YZi Labs' Strategic Bet on DeFi Infrastructure and Its Implications for 2026

The DeFi market has entered a new era of maturation, driven by the convergence of centralized and decentralized finance (CeDeFi). As institutional adoption accelerates and regulatory frameworks solidify, the investment landscape is shifting toward infrastructure that bridges the transparency of DeFi with the compliance and scalability of CeFi. At the forefront of this transformation is YZi Labs, a venture capital firm strategically positioning itself to capitalize on the next phase of DeFi growth. By analyzing YZi Labs' investments in CeDeFi platforms and DeFi execution tools, we uncover a compelling thesis for 2026: the tokenization of real-world assets (RWAs) and the institutionalization of blockchain-based financial systems will redefine global capital markets.

The Rise of CeDeFi: A Hybrid Model for Institutional Adoption

The CeDeFi market has emerged as a critical bridge between the speculative volatility of pure DeFi and the regulatory rigor of traditional finance. Platforms like OKX and Gate have demonstrated strong growth by offering hybrid custody models, cross-chain interoperability, and proof-of-reserves mechanisms according to market analysis. For instance, Gate's Layer 2 network and regulatory licenses in major markets have enabled it to scale institutional-grade infrastructure while maintaining DeFi's core principles of transparency as reported.

This hybrid approach is not just a technical innovation-it's a strategic response to market demand. In Q2 2025, DeFi lending applications rebounded with $26.47 billion in outstanding loans, a 42.11% increase from the previous quarter according to research. Meanwhile, CeFi platforms like Nexo and Galaxy expanded their lending volumes to $17.78 billion, reflecting a broader trend of capital seeking both yield and compliance as data shows. The integration of DeFi features into centralized platforms-such as perpetual trading and tokenized RWAs-has further blurred the lines between the two ecosystems according to industry analysis.

YZi Labs' Infrastructure Play: Bridging TradFi and DeFi

YZi Labs has positioned itself as a key architect of this transition by investing in projects that unify traditional finance (TradFi) with DeFi. Two notable examples are Temple Digital Group and Better Payment Network (BPN).

Temple Digital Group, a privacy-focused trading platform built on the Canton Network, is addressing the fragmentation of digital asset markets by creating a synchronized ledger for tokenized assets and compliance as detailed in their announcement. This investment aligns with YZi Labs' thesis of institutional adoption, as Canton's collaboration with institutions like Goldman Sachs and BNY Mellon signals a shift toward regulated, interoperable infrastructure according to their blog post.

Meanwhile, BPN's programmable payment network is redefining cross-border transactions by enabling real-time minting, swapping, and settling of stablecoins on BNB Chain according to their investment announcement. By bridging CeFi and DeFi, BPN offers a dual-rail system that supports both regulated fund transfers for enterprises and permissionless on-chain FX markets as reported. This model is particularly attractive in 2026, as stablecoins become the foundational monetary layer for DeFi execution according to industry research.

YZi Labs' strategic bets are not limited to infrastructure. The firm has also prioritized security and scalability, co-investing in projects like Gonka, Portal, and Axis FDN, which leverage AI-driven blockchain and interchain liquidity to enhance capital efficiency as detailed in their announcement. These investments underscore a broader trend: DeFi is evolving from a speculative arena into a durable financial system where execution, risk management, and governance are institutional-grade according to market analysis.

DeFi Execution Tools: The New Competitive Axis

The maturation of DeFi execution tools has been a defining feature of 2025. Stablecoins now serve as the backbone of on-chain activity, connecting payments, trading, collateralization, and treasury operations into a cohesive system according to industry research. This shift has created a competitive axis centered on performance, capital efficiency, and risk management-a space where CeDeFi platforms are leading the charge.

For example, OKX's in-app DEX features allow users to trade, stake, and swap across multiple blockchains without relying on external bridges or wallets according to their platform description. These integrations leverage smart aggregation tools to minimize slippage and optimize execution quality, reflecting a broader trend toward user-friendly, institutional-grade infrastructure as noted in analysis.

Blockchain analytics tools have also become critical for evaluating DeFi projects. By providing real-time insights into TVL, trading volume, and liquidity drains, these tools enable investors to assess the sustainability of protocols according to industry analysis. YZi Labs has capitalized on this by partnering with CertiK to launch a $1M grant program for early-stage DeFi startups, addressing security concerns that plagued the sector in early 2025 as reported.

2026 Projections: Tokenization and the Institutional Takeover

Looking ahead, YZi Labs is particularly bullish on stablecoins and RWA tokenization as foundational assets for 2026. The firm's $1 billion Builder Fund is accelerating the development of BNB Chain-based infrastructure, positioning BNB as the core engine of the global Web3 economy according to their blog post. With a historical annualized price increase of 113%, BNB's deflationary model and expanding utility in CEX-based programs make it a compelling long-term bet as detailed in their analysis.

The tokenization of RWAs is set to disrupt traditional markets. Institutions like BlackRock, JPMorgan, and Apollo have already launched tokenized funds, leveraging blockchain for faster, cheaper, and more transparent transactions according to industry reports. U.S. Treasuries, real estate, and equities are among the first asset classes to benefit from this transition, with fractionalized ownership models reducing barriers to entry and increasing liquidity according to market analysis.

YZi Labs' investments in RWA-focused projects-such as Probable, a zero-fee prediction market on BNB Chain-highlight its confidence in this trend as reported. By 2026, tokenized assets are expected to move beyond niche experimentation to mainstream adoption, driven by regulatory clarity and technological advancements according to industry research.

Conclusion: A Strategic Bet on the Future of Finance

YZi Labs' strategic bets on CeDeFi platforms and DeFi execution tools position it at the intersection of innovation and institutional adoption. By aligning with projects that bridge TradFi and DeFi, the firm is capitalizing on the maturation of the DeFi ecosystem and the tokenization of real-world assets. As 2026 approaches, the investment potential of CeDeFi platforms and DeFi execution tools will only grow, driven by demand for scalable, compliant, and user-friendly financial infrastructure. For investors, the message is clear: the future of finance is hybrid, and YZi Labs is building the rails to get there.