DeFi bull market strategy: The US SEC has released positive news, and three categories are worth paying attention to

Author: Cryptofada

Compiled by: Felix, PANews

On June 9, the Cryptocurrency Task Force roundtable, chaired by SEC Chairman Paul Atkins, portended a potentially positive situation for cryptocurrencies and DeFi participants in many ways. This is the most supportive attitude ever from U.S. regulators toward DeFi, and most people don’t realize it yet. Although not yet officially legislated, these remarks:

• Creating a regulatory environment that encourages innovation
• Strengthening the legitimacy of self-custody and on-chain participation
• Hinting at looser, sensible rules for DeFi experiments

This is likely to be the fuse for a new round of DeFi revival led by the United States. If you are in the crypto field, you know that this undoubtedly sends a signal: a new era of DeFi regulated by the United States is being born. This is not just a regulatory shift, but also an investment game.

Key positive signals from the SEC roundtable

1. Financial independence

Atkins links economic freedom, innovation, and private property rights to the spirit of DeFi. This narrative redefines DeFi as a continuation of the American spirit of financial independence rather than a regulatory threat. This is in stark contrast to the previous confrontational attitude.

2. Eliminating the uncertainty of the Howey test: Staking, mining, and validators — not securities

It is made clear that staking, mining, and validator operations are not securities transactions, removing a major regulatory cloud that has long hindered institutional participation in consensus mechanisms. This addresses the fundamental concern that network participation itself may trigger securities regulation due to the Howey test. This clear provision directly benefits the $47 billion liquid staking market. The US SEC has made it clear that participating in proof of stake or proof of work as a miner/validator, or participating in staking through staking as a service, is not essentially a securities transaction. This reduces regulatory uncertainty in the following areas:

• Liquidity staking protocols (e.g. Lido, RocketPool)
• Validator Infrastructure Companies
• DeFi protocols with staking functionality

3. On-chain product innovation exemption

Atkins proposed a "conditional exemption" or "innovation exemption" policy that would allow for rapid experimentation and launch of new DeFi products without cumbersome SEC registration. The proposed "conditional exemption" mechanism creates a regulatory sandbox designed specifically for DeFi innovation. This approach draws on successful fintech regulatory frameworks in jurisdictions such as Singapore and Switzerland, allowing controlled experimentation without fully meeting securities registration requirements: This could pave the way for:

• Permissionless Innovation
• US DeFi product launch
• Faster integration with traditional finance

4. Self-Hosting is Protected

Atkins advocates for self-custody of digital assets, calling it a “fundamental American value.” This supports the following types of products:

• Wallet providers (e.g. MetaMask, Ledger)
• Non-custodial exchanges (e.g. Uniswap)
• On-chain trading and investment tools

5. Openly Supporting Trump’s Pro-Crypto Agenda

Atkins mentioned Trump's goal of making the United States the "crypto capital of the world," aligning the regulatory tone with the current political leadership. As the dust settles on the 2024 U.S. election, this political alignment could unleash more favorable regulatory policies and promote government-led crypto infrastructure.

6. Encouragement for on-chain resilience

Atkins cited data from S&P Global, praising DeFi for remaining operational during the collapse of centralized financial systems (such as FTX and Celsius). This is a direct recognition of DeFi's reliability in stressful environments.

Strategic Positioning Framework

Layer 1: Core Infrastructure Protocols

The most direct beneficiaries of regulatory clarity are the protocols that form the backbone of DeFi infrastructure. These protocols typically have high total value locked (TVL), mature governance structures, and clear utility functions that align with traditional financial services.

Liquidity staking protocols : As staking rules become clearer, protocols such as Lido Finance ($LDO), Rocket Pool ($RPL), and Frax Ether ($FXS) are expected to attract institutional capital inflows seeking compliant staking solutions. The $47 billion liquidity staking market is likely to grow significantly as regulatory barriers are removed.

Decentralized exchanges : Uniswap ($UNI), Curve ($CRV), and similar protocols benefit from both self-custody protections and innovation exemptions. These platforms can launch more complex financial products without facing regulatory delays.

Lending protocols : Aave ($AAVE), Compound ($COMP), and MakerDAO ($MKR) are able to expand their institutional-facing products amid greater regulatory clarity, particularly in automated lending and synthetic asset creation.

Layer 2: Real-world asset integration

The innovative exemption framework is particularly beneficial to protocols that bridge traditional finance and DeFi. Real World Asset (RWA) protocols can now experiment with tokenization models without the cumbersome securities registration process.

Leaders in the RWA space: Ondo Finance, Maple Finance, and Centrifuge are expected to accelerate institutional adoption of tokenized securities, corporate credit, and structured products. The RWA space currently has a TVL of approximately $8 billion and could expand rapidly if the regulatory path becomes clearer.

Tier 3: Emerging Innovation Categories

The conditional exemption mechanism creates opportunities for entirely new categories of DeFi products that were previously held back by regulatory uncertainty.

Cross-chain infrastructure : Protocols that support secure asset transfers across chains can now develop more sophisticated products without worrying about inadvertently violating securities laws.

Automated Financial Products : Yield optimization protocols, automated trading systems, and algorithmic asset management tools can now be developed and deployed faster in the U.S. market.

How to prepare for the future DeFi bull market?

1. Double down on high-reliability DeFi protocols

Focus on protocols that stand to benefit from regulatory clarity:

• Staking and LST: Lido, RocketPool, ether.fi, Coinbase’s cbETH
• Decentralized exchanges: Uniswap, Curve, GMX, SushiSwap
• Stablecoin protocols: MakerDAO, Ethena, Frax
• RWA protocols: Ondo, Maple, Centrifuge

2. Hoarding governance tokens

Tokens of core DeFi infrastructure (especially those with high TVL and good regulatory compliance) may benefit: $UNI, $LDO, $AAVE, $RPL, $MKR, $FXS, $CRV.

3. Participate in on-chain governance

Participate in governance forums and participate in delegate voting. Regulators may prefer protocols that are transparent and have decentralized governance.

4. Build or contribute to the U.S. crypto ecosystem

The SEC’s signal will make it safer for:

• On-chain startups
• Wallet Developers
• Staking as a Service Companies
• Open Source Software Contributors

Now is the time to:

• Launch or contribute to public goods
• Apply for funding or participate in DAO ecosystem construction (such as Optimism Retro Funding, Gitcoin)
• Join a DeFi organization or DAO in the United States

5. Be the first to plan projects involving institutions

Focus on institutional funding inflows and innovation exemption pilot projects:

• Establish positions in liquid DeFi protocols that institutions can integrate
• Watch for pilot announcements from Coinbase, Franklin Templeton, BlackRock, and more
• Keep an eye on the Ethereum ecosystem, especially given the clarity around staking and high adoption of infrastructure.

6. Pay close attention to the “ Innovation Exemption ” guidance

If the SEC issues clear standards, you can:

• Launching new DeFi tools that meet the exemption criteria
• Obtain airdrops or incentives from compliance protocols
• Content or services that create a simplified exemption framework

Institutional adoption of catalyst analysis

Capital Flow Forecast

Regulatory clarity opens up multiple previously blocked avenues for institutional adoption:

• Traditional asset management companies: Companies like BlackRock and Fidelity can now explore integrating DeFi into their businesses to achieve revenue growth, portfolio diversification, and improved operational efficiency. The current institutional adoption rate of DeFi is less than 5% of the scale of traditional asset management, which shows that it has huge growth potential.
• Corporate Treasury Management: Today, companies can consider using DeFi protocols for treasury management operations, including yield generation on cash reserves and automated payment systems. The corporate treasury management market has approximately $5 trillion in assets, some of which may migrate to DeFi protocols.
• Pension funds and sovereign funds: Large institutional investors can now consider DeFi protocols as a legitimate investment class for asset allocation. These investors typically invest in funds ranging from $100 million to $1 billion, which represents an order of magnitude increase in the TVL of the protocol.

Innovation Acceleration Index

The innovative exemption framework can significantly accelerate the development of DeFi:

• Product development cycle: Previously, new DeFi products required 18 to 24 months of legal review, which may also involve the involvement of the US SEC. The exemption framework is expected to shorten this cycle to 6 to 12 months, thereby effectively accelerating the pace of financial innovation.
• Geographic reshoring: Many DeFi protocols are developed overseas due to regulatory uncertainty in the U.S. The new framework could attract these projects back to U.S. jurisdictions, thereby increasing domestic blockchain development activity.

Case Study: Turning $ 10K- $ 100K into $ 100K- $ 1M

The above strategic framework can be applied to different fund sizes to formulate specific asset allocation strategies for different risk preferences and investment periods.

Timeline: 12 to 24 months

Funding range: $10,000 to $100,000

Target ROI: Achieve 10x return using a combination of strategies

Retail Investor Strategies (Capital Range: $ 10,000 to $ 25,000 )

For retail participants, the focus should be on mature protocols with clear regulatory positioning and strong fundamentals. A conservative strategy may allocate 60% of funds to liquid staking protocols and mainstream DEXs, 25% to lending protocols, and 15% to emerging categories with high upside potential.

The key is to gain access to governance participation and yield generation opportunities that were previously only available to professional investors. With regulatory clarity, these protocols can provide a more transparent and accessible mechanism.

High Net Worth Strategy (Capital Range: $ 25,000 - $100,000)

This capital range is able to support more complex strategies, including direct participation in protocols, delegated governance, and use of institutional-grade DeFi products. Strategic allocations may focus on governance tokens of major protocols (40%), direct staking positions (30%), exposure to RWA protocols (20%), and innovation-stage protocols (10%).

High net worth participants can also participate more actively in governance and create possible additional value through governance mining and participation in early protocol development.

Institutional Strategy (Fund Range: $ 100,000 and above)

Institutional capital can participate in wholesale DeFi business, including directly operating validation nodes, managing protocol treasury, and adopting complex yield strategies. These participants can also participate in protocol cooperation and customized integration development.

Institutional strategies should emphasize operating protocols with clear regulatory compliance frameworks, sound governance structures, and institutional-grade security measures. At this scale, direct staking operations become feasible, with potentially higher risk-adjusted returns than liquidity staking protocols.

Return Potential Analysis

Conservative projections based on past DeFi adoption cycles suggest the following returns are possible within these funding ranges:

Token Appreciation: Regulatory clarity typically leads to a 3-5x appreciation in the value of well-positioned governance tokens as institutional adoption accelerates and protocol utility increases.

Yield Generation: DeFi protocols offer 4-15% annual yields through various mechanisms such as staking rewards, transaction fees, and lending interest. Regulatory clarity could stabilize and potentially increase these yields as institutional capital enters the market.

Innovation Access: Early participation in innovation waivers can result in outsized returns (5x to 10x) as projects develop new financial primitives and capture market share in emerging categories.

Compounding Effect: The combination of token appreciation, yield generation, and governance participation can produce compound returns that can significantly exceed traditional investment options over a 12 to 24 month period.

Implementation timeline considerations

Phase 1 (Q3-Q4 2025): Implementation of initial regulatory guidelines, early institutional pilot projects, appreciation of governance tokens of well-positioned protocols.

Phase 2 (Q1-Q2 2026): Broader institutional adoption, new product launches under the innovation exemption, and significant growth in TVL for major protocols.

Phase 3 (Q3-Q4 2026): Institutional integration is fully realized, traditional finance and DeFi fusion products may be launched, and a mature regulatory framework is implemented.

The DeFi roundtable held by the US SEC in June 2025 not only marked the evolution of regulation, but also heralded the beginning of the DeFi institutional era. The combination of clear regulation, political support, and technological maturity creates a unique opportunity for early deployment to avoid missing out before broader market recognition drives up valuations.

For sophisticated investors, the current environment presents a rare convergence of regulatory clarity, technological advancement, and market undervaluation. The protocols and strategies that are able to attract institutional capital flows over the next 18 months will likely determine the next phase of growth and value creation in DeFi.

The transition from experimental technology to regulated financial infrastructure marks a fundamental shift in the DeFi value proposition. Those who strategically position themselves during this regulatory transition are likely to benefit from both the immediate effects of institutional adoption and the long-term value creation that comes with mature, regulated financial markets.

Related reading: SEC's "Innovation Exemption" ignites the DeFi engine: DeFi's top players' TVL and coin prices interpret a song of ice and fire