Aave leads DeFi higher as crypto shrugs off surging bond market

DeFi tokens led crypto markets higher Tuesday, with the DeFi Select Index rising roughly 5.0% and lending-protocol token Aave posting the biggest move among major constituents after its founder hinted a token burn could be part of an upcoming "Aavenomics" upgrade. Aave gained about 11% since midnight UTC, trading around $166.55 and topping the CoinDesk 20 performers.

Broader market measures were also positive: Bitcoin recovered Monday’s declines and traded near $84,170, bringing the CoinDesk 100 up 0.89% to 1,904.49, with 72 of the 100 constituents in positive territory. Other notable winners included Quant (QNT), which rose 17% to $269.58, and Curve DAO token (CRV), which was up roughly 5.2% since midnight and about 22% over the rolling 24-hour period to $0.40.

The gains came in spite of an elevated U.S. Treasury yield environment that has pressured traditional risk assets. The 10-year Treasury yield sat at about 5.234% and the 30-year was near 5.55% after topping roughly 5.56% the previous session; U.S. equities extended losses on Monday. That backdrop has weighed on risk assets, but crypto traders still pushed several altcoins higher.

On derivatives markets, overall futures open interest was essentially unchanged at $149.36 billion while 24-hour volume climbed to $218 billion and liquidations held near $389 million. Bitcoin futures open interest fell to about 644,000 BTC, the lowest since early March, even as funding rates moved back above zero. Traders showed nervousness in some tokens: zcash and dash were notable decliners, with zcash down more than 4% intraday and roughly 8.4% over 24 hours.

Other active tokens included Internet Computer (ICP) and Avalanche (AVAX), which climbed as they recovered from Monday’s sell-off, while hedged or fading trades affected tokens such as Hedera (HBAR) and Litecoin (LTC). Options market flows also shifted, with BTC put-call skew turning slightly negative as calls began trading at a premium and short-dated call strikes drew most volume.