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.

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.

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.

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.

New data from Artemis shows that Hyperliquid, an on-chain derivatives platform, has overtaken Coinbase in notional trading volume. Notably, Coinbase is revered as the largest US-based exchange by trading volume.

Hyperliquid’s ascent is forcing the crypto industry to reassess long-held assumptions about where serious trading activity takes place.

Hyperliquid Surpasses Coinbase in Trading Volume

According to Artemis, Hyperliquid recorded roughly $2.6 trillion in notional trading volume, compared with $1.4 trillion for Coinbase, meaning nearly double the activity.

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The figures mark one of the clearest signals yet that high-performance on-chain platforms are capturing a growing share of global derivatives flows.

This milestone fuels debate over whether decentralized trading venues are beginning to rival centralized exchanges in scale and influence.

“Hyperliquid is quietly outgrowing Coinbase. Trading Volume (Notional): Coinbase: $1.4T Hyperliquid: $2.6T That’s nearly 2x Coinbase’s volume… from an on-chain exchange. And the market is noticing,” Artemis stated.

The gap is not limited to trading volumes. Year-to-date performance data shows a striking divergence between the two companies.

Hyperliquid is up 31.7%, while Coinbase is down 27.0%, creating a 58.7% performance gap in just a matter of weeks.

For analysts, this divergence reflects deeper structural shifts rather than short-term volatility. Anthony, a data analyst at Artemis, emphasized that underlying metrics are increasingly driving market sentiment.

The comment highlights a growing belief among market observers that liquidity, execution quality, and user activity are beginning to shape valuations and investor narratives. This is as opposed to brand recognition alone.

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One question raised by the data is why Binance, the world’s largest crypto derivatives exchange, was not included in the comparison.

The reason lies in what the figures are measuring and the narrative surrounding them. The Artemis analysis focused on Hyperliquid overtaking Coinbase, a major centralized exchange whose business is heavily weighted toward spot trading and regulated markets.

The milestone, therefore, highlights a shift in market structure rather than a direct challenge to the largest derivatives venue.

Binance remains the dominant player in perpetual futures trading by a wide margin. Coingecko data shows the exchange processing over $53 billion in daily derivatives volume. This exceeds Hyperliquid’s $6.4 billion.

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Hyperliquid’s Surge Sparks a New Fight Over Who Controls Crypto Trading

The data has sparked strong reactions across the crypto community, highlighting long-standing tensions between centralized and decentralized trading models.

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To some, Hyperliquid’s rise is a validation of on-chain markets, while others used the moment to criticize centralized exchanges.

Good, Coinbase is highly predatory on users.

— Duo Nine ⚡ YCC (@duonine) February 10, 2026

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Such criticism reflects a broader sentiment among some traders who argue that transparent, on-chain systems reduce counterparty risk and improve market fairness.

However, defenders of centralized exchanges note that they still dominate in fiat on-ramps, regulatory integration, and retail accessibility.

Perhaps the most significant implication of Hyperliquid’s growth is how it is changing the competitive sector. Rather than being compared primarily with other perpetual DEXs, the platform is increasingly being measured against major centralized derivatives venues.

Hyperliquid Hub, a community account tracking the ecosystem, argued that the platform has already pulled ahead of most decentralized rivals.

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“Hyperliquid is now absolutely dominating the on-chain derivatives sector. At this point, people are only comparing Hyperliquid with major centralized exchanges like Binance, OKX, and Bybit. Other perp DEXs have already been left far behind by Hyperliquid in terms of technology, liquidity depth, and overall performance,” they wrote.

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If this perception continues to gain traction, it could mark a turning point in how traders evaluate execution venues. It is less about whether they are centralized or decentralized and more about liquidity, speed, and reliability.

While the Coinbase exchange remains one of the largest and most regulated crypto platforms globally, Hyperliquid’s momentum highlights how quickly market structure can shift in the digital asset space.

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Still, challenges exist, after Coinglass data showed major gaps between volume, open interest, and liquidations across perp DEXs.

Compared a few DEX perp venues and noticed something important:

High reported volume ≠ real market activity.

24h snapshot

Hyperliquid: $3.76B volume / $4.05B OI / $122.96M liquidations

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Aster: $2.76B volume / $927M OI / $7.2M liquidations

Lighter: $1.81B volume / $731M OI /… pic.twitter.com/TFJDWHC8W8

— CoinGlass (@coinglass_com) February 9, 2026

As BeInCrypto reported, there remains disagreement about the lack of standards for defining “real” activity in decentralized derivatives markets.

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Additionally, industry executives like Kyle Samani also bear reservations about the integrity of Hyperliquid, saying the DEX is in most respects, everything wrong with crypto.

Hyper liquid is in most respects everything wrong with crypto

Founder literally fled his home country to build
Openly facilitates crime and terror
Closed source
Permissioned

— Kyle Samani (@KyleSamani) February 8, 2026

Crypto market analysts have become increasingly bearish, with technical signals favoring further downside before any meaningful recovery. 

More and more peak bear market signals are flashing up on the Bitcoin charts, leading analysts to believe that the pain is not over yet, but we may be nearing the bottom.

Bitcoin has now closed for a third week below the 100-week moving average and has been under this long-term trendline for 13 days, observed Coin Bureau CEO Nic Puckrin on Monday.

Historically, BTC has remained below this for an average of 267 days, with the shortest period at 34 days during the Covid flash crash in March 2020, he added, before predicting it could stay below this for longer.

“Therefore, historically, we are more likely to remain below for a longer period of time. A quick bounce back is still possible, but the longer we remain below, the less likely.”

Further Losses Make Accumulation Opportunities

Meanwhile, MN Fund founder Michaël van de Poppe said the “holder’s supply in profit/loss is rising,” which means more people aren’t profiting from Bitcoin, and the loss is growing significantly.

“This is something we’ve only been seeing during peak bear markets in 2015, 2018, and 2022,” he said, before adding that it should provide accumulation opportunities.

CryptoQuant founder Ki Young Ju was also bearish, stating, “Bitcoin is not pumpable right now.”

Selling pressure is too heavy for any multiplier effect, he said before adding that digital asset treasuries “won’t work until it becomes pumpable again.”

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Bitcoin is not pumpable right now.

In 2024, $10B in cash could create $26B in BTC book value. In 2025, $308B flowed in, yet the market cap fell $98B. Selling pressure is too heavy for any multiplier effect.

MSTR and DATs won’t work until it becomes pumpable again. pic.twitter.com/T8NZHio4H9

— Ki Young Ju (@ki_young_ju) February 9, 2026

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Glasnode reported on Monday that the unrealized market loss of $70,000 is approximately 16% of the market cap.

“Current market pain echoes a similar structure seen in early May 2022.”

“Bitcoin volume is telling,” observed analyst ‘Sykodelic’. “On the nuke to $60k we hit the fourth largest volume period since the 2022 bottom,” he said.

However, the analyst also said that each period since then that has recorded volume to this degree “has marked a key pivot in price direction,” questioning whether $60,000 was the bottom.

Bitcoin Loses $70K Level Again

The bearish sentiment is for good reason. Bitcoin fell below $70,000 twice on Monday and traded around $69,000 on Tuesday morning in Asia.

The asset has been consolidating around this level since recovering from its crash to $60,000 on Friday. It remains down 44% from its peak and is in bear-market territory, with the path of least resistance downward.

The XRP price rebounded more than 30% after bouncing from its early February low near $1.12. The move revived hopes of a recovery and briefly pushed the token toward the $1.50 zone. On the surface, the rally looked constructive. Momentum indicators improved. A breakout pattern began to form. Traders started discussing a possible trend reversal.

But blockchain data tells a different story. Instead of showing strong accumulation, on-chain metrics suggest that many holders used the rebound to exit losing positions. Selling at a loss remains dominant. Several groups are still reducing exposure. This raises a key question: was the bounce genuine demand, or simply exit liquidity for trapped sellers?

Technical Setup Shows Bounce Potential, But It Needs Confirmation

On the 12-hour chart, XRP is trading inside a falling wedge pattern, with a 56% breakout potential above the upper trendline.

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For this pattern to activate, XRP needs to first reclaim its short-term moving average, the 20-period exponential moving average (EMA), which gives more weight to recent prices. This level acts as dynamic resistance in downtrends. In early January, a clean break above this EMA triggered a rally of nearly 30%.

Momentum is also showing early improvement.

Between January 31 and February 9, XRP printed a lower low in price. At the same time, the Relative Strength Index (RSI), a momentum indicator that measures buying and selling pressure, formed a higher low. This bullish divergence suggests that sellers are losing strength.

Want more token insights like this? Sign up for Editor Harsh Notariya’s Daily Crypto Newsletter here.

On its own, this setup points to a possible bounce.

But technical patterns only work when holders are willing to stay invested. To understand whether this bounce has real support, we need to look at how investors are behaving on-chain.

SOPR Shows Holders Are Still Selling at Losses Despite the Bounce

One of the clearest warning signals comes from the Spent Output Profit Ratio, or SOPR. SOPR measures whether coins being moved on-chain are sold in profit or at a loss. When it stays above 1, it shows profit-taking. When it remains below 1, it shows loss-selling.

Since late January, XRP’s SOPR has remained below 1 for more than ten consecutive days.

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This is unusual. After a 30%+ rebound, short-term traders are normally sitting in profit. That usually pushes SOPR higher. But in XRP’s case, profitability never returned. Loss selling continued even as the price recovered. This means many holders are still exiting underwater positions.

In simple terms, the market is not seeing confident profit-taking. It is seeing stress-driven exits. To understand who is responsible, we need to look at holder cohorts.

Holder Data Confirms the XRP Bounce Is Being Used to Exit, Not Accumulate

HODL Waves group XRP wallets based on how long they have held their coins. This helps identify which investor groups are buying or selling.

The most striking shift appeared in the 24-hour holder cohort.

On February 6, this group controlled about 1% of XRP’s circulating supply. Within days, that share collapsed to roughly 0.09%. That represents a decline of more than 90%.

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These were highly reactive traders who entered during volatility and rushed to exit during the rebound.

Selling was not limited to this group.

The 1-month to 3-month cohort, which accumulated heavily in January when XRP traded near $2.07, has also been reducing exposure. Their share of supply fell from around 14.48% in mid-January to about 9.48% recently. That is a decline of roughly 35%.

These holders remain underwater. Instead of waiting for a full recovery, they are using rallies to minimize losses. Together, these two cohorts explain why SOPR has remained depressed for a long time now.

Short-term traders are exiting failed trades. Medium-term holders are cutting losing positions.

This behavior is typical of distribution phases, not early bull markets. And it directly impacts price structure.

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Cost Basis Data Shows Why $1.44–$1.54 Is a Wall for the XRP Price

Cost basis heat maps show where large groups of investors bought their coins. These zones often become resistance when the price returns to them.

For XRP, the strongest near-term cluster sits between $1.42 and $1.44. More than 660 million XRP were accumulated in this range. This creates a powerful sell zone.

When the price approaches this area, many holders reach break-even. After weeks of losses, they chose to exit.

Above this cluster lies the $1.54 level, which aligns with EMA resistance. Together, these zones form a barrier that XRP has repeatedly failed to clear. Each time the XRP price rallies into this region, selling intensifies. This is consistent with the distribution seen in SOPR and HODL Waves.

If XRP fails again near $1.44, downside risk increases. A rejection could send the price back toward $1.23 and possibly $1.12, the recent low. That would represent a decline of more than 20% from current levels.

Only a sustained break above $1.54, supported by improving profitability and reduced selling, would change this XRP price structure.

Federal Reserve Governor Chris Waller says the crypto hype that came with US President Donald Trump’s election victory has begun to wane as the market has become more entangled with traditional finance.

“I think some of the euphoria that came into the crypto world with the current administration, some of that’s kind of fading,” Waller said at a conference on Monday.

“A lot of it has been brought into the mainstream finance,” Waller said. “Then, you know, things have to happen there, so I think there was a lot of sell-off just because firms that got into it from mainstream finance had to adjust their risk positions.”

More traditional finance players have started to increase their exposure to crypto under the Trump administration, which has helped to elevate the market, but Waller argued that Congress’ failure to quickly pass the crypto market structure bill had also “put people off” as it leaves much uncertainty about how the products are regulated.

He also brushed off the recent market drop as “part of the game” with crypto. “You get in, you make some money, you might lose some money — that’s the nature of the beast.”

“Look, prices go up, prices go down — it’s just the nature of the business,” Waller said. “If you don’t like it, don’t get in it, that’s my advice to everybody.”

Bitcoin (BTC) has fallen 45% from its peak of $125,000 in October and is currently trading around $69,500 after a brief crash to under $60,000 on Friday.

Fed “skinny master accounts” to come this year: Waller

Waller said that the Fed would roll out its proposed “payment accounts” this year, which aims to give fintech and crypto firms limited access to the central banking system.

The Fed fielded feedback on the accounts, dubbed “skinny master accounts,” up until Friday, with crypto companies backing the plan while banking associations urged caution over the proposal.

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“We got a ton of stuff, and we’ll have to kind of work through that,” Waller said. “If we can get that done reasonably well, I’d like to try to have this done by the end of the year, if possible.”