Hey Edge readers,

We just got back from Permissionless IV, one of the most important gatherings in crypto and DeFi. The conference was packed with builders, investors, and founders pushing the boundaries of what’s possible across DeFi, Bitcoin, stablecoins, and beyond.

The energy on the ground was clear. Teams are focused. Infrastructure is improving. And the conversations have shifted from speculative hype to long-term impact.

This week, we break down our key takeaways from this year’s conference.

Stay sharp. 🫡

-The Exponential team

Takeaways from Permissionless IV

1. Bitcoin is finally getting to work

Bitcoin is no longer just digital gold. It is becoming the foundation for an entirely new financial system.

A wave of Bitcoin-native DeFi products including staking protocols, liquid staking tokens (LSTs), and yield-bearing wrappers is making BTC productive without breaking self-custody or triggering tax events. Protocols like Maple, CoreDAO, and Lombard offer BTC-denominated yield products that let users retain BTC exposure while earning onchain yield. Others like Threshold’s tBTC and Rootstock are building infrastructure to port BTC into EVM and non-EVM DeFi ecosystems without relying on custodial bridges like WBTC.

The BTCFi narrative is no longer theoretical. It is being driven by two forces:

• Institutions are searching for non-custodial, yield-generating BTC strategies to monetize idle reserves

• Builders are designing seamless integrations with exchanges and custodians to bridge native BTC into DeFi

The common thread across each ecosystem is simple. Bitcoin can now generate yield, power applications, and back stable assets. Whether through secure second layers or EVM-compatible sidechains, BTC is entering a productive phase.

2. Stablecoins reflect DeFi’s growing maturity

The evolution of stablecoins tells the story of how DeFi has changed.

Early stablecoins were built for crypto-native users who valued decentralization above all else. That audience wanted blacklists removed, self-custody preserved, and every dollar to be verifiably collateralized or algorithmically maintained. But the collapse of Terra marked a turning point. It became clear that safety, transparency, and regulation were essential for broader adoption.

Today, stablecoins are being built for different user segments, each with its own needs:

• Crypto-native users prefer permissionless, censorship-resistant designs

• Institutions require compliance, transparency, and trusted custodians

• Mainstream users expect clean interfaces and app-like simplicity

The future of stablecoins will not be defined by one model. Instead, it will span a range of approaches, from decentralized primitives to bank-issued tokens embedded in consumer applications. What matters now is not just how a stablecoin is structured, but how well it serves its audience.

Stablecoins are no longer just tools for trading. They are becoming the foundation for a global financial system that connects traditional banking, fintech, and DeFi under a shared settlement layer.

3. The risk layer is becoming its own market

Risk management in DeFi is moving from behind the scenes to center stage.

Many protocols now rely on external risk managers to define collateral parameters, select oracles, and model capital efficiency. The trend is moving away from in-house risk teams toward permissionless curators who build on top of protocol primitives.

There are three distinct models:

• The consulting model where protocols hire specialized firms with a defined scope of work and stable compensation

• The curation model where anyone can launch vaults or strategies on modular platforms and earn rewards based on how much capital they attract and how well they manage it

• White-label, where protocols outsource risk to a dedicated provider and focus on distribution, while the partner handles all risk responsibilities

Each model introduces different tradeoffs in specialization, transparency, and risk appetite. Fixed compensation favors conservative strategies. Variable models may drive more aggressive risk-taking. White-label offers a middle ground, giving protocols access to risk expertise without needing to build it in-house.

4. UX is still crypto’s biggest bottleneck

Crypto has come a long way but using it still feels too hard.

DeFi was originally built for an ideological, technical audience. That worked for early adopters, but the next wave of users is different. They are not here for decentralization or composability. They just want financial apps that feel familiar and reliable.

Whether onboarding into a wallet or accessing a yield strategy, the current experience is still fragmented. But that is starting to change. Infrastructure teams like Privy, recently acquired by Stripe, are enabling embedded wallet flows that power apps like Hyperliquid and OpenSea. Their goal is to make self-custody invisible, so users interact with products, not protocols.

Teams working on XRP and Bitcoin are also removing friction. Instead of showing bridges or complex flows, they are offering one-click deposits and visible yield. That shift is critical. If crypto wants to onboard the next hundred million users, it needs to work like the apps they already trust.

In the news

• Nasdaq hits record while Bitcoin, gold remain under pressure. The Nasdaq 100 climbed to new all-time highs as core PCE inflation rose 0.2% in May, above expectations. Meanwhile, Bitcoin held near $106K and gold dropped 2% on the day, despite weak personal income and spending data fueling stagflation concerns. The dollar index hit new lows, yet risk assets reacted cautiously to the mixed signals.

• Trump-linked DeFi project World Liberty teams up with Re7. World Liberty Financial is partnering with Re7 Labs to launch a USD1 stablecoin vault on lending protocols Euler and Lista. The collaboration aims to expand the reach of USD1 across BNB Chain, offering low-cost, high-speed dollar liquidity to both retail and institutional users.

• Market cap of euro stablecoins surges to nearly $500M. EUR-pegged stablecoins have grown 44% this year, with Circle’s EURC leading the pack after rising 138% to over $200M. The surge tracks the euro’s own rally, up nearly 13% against the dollar in H1 2025. Despite the momentum, euro stables still make up less than 1% of the broader stablecoin market.

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