Olivia Capozzalo & Camila Russo
December 19, 2025

Happy Friday, Defiers!

Today’s big story:

The question of who should regulate prediction markets in the U.S. — state or federal regulators — is becoming the focus of debate, and multiple lawsuits.

In other news:

Synthetix launches Ethereum perp DEX
Lido DAO proposes expanding beyond staking
Intuit integrates Circle’s stablecoin infra
HumaTek is rebuilding trust in humanitarian aid with blockchain [SPONSORED]
How AI agents are reshaping DeFi [SPONSORED]

Read more below! But first, please give our sponsors some love; they make this newsletter possible.

Stellar: The Proving Ground for Real-World Privacy The latest Stellar upgrade, X-Ray, delivers zero-knowledge cryptography that lets developers build privacy into their apps—protecting what matters while keeping Stellar radically open, trusted, and ready for real-world finance.

Ethereum has solved scale. It unlocked programmability.

Now it’s approaching the challenge that will define the next crypto cycle: privacy.

As institutions and everyday users move onchain, radical transparency is no longer enough. Payroll, treasury flows, vendor relationships, and financial strategies can’t live forever in public. Adoption has arrived, but retention depends on confidentiality that works in the real world.

A new privacy layer is forming across Ethereum, focused on selective disclosure, regulatory alignment, and practical use at scale. This isn’t about hiding activity, it’s about restoring balance between transparency and discretion.

In our latest article, we explore why privacy is becoming crypto’s next foundational layer, and how it will shape the cycle ahead.

📈 Markets in the Past 24 Hours

TICKER	VALUE	24H
Bitcoin	$88,061	3.22 %
Ethereum	$2,974.73	5.51 %
BNB	$855.94	3.26 %
XRP	$1.91	6.60 %
Solana	$125.97	6.05 %

Today’s Big Story

To Become the “Everything Exchange,” Coinbase is Prepared to Fight

The exchange that once built its brand on listing tokens and defending Bitcoin’s neutrality is now taking on the U.S. legal system and Wall Street incumbents at the same time.

On Wednesday, Coinbase unveiled one of its most strategically audacious product expansions yet: zero-commission stock trading alongside thousands of Kalshi-powered prediction markets integrated directly in the app. A move that positions Coinbase not just as a crypto hub, but as a broader financial “everything exchange.” Retail users will now trade equities and speculate on real-world events — politics, economic data, even cultural outcomes — all alongside crypto.

But by Friday morning, the headlines were dominated not by product features, but by lawsuits filed in federal court against three U.S. states — Michigan, Illinois and Connecticut — seeking preemptive rulings that prediction markets are regulated by the Commodity Futures Trading Commission (CFTC), not state gambling regulators.

Coinbase’s Chief Legal Officer Paul Grewal said on X: the company wants clarity that prediction markets fall under federal, not fifty state, regimes.

Coinbase’s filings frame this as a matter of federalism and innovation, warning that patchwork restrictions would choke off a burgeoning market before it matures.

If states succeed in classifying prediction markets as gambling, they could regulate them, the same way they regulate sportsbooks, state by state. It’s not a straightforward argument, since (let’s be honest) prediction markets do look a lot like sports betting today. In fact, sports make up most of prediction markets, as we wrote about here.

Grewal argued on X, “prediction markets are fundamentally different from sportsbooks. Casinos win only if you lose and set odds to maximize their profits. Prediction markets are neutral exchanges, indifferent to price, that match buyers and sellers.”

If Coinbase wins, prediction markets would sit under CFTC jurisdiction, creating a single national framework, the opposite of how sports betting works today.

For the crypto industry, this week underscores the strategy has shifted: Coinbase is no longer just defending crypto’s perimeter; it’s leveraging regulatory fights to define the next generation of tradable assets. Whether that’s prediction markets classified under the Commodity Exchange Act or fractionalized equities sitting next to ETH and BTC in one app, the company is pushing for a consolidated financial stack inside its ecosystem.

Coinbase, which fought hard to push the friendlier regulatory environment for crypto we have today, now has to continue influencing regulation in its quest to add more assets to its platform. Whether it’s successful or not will reverberate far beyond Coinbase’s legal filings and product announcements.

With love,

Cami, founder of The Defiant

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🎬WATCH

Ethereum’s “HTTP Moment” with Marissa Posner & Yoav Weiss

In this episode of The Defiant podcast, Camila Russo sits down in Buenos Aires (Devconnect) with Marissa Posner (Product, Ethereum Foundation) and Yoav Weiss (security researcher, Ethereum Foundation) to unpack The Trustless Manifesto and the Ethereum Interop Layer (EIL), why “trust assumptions” are quietly creeping into Ethereum’s stack, and what it will take to preserve Ethereum’s core values while making UX actually usable.

Top News in the Past 24 Hours

Synthetix Unveils Perpetual DEX on Ethereum Mainnet Decentralized derivatives protocol Synthetix is launching a perpetual derivatives DEX on Ethereum mainnet. Why it matters: The DEX will use a hybrid onchain-offchain order matching system to bypass Ethereum mainnet's latency and high gas fees
Lido Outlines $60M Plan to Expand Beyond Liquid Staking Lido DAO, the decentralized organization behind the largest liquid staking protocol in DeFi, is signaling plans to push beyond its core ETH staking business next year. Why it matters: The proposal lays out a $60 million budget for new products.
Intuit Partners with Circle to Integrate Stablecoin Infra, USDC Across Its Platform The fintech company behind TurboTax, QuickBooks, and Credit Karma has partnered with USDC issuer Circle to add stablecoin capabilities across its platform. Why it matters: The partnership reflects a growing trend among fintech and TradFi firms to explore stablecoins and blockchain-based payment rails.