UNI and AAVE are first in line! Analyst: The current draft crypto market law could severely damage the DeFi yield myth

10x Research warns that if the CLARITY Act bans yield on stablecoin balances, DeFi protocols and governance tokens could be brought under regulation, with earnings flowing back to the traditional banking system.

Relevant to the U.S. crypto market structure, the Digital Asset Market Clarity Act (CLARITY Act) has recently become a market focus due to stablecoin regulatory rules. But research firm 10x Research warns that if the bill passes, the hardest hit would actually be DeFi protocols and related tokens—especially those that use “yield” as a selling point.

The core dispute in the CLARITY Act is that it would prohibit platforms from providing any form of yield or incentives on “stablecoin balances.” In other words, in the future, stablecoins would no longer be allowed to function as on-chain savings or yield-bearing products, but would be reclassified as payment and settlement tools.

10x Research founder Markus Thielen said: “This is actually a re-centralization of yield.”

He explained that if the bill is implemented smoothly, opportunities for yield are bound to be re-concentrated in traditional banks, money market funds (MMFs), and regulated financial products. This would shrink the competitive space for crypto platforms in terms of yield.

Markus Thielen’s analysis notes that the market’s initial optimistic interpretation was: if centralized platforms are banned from offering stablecoin yields, users will shift to on-chain DeFi protocols. But he cautioned that this conclusion hinges on the premise that “DeFi can be exempted from the same regulatory framework.”

He believes the regulatory scope of the CLARITY Act is very likely to extend to the front-end interfaces and token economic models. Especially when the protocol’s fees or governance mechanisms start operating like equity, they are destined to be brought under regulation.

This means a large number of DeFi projects will face intensified scrutiny. The report names decentralized exchanges Uniswap (UNI), SushiSwap (SUSHI), dYdX (DYDX), as well as lending protocols like Aave (AAVE) and Compound (COMP). Going forward, they may face tighter restrictions in their operating models and value distribution. The outcome could be: trading volumes decline, liquidity shrinks, and token demand weakens.

However, Markus Thielen also noted that this regulatory framework is actually a “positive” for infrastructure providers, because the bill would force stablecoins to become more deeply rooted in the payment system, strengthening issuers like Circle.

• This article is reprinted with permission from: 《BlockGeek》
• Original title: 《UNI 、 AAVE Take the Brunt First! Analyst: U.S. “CLARITY Act” Could Severely Damage the DeFi Yield Myth》
• Original author: BlockMei MEL