Analyst says the CLARITY Act could hinder yield opportunities for DeFi tokens

“The proposed yield restriction will shift focus toward regulated players and divert funds away from decentralized finance tokens,” said Markus Thielen of 10x Research.

At the core of the proposal is a ban on offering yield — or anything resembling a reward — on stablecoin balances. This effectively ends the idea of stablecoins as savings products on the blockchain and redefines them as purely payment systems.

“This represents a clear re-centralization of yield,” wrote Markus Thielen, founder of 10x Research. “This is because the proposed model shifts yield back to banks, money market funds, and regulated platforms, leaving crypto platforms with fewer opportunities to compete on returns.”

This shift may also impact DeFi, despite initial expectations that it would benefit.

“The logic was that if centralized platforms could not offer yield, users would move on-chain,” Thielen said.

However, this assumes that DeFi will avoid the same rules. According to Thielen, in practice, the CLARITY framework will likely extend to frontend interfaces and token models, especially where fee generation or governance begins to resemble equity participation.

“This calls a wide range of the sector into question. Decentralized exchanges such as Uniswap (UNI) and dYdX (DYDX), as well as lending protocols such as Aave and Compound, could face stricter limitations on how they operate and distribute value,” the report states. The result could be lower trading volumes, reduced liquidity, and weakened demand for tokens.

“On the other hand, the proposed regulation is ‘structurally favorable’ for infrastructure players such as Circle (CRCL), as it integrates stablecoins more deeply into payment systems,” Thielen noted.

See also: "CryptoQuant analysts believe Bitcoin has not yet reached its final bottom"

#CLARITY Act #DeFi tokens

Share: