$4 Billion DeFi Yield Vault Collapse Follow-up: MEV Capital Assets Shrink by 80%, Decentralized Leverage Strategy Risks Reconsidered

On March 5th, nearly four months have passed since the collapse of the DeFi yield vault that shook the crypto industry at the end of 2025. This event caused the market capitalization of related strategy sectors to evaporate by over $4 billion. Latest reports indicate that MEV Capital, a risk management firm involved in this ecosystem, failed to recover from the crisis, with its assets significantly reduced and taken over for integration by partner Belem Capital.

Data shows that MEV Capital’s managed assets plummeted from approximately $1.5 billion to about $300 million, a decline of nearly 80%. The market generally believes this downturn is closely related to its previous involvement in the deUSD leveraged yield cycle strategy. In early November 2025, following the collapse of Stream Finance, the peg between deUSD and Bitcoin rapidly disintegrated, causing significant price volatility in related assets. Soon after, Elixir announced the cessation of deUSD trading, further straining the leverage structure’s funding chain.

Amid the spreading risk, significant changes also occurred within MEV Capital. Public information indicates that CEO Laurent Bourquin suddenly resigned. Meanwhile, the asset tokenization platform Midas Capital announced the termination of all cooperation with MEV Capital and transferred management rights of mMEV and mevBTC to RockawayX.

Looking back at this DeFi turmoil, its trigger was rooted in the recursive lending structure among yield vault tokens. In late October 2025, the market began questioning the sustainability of several high-yield vault strategies. Shortly thereafter, Stream Finance admitted to losses of $93 million and declared bankruptcy, with its core asset xUSD dropping by 75%. Due to complex leverage relationships among multiple projects, the risk quickly spread to assets like deUSD launched by Elexir.

This chain reaction triggered a large-scale deleveraging process. In just one month, nearly half of the locked-in value in this sector disappeared, with approximately $10 billion in funds evaporating. Although there has been some recovery, the overall scale remains around $6 billion.

Meanwhile, some projects are shifting toward more stable asset structures, such as integrating real-world assets (RWA) into DeFi systems. For example, Midas Capital tokenized the F-ONE fund under Fasanara and issued on-chain assets called mF-ONE. However, such off-chain assets also spark controversy. Industry insiders question the transparency of off-chain reports, arguing that related assets still suffer from information lag and incomplete disclosures.

Recently, risk research firm Chaos Labs pointed out that the bankruptcy of an auto parts supplier caused about a 2% fluctuation in F-ONE asset prices. This case serves as a reminder that even RWA assets cannot fully prevent traditional financial risks from propagating onto the blockchain. Experts generally agree that in a DeFi ecosystem where high-yield strategies and complex collateral structures coexist, the principle of “high returns come with high risks” remains unavoidable.