DeFi Markets Update 2026-07-02

Jul 02, 2026

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

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.

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.

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.