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Vitalik Buterin Slams ‘Fake’ DeFi, Backs ETH-Based Algo Stablecoins

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Copy-Paste L2s Are Hurting Ethereum’s Progress


Buterin criticized modern DeFi as centralized in disguise, arguing USDC yield farming misses core principles.

Ethereum co-founder Vitalik Buterin has questioned the legitimacy of popular USDC yield strategies, arguing they don’t follow the principles of true decentralized finance (DeFi).

His critique was in response to crypto analyst C-node, who said that most modern DeFi focuses on speculative gains instead of building genuinely decentralized infrastructure.

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Critique of Modern DeFi

C-node challenged the crypto industry on social media, saying there is little reason to use DeFi unless users hold long cryptocurrency positions and need financial services while keeping self-custody.

Buterin supported this perspective, arguing that depositing stablecoins such as USDC into lending protocols like Aave does not count as true DeFi. He dismissed such strategies, stating, “inb4 ‘muh USDC yield,’ that’s not DeFi.”

In his view, the underlying asset remains controlled by Circle, meaning the arrangement is fundamentally centralized even if the protocol itself is decentralized.

The Ethereum developer suggested two frameworks for evaluating what should qualify as real DeFi. The first, which he described as the “easy mode,” centers on ETH-backed algorithmic stablecoins. In this model, users can shift counterparty risk to market makers through collateralized debt positions (CDPs), where assets are locked to mint stablecoins.

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He explained that even if 99% of the liquidity is backed by CDP holders who hold negative algorithmic dollars while holding positive ones elsewhere, the ability to offload counterparty risk to a market maker remains an important feature.

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The second, or “hard mode,” framework allows for real-world asset (RWA) backing, but only under strict conditions. Buterin said an algorithmic stablecoin backed by RWAs could still qualify as DeFi if it is sufficiently overcollateralized and diversified to survive the failure of any single backing asset.

Under this structure, the overcollateralization ratio must be more than the maximum share of any individual asset, ensuring the system remains solvent even if one part collapses. This means that it would act as a buffer that distributes risk instead of concentrating it within centralized entities.

“I feel like that sort of thing is what we should be aiming more towards,” Buterin said, adding that the long-term goal should be moving away from the dollar as the unit of account toward a more diversified index.

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Crypto Community Response

The remarks were widely supported within the X crypto community, with one user calling it a “great take” and noting that ETH-backed algorithmic stablecoins offer real risk reduction, while RWA diversification spreads it instead of eliminating it. Another commented that “True DeFi needs real risk innovation, not just USDC parking.”

However, there were also some concerns. For instance, X user Kyle DH pointed out that algorithmic stablecoins have not updated their designs to address known issues, which makes them similar to money market funds that have the same “breaking the buck” risks seen before with TerraUSD and LUNA. They added that RWA backing requires careful diversification, warning that highly correlated assets or black swan events could still cause a stablecoin to fail.

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Franklin Templeton launches crypto division with 250 Digital acquisition

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Franklin Templeton launches crypto division with 250 Digital acquisition

Wall Street asset management giant Franklin Templeton is launching a dedicated cryptocurrency division as it deepens its push into digital assets, anchored by a planned acquisition of crypto investment firm 250 Digital.

The new unit, called Franklin Crypto, will bring together the 250 Digital team and its liquid crypto strategies — previously managed by CoinFund — under one structure aimed at institutional investors, the firm said Wednesday.

Former CoinFund executive Christopher Perkins will lead the division, with Seth Ginns serving as chief investment officer alongside Franklin Templeton digital assets executive Tony Pecore. The group will report to Sandy Kaul, the firm’s head of innovation.

The move builds on Franklin Templeton’s existing digital asset business, which manages about $1.8 billion, and signals a shift toward offering more active crypto investment strategies alongside its current products.

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“This is an exciting addition for Franklin Templeton,” CEO Jenny Johnson said, adding that the deal strengthens the firm’s ability to deliver dedicated crypto expertise to clients globally.

The launch of Franklin Crypto reflects a broader trend among large asset managers that are moving beyond passive exposure, such as exchange-traded funds, toward building in-house capabilities.

Perkins said the effort is aimed at meeting that demand. “Crypto’s institutional moment has arrived,” he said, pointing to growing interest from large investors seeking structured exposure to digital assets.

The transaction also includes an experimental element: part of the consideration will be paid using BENJI tokens, linked to Franklin Templeton’s on-chain U.S. Government Money Fund. The fund uses blockchain infrastructure to process transactions and record ownership.

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That approach suggests early steps toward conducting mergers and acquisitions using tokenized assets, with settlement occurring more directly on blockchain rails.

The acquisition is expected to close in the second quarter of 2026, subject to approvals and other conditions. Financial terms were not disclosed.

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Avalanche (AVAX) gains 4% as index moves higher

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9am CoinDesk 20 Update for 2026-04-01: vertical

CoinDesk Indices presents its daily market update, highlighting the performance of leaders and laggards in the CoinDesk 20 Index.

The CoinDesk 20 is currently trading at 1968.28, up 1.0% (+20.29) since yesterday’s close.

Eighteen of 20 assets is trading higher.

9am CoinDesk 20 Update for 2026-04-01: vertical

Leaders: AVAX (+4.0%) and HBAR (+3.6%).

Laggards: BCH (-2.1%) and BNB (+0.0%).

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The CoinDesk 20 is a broad-based index traded on multiple platforms in several regions globally.

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Bitcoin Breaks 5-Month Losing Streak With $68K March Close: What’s Next?

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Cryptocurrencies, Bitcoin Price, Markets, BTC Markets, Price Analysis, Market Analysis

Bitcoin (BTC) closed March in green, ending the longest monthly losing streak since 2018. Data suggests that the coming months may prove to be profitable for BTC.

Key takeaways:

  • Bitcoin ended March 2% higher, marking the first green monthly close in six months.

  • A similar streak in 2018/2019 led to an over 316% BTC price rebound over five months.

  • Bitcoin price faces stiff resistance at $70,000-$72,000, where key trend lines converge.

Past multi-month downtrends were followed by 300% price gains

Historical price data from CoinGlass confirms Bitcoin printed its first green monthly candle in six months, closing March 2% higher after five straight months of losses.

“This is a massive dose of hopium,” analyst Ash Crypto said in an X post on Wednesday.

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The analyst was referring to a possible shift in momentum, which might lead to a sustained recovery, as seen in previous cycles.

Related: Crypto Fear & Greed Index stuck on ‘extreme fear,’ but is there a silver lining?

The last time this happened was in 2018/2019 when BTC closed February 2019 in green, after six consecutive red months, as shown in the figure below.

This led to a reversal with over 300% returns the following five months, as Bitcoin recovered from the 2018 bear market.

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“Last time BTC dumped 6 months in a row, it pumped the following 5 months in a row that came after!” trader Satoshi Flipper said in a Wednesday post on X.

Cryptocurrencies, Bitcoin Price, Markets, BTC Markets, Price Analysis, Market Analysis
Bitcoin monthly percentage returns. Source: CoinGlass

If history repeats itself, the reversal may continue in April, suggesting that BTC price may have bottomed at $60,000.

Bitcoin’s bullish monthly close is a ”catalyst for fresh inflows into early April,” Trader Caleb said, adding:

“April starts with momentum.”

Bitcoin has a well-established tendency for significant price swings in April.

Since 2013, April has been a green month for eight of the past 13 years, with average returns of about 12.2%

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However, Bitcoin also tends to move in the opposite direction to March in April, and this is true for nine out of the past 13 years. 

In recent years, Bitcoin dropped in April after closing March in green, three out of four times between 2021 and 2024. 

Therefore, while the end of past multi-month drawdowns suggests a rebound is due, data demonstrates that BTC price could also slide in April.

Watch these Bitcoin price levels next

Data from TradingView shows BTC price up 2.5% on the day to trade at $68,470 as the $69,000-$70,000 resistance remains in place.

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Analysts expect Bitcoin’s range-bound price action to continue for longer, with important price levels to look for in case of a breakout. 

These include the $70,000-$72,000 supply zone, coinciding with the 50-day simple moving average (SMA), the 50-day exponential moving average (EMA) and the 1w–1m cohort cost basis

This is also where investors acquired approximately 650,000 BTC, marking a potential point of sell pressure, according to the cost-basis distribution data from Glassnode.

Breaking above this level could see BTC/USD revisit the $76,000 range high and eventually the $80,000 psychological level.

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BTC/USD daily chart. Source: Cointelegraph/TradingView

Zooming out, trader Sheldon Diedericks said Bitcoin could “push into resistance” at $83,000 on the monthly time frame, a key support level from April 2025. The 200-day EMA is also close to this area.

BTC/USD monthly chart. Source: X/Sheldon Diedericks

On the downside, the 200-week EMA at $68,300 and the 200-week SMA at $59,400 remain key levels to watch. Below that, the next major level is Bitcoin’s realized price around $54,000.

As Cointelegraph reported, Bitcoin’s bear market bottom could be formed once BTC price drops toward or below its realized price.