Ether Products Lead $600M Crypto ETP Flow Rebound in July
Global crypto exchange-traded products experienced a net inflow of $600 million in July, marking their first positive month since April, according to 21Shares. Ether-native products accounted for $350 million of the inflows in July, which was roughly double the $176 million that bitcoin-native products received. Bitcoin products continued to dominate trading volume, representing 78.5% of global crypto ETP and ETF turnover, while Ethereum accounted for 11.1%. The total turnover for global crypto ETPs and ETFs reached $133.3 billion in July, with other assets making up 9.1% and Solana 1.3%. Ether outperformed bitcoin with a 19% price gain during the period, and the ether bid remained strong beyond the report's cutoff date. XRP products added $34 million, Solana products $13 million, and baskets $7 million in net inflows, ending a brief period of heavy redemptions. Matt Mena of 21Shares attributed the flow reversal to July's price action, noting bitcoin's 8% monthly gain, its best since April 2026. The S&P 500 index fell by 1% and the Nasdaq 100 declined 7% during July, contrasting with bitcoin's positive performance. Farside Investors reported daily net inflows into U.S. spot ether ETFs of $53.1 million on August 4 and $60.8 million on August 5. Additional net inflows of $92.1 million on August 6 and $49.6 million on August 7 followed a minor $11.9 million outflow earlier in August.
Grayscale quietly drops Cardano, Polkadot and Hedera ETF plans
Grayscale initially proposed Cardano and Polkadot ETFs in February 2025, with filings for ADA and DOT registrations submitted on August 29 and HBAR on September 9. These proposed ETFs were designed as passive investment vehicles tracking the value of their respective tokens after fees and expenses. Late on a Friday, Grayscale submitted three separate requests to the SEC to withdraw its Cardano, Polkadot, and Hedera ETF registrations. The asset manager stated it no longer intends to proceed with the planned distribution of shares for each of these trusts. None of the ETF registrations became effective, and Grayscale did not issue or sell any securities related to these filings. Grayscale confirmed it had not sold securities or distributed preliminary prospectuses under the withdrawn registrations. The withdrawals were initiated by Grayscale itself and were not rejections by the SEC, which may allow for future new registrations. Since the filings in late February 2025, ADA experienced a 70% drawdown, DOT declined by 80%, and HBAR dropped more than 70%. Year-to-date, ADA lost over 41% of its value, DOT declined by 54%, and Hedera's HBAR decreased by 35%. These withdrawals reduce Grayscale's pipeline of proposed single-token ETF products, narrowing its future offerings. Currently, Grayscale lists 17 ETF products on its website, including Bitcoin Mini Trust ETF, Ethereum Staking Mini ETF, and Hyperliquid Staking ETF.
Hackers Drain $8 Million From Crypto Exchange Across Two Blockchains
On August 9, an attacker drained over $8 million from Coinsbuy wallets across the Tron and Ethereum blockchains, according to BlockWatchdog. The attacker initially tested the breach with a 5 USDT transaction on Tron before stealing more than 6 million USDT from eight wallets. On Ethereum, the attacker took 1.89 million USDT and 77 ETH from three different wallets during the same incident. BlockWatchdog linked the transactions on both blockchains to the same attacker using the cross-chain swap service Bridgers. Approximately $6.34 million, or 79% of the stolen funds, were moved through the FixedFloat cryptocurrency exchange by the attacker. Another 150 ETH was sent through the ChangeNOW exchange as part of the laundering process, according to BlockWatchdog's analysis. Coinsbuy replenished the drained wallets hours after the theft, returning around $3.93 million to the affected addresses. The decision to refill wallets suggests Coinsbuy believed the private keys were not compromised during the attack. Coinsbuy stated that all client funds affected have been fully covered from their own reserves, preventing user financial losses. The company announced a $100,000 reward for information leading to the identification of those responsible for the incident. Coinsbuy confirmed the security incident involved unauthorized withdrawals from several platform wallets but has since contained the issue. At the time, Coinsbuy was conducting a thorough investigation to determine exactly how the attacker gained access to their system.
Decentralization was the beginning. Call it onchain finance
Decentralization was the initial foundation for DeFi, but it no longer fully defines most protocols' operating models, requiring more precise language about trust and responsibility. Tokens in DeFi are now primarily assessed as economic exposure before considering their utility, reflecting a broader and more evolved user base than before. Modern protocols demand reliable front ends, support channels, offchain infrastructure, and operational bots, all of which incur real costs and require dedicated teams. Many DeFi protocols increasingly resemble operating companies by charging fees, employing teams, and maintaining systems over time beyond just smart contracts. Upgradeability in complex financial systems is generally recommended over immutability, provided governance and security models accommodate this design choice. Circuit breakers are essential features that introduce necessary friction, such as withdrawal delays, to enhance security and operational safety in protocols. A single developer key with unilateral upgrade authority poses a system-wide failure risk, which audits alone cannot fully mitigate. Yearn Finance originally launched fully onchain with no team allocation or pre-mine, aiming to minimize founder dependence and empower the community. Today, users expect identifiable teams to maintain products, manage risks, and provide ongoing value beyond the original fully onchain model. As DeFi protocols add teams, offchain infrastructure, and upgradeable systems, users must evaluate counterparties, trust assumptions, and operational risks. Immutability remains valuable for simple systems, but in dynamic financial environments, upgradeability introduces significant threat surfaces requiring serious responsibility.
Veda founder warns vault users against misconceptions of safety
Sunand Raghupathi, founder and CEO of Veda, cautions users against viewing onchain vaults as FDIC-insured savings accounts, emphasizing their hedge fund-like nature. Veda has expanded into ecosystems such as Solana and integrated with platforms like Privy to increase user access, despite many users lacking yield generation knowledge. The Kraken integration demonstrates traditional crypto players' trust in Veda's infrastructure, though retail users may have less insight into their deposits' management. Veda's vaults power Kraken's DeFi Earn product, which has attracted over $600 million in deposits and more than $100 million in inflows since mid-2025. Veda raised $18 million in June 2025, led by CoinFund, reflecting growing institutional interest in vault infrastructure within DeFi. The primary risks for well-audited vault systems have shifted from smart contract exploits to operational factors like key management and governance decisions. Veda employs BoringVault architecture and adheres to ERC-4626 standards, enhancing transparency and composability for users and integrators. Users face risks from the underlying protocols' smart contracts, oracles, and liquidity, which may be less secure than the vault itself. Institutional clients evaluate Veda's compliance controls, operational security, key management, and governance alongside yield performance when allocating capital. Veda has processed over $16 billion through its vault infrastructure without a major smart contract incident, highlighting operational robustness. Raghupathi stresses that misunderstanding vault safety is costly, as the risk landscape in DeFi has evolved beyond just smart contract bugs. According to Raghupathi, onchain vaults resemble hedge funds more than savings accounts, and users must internalize this to avoid harm.
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