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Fiat-backed stablecoins reached yet another all-time high in August, climbing to $247B in circulation (+5% month-over-month). That's a staggering 54% surge since August 2024. Over the past year, Circle's USDC more than doubled its circulating supply, adding $36B (+104%) while Tether's USDT grew by $54B (+45%). Collectively, USDT and USDC now account for 99% of all fiat-backed stables in circulation, an unprecedented level of dominance. h/t @AlliumLabs

Renaud Partners Deep Dive: Hylo Why Hylo? At Renaud Partners, one of our core goals for more than five years has been to support the growth of the Solana ecosystem. @Hylo_so reflects that vision: it’s Solana-native, permissionless, and designed to scale alongside the chain. We backed Hylo early as they are Solana OGs we've known for years and the products they’re creating, hyUSD and xSOL, are the kind of primitives that strengthen the entire ecosystem. Stablecoins and leverage will always be pillars of onchain finance. Hylo is building them in a way that’s decentralized, scalable, and uniquely Solana. That’s why we support them. Let’s dive in. Hylo: Solving the stablecoin trilemma Stablecoins are the foundation of the onchain economy. In 2024 alone, they facilitated more than $23 trillion in transactions, surpassing Visa and Mastercard in total payment volume, and accounting for the vast majority of trades on DEXs and CEXs. They consistently made up 20–40% of TVL in DeFi protocols. For many users, stablecoins are the first and sometimes only crypto product they interact with. But today’s dominant stablecoins are centralized. USDC and USDT are collateralized by treasuries and bank deposits, leaving them exposed to the policies of the Federal Reserve and the politics of regulators. They carry custodial risks that can’t be hedged: Bank accounts can be frozen or seized at any time. And while issuers capture the yield on backing assets, users get none of the upside and all of the tail risk. Recent history has shown that centralized control means centralized intervention: freezing addresses, blocking transactions, and dictating access. DeFi promised an open, permissionless financial system. Yet the money that powers it is still controlled by a handful of corporations. The Stablecoin Trilemma Decentralized alternatives exist, but they all struggle with the stablecoin trilemma: you can only ever achieve two of the three properties: Price stability, decentralization, and capital efficiency. -Collateral Debt Positions (like Maker’s DAI) are stable and decentralized, but require heavy overcollateralization. That kills scalability. -Algorithmic stablecoins promised efficiency but collapsed spectacularly, with UST demonstrating the fragility of those systems. -Synthetic dollars (like Ethena’s USDe) are stable and capital-efficient, but they rely on centralized exchanges and complex hedging strategies, which weaken decentralization. No decentralized stablecoin has yet solved the trilemma while scaling sustainably. Why We’re Bullish on Hylo Hylo is trying a different approach: building a native Solana stablecoin system with two tokens: hyUSD and xSOL that work in symbiosis. Instead of relying on treasuries or synthetic hedges, Hylo uses liquid staking tokens as onchain collateral. That unlocks yield directly from the network while keeping the system fully decentralized. We’re bullish because Hylo addresses two of the biggest gaps in DeFi today: -A truly decentralized stablecoin that doesn’t rely on banks, custodians, or off-chain collateral. hyUSD is censorship-resistant, capital efficient, and scalable, everything USDC isn’t. -A long-term leverage product that works without funding rates, liquidation risk, or constant position management. xSOL offers dynamic exposure to SOL with protocol-managed rebalancing, making leverage practical for long-term strategies. This combination is unique. Stablecoins are sticky because they’re safe. Leverage products are attractive because they’re risky. By pairing the two into one system, Hylo creates balance: hyUSD stability is protected because xSOL absorbs volatility, while xSOL holders benefit from the upside of Solana’s growth and validator yield. How Hylo Works Two tokens, one pool: A basket of Solana LSTs backs both hyUSD and xSOL. The total value of the collateral pool always equals the sum of hyUSD + xSOL market caps. hyUSD: Pegged to $1, stable, scalable, and yield-bearing. Backed entirely by onchain assets with no custodial risk. Can be redeemed slippage-free at any time. xSOL: A tokenized leveraged long position on SOL with no funding costs, no liquidation, and protocol-managed rebalancing. Holders capture amplified upside when SOL appreciates. Dynamic leverage: xSOL’s leverage ratio adjusts based on supply and activity. Minting hyUSD increases xSOL’s effective leverage, redeeming it lowers leverage. This makes the system self-balancing. Native yield: LSTs generate yield continuously. That yield flows into hyUSD’s Stability Pool, where users who stake hyUSD can usually earn 2 to 3 times the SOL base yield, while being delta-neutral, which is one of the highest stablecoin yields (15-20% APY) on Solana at the moment. The result is a dual-token system where: -hyUSD holders get a stable, censorship-resistant dollar backed by Solana’s security and yield. -xSOL holders get simple, passive leverage without the constant stress of liquidations or funding fees. Why It Matters Stablecoins are the heart of DeFi, but they’re centralized and extractive. Leverage is the lifeblood of trading volume, but it’s inefficient and risky in its current form. Hylo rewires both. -hyUSD can scale beyond the limits of CDPs, offering deep, slippage-free liquidity for Solana DeFi. -xSOL provides leveraged exposure in a way that’s actually usable for long-term investors and not just day traders. -Together, they create a system that’s capital efficient, decentralized, and aligned with Solana’s ethos. With billions in SOL staked and growing demand for both stable assets and leverage, Hylo is building products DeFi actually needs. And the early growth reflects that demand: Hylo has already surpassed $24 million in total value locked, with nearly $14 million hyUSD issued, more than $10 million in xSOL supply, and close to $11 million staked in the Stability Pool. Protocol fees have topped $360k to date, a clear sign that usage is accelerating.