When stablecoins no longer earn yield: 7 DeFi protocols that benefit from the CLARITY Act

Original Author: Tindorr

Original Translation: Chopper, Foresight News

The market is fixated on the regulatory jurisdiction battle between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), arguing over which altcoins qualify as "digital commodities." However, this is merely a surface-level interpretation that has already been priced in by the market.

The real profit logic of the CLARITY Act lies elsewhere: the bill quietly delineates the legal boundaries of DeFi activities permissible for institutions; at the same time, under strong lobbying from banks, it directly shuts down the mainstream channel for ordinary users to earn passive income from idle stablecoins.

This will not only spur a new wave of institutional capital entering DeFi but also force massive capital flows into specific protocols that have already established compliant frameworks.

Below are the 7 main beneficiary projects I have identified.

30-Second Summary of the CLARITY Act

The bill passed the House of Representatives in July 2025 (294 votes in favor, 134 against); it entered the Senate Banking Committee's review stage on May 14, 2026 (Translator's note: On May 14, the CLARITY Act passed a vote in the Senate Banking Committee).

To summarize the core content of CLARITY in two sentences:

• It clarifies the division of regulatory authority between the SEC and the CFTC, placing digital commodities under CFTC jurisdiction;
• It establishes safe harbor rules for DeFi protocols, node validators, and open-source developers, preventing them from being simply categorized as money transmitters or brokers.

The most important part of this article concerns Section 404 on stablecoin yields: The GENIUS Act, which took effect in the U.S. last year, prohibits stablecoin issuers from directly paying interest to users; however, exchanges, DeFi platforms, and intermediaries could still offer yield-generating products on users' idle funds.

Why the CLARITY Act's Impact Far Exceeds the Legalization of DeFi

Once the CLARITY Act is officially enacted, it will immediately trigger two major shifts:

• Removing Barriers for Institutional Capital. Institutions like BlackRock, Apollo, Deutsche Bank, pension funds, and corporate treasuries have been on the sidelines. Compliance teams couldn't assess whether related assets were securities, making large-scale allocation impossible. Now, with clear CFTC jurisdiction and a safe harbor for DeFi, institutions can finally enter the market in a big way.
• Profit-seeking Capital Abandons Idle Stablecoin Yields. The previous model of earning roughly 5% annualized yield simply by holding USDC on exchanges will cease to exist. Tens of billions of dollars seeking stable returns must find new allocation outlets.

Thus, two massive capital flows (institutional investors finally entering the market + retail investors seeking yields) will converge on the same type of target: compliant products with real business scenarios and structured yield.

The following protocols are tailor-made for this new regulatory landscape.

Pendle: The Core Yield Infrastructure Layer

Pendle is the DeFi protocol best aligned with the CLARITY Act. It splits any yield-bearing asset into a Principal Token (PT) and a Yield Token (YT): holding PT locks in a fixed annualized yield; holding YT allows betting on yield fluctuations. The entire process involves active trading and liquidity provision, which is a business activity, not merely passive holding for interest.

Before the Act: Institutions recognized its product mechanism but were limited by regulatory ambiguity, unable to participate at scale. Tokenized real-world assets (RWA) remained in pilot or offshore packaging stages. Whether PT and YT tokens were considered securities was compliance-wise undefined.

After the Act: PT/YT trading is clearly classified under CFTC commodity derivatives regulation. The ban on passive stablecoin yields will force massive capital flows into such active yield products. Large asset managers like BlackRock can custody tokenized RWAs and private credit assets, using Pendle to offer clients on-chain fixed-income exposure.

For example: The Apollo Credit Fund ACRED, tokenized via Securitize and wrapped by the Ember Protocol into eACRED, went live on Pendle in April 2026. Holding PT-eACRED provides one-click allocation to Apollo's entire credit portfolio, including direct corporate lending, asset-backed lending, senior credit, distressed credit, and structured credit. All products are composable and operate entirely on-chain.

Once the CLARITY Act is enacted, this model will become the standard template for U.S. institutional capital entry, and Pendle will become the core yield infrastructure for incremental institutional liquidity.

Key Metrics to Watch: RWA asset pool Total Value Locked (TVL), progress of partnerships with compliant custodians, and the issuance scale of tokenized asset PTs.

Morpho: On-Chain Prime Broker

Morpho focuses on permissionless lending markets with customizable risk parameters.

Before the Act: Using tokenized RWAs as collateral for loans posed risks of being deemed unregistered derivatives. There was a lack of capital pools meeting institutional risk standards with fiduciary qualifications. Liquidation risks and oracle risks deterred large capital.

After the Act: Strategy firms like Gauntlet and Steakhouse can set up compliant permissioned pools, customizing loan-to-value ratios, oracles, position limits, and KYC access. Institutions can borrow against RWA assets with stablecoin collateral, engage in leveraged arbitrage, and provide market liquidity, all within the clear regulatory framework of the CFTC. Stablecoin capital squeezed out of passive yield markets will continuously flow into Morpho pools, earning compliant yields through active lending activities.

The on-chain prime broker model will be officially operational. Stablecoin capital pushed out of passive yield markets will continuously flow into Morpho liquidity pools, earning compliant returns through active lending activities.

Key Metrics to Watch: TVL of pools managed by institutional strategy firms, new RWA collateral types added, and the number of institutional strategy partnerships launched.

Sky (USDS / sUSDS)

Sky (formerly MakerDAO) allows users to deposit USDS to mint sUSDS and earn protocol yields, including stability fees, reserve asset US Treasury yields, and RWA allocation returns. Sky is arguably the DeFi product closest to a tokenized money market fund.

However, the question is: Is depositing USDS for sUSDS considered an active business activity or the banned passive "lazy" yield?

Sky has been following the Ethena path, collaborating with compliant institutions to build a regulatory-compliant framework. If regulators adopt a lenient interpretation of the "active business exemption," sUSDS could become one of the largest compliant on-chain yield-bearing instruments, inherently providing exposure to RWAs.

The ban on stablecoin yields will directly drive capital from idle USDC towards USDS-linked savings products.

Key Factors to Watch: Rulemaking by the Treasury Department and the CFTC after the bill passes.

Maple Finance: On-Chain Credit Trading Desk

Maple Finance specializes in institutional lending pools. Users deposit stablecoins as lenders, and borrowers (market makers, hedge funds, institutional treasuries) undergo strict due diligence. Its Syrup pool is accessible to retail users.

Before the Act: Under-collateralized institutional lending risked being classified as unregistered securities. Banks and insurance companies couldn't participate compliantly due to ambiguous regulatory classification. After early default events in pools, compliance teams were generally cautious.

After the Act: Maple officially transforms into a compliant on-chain credit asset issuance platform. Banks and insurance institutions can participate without barriers.

Maple is inherently institutionally adaptable: The Syrup pool is already integrated with Morpho, enabling cross-protocol credit portfolio allocation. Bitwise and Sky had already laid out Maple strategies before the Act's passage.

The CLARITY Act simply removes the regulatory constraints limiting its growth.

Key Metrics to Watch: TVL of the Syrup pool, progress on diversifying institutional borrowers, and the launch of new credit strategies targeting RWA asset originators.

Centrifuge: Native RWA Asset Issuance Layer

If Pendle handles yield splitting and Maple manages credit pools, Centrifuge sits further upstream – at the origin of real-world asset tokenization. Private credit, commercial paper, structured credit tranches, and SME loans can all be packaged as on-chain tokens, seamlessly integrating into the entire DeFi ecosystem.

Before the Act: Tokenization of real-world credit assets remained experimental. The classification of tokens (security, commodity, or new category) was ambiguous, deterring institutions. There were no federal-level custody and settlement rules for underlying assets. Most pools were limited in size, operating through offshore structures.

After the Act: Centrifuge will become the primary entry point for RWA tokenization. Tokenized private credit tranches will have clear regulatory classification, allowing compliant custody and use as collateral for large-scale institutional lending. Banks and asset managers can participate in SME financing, bill discounting, and structured credit on-chain without needing offshore structures.

Protocols Based on STRC Assets: Pathways in Fixed-Income Track

Strategy issued perpetual preferred stock STRC, listed on Nasdaq, with an annualized dividend yield of approximately 11.5%, adjusting monthly to keep the stock price near its $100 par value. Apyx and Saturn Credit are the two major STRC wrapping protocols. Apyx issues apxUSD and apyUSD (total supply over $400 million); Saturn issues USDat and sUSDat. Both have launched PT/YT trading markets on Pendle.

Before the Act: Although the entire business pathway was established, compliant U.S. funds couldn't custody, restructure, or repackage these wrapped assets at scale.

After the Act: PT trading falls under CFTC commodity regulation, and the DeFi safe harbor protects protocol compliance. Compliant large U.S. funds can bulk purchase Apyx and Saturn-related PT tokens, locking in fixed yields for around 12 months, and then package them into fixed-income investment products for retail investors through traditional brokerage channels.

The complete flow is: Strategy issues STRC → Apyx/Saturn wraps the dividend yield on-chain → Pendle splits into PT and YT → Compliant U.S. funds purchase large amounts of PT to lock in fixed yield → These are packaged as "Bitcoin-linked fixed income products (~12% annualized)" for retail investors.

Key Metrics to Watch: TVL of related PT tokens, whether compliant U.S. funds launch STRC-linked fixed-income products, and the monthly STRC dividend adjustments.

Common Logic Among the Seven Protocols

Zooming out, we can identify a unified pattern among the seven protocols:

• These protocols proactively adopted KYC compliance and business scenario-based architectures *before* regulatory pressure;
• The combination of CFTC jurisdiction allocation and the DeFi safe harbor completely eliminates the biggest securities classification risk for institutions;
• The ban on passive stablecoin yields funnels massive capital flows towards these structured, business-backed, RWA-grounded products;
• Institutions will act as natural aggregators, seamlessly layering their existing custody and prime brokerage infrastructure onto these DeFi protocols.

Important Considerations

• The Act hasn't been finalized yet. It has only passed committee review and still needs to go through processes like merging House and Senate versions, clearing the 60-vote threshold in the Senate, reconciling texts between chambers, and receiving the President's signature. Prediction market Polymarket gives it a 76% probability of enactment by 2026 – high but not guaranteed.
• All protocols carry inherent DeFi risks, including smart contract vulnerabilities, oracle failures, stablecoin de-pegging, and counterparty credit risk. The CLARITY Act only clarifies regulatory boundaries; it does not eliminate investment risks.
• The "beneficial uptrend" assumes institutions will enter the market according to market expectations. While the consensus is strong, actual implementation cycles are often slower than trading prices imply, and institutional onboarding typically takes months of due diligence.

Summary

The CLARITY Act is not just a simple "DeFi legalization" story. That is the surface narrative, already priced in by the market.

The real second-order market logic is: When passive stablecoin yields are banned, where will the massive flows of profit-seeking capital go? Which protocols and tracks can accommodate incremental institutional capital without needing last-minute compliance architecture overhauls? This doesn't mean these protocols' token prices will necessarily rise; the tokenomics still require individual analysis.