Tokenized gold has moved deeper into crypto lending after Aave’s XAUT-backed debt reached a $25 million ceiling and Arch Lending added loans against the two largest gold tokens.

Arch co-founder and chief technology officer Himanshu Sahay told crypto.news that demand for tokenized gold loans shows holders are beginning to treat the assets as usable parts of the digital financial system, rather than only as a way to track bullion prices.

“The most interesting thing about the demand we’re seeing around tokenized gold is that people aren’t just treating these assets as a way to get exposure to the price of gold. They’re increasingly looking at them as something that can be put to work within the broader crypto financial system.”

Demand recorded on Aave provides one example. In late January, the decentralized lending protocol’s XAUT market reached its $25 million debt ceiling, according to a Chaos Labs assessment.

Chaos Labs recommended raising the ceiling to $30 million after finding demand to use XAUT as collateral for stablecoin borrowing. Within days, the risk manager reported that the added capacity had filled in less than 24 hours and proposed staged increases to $36 million, $43 million, and eventually $50 million.

Aave demand has tested tokenized gold lending capacity

Although the Aave activity showed that investors were willing to borrow against tokenized bullion, Chaos Labs found that the market was highly concentrated. Its February assessment said the largest position accounted for more than 75% of all debt secured by XAUT.

The same report described the users’ health factors as moderately safe and cited XAUT’s liquidity and relatively conservative volatility when assessing liquidation risk. Aave listed XAUT in isolation mode, preventing holders from using the asset to borrow more volatile tokens.

Initial parameters allowed users to borrow up to 70% of their XAUT collateral’s value, while liquidation could begin at 75%. The arrangement treated XAUT as collateral only, meaning users could supply it to support debt but could not borrow the gold token itself.

Sahay described the January activity as more meaningful than a one-time jump because the extra capacity was also used quickly. According to him, the demand indicates that “the collateral itself is becoming useful.”

Current balances require a separate reading from the January episode. Aave’s Ethereum v3 reserve page recently showed about $70 million of XAUT supplied but no XAUT-backed debt, according to figures provided by Sahay. He said the earlier borrowing should therefore be treated as historical evidence of willingness to use the asset, rather than a description of Aave’s present debt balance.

Recent activity has also extended beyond lending. An August CoinShares report found that real-world asset deposits had tripled to $7.4 billion even as DeFi activity declined, with XAUT and PAXG producing much of the measured spot activity. As reported earlier this month, traders used the two tokens to change their gold exposure as bullion prices moved.

Tokenized gold lets holders borrow without selling

For investors who still want exposure to gold, Sahay said borrowing and selling meet different financial needs. A sale closes the position, while a collateralized loan supplies cash or stablecoins without requiring the investor to give up the asset immediately.

“If an investor sells their gold exposure, they have exited the position,” Sahay said. “Borrowing allows them to access liquidity while retaining exposure to the underlying asset.”

Tokenization reduces some practical barriers because the collateral already exists on a blockchain. Holders do not have to transport physical bullion into a lending arrangement or arrange separate storage before seeking a loan.

PAXG and XAUT each represent a claim linked to physical gold, although their legal and operational structures differ. Paxos says one PAXG represents one fine troy ounce of London Good Delivery gold held in professional vaults. Tether says one XAUT represents one fine troy ounce of gold held in Switzerland.

On Aug. 28, Tether’s website placed XAUT’s market capitalization at approximately $3.27 billion, while CoinGecko valued PAXG at about $1.93 billion. The figures give the two products a combined market value of approximately $5.2 billion.

Tokenized gold previously reached another milestone in March when Tether deployed XAUT on BNB Chain. The BNB Chain expansion gave the token another settlement network alongside its existing infrastructure, while each unit remained tied to an ounce of physical bullion.

Sahay cautioned that digital access does not remove the dangers created by debt. In his view, a lending service still needs suitable LTV limits, custody arrangements, and risk controls because collateral can be liquidated when its value no longer supports the outstanding loan.

“The fact that an asset can be used as collateral doesn’t mean it should be leveraged aggressively,” he said.

Gold and Bitcoin serve different collateral needs

Rather than presenting tokenized gold as a replacement for Bitcoin, Sahay said the assets offer different characteristics to borrowers and lenders.

Bitcoin has more established liquidity across crypto markets and plays a central role as a native digital asset. Gold, however, has a much longer record as a store of value and has historically experienced less price volatility than Bitcoin, according to Sahay.

Gold-backed tokens may therefore appeal to investors who want on-chain borrowing without taking the same level of directional exposure associated with Bitcoin. The blockchain token still introduces risks tied to its issuer, custodian, smart contract, and redemption terms, even when the underlying bullion moves less sharply than BTC.

“I don’t think tokenized gold replaces Bitcoin as collateral. I think it expands the range of assets that can support crypto-native liquidity.”

His comments follow a previous interview in which he identified qualified custody, zero rehypothecation and clear collateral rules as safeguards for digital-asset loans. The custody discussion also covered margin calls and liquidations, which can force a sale when borrowers fail to add collateral or reduce their debt.

Arch has added PAXG and XAUT-backed loans

Within that developing market, Arch Lending has started accepting PAXG and XAUT as collateral at up to 75% LTV, according to information supplied by the company. Anchorage Digital will hold the pledged tokens.

Arch says it does not rehypothecate borrower collateral, meaning the assets are not lent to another party to produce revenue. Its website states that Anchorage holds collateral in segregated wallets and that Arch uses partial liquidations intended to sell only the amount required to restore a loan’s health.

The company’s public website has not yet added PAXG and XAUT to its displayed list of supported assets, which still names BTC, ETH and SOL and shows an LTV of up to 60% for existing loans. The 75% limit and support for both gold tokens therefore come from the company’s new product information.

Competitors already offer parts of the same service. Nexo says eligible customers can borrow against PAXG or XAUT, subject to location and account requirements, while YouHodler and CoinRabbit advertise PAXG-backed products. Ledn announced XAUT-backed lending in June but said the service would become available later in 2026.

US borrowers face tax, access and liquidation questions

For US investors, borrowing against an appreciated digital asset generally differs from selling it because the Internal Revenue Service treats a sale or other disposal as an event that requires the owner to calculate a capital gain or loss. A loan does not involve the same immediate disposal, although a lender’s sale of collateral may create tax consequences.

Individual circumstances, loan structures and liquidation events can affect reporting, and the IRS advises digital-asset owners to keep transaction records and consult a qualified tax professional when necessary.

Arch operates legally as ChainFi Inc. and provides loans to US borrowers under NMLS number 2637200. Its disclosures state that product availability and interest rates vary by jurisdiction, loan type, and principal amount.

According to the company’s current state restrictions, loans are unavailable to individual residents of California, Delaware, Hawaii, Maryland, Mississippi, Montana, Nevada, North Dakota, Rhode Island, South Carolina, and Vermont. Arch also requires borrowers to complete identity checks before transferring collateral and receiving USD or USDC.

An ongoing attack against Solana-based crypto card platform Avici has reportedly drained more than $1 million from user collateral accounts while sending its AVICI token to an all-time low.

Avici attacker adds administrators before withdrawals

According to reports, the suspected attacker had collected 10,005.03 SOL, worth about $1.07 million at 18:58 UTC, along with approximately $11,600 in USDC and USDT. Its analysis was based on Solana transaction logs and RPC data gathered while the attack was still underway.

The wallet received its initial funding through deBridge at 13:40 UTC, when 1.79 SOL arrived from another network. After remaining inactive for about three hours, the address made its first call involving Avici’s programs at 16:49:48 UTC.

Transaction logs reviewed by the publication showed the same three-step process across affected accounts. First, the wallet called SubmitSignatures through Avici’s authorization program in a transaction that also used Solana’s Ed25519 signature verification program.

Next, the attacker called AddCollateralAdmin on Avici’s collateral program, registering an additional administrator for the user’s account. A final WithdrawCollateralAsset call then transferred the collateral to an account controlled by the attacker.

In one reviewed transaction, the withdrawal instruction moved 2,346.77 USDT from a user’s collateral account. The attacker also converted some of the collected stablecoins into SOL, including one swap that returned 209.76 SOL.

By the publication’s checkpoint, the wallet had signed 14,672 transactions, of which 2,344 had failed. Its SOL holdings increased by about 2,595 tokens, then worth approximately $277,000, during an 11-minute period.

Anonymous on-chain analyst STACC also created a live tracker for the affected transfers. According to figures cited from the tracker, 125 sending accounts had been identified, with individual transfers ranging from approximately 9 USDC to more than 26,000 USDT.

Neither Avici nor an independent security company has published a post-mortem identifying how the attacker obtained authorization. Although the transaction sequence shows how funds moved, it does not establish whether the incident resulted from a program flaw, compromised credentials, an exposed signing authority, or another failure.

Avici confirms card withdrawal issue

Avici acknowledged the incident in an X post published about one hour and 53 minutes after the first reported transaction involving its programs.

“We’re aware of an issue affecting card balance withdrawals and are closely monitoring the situation.”

The company added that it was working directly with relevant partners and would provide updates once more information became available. Avici did not call the incident an exploit, confirm how much had been taken or state how many customers were affected.

Several other questions also remain unanswered, including whether the activity has stopped, whether Avici has paused its programs, and whether affected users will receive compensation. The company has not disclosed whether any signing keys or administrative accounts were compromised.

Users had reported missing balances on social media before Avici released its statement. One user notably said their entire Avici balance had been drained while they waited for information from the project.

The incident concerns Avici’s card collateral and authorization programs rather than the Solana network itself. No available report has identified a vulnerability in Solana’s underlying blockchain.

Both Avici programs were upgradeable and shared the same upgrade authority, according to reports. The authority was reportedly a standard Solana account rather than a multisignature account, although no evidence has yet shown that the upgrade authority caused or enabled the withdrawals.

Operational controls have received increased attention as attacks move beyond flaws contained in smart contract code. In July, crypto.news reported security findings showing that compromised keys, signers and infrastructure accounted for 88.3% of roughly $764 million stolen during the second quarter of 2026. The Hacken report cited in the article found that only 4% of tracked projects combined audits, active bug bounties, and third-party monitoring.

Avici attack challenges its self-custody claims

Avici describes its product as a self-custodial wallet connected to a secured Visa credit card. Its Apple App Store listing states that users remain in control and that Avici never holds their funds.

Under the card model, customers deposit crypto into collateral accounts and receive a corresponding credit limit. Purchases reduce the available card balance, while the related collateral is later used for settlement.

The reported ability to add another administrator and remove unspent collateral raises questions about how Avici’s authorization controls enforce its advertised self-custody model. A technical finding will require Avici or an independent security company to explain why the attacker’s signature submissions were accepted.

Avici’s documentation identifies Rain as a partner involved in its card service. Rain supplies stablecoin payment infrastructure and works with licensed institutions to issue cards connected to Visa and Mastercard. Available transaction analysis points to Avici’s Solana programs, and neither Avici nor Rain has said that Rain’s or Visa’s systems were compromised.

The distinction is important for users because a self-custodial payment product is supposed to keep unspent assets under the wallet owner’s control. Tangem introduced a similar model in November 2025, with on-chain USDC spending through a virtual Visa card while users retained custody of their funds.

Payment infrastructure has also faced separate wallet-related incidents. In July, on-chain analysts identified suspicious outflows exceeding $9.7 million from wallets linked to stablecoin payment provider Triple-A across networks including Solana, Ethereum, TRON and TON. Triple-A had not confirmed whether customer assets were involved when the report was published.

AVICI falls 49% to an all-time low

AVICI dropped 49.4% over 24 hours to $0.2175 as reports of the withdrawals spread, according to CoinGecko data cited at the time. The selloff reduced the token’s market capitalization to approximately $2.84 million and pushed its price to a record low.

Trading volume reached about $656,543 during the same 24-hour period. Most AVICI trading occurred through MetaDAO’s futarchy automated market maker, while LBank, KCEX and MEXC accounted for the remaining reported activity.

CoinGecko lists AVICI’s record high at $7.56, reached on Nov. 26, 2025. The incident-day low left the token approximately 97% below that peak.

Avici Inc. is a US company that lists a San Francisco address on its website, while its privacy policy identifies it as a Delaware corporation. The platform also provides separate card terms for US customers, creating direct exposure for eligible American users of its wallet and secured card services.

The company raised $3.5 million through a capped MetaDAO token sale in October 2025. MetaDAO’s fundraising record shows that 7,352 contributors committed approximately $34.23 million, but Avici returned about 89.8% of the pledged USDC after applying the sale cap.

The offering priced AVICI at $0.35 and valued the project at approximately $4.52 million on a fully diluted basis. Avici issued 10 million tokens through the sale, representing about 77.5% of its 12.9 million-token supply.

HyENA has announced plans to close every market between Aug. 31 and Sept. 2 after processing more than $4 billion in trades for over 12,000 users.

HyENA will remove markets over three days

HyENA said in an Aug. 28 shutdown announcement that it would stop operating after changes in Hyperliquid’s stablecoin setup reduced the opportunity for USDe-backed margin products.

The platform will begin delisting markets on Aug. 31 and complete the process on Sept. 2. Rather than closing every contract at once, HyENA will remove one market per hour throughout the scheduled period.

Users do not have to close their positions manually before each delisting, according to the announcement. Once a market is removed, its mark price will move toward the one-hour weighted average of the relevant oracle price before the remaining positions settle automatically.

Margin released through that process will return to each trader’s spot balance. HyENA said user funds are not at risk during the closure, although traders may still choose to exit positions before their respective markets reach the settlement stage.

“User funds are safe,” the team said, adding that the planned process is designed to let customers withdraw their assets without requiring manual settlement.

HyENA has handled more than $4 billion in cumulative trading volume since launch, according to the team. Over 12,000 traders used the platform, while holders of USDe margin received almost 2.5 million USDe in rewards.

Built by the Based team, HyENA used Hyperliquid’s HIP-3 system to offer perpetual contracts with Ethena’s USDe serving as margin. The design allowed traders to keep margin in USDe and receive rewards while using the same capital to support open derivatives positions.

Hyperliquid’s USDC alignment reduced room for USDe

At launch, HyENA operated during a period when several dollar-linked assets were competing for a larger role within Hyperliquid. The team identified USDT, USDe, and USDH among the assets seeking use across the trading network.

Hyperliquid’s closer relationship with USDC later changed the conditions supporting HyENA’s model, the announcement said. While the team described stronger USDC integration as a reasonable course for Hyperliquid, it also said the arrangement left less room to expand USDe-based margin.

In May, Coinbase became Hyperliquid’s official USDC treasury deployer under an agreement that also made USDC an aligned quote asset across the ecosystem. As crypto.news previously reported, Hyperliquid held about $5 billion in circulating USDC at the time, roughly twice the amount recorded a year earlier.

USDC gained another defined role under the agreement, with Circle supplying cross-chain infrastructure through its Cross-Chain Transfer Protocol and Coinbase handling treasury deployment. The arrangement also gave Coinbase purchasing rights for USDH-branded assets through Native Markets.

By June 11, USDC had become Hyperliquid’s preferred stablecoin, according to a July JPMorgan research note. The bank estimated that Hyperliquid held about $6 billion in USDC, equal to roughly 8% of the stablecoin’s circulating supply.

JPMorgan also said Coinbase would return 90% of the reserve income earned from USDC held on Hyperliquid to the protocol. The bank cut earnings estimates for Coinbase and Circle after assessing how the revenue-sharing terms could affect the two companies’ stablecoin income.

The agreement provides a direct U.S. connection because Coinbase and Circle are publicly traded American companies. JPMorgan’s assessment tied Hyperliquid’s stablecoin setup to the earnings outlook for both firms, although the bank still expected USDC-related income to grow through 2027 based on its interest-rate forecast.

HIP-3 leaves settlement duties with market deployers

HyENA’s closure also shows how HIP-3 market operators can manage contracts built on Hyperliquid without the core protocol directly running each product.

Under HIP-3, independent teams may introduce perpetual markets while using Hyperliquid’s order books, margin tools and liquidation system. Deployers choose the contract, oracle, leverage limits, and settlement terms, giving each operator responsibility for managing its markets.

A May report on HIP-3 noted that the framework went live in October 2025 and requires teams to stake HYPE before creating perpetual contracts. Products launched under the framework have included synthetic markets tied to commodities, listed shares, and private companies.

More recent coverage of a sharp move in an SK Hynix-linked perpetual explained that a HIP-3 deployer supplies oracle prices, external perpetual prices, and as many as two additional mark-price inputs. Hyperliquid then combines the submitted figures with local trading data to calculate the contract’s mark price.

The same HIP-3 market controls allow deployers to halt trading, adjust open-interest limits or settle contracts. HyENA is using that settlement authority to close its remaining markets according to the published schedule.

For its shutdown, HyENA said each final mark price would converge with the one-hour weighted average of the oracle price before settlement. The method matters for traders holding leveraged positions because the final mark price will determine the value at which outstanding contracts close.

HLPe withdrawals will continue through Upshift

Alongside the market closures, HyENA said users with HLPe deposits can claim their principal and accumulated rewards through Upshift. Deposits will be redeemable at a 1:1 rate, with no withdrawal charge from HyENA and a one-day redemption period.

The final regular reward distribution took place on Aug. 27, one day before the shutdown announcement. Affiliate rewards are scheduled for their last payment on Sept. 9, after the market-removal process has finished.

Ethena ended its exchange reward program in June 2026, according to HyENA. With that campaign already closed, the platform will leave HyENA Points in their final recorded state instead of taking another snapshot.

No point conversion or distribution will occur, and the points carry no monetary value, the announcement said. Addressing possible expectations of an eventual airdrop, the team also stated that HyENA has no token and no plans to issue one.

The fact that the people in the study were able to maintain lower levels of LDL and triglycerides for up to a year means that CRISPR was able to edit enough cells in the liver, where much of the body’s cholesterol and triglycerides are produced, to give patients the benefit of having lower levels of the lipids. It also shows that these edited cells continue to produce new generations of cells that carry the CRISPR edit in AGNPTL3. People who received the highest dose of the CRISPR therapy saw levels of the ANGPTL3 enzyme drop by nearly 80%, which contributed to a drop in LDL and triglycerides of about 50%. “This is a really big step for CRISPR to show the durability of the result,” says Dr. Luke Laffin, co-director of the Center for Blood Pressure Disorders at the Cleveland Clinic and lead author of the study.

The CRISPR therapy did not cause significant side effects—and researchers did not expect it to, since people born with the defective ANGPTL3 gene don’t seem to have serious diseases either. That means the one-time therapy could potentially replace the current treatment for high LDL and triglycerides: daily statin pills. While effective, many people don’t take the pills on a daily basis for years, which lowers their effectiveness. “We could look at a situation further down the line where we are able to give people a choice,” says Laffin. In the future, if someone has a serious family history of heart disease or high cholesterol, for example, “this therapy may be an option for them where we could treat them now, edit their [liver cells], and they can continue to have a genetic defect that we know is safe and will control their cholesterol.”

Solana validators have approved a major change to the network’s token supply schedule, voting to double the protocol’s annual disinflation rate. The decision is expected to slow future SOL issuance while preserving Solana’s long-term inflation endpoint.

Finalized results posted on Solana’s governance portal show the proposal—SGP-0002, also called “Double Disinflation”—received 67% support, with 25.16% voting against and 7.84% abstaining. Participation reached 60.7% of eligible stake, according to the finalized tally.

Key takeaways

• SGP-0002 passes with 67% support, despite notable opposition and a meaningful abstention share.
• Annual disinflation is set to rise from 15% to 30%, while the terminal inflation target remains at 1.5%.
• Solana is projected to reach 1.5% inflation faster—about 2.8 years instead of roughly 5.7 under the prior schedule.
• Lower issuance likely means less dilution for SOL holders, but staking rewards for delegators and validators may also decline.
• Large participants were split, with some major voting blocs shifting or diverging strongly from each other.

What the governance vote changes on Solana

SGP-0002 updates Solana’s disinflation mechanism by increasing the annual disinflation rate from 15% to 30%. Importantly, the proposal does not alter Solana’s long-term inflation target, which remains at 1.5%—meaning the network still aims to converge on the same terminal rate, just on a faster timeline.

According to Solana Compass, the revised schedule is expected to bring Solana to the 1.5% terminal inflation level in about 2.8 years, compared with an estimated roughly 5.7 years under the previous disinflation pace.

The same analysis estimated that the new policy would reduce issuance by about 18.9 million SOL over the next six years. That reduction is the core trade-off of “double disinflation”: potentially less token dilution over time, paired with reduced inflation-driven incentives that feed staking returns.

Numbers behind the approval: turnout and dissent

The finalized results reflect not only a clear majority in favor, but also substantial minority resistance. Per the governance tally, 25.16% of voting stake opposed the measure, while 7.84% abstained. Overall participation was 60.7% of eligible stake, a meaningful share that helped finalize the outcome.

The decision was part of Solana’s first binding governance process. Alongside SGP-0002, validators approved a proposed Solana Constitution and rejected a separate proposal related to resource and inclusion fees. The supply-rate vote therefore landed in the middle of a broader governance package rather than as a standalone change.

Big voters split—and one notable stance shifted

While the final result leaned toward approval, some of the largest governance participants were not aligned. Solana Compass noted that major participants were divided over SGP-0002. Figment—identified as the largest voter shown in the finalized governance data with 17.1 million SOL staked—voted entirely against the measure.

Other large participants reportedly took the opposite view. Helius and Jupiter, for example, backed the proposal overwhelmingly, according to the governance reporting referenced by Solana Compass.

Kraken’s voting behavior also drew attention. Solana Compass reported that Kraken’s position shifted during the vote. The US-based exchange initially voted against SGP-0002 at 12:33 UTC, which temporarily reduced support below the required threshold. By the end of voting, more than 90% of Kraken’s roughly 8.9 million SOL voting stake backed the proposal.

That kind of late re-alignment matters in binding governance systems, because threshold conditions can make outcomes sensitive to large holders’ final preferences.

Why the faster path to 1.5% matters for SOL holders

From an investor and network economics perspective, the key effect of doubling disinflation is the speed at which Solana’s inflation rate declines toward its terminal 1.5% target. A faster decline typically reduces the ongoing flow of new tokens into the market, which can lower dilution pressure for long-term SOL holders.

However, the vote also signals a change to the balance between supply control and staking incentives. Because disinflation determines the rate at which new SOL is reduced, moving to a higher disinflation schedule can correspond to lower inflation-driven rewards over time. That means delegators and validators may face a less generous reward environment relative to what the previous schedule implied.

In other words, SGP-0002 tightens the emissions profile while leaving the terminal destination unchanged—shifting the timing of rewards and token issuance rather than eliminating them outright.

Governance decision arrives alongside ETF momentum

Solana’s governance vote also landed amid continued interest in US-listed SOL exposure products, even with weaker performance for SOL earlier in the year.

According to an X post shared by Bloomberg ETF analyst Eric Balchunas, Bitwise’s Solana ETF surpassed $1 billion in assets, becoming the first Solana ETF to reach that milestone. Balchunas also said US Solana ETFs have accumulated roughly $1.7 billion in cumulative net inflows, with little sustained outflow since their launch, based on his Friday update.

While governance changes and ETF flows aren’t directly linked, the juxtaposition highlights a broader theme: Solana is simultaneously adjusting its long-term supply mechanics and drawing continued investor capital through regulated investment channels.

Next, SOL stakeholders should watch how quickly the new schedule translates into staking economics and whether major validators and large delegators adjust their strategies in response. On the market side, the key question is whether ETF-driven demand can counterbalance any reward-related expectations shifting due to lower future issuance.