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Happy Monday everyone! Well, perhaps not so happy as the crypto market cap continues to tumble, falling from $4.12 trillion to $3.9 trillion over the last 10 hours. BTC is down more than 3% to below $112,800, while ETH has fallen 7% to $4,150. ETH is witnessing exceedingly higher liquidations than BTC in the last 24 hours.

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As we know, when BTC sneezes, the rest of the market catches a cold. The L2 index has fared the worst (-6%), although it was one of the best-performing segments last week, so a pull-back was not surprising. Meme and gaming also fell (each by roughly 2%) over the past 24 hours. Whether this is a weekend blip or downside momentum carrying over to the week remains to be seen. 

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Katana was built by answering a core question: What if a chain contributed revenue back into the ecosystem to drive growth and yield?

We direct revenue back to DeFi participants for consistently higher yields.

Katana is pioneering concepts like Productive TVL (the portion of assets are actually doing work), Chain Owned Liquidity (permanent liquidity owned by Katana to maintain stability), and VaultBridge (putting bridged assets to work generating extra yield for active participants).

On Friday’s livestream, we covered:

• MegaEth’s USDM stablecoin with Ethena — we examined how launching a chain-native stablecoin redirected yield to the L2 rather than relying on sequencer margins and can dynamically pivot toward other Ethena products as rates change, with the aim of scaling TVL and app incentives independent of transaction-fee take.

• Ecosystem capture vs. neutrality — we explored how MegaETH planned to avoid “nationalizing” core apps by first partnering within the ecosystem, noted Cap’s yield-bearing stablecoin as complementary (using USDM as collateral), and outlined a strategy to deploy treasury-backed incentives without crowding out third-party teams.

• Throughput, contracts and state growth on MegaEth — we detailed Redstone’s push oracle targeting ~2ms updates that alone could generate ~400 TPS, we noted EVM equivalence with much larger contract size limits (~512 KB vs. ~24 KB on mainnet), and we discussed pursuing singleton-style contract patterns to curb redundant state that bloats fast chains.

• Market-structure design for perps/HFT — we examined a FIFO matching start with later priority mechanisms, the rationale for enabling market makers to avoid each other’s toxic flow without chain-wide speed bumps, and a gas model that considered a “fast lane” for high-frequency participants to tighten spreads and deepen onchain liquidity.

• Blue-chip protocol onboarding realities — we assessed why deployments like Aave/Pendle remain feasible but non-trivial on a very fast L2 (oracle choices, infra dependencies, and potential refactors to fully exploit latency), emphasizing that permissionless ports are possible yet may not show best-case performance without bespoke tuning.

• Mega Mafia pipeline highlights — we reviewed “gamified payments” that layered viral consumer mechanics at point-of-sale, a team pursuing a Turkish-lira basis-trade product akin to Ethena’s model, and a DePIN/edge-compute effort leveraging SIM/eSIM TEEs as verifiable hardware to harden contribution proofs and reduce Sybil in broadband networks.

• Solana positioning and fund-flow analogs — we discussed trading SOL around FOMC and the “DAT”/ecosystem-vehicle thesis (Multicoin’s cited ~$1.5 billion focus), weighed pseudo-ETF dynamics vs. eventual SOL ETFs, and noted names likely to benefit from onchain flows and MEV/LST plumbing (e.g., Jito, Drift, Camino, Sanctum), while flagging tax/structure frictions that could blunt yield-product appeal.

Find the full livestream on YouTube, Spotify, Apple Podcasts and X.

This summary was generated with assistance from AI tooling.

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Charts of the week

BTC DATCOs recorded $24 billion in trading volume over the past week, making up 51% of total volumes and up from $15.1 billion in the prior week. ETH DATCOs followed with $19.2 billion (44% of total volumes), which was higher than the $12.9 billion recorded last week, but still trailing BTC DATCOs for the fourth consecutive week.

BTC ETFs had $940 million of inflows this week (down from $2.32 billion in the prior week), while ETH ETFs had $557 million (down from $638 million) and SOL ETFs had $38.1 million (up from $15.9 million). BTC has led inflows for four straight weeks and continues to dominate ETF demand.

BNB’s REV share has been on the rise, ending the week with 24% of REV share (considerably higher than its mid-single digit average). However, Hyperliquid is still the market leader with ~27% of REV share, and Solana now sits in third at ~19%. 

The top three applications continue to dominate. Pancakeswap ended the week with over $27 million in revenue and over 40% of application-revenue share. Pump.fun recorded ~$18 million for the week and ended with ~12.5% of revenue share, while Hyperliquid recorded ~$17 million and ended the week with ~13% of revenue share. 

— Marc