Solana News Update: Clearer Regulations Help Crypto Yields Close the Gap with Traditional Finance

Innovations in liquid staking tokens (LSTs) and real-world assets (RWAs) are closing the yield gap between cryptocurrencies and traditional finance (TradFi), as detailed in a

. Currently, only 8% to 11% of crypto assets provide passive income, compared to 55% to 65% in TradFi, but the report points to swift advancements in areas like stablecoins and tokenized assets.

Clearer regulations, especially following the U.S. GENIUS Act passed in July, have fueled interest in yield-generating stablecoins and RWAs. The legislation introduced strict collateral rules for stablecoins and required Anti-Money Laundering measures, boosting confidence among institutions. Consequently, the market value of interest-earning stablecoins has grown by 300% year-over-year, with new protocols emerging each month to seize this momentum.

Stablecoins, now often backed by assets such as U.S. Treasuries, have become central to crypto yield strategies. Companies like

and are seeing significant profits from returns on their reserves. For example, Circle reported a 4.15% return rate on reserves in Q3, despite falling short-term interest rates, which helped drive a 66% annual revenue increase to $740 million, according to . At the same time, Transak CEO Sami Start noted that stablecoins are becoming "invisible" to users, integrated into consumer applications through white-label solutions. This development enables people to benefit from yield without directly interacting with crypto platforms, making payments and remittances more user-friendly, as .

Tokenized versions of traditional assets like bonds and funds—RWAs—are also gaining momentum. Leading institutions are adopting on-chain settlement for greater efficiency, while tokenized assets are opening up new avenues for passive income.

(ETH) and (SOL) LSTs, for instance, have improved capital efficiency for stakers by allowing liquidity alongside rewards. Solana's network has shown particular strength, with decentralized exchange (DEX) trading volumes exceeding $5 billion in early November—surpassing and Chain—even amid overall market turbulence, as reported by .

The adoption of stablecoins and RWAs is advancing quickly, but obstacles remain. A recent DeFi crisis, triggered by the loss of peg in yield-generating stablecoins like

and , resulted in a $42 billion drop in total value locked (TVL) and highlighted weaknesses in decentralized protocols, according to . Experts emphasize the importance of strong risk controls and transparent systems to restore confidence.

Despite these challenges, the report points to crypto's "biggest opportunity" in narrowing the yield gap. With more institutions entering the space and regulatory structures becoming clearer, the industry could attract major financial players looking for efficient and scalable yield options. As RedStone observed, "Yield-generating assets make up just 8% to 11% of crypto, compared to 55% to 65% of traditional finance," underscoring the significant room for growth, as mentioned in the

.

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