Everyone in the market is watching the regulatory jurisdiction battle between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), arguing about which altcoins belong to “digital commodities.” This is just a superficial interpretation and has already been priced in by the market.
The real money-making logic of the CLARITY Act lies elsewhere: the bill quietly defines the boundaries of legitimate DeFi businesses that institutions can conduct; at the same time, under the strong lobbying of banks, it directly blocks the mainstream channels for ordinary users to passively earn income from idle stablecoins. This will not only spur a new round of institutional funds entering DeFi, but also force massive capital to pour into specific protocols that have already deployed compliant architectures. Here are the 7 main beneficiary projects I have identified.
The bill was passed by the House of Representatives in July 2025 (with 294 votes in favor and 134 votes against); on May 14, 2026, it entered the Senate Banking Committee for consideration. The core content of CLARITY is to clarify the division of regulatory powers between the SEC and CFTC, assign digital commodities to the jurisdiction of the CFTC, and establish safe harbor rules for DeFi protocols, node validators, and open-source developers, so that they are no longer simply identified as money transfer agencies or brokers.
Once the CLARITY Act is officially implemented, it will immediately trigger two major changes: institutional funds will clear the way for entry, and institutions such as BlackRock, Apollo, and Deutsche Bank can finally enter the market with large sums of money; at the same time, profit-seeking funds will withdraw from idle stablecoin wealth management, and the previous model of lying down and earning about 5.00% APR by storing USDC in exchanges will no longer exist. Therefore, two huge amounts of funds will jointly flow to compliant, structured yield products with actual business scenarios.
Pendle is the DeFi protocol with the highest degree of adaptation to the CLARITY Act. It can split assets with yield attributes into Principal Tokens (PT) and Yield Tokens (YT). After the bill is implemented, PT/YT trading will be clearly classified into the regulatory scope of CFTC commodity derivatives, and Pendle will become the core yield infrastructure for incremental institutional liquidity.
Morpho focuses on permissionless lending markets and supports custom risk control parameters. After the bill is implemented, institutions can use stablecoins to mortgage and borrow real-world assets and circulate leveraged arbitrage. Funds squeezed out of the passive wealth management market will continue to flow into the Morpho pool, earning compliant income through active lending businesses.
Sky (formerly MakerDAO) can be described as the product in DeFi that is closest to a tokenized money market fund. If the regulator adopts a lenient interpretation of “active business exemptions,” sUSDS will become one of the largest compliant on-chain wealth management targets, and the stablecoin yield ban will directly drive the flow of idle USDC funds to USDS series savings products.
Maple Finance focuses on institutional lending pools. After the bill is implemented, it will officially transform into a compliant on-chain credit asset issuance platform, and banks and insurance institutions can enter the market without barriers. Centrifuge is at an even higher level. As the native issuance layer of RWA assets, after the bill is implemented, the regulatory definition of tokenized private credit tranche assets will be clear, and institutions can participate in physical businesses on-chain without offshore structures.
In addition, protocols based on STRC assets (such as Apyx, Saturn Credit) will also benefit. By encapsulating dividend income on-chain and splitting it into PT/YT, U.S. compliant funds can buy PT in batches to lock in fixed income, and then package it into fixed income wealth management products for retail investors.
In summary, these protocols have deployed compliant architectures in advance before regulatory pressure. Although the bill has not yet been finalized and all protocols have native DeFi risks, the CLARITY Act has laid the foundation for massive funds to flow to structured products with actual business and RWA endorsement by clarifying regulatory boundaries.
[TechFlow]
The CLARITY Act: Institutional Gateway to DeFi and the Death of Passive Yields
The market’s focus on the SEC vs. CFTC jurisdiction battle regarding digital commodities represents a superficial reading of the CLARITY Act’s true implications. While the bill’s assignment of digital commodities to CFTC jurisdiction is noteworthy, the transformative power lies elsewhere—in its redefinition of legitimate DeFi business boundaries and the deliberate curtailment of passive stablecoin yield generation for retail investors.
Beyond Surface-Level Regulatory Arbitrage
The CLARITY Act’s core value proposition extends far beyond simple regulatory clarity. It represents a strategic realignment that accomplishes two critical objectives simultaneously: creating a legal pathway for institutional capital to enter DeFi while deliberately extinguishing the retail-friendly, passive yield ecosystem that has thus far dominated stablecoin utilization.
This dual approach isn’t accidental. The bill’s restriction on passive stablecoin wealth generation—effectively eliminating the “lay and earn” 5% APR model currently offered by exchanges—serves as a catalyst. It forces capital to either exit the system entirely or migrate to active yield generation through structured products with verifiable business utility. Combined with the establishment of safe harbor provisions for certain DeFi activities, this creates a powerful institutional on-ramp previously unavailable.
Market Implications: Two-Pronged Capital Flow
The implementation of the CLARITY Act will trigger a significant reallocation of capital across the crypto ecosystem:
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Institutional Influx: With regulatory boundaries clearly defined, traditional financial institutions like BlackRock, Apollo, and Deutsche Bank will finally have the legal certainty needed to deploy significant capital into DeFi. This institutional flow will dwarf previous retail-driven capital deployments, bringing trillions of dollars into the ecosystem.
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Retail Yield Migration: The elimination of passive stablecoin yields will force retail investors to seek alternative yield strategies. Rather than exiting the system, capital will flow toward structured products offering higher yields but requiring active management—a shift that favors protocols with sophisticated architecture.
Prime Beneficiaries: The Compliant Architecture Advantage
Among the protocols positioned to benefit, several stand out for their pre-emptive compliance architecture:
Pendle: The Structured Yield Infrastructure
Pendle’s PT/YT tokenization framework represents the ideal structure for post-CLARITY markets. By splitting yield-bearing assets into principal and yield tokens, Pendle creates instruments that naturally fall under CFTC jurisdiction as commodity derivatives. This positions Pendle as the foundational layer for institutional yield management, where PTs can be traded like traditional bonds while YTs capture yield exposure. We expect significant capital inflows as institutions seek exposure to on-chain yields through regulated derivatives structures.
Morpho: Institutional Lending Redefined
Morpho’s permissionless lending model with customizable risk parameters provides the flexibility required by institutional borrowers. With CLARITY, institutions can deploy stablecoins as collateral to borrow tokenized real-world assets, creating leveraged arbitrage opportunities previously unavailable. The protocols’ focus on over-collateralization and risk management aligns perfectly with institutional requirements, making it a natural destination for capital exiting passive yield products.
Sky (MakerDAO): The Money Market Fund Analogue
Sky’s evolution represents one of the most compelling compliance narratives. If regulators adopt a lenient interpretation of “active business exemptions,” sUSDS could emerge as the premier on-chain money market fund equivalent, directly benefiting from the prohibition on passive stablecoin yields. The protocol’s decentralized governance and established track record provide additional credibility, potentially positioning Sky as the primary destination for institutional and retail capital seeking yield alternatives.
Maple Finance & Centrifuge: The RWA Nexus
Both protocols represent the frontier of compliant real-world asset (RWA) tokenization. Maple’s institutional lending pools and Centrifuge’s native RWA issuance layer stand to benefit from clear regulatory definitions around tokenized credit assets. This clarity will enable traditional financial institutions to participate in on-chain credit markets without complex offshore structures, unlocking trillions in currently illiquid assets.
STRC-Based Protocols: The Next Generation Structured Products
Protocols like Apyx and Saturn Credit represent the evolution of yield tokenization. By encapsulating dividend income on-chain and splitting it into PT/YT structures, these protocols enable compliant creation of fixed-income products for US-based funds. This innovation bridges traditional fixed-income markets with DeFi, creating a new asset class for risk-averse investors.
Risks and Considerations
Despite the promising outlook, several risks warrant attention:
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Regulatory Ambiguity: The final language of the CLARITY Act remains subject to change, particularly regarding interpretations of “active business” and “safe harbor” provisions.
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Implementation Timeline: While the bill has passed the House, Senate deliberation could delay implementation or introduce substantive changes.
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Protocol-Specific Vulnerabilities: Each protocol faces unique smart contract, governance, and competitive risks that must be evaluated independently.
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Market Volatility: Regulatory announcements often trigger short-term volatility, with prices potentially overshooting on both upside and downside.
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Competition: The compliance narrative may attract new entrants, potentially eroding first-mover advantages.
Investment Implications
For experienced investors, the CLARITY Act represents a fundamental shift from retail-dominated DeFi to institutionally-driven financial infrastructure. The optimal strategy involves:
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Early Positioning: Front-running institutional flows by establishing positions in protocols with demonstrated compliance architecture.
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Layer-1 Focus: Prioritizing protocols that serve as foundational infrastructure (like Pendle) over application-layer protocols.
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Yield Tokenization Exposure: Increasing allocation to protocols that facilitate yield tokenization, as this structure will become central to institutional participation.
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RWA Integration: Identifying protocols with successful RWA integrations, as these represent the most direct path to institutional capital.
The CLARITY Act doesn’t merely resolve jurisdictional debates—it fundamentally reshapes the DeFi landscape from a playground for retail yield farmers into a legitimate institutional financial market. The protocols that have anticipated this shift and built compliant architectures stand to capture disproportionate value as trillions in institutional capital begins to flow into the ecosystem.