four ways, each drawing on the same balance with no transfer step in between.

• Earn: The balance accrues yield continuously in the background, with no action required.

• Spend: The Money Account connects directly to the MetaMask Card, online or tap-to-pay, at the hundreds of millions of merchants that accept Mastercard. Purchases settle straight from the users’ balance, and eligible purchases earn up to 3% back, paid in mUSD to the same balance (subject to regional restrictions).

• Trade: The balance plugs into MetaMask’s built-in venues, from swaps to perps to prediction markets to tokenized real-world assets, with no transfer step in between (subject to regional restrictions).

• Send: mUSD is a standard onchain token, the balance can be sent to any compatible wallet at any time, with no approval steps or send limits.

Every action within the Money account draws on the same balance, funds never have to be moved into a separate account first to earn, spend, or trade.

Where the yield comes from

When funds land in the Money Account, mUSD is deposited into a smart-contract vault built and maintained by Veda. The vault allocates to a predefined set of approved lending markets encoded in the vault’s smart contract. Initially, lending markets will be powered by Morpho, with more protocols to come. Steakhouse curates that set and monitors the vault’s allocations, liquidity conditions, and risk controls.

What to keep in mind

The Money Account earns a variable rate that moves with market conditions and is not guaranteed. The yield is generated through DeFi protocols, which carry smart-contract and protocol risk. It is a self-custodial account, not a bank account, and the balance is not insured by the FDIC. The holder controls the keys, which also means they are responsible for them. Full detail is in the disclaimer below and in MetaMask’s documentation.

Looking ahead

The economy is stablecoinizing under our feet, and the question is no longer whether people hold stablecoins but what those balances can do. A simpler, unified experience on a wallet that millions already use lowers the barrier to earning, spending, and trading onchain, and that ease is one of the clearest paths to bringing more users onchain in the first place. Steakhouse’s role is to keep the engine behind that experience reliable, curating where the yield comes from and watching the risks so the person using the account does not have to.

Learn more at metamask.io/money-account.

Disclaimer: Steakhouse Financial curates onchain yield strategies across multiple vault infrastructures. For more on how we evaluate infrastructure and monitor risk, visit steakhouse.financial.

The MetaMask Money Account is not a bank account, savings account, or regulated investment product. The Money Account balance (mUSD) is not insured by the FDIC or any government agency.

The rate shown is an estimated Annual Percentage Yield (APY). APY is variable and may fluctuate based on the performance of the third-party DeFi protocols and blockchain networks where funds are deployed. These carry inherent risks, including but not limited to smart-contract and protocol risk. In extreme cases, this could result in partial or total loss of funds. Withdrawals may be delayed if liquidity is tight.

mUSD is a stablecoin backed 1:1 by US dollars and short-term US Treasury bills, but like all crypto assets it carries inherent risks, including smart-contract risk and market volatility. You are responsible for all taxes, fees, and expenses associated with receiving and claiming any earnings, including gas fees.

The MetaMask Money Account is available only in eligible jurisdictions and is not offered in the UK or other restricted regions. It does not constitute an offer, recommendation, or solicitation to engage with digital assets, and it is not intended for jurisdictions where such participation would violate applicable laws or regulations. Users are responsible for ensuring compliance with the rules that apply to them.

Nothing in this article constitutes financial, investment, tax, or legal advice, nor a recommendation to buy or sell any digital asset or to adopt any investment strategy. DeFi protocols carry inherent risks, including smart-contract, oracle, and liquidity risk. Always conduct your own research before depositing. Terms are subject to change at the sole discretion of Consensys; please review the full MetaMask Terms of Use before using the Money Account.

Disclaimers → steakhouse.financial/disclaimers

Learn More

By the 1770s, money meant metal. Across Europe and the trading world, value moved as gold and silver coin, and the few paper notes in circulation were claims on it, issued sparingly by a handful of state-chartered banks. However, not in Scotland. Silver and gold were slipping out of daily use, and a different kind of money was rising in their place: bank notes, issued by private banks that competed for customers, redeemable on demand, and trusted enough to pass from hand to hand as cash. Each note was the issuing bank’s own promise to pay, and Scots used them for everything. These notes would even occasionally ‘depeg’, or trade at a discount relative to their physical distance from the main branch.

If this private-money arrangement feels familiar, you’re not wrong. Two and a half centuries later the same thing is happening onchain, and most of finance still hasn’t noticed.

That is why we republished the book that documented one of the main instances where free banking thrived.

A market in money

Between 1695 and the middle of the next century, Scotland built a competitive market in money itself. Banks issued their own notes, redeemable on demand, and no central authority decided who could play. They learned as they went along: the cash credit, the first overdraft, arrived in 1728. The Bank of Scotland’s founding Act called its shareholders “adventurers” and even naturalized any foreigner who bought in.

The Scots wrote rules into the notes themselves. In 1730, tired of rivals collecting its notes and presenting them all at once to force a run, the Bank of Scotland printed an “optional clause” into its paper: the bank could redeem on demand, or defer payment for six months at interest, marking each note so the holder knew it was temporarily inconvertible and earning interest. A circuit breaker, written into the money.

Not every bank was so disciplined. In 1769 two dukes, two earls and some hundred and forty other landowners launched the Ayr Bank under the motto Pro Bono Publico, set on out-issuing everyone. It over-issued, lent loosely against land, and collapsed in 1772, taking most of the country’s private banks with it. Many of its backers learned only then that their liability was unlimited. Free money rewards discipline and punishes its absence, and Scotland ran the whole experiment of creative destruction, invention and wreckage both.

Today, we are building the same thing onchain, out of the same parts. Stablecoins are the redeemable notes. Onchain lending is the cash credit, now with a public ledger where a clerk used to sit. None of that is what decides whether it works. Scotland’s banks lasted a century and a half because most of them knew what stood behind their notes and issued no more than that. Ayr Bank was rare to ignore the rules and nearly took the rest down with it.

The whole thing turned on underwriting then, and still does.

Scottish Banking is back to the Future

Scottish Banking is the most complete record of that experiment in print. Checkland, a pioneer of postwar British economic history, spent his academic career on it and traced the whole arc across more than a hundred institutions: the inventions, the note wars between Edinburgh and Glasgow, the crises, the characters, and the legislation that ended the free period in 1844 and 1845, after which Scotland’s seventeen banks of 1850 became eight by 1914. The data is there in full, including the system’s slow run onto ever-thinner capital, from more than half the balance sheet to roughly 7%, each generation backstopped differently from the last.

Every argument onchain finance is having today, Scotland once had, with real money on the line. Who gets to issue money? What has to back a claim that’s redeemable on demand? What happens when everyone redeems at once? Does regulation keep the system open, or does the government appoint it to a licensed few?

Scotland answered all four, in order, over a century and a half.

Why we think in centuries

We republished it for a plain reason. We’ve used it as a reference point ever since we started contributing to MakerDAO years ago. It is the closest thing we have found to a field manual for what we do: underwrite private money and credit onchain, decide what backs a position, and judge how much room it has before something breaks. Checkland documented the first run of that experiment, start to finish. The second run is happening now. The book is the fastest way to see where it could go.

Scottish Banking: A History, 1695–1973, by SG Checkland, expanded with a new foreword from Steakhouse. On sale now.

Buy the book today from your preferred Amazon marketplace: https://www.amazon.com/dp/1036901750

Access the data and tables from the book: https://books.steakhouse.financial

Register for the book launch event in London on June 30, 2026, from 18:00 to 21:00.

Welcome to another DeFi Markets Update—your no-nonsense briefing on the cryptobanking plumbing and market pulse.

The (Re)Launch of “Scottish Banking: A History, 1695–1973”

• On June 30th 2026, Steakhouse Financial will host a book launch event in London for “Scottish Banking: A History, 1695–1973” by economic historian S.G. Checkland. Originally published in 1975 and out of print for decades, the book has been republished by Steakhouse with new forewords from Sarah Jane Checkland and our team.

• The book traces the evolution of Scottish banking from the founding of the Bank of Scotland in 1695 through the banking consolidations of the twentieth century. Scotland pioneered many banking practices that are standard today, including branch banking, overdraft facilities, interest-bearing deposits, joint-stock banking, and the widespread use of paper notes.

• At Steakhouse, we became interested in the book because of its parallels to stablecoins and onchain finance. The expanded edition includes a new Steakhouse foreword exploring how Scotland’s free banking era and today’s stablecoin ecosystem share a common foundation, with privately issued monetary instruments competing for users, liquidity, and trust while settlement, credit allocation, and market adoption emerge through competition between institutions.

• Join us in London on June 30 to discuss Scottish banking, stablecoins, and the parallels between the historical and onchain financial systems. If you can’t make it, grab a copy of the book and send us a message!

USDC Deposits Continue Growing on Base

• Comparing USDC deposits across all Morpho curators on Base and Ethereum Mainnet, Morpho vaults on Base now hold over $1.5bn of USDC deposits, nearly twice the size that is on Ethereum Mainnet.

• The increase in USDC activity on Base is also reflected in Steakhouse vaults. Steakhouse Prime USDC V2 on Base grew by over 40% in June and now manages more than $275m in deposits. Both the Base and Ethereum Prime USDC V2 vaults launched at the end of 2025 and maintained similar deposit levels until May 2026, but Base has since pulled ahead, with deposits now around 4x larger than the Ethereum vault.

• As covered in our previous DeFi Market Updates issue, Coinbase Borrow routes USDC loans through Morpho on Base, creating additional borrowing demand and supporting more consistent utilisation across the underlying markets. This has helped Prime USDC on Base maintain an overall higher lending rate, which naturally attracts more deposits.

• Prime USDC V2 on Base has been earning around 4.0–4.5% APY, while the Mainnet vault has remained closer to 3.7–4.0%.

• For users seeking higher yield, Steakhouse also curates the High Yield USDC V2 vault on Base. The strategy expands the collateral beyond the blue-chip Prime framework, with around 80% currently allocated to the cbXRP/USDC market, where strong borrowing demand has supported higher lending rates and APY.

Steakhouse Confidential USDC Prime for cUSDC Holders

• Steakhouse Confidential Prime USDC is now live on Morpho, allowing Confidential USDC (cUSDC) holders to earn yield from our Prime strategy while keeping balances and transfer amounts encrypted onchain.

• cUSDC is Zama‘s confidential version of USDC, designed to keep balances and transaction amounts encrypted on Ethereum. The launch creates the first DeFi yield venue for Confidential USDC on Ethereum, extending the utility of cUSDC beyond transfers and enabling confidential assets to participate in onchain lending.

• The strategy follows the same allocation framework, collateral exposure, and risk parameters as Steakhouse Prime V2:

  

• Users can convert USDC into Confidential USDC through the Zama App and deposit directly into Steakhouse Confidential USDC Prime Vault. Deposits remain on Ethereum and earn yield from the underlying Morpho markets while balances and transaction amounts stay encrypted.

• The vault is particularly useful for institutional allocators, corporate treasuries, and other large capital pools that actively manage positions onchain. Powered by Zama’s Fully Homomorphic Encryption (FHE), encrypted balances and transfers can reduce the visibility of position sizes, capital movements, and transaction activity while continuing to participate in onchain lending.

Welcome to another DeFi Markets Update—your no-nonsense briefing on the cryptobanking plumbing and market pulse.

Steakhouse High Yield Reaches Coinbase App Users

• Steakhouse High Yield USDC Edition is now live on Coinbase, alongside the existing Steakhouse USDC (v1 - 0xbeeF010f9cb27031ad51e3333f9aF9C6B1228183) option that launched in September 2025.

• Through the Coinbase App, users can now select Prime for blue-chip collateral exposure or High Yield for a broader, higher-yielding collateral set, depending on the level of risk they want to take.

• Coinbase High Yield expands Coinbase’s USDC lending product to include markets backed by USDe collateral from the Ethena ecosystem. This allows Coinbase lenders to earn yield from borrowing demand generated by Ethena users on Morpho.

• For reference, the USDC High Yield vault, which is separate from the new Coinbase High Yield Edition but follows the same HY strategy, has earned around 4–6% APY for most of 2026, with rates moving alongside activity in the underlying Morpho markets.

• The original Coinbase App-enabled Steakhouse USDC vault grew from $20m before launch to a peak of over $500m in January, and has since estabilised at around $260m.

Using FLHYon as Collateral on Morpho

• FLHYon was added as eligible collateral across new FLHYon/USDC, FLHYon/USDT and FLHYon/AUSD markets on Ethereum. FLHYon is Ondo’s tokenized version of the Franklin High Yield Corporate ETF (FLHY), a ~$1.1bn fund providing exposure to U.S. high-yield corporate bonds.

• FLHYon brings corporate credit exposure into our High Yield vaults, expanding the range of RWAs available across Morpho. The asset offers exposure to traditional fixed income markets through a tokenized fund structure, with the underlying fund primarily allocated to BB and B rated corporate debt.

• The new markets allow FLHYon holders to borrow stablecoins while keeping exposure to the underlying bond fund. This improves capital efficiency for holders who want access to onchain liquidity alongside high-yield bond exposure.

• As the borrow rate against FLHYon is lower than the yield to maturity of the FLHYon, borrowers could take a leveraged exposure. This is not without risk as FLHYon can be subject to market volatility.

• The markets are already integrated with our High Yield vaults and could be rolled out to Prime vaults in the coming weeks. Each market launches with an 86% LLTV, set to account for overnight and weekend price gaps while onchain liquidity continues to build.

Organic vs Incentivised PYUSD Vaults

• Our Steakhouse PYUSD Prime Instant vault has been earning the highest organic APY in the PYUSD market on Morpho for over six months.

• This refers only to organic yield. The total APY of the other three vaults on Morpho was higher during parts of this period due to PYUSD incentive campaigns funded by PayPal through Merkl, which provided additional rewards on top of the underlying lending rate. Since launching in late 2025, there have been 25 PYUSD incentive campaigns that distributed rewards to depositors in these Sentora vaults.

• The latest campaign distributed 35,179 PYUSD per day across the PayPal USD Main and the Sentora PRIME Main vaults. That is equivalent to approximately 246,000 PYUSD over seven days on Morpho alone.

• The campaigns increase the total APY, but they do not change the underlying lending rates. As of June 15, the split between total APY, organic APY, incentive APY and vault fees was as follows:

• There are currently no scheduled follow-on Merkl campaigns for these Sentora PYUSD vaults after the current campaign ends on June 18, though these campaigns are typically renewed on a weekly basis. Should incentives ever run out, deposits in those vaults would earn the underlying organic lending rate only.

Welcome to another DeFi Markets Update—your no-nonsense briefing on the cryptobanking plumbing and market pulse.

Apyx Depeg with STRC price’s fall triggers Morpho Liquidations

• Last week, apxUSD, Apyx’s STRC-backed stablecoin, saw its largest depeg to date, declining to $0.909. According to Apyx’s post-mortem, this happened as BTC fell, triggering retail panic and causing Strategy’s perpetual preferred stock STRC, the main asset backing apxUSD, to fall from near its $100 par value to $90.38.

• The event was notable for the divergence between Morpho market oracle prices and apxUSD secondary-market prices. The affected oracles used an exchange-rate-based NAV intended to reflect the fair net asset value of the product’s backing assets. As apxUSD depegged, the market price adjusted more quickly than the NAV-based oracle price, creating a gap between market and oracle valuations. The slower decrease in the NAV exchange rate led to liquidations being triggered in a mechanically ordered sequence.

• The Apyx USDC vault was affected through its Morpho allocations. The vault lends USDC into Apyx-related markets, including apyUSD/USDC and the Pendle PT-apxUSD/USDC markets. As apxUSD and related assets repriced during the depeg, leveraged borrower positions breached liquidation thresholds, leading to a rise in liquidations across those markets.

• The depeg began around June 3 and peaked on June 5, when liquidations across these Morpho markets exceeded $4m in a single day.

• The event did not cause any bad debt, and liquidations were handled orderly. The impact stayed contained within the Apyx vault and its related Morpho markets.

Token Terminal’s Analysis of Steakhouse Financial

• Last week, Token Terminal published its Q1 2026 analysis of Steakhouse Financial, which we recommend reading in full. Below is a short summary.

• According to the report, we ended Q1 as the largest curator on Morpho, with Morpho deposits increasing 9% QoQ from $1.64bn to $1.79bn.

• Morpho Vault Curation accounted for 94.42% of Steakhouse TVL in Q1, up from 90.79% in Q4, while Kamino Vault Curation fell from 9.21% to 5.58%.

• Q1 took place during a period of lower lending activity across DeFi. Aggregate lending TVL averaged $82.5bn during the quarter, down 18.2% QoQ but still up 44.8% YoY, while our curator deposits continued to grow. During the Feb/March volatility, markets where our vaults were exposed processed $234m of liquidations while maintaining full redeemability across nearly $1.7bn in deposits.

• Steakhouse vaults Q1 allocation mix was concentrated in stablecoin lending against liquid collateral. BTC-backed USDC markets accounted for more than 56% of allocations, with cbBTC/USDC on Base as the largest destination. This is consistent with our conservative curation approach focused on collateral quality, liquidity, and risk-adjusted demand.

• In Q2 so far, we continue to be the largest curator on Morpho with around $1.7bn in deposits and approximately 2x the TVL of the next largest curator. Much more Steak to come in Q3, with more updates soon!

What Basin changes for tokenised Treasuries

• Grove’s Basin has been announced almost a month ago with up to $1bn in committed daily liquidity for tokenised RWAs. The product focuses on reducing the settlement friction associated with Treasury-backed assets by enabling instant access to USDC.

• Centrifuge recently published an article on JTRSY, the Janus Henderson Anemoy Treasury Fund, which will support instant 24/7 redemption into USDC via Basin once it launches. The article focuses on how this changes the utility of tokenised Treasuries across onchain markets.

• Historically, Treasury products have typically operated with T+1 redemption timelines, creating a tradeoff between earning Treasury yield and keeping USDC immediately available. With Basin, JTRSY can keep short-duration Treasury exposure while giving holders access to USDC when liquidity is required.

• The article points to three areas where this becomes most relevant: stablecoin reserves, treasury management and lending collateral. In each case, the value comes from making Treasury-backed assets more operationally useful inside onchain systems.

• In practise, for treasuries and allocators, Basin changes how idle capital can be managed. A DAO treasury can hold part of its idle USDC in tokenised Treasury exposure, keep earning yield, and move back into USDC when capital is needed for incentives, investments or expenses.

Welcome to another DeFi Markets Update—your no-nonsense briefing on the cryptobanking plumbing and market pulse.

USDC Borrowings on Base

• Base has overtaken Ethereum Mainnet as the largest chain for USDC borrowings on Morpho, ending May with more than 65% more borrowings.

• Both Base and Mainnet had been growing consistently over 2024 and 2025, until the Stream Finance exploit at the early start of November 2025, which caused Mainnet borrowings to drop by more than $700m in a single week. From then on, borrowings on both chains remained fairly similar in size. The Resolv exploit on 22 March marked another turning point, after which the two chains diverged, with Base continuing to grow while Mainnet borrowings declined yet again.

• Furthermore, on Base, borrowing USDC against ETH has grown by more than 6.5x since Coinbase enabled its users to borrow USDC by posting WETH as collateral directly in Coinbase app, through its Morpho-powered borrowing product in late November 2025.

• However, even with ETH borrowing growing rapidly, BTC remains the dominant collateral on Base, accounting for over 90% of all USDC borrowings and more than $1.2b.

• Growth across the three Steakhouse Prime USDC vaults closely mirrors the growth in USDC borrowings on Base. As the vaults allocate primarily to the largest borrowing markets, increasing borrow demand has driven growth in vault assets.

Trezor Launches Stablecoin Earn

• Trezor, one of the original hardware wallet providers, launched a native Stablecoin Earn feature in Trezor Suite. Users can now deposit USDC and USDT into Steakhouse-curated Morpho vaults from within the app, with every transaction verified and signed on their hardware wallet.

• Deposits are routed into Morpho vaults, where capital is lent to borrowers and earns a variable yield generated from lending activity. Users receive a vault share token representing their position and can withdraw at any time through Ethereum.

• Trezor selected Steakhouse USDC Prime and USDT Prime as the underlying vaults powering the experience.

Summary:

• The integration turns Morpho lending into a native self-custody product, with Trezor handling the wallet flow and Steakhouse providing the risk curation layer underneath. Users get hardware-wallet signing, net APY visibility, and direct exposure to borrower-driven stablecoin yield, while the underlying vault strategy continues to manage allocations, liquidity, collateral quality, and market risk across Morpho lending markets.

High Yield Performance Across Chains

• Steakhouse High Yield V2 on Base has outperformed most large-curator USDC vaults on Morpho over the past month, delivering around 50 basis points of additional yield.

• Interesting to note is that over the weekend, the vault saw a liquidity squeeze as capital was reallocated across the underlying markets. The largest allocations were concentrated in cbXRP, SOL and cbDOGE, where available liquidity fell close to zero relative to market size. As liquidity tightened, rates across the three markets jumped above 20%, which pushed the Steakhouse HY vault APY higher.

• Furthermore, comparing the same V2 High Yield strategy across chains shows that Base now earns higher APY than the Mainnet one. Over the last month, the spread has been around 0.5-2%, likely driven by stronger borrowing demand across Base lending markets.

Welcome to another DeFi Markets Update—your no-nonsense briefing on the cryptobanking plumbing and market pulse.

EURCV Adoption Across Morpho

• EURCV borrowings on Morpho Mainnet have grown by more than 3x since January 2026, driven largely by cbBTC collateral usage, which expanded from near zero to nearly $9m in borrowings in the last 3 months.

• One reason for this recent growth is the cheap EURCV borrowing available against cbBTC collateral on Morpho, with rates below 1% (same rates for all collaterals). Borrowed EURCV can then be deployed into Steakhouse Prime EURCV, which is currently yielding around 3–4%, creating a potential carry opportunity highlighted in one of our previous Markets Updates.

• EURCV supply has also continued expanding in 2026, increasing from roughly €48m at the start of the year to over €75m in May, displaying the growing demand for euro-denominated stablecoin liquidity and euro borrowing markets onchain.

• Moreover, Morpho V2 adoption has also continued expanding across Steakhouse EURCV vaults, with more than €30m deposited into V2 vaults since the start of March.

USDG Lending Rates and Borrow Activity on Kamino

• Steakhouse USDG vaults on Kamino: Steakhouse USDG and Steakhouse USDG High Yield, are both now earning around 7% APY.

• USDG is a dollar-backed stablecoin issued by Paxos through the Global Dollar Network, which expanded to Solana in 2025.

• A key driver behind these elevated yields has been the launch of Kamino’s Ethena Market in mid-May 2026, built around leveraged USDe/USDG looping strategies.

• The strategy allows users to deposit USDe, borrow USDG at rates around 2.5%, swap back into USDe and repeat the loop with leverage. This has driven strong borrow demand for USDG, pushing utilisation across USDG markets higher and increasing lending yields for USDG suppliers on Kamino.

SOFR as the Base Layer for Stablecoin Yields

• A recent paper, “U.S. Stablecoins and the Global Safe Asset Channel: Private Money Meets Public Debt”, by researchers from the European Central Bank and Politecnico di Milano explains how stablecoins are becoming increasingly connected to U.S. money markets through their reserve structures.

• Stablecoin market capitalization has grown quickly over the last few years, with USDC and USDT now holding around $200bn across short-term U.S. government debt and repo-related assets.

• As stablecoin supply grows, issuers need to hold more reserve assets. Since those reserves are mainly held in Treasury bills and repo, more stablecoin demand means more demand for U.S. safe assets. This creates a direct relationship between stablecoin markets and U.S. money markets. Because stablecoin reserves earn short-term dollar yields, onchain dollar lending should be priced from those same rates, making SOFR and Treasury yields the rate benchmark for onchain dollar liquidity.

• Recently, one of our co-founders at Steakhouse pointed out this dynamic when framing DeFi lending rates through a simple pricing model: yield = risk-free rate + expected loss + risk premium + liquidity premium. In this framework, SOFR acts as the starting point, while the spread above it reflects the additional risks of lending through onchain markets.

• For example, we can see this in Steakhouse Prime USDC. Under the framework, the fair-value rate is around 3.95%: 3.6% SOFR + 0.05% expected loss + 0.25% risk premium + 0.05% liquidity premium (note these are illustrative values).

• To conclude, stablecoin growth continues making onchain USD lending more connected to traditional money markets. Since USDC and USDT reserves sit largely in Treasury bills and repo, SOFR becomes the benchmark for lending rates.

Welcome to another DeFi Markets Update—your no-nonsense briefing on the cryptobanking plumbing and market pulse.

More Products, More Growth for Grove

• Grove, the institutional credit infrastructure protocol within the Sky ecosystem, has grown to more than $2.5bn in TVL and continues expanding across both onchain savings and tokenized real-world asset infrastructure.

• Last week, Grove introduced Basin, a programmable liquidity layer for tokenized real-world assets. It gives eligible holders instant onchain stablecoin liquidity when they redeem, sell, or transfer supported RWAs instead of the traditional redemption wait lockup.

• Tokenized Treasuries and money market funds can move onchain 24/7, but redemption still follows traditional finance settlement timelines of 1-2 days wait. Basin finances the settlement timing gap while the relevant fund, issuer, transfer agent, broker-dealer, or tokenization platform completes its existing workflow.

• Over time, Basin may extend across tokenized credit assets including investment-grade bonds and private credit. Grove is starting with Treasury and MMF products first because they are liquid, operationally mature, and institutionally adopted.

• Furthermore, a new rewards program is launching this week. Users who supply USDS or USDC through Grove Savings on Ethereum to mint sUSDS will begin accruing Grove Points when the program goes live on 21 May at 9am ET.

• Points accrue proportionally to a wallet’s share of total sUSDS minted through Grove Savings and are tracked through Grove’s referral code infrastructure inside the Sky ecosystem.

Diverging Capital Flows Across Lending Markets

• Lending venue preference appears to have shifted after the 18th of April KelpDAO/ LayerZero exploit, with users moving away from pooled lending exposure and into more isolated market structures. For comparison, aggregate USDC market size across Mainnet and Base is now similar between Morpho and Aave.

• Overall, in total size Morpho has continued growing this quarter and over the past 90 days, Morpho TVL is up 29%.

• In contrast, Aave TVL is down by around 45% over the same period, with roughly $18bn leaving since 18th of April.

• Isolated market design allocates capital across separate vaults and markets rather than one shared pool. Each market has its own collateral exposure and risk profile, making risk easier to contain. [read more here]

• Risk on Morpho still depends on the curator. Curators choose collateral, manage allocations, and define each vault’s risk-return profile. Steakhouse, the leading curator, currently curates more than 45% of Morpho stablecoin vault market share, giving users a broad set of vaults across different risk profiles and return targets.

AUSD Opportunities Across Chains

• Agora’s dollar stablecoin vaults curated by Steakhouse have continued earning above 8% APY for several months, supported by sustained borrow demand and ongoing incentive programs across multiple markets.

• On Ethereum, the AUSD High Yield Term Vault on the Steakhouse App combines organic lending strategies earning around 4–5% with an additional ~5% in AUSD incentives, bringing total vault APY close to 10%.

• Term strategies are built using Steakhouse Box adapters and hold direct positions to underlying assets. [read more here]

• On Morpho Monad, the High Yield AUSD vault has averaged roughly 7% organic APY over the past three months. Current MON incentives add another ~2%, pushing net vault yield toward 8-9%.

Welcome to another DeFi Markets Update—your no-nonsense briefing on the cryptobanking plumbing and market pulse.

Steakhouse Continues to Grow After the Spring of Exploits

• We all know Q1 2026 was a rough period for DeFi lending, with multiple collateral and lending incidents across the market. At Steakhouse, we are proud to say our vaults recorded less than $0.1 of bad debt across the period, while total deposits have continued growing.

• We are now the only curator managing more than $1B on Morpho and are steadily approaching $2B in total vault deposits.

• Morpho V2 adoption also continues to scale, with Steakhouse leading V2 vault TVL. Users with V1 positions can migrate into equivalent V2 vaults with similar risk-return profiles through the Steakhouse App, including Box Vaults for Term and Turbo strategies. [read more here]

• Steakhouse now curates around Two-Thirds of total USDC TVL on Morpho on all chains. Our Prime USDC vault on Base is also the largest vault on Morpho and was used as a benchmark in Morpho’s Q1 report.

• The spread between our Base Prime USDC and High Yield USDC vaults is widening again and is now above 2%. Prime continues to offer the more conservative USDC exposure, while High Yield rewards users willing to take on a broader collateral mix.

EtherFi: New Markets coming to Morpho

• Steakhouse vaults are onboarding weETH from EtherFi as eligible collateral across both ETH and USD lending markets. This includes new weETH/USDC, weETH/USDT and weETH/ETH markets deployed using our meta oracle setup.

• The review was benchmarked against both the internal Steakhouse risk framework and Lido’s wstETH architecture, which serves as the engineering baseline for Prime vaults. weETH was previously only eligible in Steakhouse High Yield vaults, but after the hardening process it now meets the threshold for Prime inclusion, positioning it as a more institutionally-grade collateral asset.

• EtherFi strengthened governance by moving key powers behind longer timelocks, expanding multisigs with external signers, and reducing instant internal control over upgrades. Additionally, after the rsETH bridge exploit, EtherFi hardened its LayerZero setup by pinning message libraries and DVNs, requiring 4/4 DVN approval, and adding stricter rate limits to reduce exploit damage.

• Before the new Prime markets went/go live, they entered a 7-day Steakhouse timelock period during which vault users could veto the onboarding through the Aragon DAO mechanism.

Are Stablecoins Actually Stable?

• A new IMF paper, ‘Making Stablecoins Stable’, argues that stablecoin stability depends on the reserve structure behind the peg. Stablecoins have grown from a crypto-native settlement tool into a large dollar-denominated money layer, with most supply concentrated in fiat-backed assets and dominated by USDC and USDT. As stablecoins move further into payment regulation after the GENIUS Act, the key question becomes whether reserve structures can support 1:1 redemption during stress.

  

• Stablecoins promise 1:1 redemption, while issuers back liabilities with assets carrying credit, liquidity or duration risk. The 2023 USDC depeg after Circle’s exposure to SVB showed that high-quality reserve structures can still face confidence shocks when part of the backing sits inside the banking system. The peg therefore depends on solvency, liquidity and market confidence during redemption stress.

• However this raises an obvious question: How relevant is this for today’s market, given that USDC has highly cash-like backing and USDT reports a large share of cash-equivalent reserves?

• The authors use central bank money as the benchmark for stability: instant redemption at par, deep liquidity and no-questions-asked acceptance. In our view, this comparison is too narrow, as almost no one holds central bank money at scale. The more relevant comparison is with commercial banks, which are also regulated private entities issuing money-like instruments used across payments and savings.

• Under that comparison, regulated stablecoins have a stronger structural argument. GENIUS and MiCA-style frameworks push issuers toward cash, short-term government debt and other highly liquid reserve assets. Banks, by contrast, issue money-like deposits against a broader and less liquid asset base. Therefore, regulated stablecoins may already have safer and more liquid reserve backing than traditional bank deposits, which challenges the paper’s framing of stablecoin stability.

• The more interesting policy question is whether stablecoins are being held to a higher standard than the banking system they are compared against. Large issuers already show that highly liquid reserve structures can still be profitable at scale. Like USDT, which has built a significant excess reserve buffer, giving token holders an additional layer of protection before liabilities are impaired. The debate should therefore distinguish fully reserved payment money from fractional-reserve bank money as stablecoins move further into mainstream payments.

Welcome to another DeFi Markets Update—your no-nonsense briefing on the cryptobanking plumbing and market pulse.

EURCV Opportunities on the Steakhouse App

• EURCV, Société Générale’s euro-backed stablecoin, has been consistently earning around 4% APY in the Prime Instant vault, with deposits now above $45m.

• Users with BTC collateral can borrow EURCV at around 1.5–1.9% APY, then deposit it into the Prime Instant vault to earn the higher rate. The spread creates a simple carry trade, with the main risk coming from BTC price moves and liquidation risk.

• EURCV supply has grown by over €30m since the start of 2026, a roughly 75% increase from its relatively flat ~€40m level throughout 2025.

• Transfer counts have also stepped higher since March, signalling rising usage and demand for euro-denominated liquidity and yield opportunities onchain.

How Did Morpho Perform in Q1 2026?

• Morpho’s Q1 2026 report shows strong year-on-year growth, with TVL reaching $9.63B, up 75% YoY. Active loans reached $3.64B, up 75.99% YoY, while monthly active users grew to 229.4k, up 664.67% YoY. On a quarterly basis, Q1 was softer than Q4 2025, with TVL down by 3.32% QoQ.

• Morpho remains primarily a stablecoin lending venue. Stablecoins accounted for over 84% of vault deposits, with USDC making up 64.7% of total vault deposits. Base also continued gaining share, supported by Coinbase lending products.

• Steakhouse Prime USDC, is Morpho’s largest vault by deposits, while cbBTC/USDC is Morpho’s largest individual market, where borrowers deposit cbBTC as collateral to borrow USDC. The report uses both as reference points to show Q1 rate compression across Morpho’s largest USDC lending and borrowing venues. For more context on how Morpho architecture works, read our previous Markets Update.

• Steakhouse is explicitly named as Morpho’s largest curator, managing $1.67B in vault deposits in Q1. This is up 25% from Q4 and 319% YoY, from $398.71M one year ago. The growth is especially notable as our deposits increased from Q4 to Q1, while Morpho’s total TVL declined by aforementioned -3.32% QoQ.

Kamino RWAs Growth and Expansion into Institutional Yield

• Kamino’s RWA deposits have crossed well over $1B in April, led by its three largest markets: Prime, OnRe and Maple, which together account for above $850M.

• It is also expanding borrow markets for tokenised equities. USDC can now be used as collateral to borrow xStocks, giving depositors a simple way to access onchain stock exposure while keeping stablecoins deployed.

• Beyond standard DeFi lending and borrowing, Kamino is expanding into Institutional Yield through stablecoin vaults that deploy capital into regulated, overcollateralised lending operations. These vaults generate yield from institutional borrowers backed by high-quality collateral, bringing real-world lending flows onchain in a structure that DeFi users can access directly

• Steakhouse is an active curator on Kamino, managing stablecoin strategies across vaults. Users can deposit into our Prime or High Yield vaults, with Steakhouse USDC consistently being around 4-5% APY.

Welcome to another DeFi Markets Update—your no-nonsense briefing on the cryptobanking plumbing and market pulse.

Base Opportunities: Borrowing, Yields, and Referrals

• Base is becoming the Morpho hub for USDC lending, as Coinbase Borrow lets users borrow USDC against BTC, ETH or cbETH collateral, with loans executed through Morpho on Base and accessed directly through Coinbase. The supply of Steakhouse USDC on Base has overtaken the one on Mainnet in recent months.

• With deeper borrow demand on Base, Steakhouse Prime Instant sits in a more active USDC lending market, which can support steadier utilisation and more resilient allocation. The Base vault offers a conservative profile, with APY consistently around 4% through 2026, compared to a lower circa 3% APY on Mainnet.

• Beyond our Prime vault, Steakhouse App also gives users access to other vault strategies on Base including, our USDC HY Instant yielding 6%+ APY.

• Lastly, Coinbase is also introducing more user incentives through referral rewards on Base App. Users can earn 25% of net referral swap fees when they refer friends, while referred users receive 10% off swap fees.

Pooled vs Isolated Lending Markets After KelpDAO

• Following the KelpDAO exploit, the DeFi ecosystem coordinated one of its largest recovery efforts to date under DeFi United, with reported contributions now exceeding $300m to help restore rsETH backing and stabilise affected markets. However, one question remains: if even Aave, the blue chip of DeFi lending, can face $200m+ of potential bad debt from a poisoned collateral event, what protocols can actually be considered low risk?

• Aave’s pooled design routes deposits into shared liquidity pools, where lenders are exposed to a common set of assets. In the KelpDAO / LayerZero incident, compromised rsETH entered the system as collateral, meaning the risk was able to sit against the broader pool once the asset was used due to rehypothecation. [read more about the Exploit in our previous Markets Update]

• This is why lending market design matters when thinking about platform-level contagion risk. Some designs prioritise deep shared liquidity, while others prioritise isolating risk so one asset or market has less ability to affect the rest of the system.

• Morpho uses an isolated market design, where capital is allocated across separate vaults and markets instead of one shared pool. This gives each market its own collateral exposure and risk profile. Moreover, collateral can’t be rehypothecated, limiting contagion for borrowers.

  

• In this structure, risk is contained at the market level. For example, if an asset like rsETH is compromised, only the vaults or markets exposed to that asset are affected, while unrelated markets continue to operate independently with no contamination. Borrowers are unaffected.

• It is also important to note that “low risk” on Morpho depends on the curator. Curators define the collateral set, manage allocations, and shape the overall risk profile of each vault, so choosing the curator also matters. Even within a given curator, there can be multiple vaults with different risk profiles and levels of risk appetite.

Is Everyone Inflating Stablecoin Volumes?

• Stablecoin volumes have become one of the easiest numbers to overstate and one of the hardest numbers to interpret properly. A headline can say $35tn in annual volume, like in the another can say that payments are only $390bn, and both can be true depending on whether we are talking about supply, transfer volume, adjusted activity or actual payment usage.

• For example, the headline figure of $35tn annual stablecoin transaction volume, reflects the total value transferred onchain. It includes trading flows, exchange and custodian wallet movements, arbitrage, liquidity management, internal treasury transfers, and automated smart-contract activity, where the same capital can move multiple times. Therefore the figure can be often misleading as most of this activity does not represent true end-user payments

• To understand the problem, we need to distinguish the key vocabulary often used around DeFi.

  • Circulating supply refers to how many stablecoins exist, currently over $320bn.

  • Transfer volume is the total value moved onchain, including trading, internal wallet movements and smart-contract activity.

  • Adjusted activity attempts to remove obvious noise like bots, wash-like activity and internal transfers to get closer to meaningful usage.

  • Payment volume captures stablecoins used to transfer value for an economic purpose, including business payments, remittances, payroll, card spend and settlement.

  • Real payments refers to the portion of payment volume that can be clearly identified and attributed through transaction tagging, address labels, payment infrastructure, or category-level assumptions.

• So the ~$35tn figure is essentially everything combined, and it does not represent real payment usage, which is what we often want to look at. To get a clearer picture of actual usage, we need to strip it down. A recent analysis by McKinsey & Company does exactly this.

• McKinsey starts with raw onchain data and filters out exchange and custody movements, trading, arbitrage, and automated smart-contract activity. For categories like B2B and remittances, they apply tagging and assumptions to estimate likely payment flows. The result is $390bn annualised stablecoin payment volume based on December 2025 activity, representing a conservative estimate of identifiable real-world payments.

• Therefore, the headline volume is reduced by more than 99% to estimate identifiable payment usage. This is an extremely large reduction; so does this mean stablecoins, and hence, DeFi are both underperforming? Not really. Even under McKinsey’s strict definition, identifiable stablecoin payment volume has more than doubled since 2024, per their report. At the same time, stablecoin supply has grown from roughly $130bn in 2024 to over $320bn today, showing continued inflows and adoption across the ecosystem.

• The takeaway is that stablecoins operate across multiple use cases: trading, collateral, liquidity management, settlement, payments and more. A single number rarely captures the full picture, and headlines can be attention-grabbing. Often, the wording blends very different concepts into one number, shaping how the data is interpreted, so don’t get fooled and stay sharp.

Welcome to another DeFi Markets Update—your no-nonsense briefing on the cryptobanking plumbing and market pulse.

KelpDAO Exploit

• On April 18, 2026, attackers drained about 116,500 rsETH (~$292M) from KelpDAO’s LayerZero-powered cross-chain bridge by poisoning the RPC nodes LayerZero’s verifier relied on and DDoS’ing into the backups, tricking the bridge into releasing tokens against a forged cross-chain message.

• The attackers, preliminarily linked to the Lazarus Group, deposited 89,567 rsETH on Aave and borrowed 82,650 WETH and 821 wstETH against it. As this collateral is now impaired, those positions could translated into protocol shortfall, with the final bad-debt outcome depending on how Kelp allocates the bridge loss across rsETH holders.

• In Aave’s incident report, the protocol models two bounding cases: one where the 112,204 unbacked rsETH is socialised across the full supply, implying $123.7M of bad debt, and another where the impairment is isolated to bridged rsETH only, which produces materially larger losses on L2 markets. Under the first case, Aave also notes that Ethereum Core’s Umbrella WETH module could absorb part of the hit.

  

• Aave’s exposure stemmed from its pooled architecture as lenders supply into a single shared liquidity pool, against which any whitelisted collateral, ETH, wstETH, cbBTC, or in this case rsETH, can borrow against that same pool under one blended rate and shared risk parameters.

• Moreover, the contagion spread because Kelp’s inflated supply left rsETH partially unbacked across more than 20 supported chains, including Base, Arbitrum, Linea, Blast, and Mantle. Around 18% of the circulating supply became effectively unbacked, which triggered depositor withdrawals as users rushed to avoid being affected. That wave of exits pushed DeFi TVL down by $13bn in 48 hours, making it the largest DeFi exploit of 2026. As one of the leading money markets, Aave sits at the centre of that exposure, leaving many protocols affected even as Aave itself remains largely illiquid for now.

• On Morpho, the isolated-market design meant the damage was capped; only $1M of ETH was borrowed against rsETH as collateral across two isolated markets, and just 2 of ~500 Morpho Vaults (with >$10k in deposits) had any exposure to those markets.

• At Steakhouse, we had less than $0.01 of exposure to KelpDAO, which we exited. We communicated all changes made to our vaults via our socials and remained unaffected by the hack. This marks the second major DeFi incident in a row this year in which our curation has shielded users from losses, following the Resolv USR incident. To this day, we still have zero non-dust bad debt since we started curation.

Steakhouse Prime vaults Grow after a month of Exploits

• DeFi has gone through a rough month, with multiple exploits and hacks pushing markets to price risk higher. As allocators became more cautious and moved into safer positions, the spread between Prime Instant and High Yield Instant USDC vaults widened over the past month on Mainnet.

• Based on daily averages, the spread is now around 7% APY. For users still in V1, this is a strong reason to migrate into our V2 vaults and access that spread through the updated architecture.

  

• Reallocation out of riskier strategies and into Prime vaults increased supply by $60M in a single week at the end of March on Mainnet.

• On Base, the pattern is similar. Prime continued to absorb new inflows as depositors repositioned, while Coinbase Borrow and broader Morpho activity on Base added further USDC demand. Together, those flows almost doubled the supply of our Steakhouse Prime Instant (link to V2 version) as it grew from $300M to $570M in just two months.

  

Stablecoin Spillovers to FX Markets

• We examine the March 2026 BIS/IMF paper, Stablecoin Flows and Spillovers to FX Markets, which studies whether stablecoin activity leaks into spot FX and dollar funding markets. Stablecoins are overwhelmingly dollar-denominated, but the bulk of cumulative fiat inflows into them come from non-USD currencies, which means most stablecoin purchases embed an FX conversion and makes stablecoin venues a parallel FX market.

• Someone holding local currency like the Argentinean peso (ARS) can acquire a stablecoin directly on a centralised exchange, or indirectly by first converting to USD in the spot market and then buying the stablecoin. In a frictionless market these two routes should cost the same, and any gap between them is what the authors call a parity deviation. Parity deviations are near zero for liquid developed-market currencies, like USD, but widen substantially in economies with macro instability or capital controls.

• The model centres on an intermediary that facilitates dollar swaps in both the stablecoin market and the FX swap market, can be thought of as a market maker or dealer active across both markets. For example, when local demand for USDT rises, that intermediary sells the token, takes on the local-currency exposure, and uses up some of its capacity to absorb risk. As that capacity tightens, supplying dollars through swaps becomes more expensive too.

• This is the paper’s main mechanism: stablecoin demand does not stay contained within crypto; it passes through the intermediaries that also help clear dollar demand elsewhere. That means pressure originating in stablecoin markets can feed into broader FX pricing, raising dollar premia and affecting exchange rates. The size of that spillover depends less on the token itself and more on the strength of the intermediary sitting between the two markets.

• This market cost problem could potentially be solved once the GENIUS Act comes into effect, as bank subsidiaries and OCC-qualified nonbanks enter the stablecoin space and bring their FX desks with them, which means the intermediary slot the paper describes could increasingly be filled by entities like a JPMorgan subsidiary running matched stablecoin and swap books with more capital behind them.

• Alongside bank subsidiaries, the December 2025 OCC conditional approvals of Circle, Ripple, Paxos, BitGo, and Fidelity Digital Assets for national trust charters point to a growing pool of regulated issuers. Whether the spillovers the paper measures remain meaningfully measurable in a post-GENIUS world is ultimately an empirical question for the next iteration of this research.

• Furthermore, in February 2026, SEC staff added Q5 to its crypto-asset FAQ. Q5 lets broker-dealers treat qualifying payment stablecoins as liquid assets and apply only a 2% haircut when calculating net capital. That means a broker-dealer can hold qualifying payment stablecoins with only a small capital penalty. Hence, if regulated firms can hold stablecoins more efficiently, they can put more capital behind the intermediary role the paper describes, which could help the market absorb larger flows with less friction over time.

• The paper shows that stablecoin flows affect FX through intermediary capacity, and the new SEC capital treatment, together with the GENIUS Act, could push forward a clearer federal framework for payment stablecoins. This suggests that stablecoin intermediation could become more institutional and easier to scale. The next phase of the market may therefore look less like a niche crypto venue and more like mainstream dollar plumbing built around stablecoins.