Deep in thought

Hey all, here is some weekend reading of interest, covering new DeFi primitives and institutional flows. Additionally, check out Tuesday’s podcast with Valantis, a modular DEX on the HyperEVM. Have a great weekend!

Valantis deep dive: Understanding the modular exchange protocol | Deven and Ali

On Tuesday’s 0xResearch episode, we covered:

• Valantis’ asset-specific AMMs for HYPE-based LSTs, which reduce value leakage by rebalancing through staking and unstaking queues instead of relying on arbitragers, passively lent idle HYPE into Aave/Morpho forks on Hyperliquid, dynamically shifted allocation across venues to optimize yield, and used pool reserves to perform external arbitrage and order-book market making.
  

• The role of the seven-day HYPE unstaking queue in swap pricing, where LPs benchmark opportunity cost between lending rates and LST discounts, reframing AMMs as dynamic yield vaults that allocate reserves across staking, lending and trading depending on relative returns.
  

• A modular lending architecture that routed only HYPE (not LSTs) into whitelisted lending markets via an audited module, inherited counterparty risk from protocols like Aave and Morpho, and adjusted allocations in real time based on rate differentials to optimize reserve efficiency.
  

• Cross-DEX arbitrage functionality built into the AMM logic, which enabled over $50 million in external swap volume by detecting off-platform discounts below withdrawal fees and rebalancing accordingly — paving the way for future stablecoin and RWA pool designs with similar queuing dynamics.
  

• The strategic rationale behind acquiring StakeType, which gave Valantis direct control over the LST asset layer and enabled deeper integration with its AMM infrastructure, allowing optimizations in mint/redeem logic, fee routing, and leverage unwind flows in HYPE-denominated DeFi.
  

• A redesign of StakeType around a modular CoreWriter framework, supporting multiple stake accounts with isolated logic modules for HIP-3 compatibility, validator vault strategies and future-proofing upgrades — while maintaining strict security boundaries across staking operations.
  

• The benefit of tighter integration between StakeType and Volantis AMMs, enabling direct routing of deposits to pending pool withdrawals, preferential redemption handling, validator delegation logic tied to LP behavior, and improved supply equilibrium — ultimately increasing LP yield and reducing secondary-market slippage.

Listen to the full podcast on YouTube, Spotify, Apple Podcasts and X.

This summary was generated with assistance from AI tooling.

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1. Loom Finance v1

POL Finance, LambdaClass and Levenue released a white paper titled “Loom Finance v1.” This paper introduces Loom Finance, a novel revenue‑based financing (RBF) protocol that bridges traditional markets and DeFi by tokenizing predictable real‑world cash flows. It enables businesses to access non‑dilutive capital through Levenue’s platform. Investors bid on tokenized future revenues via smart contracts that integrate onchain settlement with off-chain fiat conversion. The protocol enhances transparency, flexibility and scalability while reducing friction in funding and repayment workflows. Read more

2. Some quick thoughts on Ethereum and altcoins

Luke Nolan of Coinshares published a blog post offering a brief take on Ethereum and altcoins. He highlights the US GENIUS Act as establishing regulatory clarity for banks to issue stablecoins and custody digital assets, offering a major catalyst for future onchain institution-driven growth. Given Ethereum’s dominance in stablecoin settlement (~$146 billion of ~$280 billion) and tokenized real‑world assets (~52%), the market is rapidly repricing ETH in anticipation of increased inflows. Luke notes that while altcoins may see temporary inflows, ETH is uniquely positioned as the "net beneficiary" of a regime where real-world assets, stablecoins and institutional flows increasingly move onchain. Read more

3. Dark AMMs are the future; Monad is the place

Thogard of FastLane Labs published a blog post on X titled “Dark AMMs are the Future; Monad is the Place.” In the post, ThogardPvP argues that while Solana pioneered proprietary ("prop") AMMs, also known as dark AMMs, Monad offers a superior execution environment for these mechanisms. The post highlights that Monad’s architecture enables more efficient and effective implementation of prop AMMs, positioning it as the next frontier for their growth and evolution. Read more

4. Coinbase orderflow on Base: Early onchain insights 

Arrakis Finance published an article emphasizing the immense breadth of assets traded onchain compared to centralized exchanges, highlighting the permissionless and expansive nature of DeFi markets. In early beta, ~5% of users traded across 2,654 tokens, far surpassing the 458 tokens listed on Coinbase CEX over 13 years. Arrakis uses this data point to underscore the scale and relevance of onchain trading infrastructure. Read more