DeFi 2.0 Surge Post-Disorderly Restructuring in 2026
Original Title: "Yang Ge Gary: DeFi 2.0 Explosion in the Disorderly Restructuring of 2026"
Original Author: Yang Ge Gary
In the Q4 of the 25th year, driven by the overlay of the market and policy, the global traditional finance and emerging open finance violently collided in an increasingly disorderly environment, leading to drastic changes that cleared most of the remaining heat of the first curve (Note 1), and the emotional wreckage was difficult to digest in a short period of time. At the same time, traditional finance also found itself besieged in the bubble narrative of AI and the chaos golden age, reaching its last legs, with central banks around the world rigidly satisfying the market's rigid aesthetic with textbook monetary and fiscal policies, forcing everyone to believe that these outdated economic inertia could still be maintained for a little while longer.
In previous articles, I have detailed the failure of conventional economic models at the inflection point of the Kondratieff Cycle, but experiencing it firsthand is more sensory. Amidst a lot of noise, only Coinbase's year-end market outlook report <2026 Crypto Market Outlook> provided a relatively objective summary and forecast of the current market and industry. In fact, the overall trend is not difficult to discern, but too much emotion and inertia aesthetic have covered the brief gap. From my current standpoint, I am mainly concerned with three questions:
i) The current global situation shows a high degree of similarity in entropy growth trend compared to the 1910-1935 (Note 2) period, how long is the corresponding window today, and how will the comparison be made during the process instead of mechanically borrowing historical experience to assess risks and make decisions?
ii) The inherent development speed of Crypto and Open Finance and their contradiction in the collision with traditional finance in a positive market, which potential is greater and will become the main contradiction to restrain the other as a secondary contradiction?
iii) The combination of the first two forms a non-linear problem: will the chaos in 2026 form a turning point, becoming an independent growth factor that promotes Crypto and Open Finance to rapidly enter the mainstream world and financial market, bridging the gap (Note 3)?
Coinbase mentioned a lot of good data in the report <2026 Crypto Market Outlook>, one of the more eye-catching ones is about stablecoins: as of 4Q25, the global stablecoin total supply has reached $305 billion, with a total transaction volume of $47.6 trillion. We can roughly compare this data with the current global M0 total supply of $15 trillion and the total transaction volume of global currency usage of $1500 trillion (Note 4), we can see that the proportion of stablecoin supply has reached 2.0% and its application ratio has reached 3.2% (note here that the report indicates that the average activity of stablecoins is greater than that of traditional Fiat at 160%). In addition, with the report pointing out a consecutive 4-year annual compound growth of 65%, combined with various undertones laid down in 2025, we have reason to believe that the point where Open Finance crosses the chasm and enters the Early Majority node is just around this past year.
tl;dr
1. 1011 Ends Crypto's First Curve, 2025 Ends the Previous Kondratiev Cycle
2. The Last Stand of Traditional Finance's Inertia Aesthetics and Social Failure under Data Strong Regulation
3. The 2025 Renaissance of RWA Behind the Mainstream Narrative
4. Emerging Markets and Global Geopolitics
5. DeFi2.0, DAT2.0, Tokenomics2.0
6. Retrospective Summary of 2025 and Analytical Outlook for 2026
1. 1011 Ends Crypto's First Curve, 2025 Ends the Previous Kondratiev Cycle
In the January 25th article
1011 triggered the $193 billion largest single-day liquidation in Crypto history, subsequently affecting a total of around $400 billion in settlements over the following days. Superficially, it was the extreme leverage structure of the first curve market speculation endgame that was centrally liquidated in a low-liquidity environment, but fundamentally, it was the insufficient number of players in the zero-sum game market that led to the platform's failure to control client losses through gradual liquidation. When only two people are left at the table, all cooperative strategies will fail, and the opponent's dilemma is the inevitable reason for the end of the first curve.
Similar to the market harvesting of the $TRUMP coin, 1011 fundamentally undermined the belief foundation of the first curve, destroying the residual heat expectations based on a simple narrative, indicating that consensus based solely on gambling-style speculation will come to an end (Note 5); instead, the second curve further grows in this process, with all remaining ecosystem companies transforming or innovating to pursue a more practical long-term development path. The DeFi2.0 market based on Onchain Asset Management, RWA Finance, and Tokenization has become the inevitable direction of the next stage of the market. This includes CEXs, public chains, and Top Infra all making timely changes, swiftly transitioning to focus on PayFi and RWA aspects.
On the other hand, by the end of 2025, the global economic inflation has fully transitioned to "stagflation," where the fiscal and monetary policy adjustments of multiple central banks have become ineffective, leaving only the dispatching role of emotional value. The ultimate implosion of the traditional economy and the feeling of powerlessness in pushing the AI expectation to its limit have now become equivalent to the Rockefeller era of 1910, marking the complete end of the previous Kondratieff cycle (Note 6).
On October 29, 2025, Nvidia's market value surpassed $5 trillion, becoming the world's first company to reach this level. While many are still bullish on how much more room this price has to grow, without even comparing it to the 1910 Rockefeller Standard Oil Company, I just want to point out that the entire annual GDP of the African continent is only half this size.
As we enter 25H2, an increasing number of rating agencies, hedge funds, and investment banks begin to closely monitor Nvidia's financial situation. Setting aside its upstream and downstream production capacity and profitability along the industrial chain, the comparison between long and short positions on Nvidia based solely on systemic risk allocation has become completely imbalanced. In other words, even if the fundamentals remain overwhelmingly positive, this trend is hard to sustain; especially considering the industry reality of AI is not as optimistic as it seems.
It is noteworthy that in 1911, when Standard Oil was broken up into 34 companies due to antitrust measures, the global understanding of the application demand for oil energy in automobiles, airplanes, and the next generation of automated industries had become very clear. However, this did not successfully prevent the 30 years of chaos, depression, and systemic restructuring that followed 1911. The reason was that the essence of disorder and chaos was the result of the failure of the production relations of the previous stage, manifested in severe monopolies, widespread poverty, development imbalances, and continuous contradictions, all of which are irreversible phenomena of social entropy increase.
At the cusp of a major cycle shift, both economic policies and short-term conventional wisdom will fail. The factors hindering the development of socio-economic and environmentally benign growth are definitely not due to stagnation in growth potential, but rather because the inertia of the monopolistic production relations principle from the previous cycle is impeding or unable to support the fair and effective integration of the next stage of productivity and labor. Focusing on today, the development of AI is inevitable, but the semi-feudal, semi-monopolistic capitalist global governance mechanism cannot continue to support and adapt (Note 7).
2. The Last Stand of Traditional Financial Inertia Aesthetics and Social Dysfunction Under Data-Heavy Regulation
Even so, one of the surprises that has exceeded my expectations is that there are still so many economists and industry experts who are persistently fixated on interest rate cuts to this day. Compared to the period from February 2020 before the pandemic to the peak of the pandemic in April 2022, the U.S. M2 supply has accumulated by over 40%. Faced with such a massive monetary volume, each subsequent Quantitative Tightening (QT) and Quantitative Easing (QE) I see are merely formalistic emotional massages, where whether it is a 25bp or 100bp adjustment has already lost its original economic value measurement (Note 8).
In the current environment, interest rate cuts have become a perfect combination of a recipient's emotion-driven aesthetic expectation and a policy maker's coerced decision-making. In simple terms, this is a two-way inertia of psychological hijacking, a tool to influence the market through emotional value. It is worth noting that in delaying the global descent into chaos and comprehensive disorder and making every effort to use aesthetic inertia in financial and policy tools, countries have done their utmost.
However, the process of entropy increase cannot slow down as a result. Six months later, looking back at Greenspan's prophecy mentioned in the previous text: "We must accept that monetary and fiscal policy cannot permanently boost economic growth in the presence of deeply rooted structural constraints." We can see that many traditional policies under the traditional system have rapidly failed.
In mid-December 2025, Nasdaq publicly stated that it would submit an application to the SEC to change the stock trading hours to 24/7. This move essentially represents traditional finance pushing back against Crypto and Onchain Market in the face of major changes and at the same time testing the regulatory waters as a defensive protection. In fact, many traditional financial institutions in North America and East Asia have been adjusting their posture since the Genius Act in the middle of this year, struggling repeatedly between facing the challenges of Crypto Finance and the risks of embracing change and maintaining their previous competitive advantages as much as possible.
An interesting phenomenon is: this contradiction elicited strong reactions from various institutions in Q2 of this year. It seems that the Genius Act broke the existing game balance and cartel alliance moat (Note 9) all at once, and everyone felt threatened knowing that this trend is inevitable, and the traditional financial system is about to be completely transformed. However, as time progressed to Q3, everyone found that the market's reaction was too extreme. The market iteration process would not be as rapid as imagined. Traditional financial practitioners and policymakers miraculously reached a short-term reverse equilibrium, with the main logic being: change is inevitable, but policy compliance will be the reassuring pill to facilitate everyone's smooth transition to the new equilibrium and moat. As long as accredited parties and policymakers upgrade together, they can smoothly transition together; this stage of Q3 is very delicate, equivalent to everyone participating in a prisoner's dilemma and all agreeing to temporarily reverse their decisions midway to deal with greater external pressures, which is just a psychological illusion before the real collapse of the cartel alliance; as time moves to Q4, the most cutting-edge players know that, through the cross-sea ways of Hyperliquid and Robinhood, the complete collapse of the traditional financial cartel alliance will still come quickly, so whether it is Nasdaq or Coinbase, they will step forward to speak the truth again, by facing more realistic on-the-ground changes, such as adjusting trading hours and building their own RWA Tokenization system, to gain a real advantage in the next stage.
The above process is actually very classic, facing a major change, where all players formed a Gartner Curve psychological sandbox and participated in a game.
The strong end of traditional financial inertia aesthetics does not refer to the failure of economic principles. On the contrary, the Crypto Economy and Open Finance are further developments based entirely on economic principles. However, the bottleneck lies in the systemic issues of managing the economic and market production relations mechanics, especially after fully entering the digital age, where the existing management system is completely unable to adapt to finding a balance between regulation and freedom. The world has fallen into a great misconception of excessive digital regulation, leading to an accelerated worsening of entropy in just a decade.
Over the past decade, globally, sooner or later, has entered a huge misconception of "utilize data when available, regulate with any method." The rule cost and barrier cost of outdated systems have far exceeded the opportunity cost and risk cost. The rigidity of data management not only fails to break away from the dogmatic reliance on historical paths, but also results in paying a higher price or an even greater cost, forming a dreadful "Data Dark Age" effect.
This phenomenon has permeated every industry and corner of the world from top to bottom, where excessive digital abuse and financial restrictions have hindered the development of every industry. For example, based on my experience in VC for over 15 years, if you dogmatically use a person's bank KYC to judge whether they can receive funding, then 99% of the world's businesses and innovations will be wiped out.
Facing the entropy failure of the global financial system and socio-management environment, 2026 will inevitably enter further disorder and reorganization, with a large number of rules and industries being rewritten. It is also difficult to avoid falling into a chaotic period lasting at least 10 years.
3. The Issue Behind the 2025 Resurgence of RWA as the Mainstream Narrative
The narrative of RWA achieved a remarkable comeback in 2025 for a simple reason: the first curve's credit collapse, and the second curve temporarily lacked a new term with consensus, so RWA stepped in as a temporary substitute to win this year's MVP.
Two months ago, in a conversation with a Silicon Valley industry OG friend, upon hearing the news of Cicada Finance's upcoming listing announcement, he advised me to focus on RWA Finance. I followed his advice, while also keeping Onchain Asset Management as the core, resulting in today's Onchain Asset Management for RWA Finance. Undoubtedly, both Onchain Asset Management and RWA Finance will remain the mainstream tracks in the 2026 market.
RWA is not undergoing a revival but rather a reconstruction from the ground up, despite its name. The issue lies in the vastly different interpretations of the term by those who use it. As of 25H2, in most parts of the world, the understanding is still close to: a crowdfunding fundraising act that tokenizes assets.
Most people who get involved in RWA do not come from an industry-building perspective but rather from their own needs, which is understandable. However, just like the issues faced by P2P and E-commerce-era Crowd Funding, a demand-driven market will force the platform, channels, and the market itself to present a one-sided problem, leading the industry to quickly develop in the wrong direction.
What is the difference between RWA without fair value and equity crowdfunding from years past? Is there a need for Tokenization for illiquid RWA assets? Conversely, does every RWA asset really need liquidity? These questions obviously have not been clearly thought out or reached a consensus in the overall market by 2025, and some more profound issues related to business secrecy cannot be discussed here for the time being.
The current asset distribution data of RWA is provided in detail in Coinbase's report. T-Bill, Commodities, Liquid Funds, and Credit Loans remain the four mainstays, demonstrating the importance of quantifiable financial assets in RWA. In our view, there will be a certain proportion of changes in the RWA landscape in 2026. The above assets will still exist, but the actual business of DeFi and Crypto Finance brought by emerging economies will enter the RWA market as asset providers, with Stablecoin Payment and SupplyChainFi becoming rapid growth directions.
4. Emerging Economies and Global Geopolitics
In 2025, while developed countries and regions in the global economic and financial sphere were grappling with how to introduce management policies regarding Stablecoins and Crypto Finance, the development speed of global emerging economies and regions was astonishing and beyond imagination.
"What they all want is stablecoins, or platform coins will do." This is the consistent feedback from cross-border trading companies and payment firms this year. In addition to Nigeria, India, Brazil, Indonesia, and Bangladesh, a large number of other countries and regions in Africa, South America, South Asia, Southeast Asia, Eastern Europe, and the Middle East have also shown exponential growth rates in the application of Stablecoins and Crypto Finance for three consecutive years, with actual percentages far exceeding those of developed economies. Many have surpassed or caught up with the local mainstream fiat currency usage volume (Note 10).
These newly emerging economies of scale in emerging markets are rapidly expanding as "off-balance-sheet assets," contrasting sharply with the management dilemma in the current mainstream global environment mentioned earlier. Despite the significant differences in economic strength and consumer power in different regions globally due to historical accumulation over the years, it is evident that the analysis data of the world's mainstream economy has long been completely distorted. Faced with both overregulation-induced stagflation and rapid growth in a new environment, in less than 5 years, the global economic landscape will be reshaped, and geopolitical relations will undergo drastic changes.
Regarding the opening question ii), I clearly have a definitive answer. The true Nash equilibrium reshaping is not a breaking and reshaping within the global existing economic system but a complex reshaping formed under external forces in the new global order. The native development speed of Crypto and Open Finance will far exceed the speed of understanding and acceptance by traditional economic bodies and markets, and 2026 will likely become a significant turning point for this disruptive reconstruction.
5. DeFi2.0, DAT2.0, Tokenomics2.0
In this report, Coinbase is starting to bet on some new terminology, including DAT2.0 and Tokenomics2.0, which are essentially development branches of the familiar DeFi2.0 in the industry. The definitions of these concepts are still good, and here I will elaborate on each of them.
In 2025, the concept of DAT was successfully diffused to the mainstream global financial market by MSTR, and its fundamental logic is very simple: DAT Premium Multiple = Stock Market Value ÷ NAV (Net Asset Value) of its held BTC (or other mainstream Crypto); however, this premium multiple rapidly declined from Q3 to Q4 and even inverted, quickly ending this year's globalization wave of DAT1.0.
The fundamental reason for the value decline of DAT1.0 and the end of the financial effect is that the friction coefficient of capital multiplier is too small, the story is simple, price transparency expectations are limited, the Davis double-click and kill are too direct, and once the bullish and bearish trends reverse, confidence will quickly dissipate.
The industry value essence of the DAT concept in 2025 lies in the exhaustion of traditional financial stock market concepts with too large a bubble EV that is difficult to support, the Crypto first-curve bubble and credit collapse, with both markets shifting their focus to each other and huddling for warmth.
Why can DAT2.0 continue the value of coin-stock linkage? Simply put, DAT1.0 is the value transfer from Crypto's first curve to traditional finance, while DAT2.0 is the value integration from Crypto's second curve to traditional finance. Unlike the former, the value of the latter is sustainable in long-term development. In 2025, Ondo, Ethena, Maple, Robinhood, and Figure have actually set a good example in DAT2.0, and in 2026, more emerging companies will rapidly develop within it.
Tokenomics 2.0 is a broader concept. This year, we have proposed various derivative products related to Tokenomics, such as Liquid Engineering and Yield Engineering, which are further evolutions of Financial Engineering. In different real-world financial cases, Tokenomics continuously adjusts and optimizes every financial scenario, much like a financial circuit (Note 11), each case by case. However, in the process of industry-wide evolution, innovative generic protocols like Pendle's PT-YT, with overall significance, will gradually emerge.
In Coinbase's report, when mentioning Tokenomics 2.0, only a few issues were briefly touched upon, including Value Capture, Token Buybacks, Financial Engineering, Regulatory Clarity as Catalyst, and Protocol P&L. There was no logical connection or detailed elaboration.
Let's break it down here:
Value Capture actually has nothing to do with Tokenomics 2.0; it is only a necessary condition for the application and promotion of the second-order curve to the asset. Tokenomics exists independently of value capture. In other words, Tokenomics without sustainable value capture has been proven in the first-order curve to be Ponzinomics. It will no longer be the mainstream market in this year and beyond in the Crypto Market and Open Finance;
Token Buybacks are an important condition for Asset Tokenization in RWA and DAT 2.0, and in my view, they are even a necessary condition. More precisely, Asset Clearing Capability is a necessary condition for all asset investments. The benign development of RWA Finance next year largely depends on whether the market can build consensus on this point;
As for Regulatory Clarity, this point has been discussed earlier in this article. After Chapters 2 and 4, it should be objectively expressed as Pros and Cons. Coinbase's discussion perspective has its own uniqueness, but as discussed, the greater and faster global flexibility is actually in emerging markets and nascent economies;
In addition, the process of financial protocolization is not determined by regulatory clarity, but is highly correlated with certain financially developed regions in North America and East Asia. The P&L of Protocol Finance is entirely a transaction phenomenon of an upgraded Open Finance Market, determined by the objective market itself.
Both DAT2.0 and Tokenomics2.0 are merely temporary terms, and the Second Curve and DeFi2.0 are similarly descriptive of a phenomenon and inevitable trend of the current Crypto Market and Open Finance transitioning after 2025.
6. 2025 Review Summary and 2026 Analysis Outlook
As 2025 concludes, a review summary of the past year's forecast analysis:
February <The Second Curve of Crypto Growth>
"Zero-sum Game and the 7 Giants at the Table," "Trends of RYA/RWA and the Rise of PayFi," "Bridging the Gap: The Second Curve of Crypto Growth," "Development Patterns of Crypto under Compliance Issues and the Global Landscape";
April <Trump's Tariff Policy Will Trigger the End of the Wave and Bitcoin's Qualitative Change>
"The Triple Kill Problem of Bonds, Stocks, and Forex and the Failure of Merrill's Clock," "Thucydides Trap and a Comparison of the End of the Historical 5 Wave Cycles," "Greenspan's Prediction and the Significance of Crypto at the Intersection of Wave Cycles," "Bitcoin and the Change in Chaos Correlation: Inertia Cognitive Shift and Similarities to Merrill's Clock Issue";
May <GENIUS Act and On-chain Shadow Currency>
"Root Causes of the Decline of Traditional Dollar Dominance," "The Nominal and Real Purposes of the GENIUS Act," "Insights from DeFi Restaking to the Fiat World and the Currency Multiplier of Shadow Currency," "Gold, Dollar, and Crypto Stablecoins";
September <Asset On-chain Trend under Stablecoin Pricing Method>
"The essence of the Genius Act is to decentralize the currency issuance and settlement rights to obtain enhanced currency pricing power," "Stablecoins have triggered global financial on-chain and asset on-chain reforms through changes in currency pricing forms," "The reform has rapidly eroded the long-standing cartel alliance in traditional finance, bringing opportunities for interest restructuring amidst chaos," "The industry characteristics and issues of coin-stock linkage in two directions: Securitization and Tokenization, and market characteristics," "Stablecoins, DAT, stock tokenization, RWA, and on-chain asset management."
The outlook for 2026 has been extensively discussed in this article, and apart from issue i) all points have presumably been adequately analyzed. The further disarray and restructuring of the macro environment leading to the eruption of DeFi 2.0 have clear trends and inevitability.
Issue i) is indeed a headache, whether in socioeconomics or financial assets, trends and directions are always easier to judge to some extent over time and scale. Unlike the two Kondratieff cycles before in a paradigmatically similar environment, the main differences lie in the following 3 points:
a) The speed of information interaction to situation evolution is much faster, with a gap of 2.5-5 times from various aspects (Note 12);
b) The spillover space of global geopolitical conflicts is completely different, increasing the inevitability of conflict eruption;
c) The non-linear effects brought by AI and Crypto are much higher than industrial electrical automation.
On the other hand, there are many aspects that have not changed much compared to a hundred years ago, such as the hardware conditions of human social management, human natural lifespan, generational emotional digestion capacity, and the generally similar political-economic management cycles under different social forms.
In this context, in the past two years of corporate management, I have often discussed with partners and gradually accepted a fact, that is, to value non-linear issues, learn to deal with and master non-linear trigger situations, and incorporate unexpected changes into the plan.
References:
Note 1: The first curve refers to the 16 years of Crypto's past development, creating a speculative environment with consensus expectations, continuously driving expectations to form a wealth effect.
Note 2: The reason for choosing the year 1935 instead of the end of World War II in 1945 is that the price of gold experienced a cliff-like rise in 1934 after decades.
Note 3: Crossing the Chasm is a classic paradigm for the development of innovative things, metaphorically indicating that Crypto and Open Finance in the past few years are still in the Early Adopter stage.
Note 4: The estimate of $1500T is roughly calculated here using the annualized trading volume of the foreign exchange market and the securities commodities market as a basis to gauge the financial scale.
Note 5: The prediction market is actually a transformation extension of the first curve, where after the consensus credit no longer supported a consensus of speculative expectations, a short-term pragmatic event-based bet has become the new consensus credit soil for this kind of risk preference.
Note 6: The concept of the Kondratieff Cycle end and juncture has been mentioned multiple times in previous articles, such as Chapter 2 of Trump Tariff Policies Will Trigger the End of Kondratieff and the Qualitative Change of Bitcoin and the comparison of the Kondratieff Cycle end from history in five instances. From 2020 to 2025, the world is in the juncture process between the end of the previous Kondratieff Cycle and the start of the next one. The main difference this time refers to the end in 2025 and the accompanying socio-economic phenomena marking the completion of the previous Kondratieff Cycle.
Note 7: In the Trump's Victory Reshapes the Global Landscape of November 2024, it was first mentioned that "as of the end of 2024, most countries and stakeholders around the world are still in a semi-feudal semi-decentralized national capitalist environment," which has now been revised to the description of "semi-feudal semi-monopolistic capitalism."
Note 8: Objectively speaking, the sentimental value itself has already become an important factor in today's global financial secondary market. Economic policies and market confidence are mutually causal under the connection of sentimental value.
Note 9: The issue of breaking the cartel alliance in traditional finance is elaborately explained in Chapter 3 of Trend of Asset On-chainization under Stablecoin Pricing Methodology in May 2025.
Note 10: There is no publicly available explicit data material for the economic data of economically underdeveloped emerging countries, and the relevant information is based on non-public enterprise confidential data.
Note 11: <Financial Circuit and Web3 Tokenomics Theory> was written in October 2022, detailing the underlying framework mechanism of the Web3 Tokenomics financial system.
Note 12: This multiplier has only relatively narrow reference significance: macroscopically, 2.5x = Merrill Lynch's 10-year clock cycle / Bitcoin's 4-year cycle; microscopically, 5x = 7x24 hour trading / 5x6.5 hour trading; it cannot effectively represent the differences in actual production and social iteration.
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