Hi all, happy Tuesday! Today we break down Compound’s newly approved DAO budget, as well as the broader lending sector rally. In addition to this, we touch on EtherFi’s neobank rerating, with EtherFi Cash now driving 65% of revenues and a proposed buyback program clarifying ETHFI’s value accrual. 

Let’s get into it.

BTC closed Monday up 2.2%, diverging from a soft session in equities. The S&P 500 (-0.6%) and NASDAQ 100 (-0.4%) both finished in the red as investors positioned ahead of a heavy week of retail earnings and continued turmoil in the Middle East, while gold also rallied (+1.1%).

In terms of sectors, Monday was broadly risk-on. The Lending index (+4.0%) was the day’s best performer, followed by the Privacy index (+3.9%) and the Ethereum Eco index (+3.6%). The clearest laggard was the L2 index (-1.9%), a notable divergence from the Ethereum Eco index's +3.6%. The Gaming index (-1.0%) and the Solana Eco index (-0.6%) were the only other crypto indices in the red on Monday.

Lending’s outperformance was led by Compound Finance (COMP), which rallied 10.3% on the day and peaked at 12.2% before easing slightly. The rally was ignited by Compound’s DAO approval of a $52M budget for its v4 program, the largest ever authorized by the DAO, as well as a full overhaul of its leadership team.

The program funds a roughly two-year pivot toward bringing institutional credit onchain, with spending directed at native RWA integration, capital efficiency features, partner integrations, and credit infrastructure built to traditional standards. The new leadership team reflects this pivot, with Aaron Schnarch (former Coinbase Custody CEO) as executive director, Christopher Donovan (NEAR Foundation) as COO, and Steven Liu (who scaled Maple Finance from $500M to $5B) as CPO, as well as additional hires from Anchorage Digital, HSBC, Broadridge, and Maple.

It is worth noting that Monday’s Lending index move was not a COMP story alone. MORPHO (+6.1%) and AAVE (+3.8%) both had notable moves on Monday, as both continued their foray into institutional lending. 

— Toma

EtherFi’s Neobank Bet

On Aug. 4, ETHFI fell 12.1% following the publication of EIP-8363, nearly matching LDO’s 15% decline while ETH itself barely moved.

The reaction exposed a clear disconnect. The market was still pricing EtherFi primarily as a staking business, even though interchange revenue from Cash generated 62.5% of protocol revenue over the previous four weeks. Including Cash Borrow, EtherFi’s neobank products accounted for roughly 65% of revenue, compared with just 27% from staking.

Cash processed $100M in spend during July, up 20% month over month. Monthly spend has grown by an average of 11% since January, but even assuming that slows to 5%, Cash would process approximately $1.7B over the next 12 months.

With EtherFi retaining roughly 1.35% of card spend after cashback, that would translate into approximately $23M in net transaction revenue. This projection covers Cash alone, giving no credit to staking or Borrow revenue.

The absence of a clear value accrual mechanism had also weighed on ETHFI since discretionary buybacks stopped in late March. Last Thursday, EtherFi announced plans to activate programmatic ETHFI buybacks in September, subject to DAO approval. The program will be funded by 1% of card spend alongside contributions from trading and staking revenue.

At the current run rate, approximately $1.33M would be allocated to buybacks each month. Applying the same 5% monthly Cash growth assumption while holding swaps and staking flat produces roughly $21M in buybacks over the next 12 months, equivalent to approximately 4% of ETHFI’s current market cap. Contributions from Borrow and perps would be additive.

The programmatic structure matters as much as the size. Rather than depending on discretionary decisions, buybacks will scale alongside platform activity, tying EtherFi’s growth directly to ETHFI.

EtherFi also unveiled a redesigned platform combining trading, borrowing, spending and payments. Users will be able to trade crypto and tokenized assets while borrowing against their entire portfolios through EtherFi’s dedicated Aave v4 instance.

That lending business is already gaining traction. Outstanding loans through the EtherFi instance reached a record $35.3M yesterday, despite Borrow currently contributing only around 4% of EtherFi’s total revenue.

Cash is demonstrating demand and helping EtherFi acquire users. Trading and credit can deepen monetization over time, following the progression seen at more mature neobanks such as Mercado Pago and Nubank, where credit accounts for a much larger share of revenue. 

The market has started to recognize the shift, with ETHFI rebounding from approximately $0.35 on Aug. 4 to around $0.50 today. EtherFi’s revenue mix had already moved decisively toward consumer finance, yet the market continued treating ETHFI as a staking token until the investor call forced a reassessment.

Crypto markets remain remarkably inefficient over short periods. Following a project closely can still provide an edge in identifying what the market has yet to price, whether a changing business mix, an overlooked catalyst or an underappreciated risk. 

— Carlos

Kamino Q2 Token Holder Report

Blockworks Advisory published its Q2 2026 Kamino report, arguing that the protocol is evolving from Solana’s largest lender into broader infrastructure for scaling assets and institutional credit onchain. Kamino ended the quarter with $2.29B in deposits, $940M in loans, and $1.84M in revenue, while maintaining zero bad debt through both the Drift exploit and SOL’s June drawdown.

The standout development was the Ethena Market, which became Kamino’s fastest-scaling market ever, surpassing $500M in deposits within 72 hours and ending Q2 with $529M. Meanwhile, RWA and offchain markets contributed nearly a third of NII, curated vaults rose to 23% of deposits, and Kamino continued expanding into tokenized equities, offchain collateral, institutional yield, and fixed-rate lending.

Securing the Infrastructure of Intelligence

Jensen Huang published an article arguing that land, power, and shell (LPS) are becoming the next strategic bottleneck for AI infrastructure, particularly for frontier labs whose compute demand is growing faster than their balance sheets can support. NVIDIA is therefore partnering with SB Energy to secure roughly 4.25 GW at the PORTS-Pike campus in Ohio for OpenAI, with NVIDIA supporting defined lease, power, and residual-value obligations over a 20-year term. 

The site could host roughly 1.5M NVIDIA GPUs per hardware generation, representing an estimated $150-200B of NVIDIA revenue each cycle, while OpenAI’s broader commitments could represent around $600B of NVIDIA compute through 2030. Huang frames the arrangement not as circular financing but as a supply-chain strategy. NVIDIA can use its balance sheet to secure scarce infrastructure, repeatedly refresh the compute installed there and redeploy capacity to other customers if necessary.