CoinShares' report forecasts the rise of hybrid finance by 2026, merging traditional finance with decentralized systems.
CoinShares, in collaboration with Token Terminal, has released a report forecasting the emergence of hybrid finance by 2026, merging traditional finance with decentralized systems.
CoinShares introduced its first Hybrid Finance report with Token Terminal to illustrate the ongoing market transformations. Key players include Ethereum, Hyperliquid, Aave, and MakerDAO, among others.
— CoinShares (@CoinSharesCo) April 23, 2026
Analysts emphasized that the integration of public blockchains is facilitating the settlement of institutional assets, with major Wall Street firms establishing funds on Ethereum. They noted that Bitcoin is serving as a significant catalyst for this convergence, fostering trust among traditional financial players.
Hybrid finance, as defined in the report, consists of three main components: a robust settlement infrastructure for real economic activities, the tokenization of traditional assets like stocks and bonds, and on-chain applications that generate sustainable revenue. The authors anticipate a transition from a trend to a structured market segment this year.
Key Statistics
Stablecoins dominate the hybrid finance sector, with their supply reaching $297.6 billion in Q1, reflecting a 37.2% year-over-year increase. USDT from Tether and USDC from Circle lead the market.
Tokenized funds experienced an impressive 181% growth over the past year, now valued at $9 billion, largely driven by products backed by short-term U.S. treasury bonds. The market cap for digitized stocks rose from $27.6 million to $773.3 million, while commodities surpassed $4.9 billion, with the overall market value of Real World Assets (RWA) estimated at $29 billion.
Revenue Insights
The report also discusses revenue generation in this evolving market. In Q1, leading on-chain firms achieved revenues of $587.9 million, primarily from trading platforms and stablecoin issuers like Hyperliquid and Sky.
For instance, Ethereum facilitates settlements for around $180 billion in stablecoins, potentially generating $7 billion in annual revenue for firms at a 4% yield on underlying assets. This highlights a structural discrepancy between the economic value created and the revenue captured by the blockchain itself.
Case Study: Hyperliquid
Hyperliquid exemplifies a hybrid finance model, combining its own layer-1 blockchain with a perpetual DEX. In Q1, it reported $178.7 million in revenue, with 96% stemming from trading activities. This case illustrates that the majority of economic value in on-chain finance may be concentrated at the application level rather than the blockchain itself.
As revenue continues to aggregate within applications, traditional blockchains may need to adapt by either launching their own services or enhancing integration with key protocols.
Future Market Dynamics
The authors concluded that hybrid finance can be assessed through various segments including stablecoins, tokenized assets, and on-chain businesses. The mechanism for value distribution involves assets attracting liquidity, which applications then convert into revenue, while blockchains monetize the transactional activities.
Looking ahead, the crucial challenge for the market will be determining which issuers and applications can maintain liquidity and user engagement. Recent DeFi hacks have raised concerns, with analysts from Jefferies warning that such incidents could hinder traditional financial institutions' enthusiasm for blockchain technology.
