The Dislocation Reorganization of 2026 Sparks the Explosion of DeFi 2.0 — The Rigid Structure of Traditional Financial Systems Reaches a Turning Point

Author: Yang Ge (Gary)

In Q4 2025, the overlap of market and policy caused unprecedented chaos in the global financial environment. On one hand, the traditional financial system is constrained by rigid policy management; on the other, emerging open finance is rapidly growing from this gap. Coinbase’s “2026 Crypto Market Outlook” report, released at year’s end, presents an objective overview of the market and industry during this transitional period. However, the fundamental changes behind it are the key to understanding 2026.

Many market participants are bound by emotion and inertia, overlooking major current trends. This article focuses on three core issues. First, is the acceleration of chaos in the comparison between today’s global situation and the period from 1910 to 1935 truly similar, and how much time remains? Second, with the native growth rates of crypto and open finance and their conflicts with traditional financial compliance, which will become the main contradiction driving the market? Third, as these factors combine, will 2026 truly be a turning point where crypto and open finance “bridge the gap”?

The End of the First Crypto Curve and the Limitations of Rigid Traditional Financial Systems

The most symbolic event in the 2025 crypto market was the 1011 liquidation. A single-day maximum liquidation of $19.1 billion, with total liquidations reaching about $40 billion over a few days, superficially indicates extreme speculative leverage. But fundamentally, it exposes more serious issues.

There were too few players left at the zero-sum game table, causing market liquidity and easing mechanisms to fail. If only two players remain, all cooperative strategies collapse. The phenomenon of $TRUMP coins at the same time also fundamentally shattered the belief foundation of the first curve. Simple narrative-based speculative consensus can no longer sustain the market.

In contrast, the second curve has continued to grow during this process. Concepts like RWA (Real World Assets), DAT2.0, and Onchain Asset Management suggest more practical and sustainable development paths. All players—from CEXs to public chains and infrastructure—are rapidly shifting along this trend.

Meanwhile, traditional finance has shown even more rigidity amid this chaos. At the end of 2025, Nasdaq’s application to the SEC to switch to 24-hour trading exemplifies how traditional finance recognizes its crisis but faces rigid vested interests. This rigidity is not just technical lag but deeply rooted in monetary policy and regulatory systems.

Greenspan’s warning is now a reality: “Under deeply rooted structural constraints, monetary and fiscal policies cannot sustainably promote economic growth.” From February 2020 pre-pandemic to April 2022 peak, US M2 supply increased over 40%. Current rate cuts have lost their quantitative economic value, becoming merely emotional expectations of recipients combined with policymakers’ forced decisions.

By the end of 2025, the global economy had fully transitioned into stagflation. During the same period Nvidia’s market cap surpassed $5 trillion, and a historical comparison with Rockefeller’s Standard Oil era of 1910 quickly gained credibility. Unlike then, today’s policy adjustments in North America and parts of East Asia cannot control overall chaos.

Explosive Growth of Stablecoins in Q4 2025—A New Economic Powerhouse Leading Financial Revolution

The most notable data in Coinbase’s report concerns stablecoins. By Q4 2025, the global stablecoin supply reached $305 billion, with total transaction volume hitting $4.76 trillion.

Compared to the current global M0 supply of $15 trillion and total currency transaction volume of $1500 trillion, intriguing relationships emerge. Stablecoin supply accounts for 2.0%, with an application ratio of 3.2%. Notably, the average activity level of stablecoins exceeds that of traditional fiat by 160%. This high activity reflects actual usage demand, not just speculation.

Considering a compound annual growth rate of 65% over the past four years and various strategic moves in 2025, it’s clear that emerging markets are the main drivers of this growth. In Nigeria, India, Brazil, Indonesia, Bangladesh, as well as Africa, South America, South Asia, Southeast Asia, Eastern Europe, and the Middle East, the adoption rate of stablecoins and crypto finance has grown exponentially for three consecutive years.

Feedback from international trade and payment companies is consistent: “What they need is stable currency. Platform tokens are also acceptable.” In many emerging economies, stablecoin usage has already surpassed local mainstream fiat currencies.

These emerging economies are rapidly expanding in the form of “off-balance-sheet assets,” contrasting sharply with the rigid regulatory environments of developed economies. While economic disparities rooted in long-term historical accumulation still exist, mainstream global economic analysis is already fundamentally distorted.

DeFi 2.0, DAT2.0, Tokenomics 2.0—Core Innovations of the Second Curve

The new terminology presented in Coinbase’s report describes the deepening development of the second curve from a fresh perspective. These are not temporary terms but represent the essential phenomena of change experienced by Crypto Market and Open Finance.

In 2025, the concept of DAT successfully spread from Microstrategy to mainstream financial markets worldwide. DAT premium ratio = market capitalization of stocks / net asset value of main crypto holdings like BTC. However, the DAT1.0 premium ratio sharply declined from Q3 to Q4, and the hype cooled rapidly.

The reason is clear. DAT1.0’s capital multiplier friction coefficient was too small; once market sentiment reversed, Davis’s double effect quickly turned counterproductive. Conversely, DAT2.0 is fundamentally different. As shown by companies like Ondo, Ethena, Maple, Robinhood, and Figure, DAT2.0 represents the value fusion from the Crypto second curve into traditional finance, with much higher sustainability.

Tokenomics 2.0 is an even broader concept. Essentially, it is an advanced form of financial engineering, where derivatives like Liquid Engineering and Yield Engineering continuously optimize various financial scenarios as “financial circuits.” Protocols like Pendle’s PT-YT model are gradually forming as innovative, industry-wide versatile solutions.

The core behind these innovations is not just technological evolution but a response to the inability of rigid traditional financial systems to adapt to new producers.

Regulation, Disorder, and Outlook for 2026

The rigid policy framework of traditional finance is now effectively invalidating economic principles. The flawed idea of using data if available, regulating if possible, has spread worldwide over the past decade. The rule costs and entry barriers of old systems now far exceed opportunity and risk costs, creating a terrifying “Data Medieval Effect.”

Overly restrictive digital regulations and financial restrictions hinder industry development. From a VC perspective, if funding approval is mechanically judged based on a person’s bank KYC info, 99% of companies and innovations worldwide would vanish.

In this context, 2026 is destined to be another year of disorder and reorganization. Many rules and industries will be rewritten, plunging into at least a decade-long chaotic transitional period.

However, this chaos will also enable the reconstruction of a true Nash equilibrium. The rapid growth of emerging economies, explosive stablecoin adoption, and the fast development of DeFi 2.0 indicate that the rigid dominance of traditional finance is coming to an end.

2026 will be the year when DeFi 2.0 truly explodes amid this disorder and reorganization. The crypto market will shift from mere speculation to a genuine financial infrastructure, with emerging economies and mainstream finance exploring new equilibria. The process will be complex and filled with nonlinear changes. But the direction is clear: the rigid structures of the past will vanish, giving way to a more flexible, decentralized financial system that begins to shape a new era.