🦅 Fluid takes flight

Plus Hemi, Unichain, and blockspace specialization

Happy 4th of July to those celebrating! As fireworks light the sky, swoop in for a potpourri of DeFi stories… Fluid rockets to Ethereum’s #2 DEX, Bitcoin DeFi looks for early traction on Hemi, and Unichain’s incentives drive big TVL gains. Plus: a lively debate on whether general-purpose blockspace is just a myth.

— Macauley

Fluid’s growth:

When I first wrote about Fluid in December 2024, Fluid DEX had about 3.4% market share ($2.8b trading volumes) of the Ethereum DEX market and was fourth behind Uniswap, Curve and Balancer. After surpassing Curve in March, Fluid is today the second-largest Ethereum DEX with a market share of 11% ($6.8b in trading volumes). 

But Fluid is not merely a DEX. The protocol fuses a DEX and Morpho-style vault lending market into one. Coupled with its “smart” debt/collateral features and an advanced batched liquidation design, Fluid has innovated one of the most capital-efficient DeFi products, offering ~95% LTV ratios and 0.1% liquidation penalties that far surpass its peers (see Cyber.Fund’s technical explainer for a full breakdown of Fluid’s architecture.)

Fluid is positioned for significant growth momentum with its upcoming expansion to Solana at the end of the month. Fluid will power the underlying infrastructure for Jupiter Lend, representing a substantial opportunity for growth.

— Donovan Choy

Blockchain is shaping a radically different economy, with 10% of global GDP predicted to be tokenized onchain by 2027. The technology is disrupting key industries worldwide — upending the conventional way of doing business while transforming customer experiences.

How might this evolution play out over the next quarter century? A new special report from Blockworks Research and OKX answers this question, drawing from interviews and research conducted across the leaders of finance, technology, retail, and entertainment. 

Among the Bitcoin L2s present at Permissionless last week was Hemi, and during the conference I had a chance to chat with Jeff Garzik on the burgeoning Bitcoin DeFi scene.

(Rizzo, The Bitcoin Historian, also sat down with Garzik for the Supply Shock, podcast. Be sure to check it out.)

The Hemi team pointed to borrow/lend protocols ZeroLend and AJNA and DEXs Sushi, IZUMI and Oku, as live examples.

But it’s clearly early days — liquidity and activity is very limited — so there aren’t many promising opportunities.

One of the simplest moves to dip your toes in right now might be minting satUSD against hemiBTC on River, a CDP-based lending protocol using the Liquity V1 model. Formerly Satoshi Protocol, the dapp lets you mint satUSD at 0% interest. Once minted, you can park satUSD in River’s Staking Pool for satUSD+ which currently estimates a yield of 4.64%.

Theoretically one could LP satUSD+ on Spectra, but liquidity is super thin, so expect to hold to maturity. Alternatively, one could LP satUSD on a DEX for swap fees, and of course there are Hemi Points multipliers of unknown future value. The stablecoin is also on the roadmap for ZeroLend markets. 

River has deployed satUSD to Base, Arbitrum, BNB and beyond but each chain has its own vault system and collateral backing, and so I didn’t find any bridging options.

Following Unichain’s mainnet launch in February, the L2 struggled to gain traction with TVL at ~$8.3m one month post-launch. However, the implementation of a $21m incentive campaign has turned things around.

Unichain's incentive program which kicked off on April 15th targeted $750m TVL and $11b in swap volumes. Both KPIs have been substantially surpassed:

  • Current TVL: $867m (115% of target)

  • Trading volume: $29b (264% of target)

The below graph shows a burst in trading usage once incentives started flowing mid-April.

Unichain’s incentive campaign is off to a good start. However, the true measure of success will be determined by retention rates following the campaign's conclusion in a week or so.

— Donovan Choy

Was general purpose blockspace even real?

Jill Gunter: If you look at the reality of how general purpose blockspace has played out, it’s kind of a myth. Neither Solana nor Ethereum have been “general purpose” platforms in the sense of having decentralized Uber back in 2017, they’ve always been more specialized. This is also true for L2s – Arbitrum has been more DeFi-centric, while Base has been more consumer-centric. It has always been special-purpose blockspace.

Nick White: For Solana to fulfil its “decentralized NASDAQ” vision and compete with Hyperliquid requires various customizations at the sequencing and fee markets level. But by making those changes and making those tradeoffs, Solana becomes an app-specific chain. The winners in these categories are the ones who go out to choose the tradeoff space that is best tailored to their use-cases. It’s not playing out in Solana’s favor now.