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Gm all, and happy Friday. Crypto and risk assets continue to show weakness heading into year-end, not adding to the holiday spirit. Risk assets are in search of a floor, driven by fundamental flows supported by ETFs or protocol buybacks. To take a step back from the charts, here is some weekend reading of interest and Monday’s 0xResearch livestream with Omnia from Kinetiq. Enjoy!
This week closes out with continued weakness across the board, and in crypto risk in particular. Both the S&P 500 and the Nasdaq 100 moved over a 1% lower this week, with gold being the one instrument showing strength. Concurrently, every crypto index we track has traded lower throughout the week. Notably, exchange tokens, buyback leaders and the 2025 crypto equity cohort outperformed BTC intra-week, while everything else underperformed.
The AI sector was the top loser on the week, trading down -26%. The downside was led by TAO, which notched new multi-month lows after being a top performer in October.
Broadly, crypto continues its downtrend, with majors like BTC, ETH and SOL showing weakness while longer tail alts make larger moves to the downside. Risk is in search of a fundamental floor, which still may remain lower until price/buybacks becomes too compelling, and buyback flows from these protocol cashflows can set a low. Similarly, majors may need an uptick in ETF inflows to set their low, while the support provided by these vehicles has been anemic in the weeks past.
— Luke
On Monday’s 0xResearch livestream, we covered:
Kinetiq’s approach to liquid staking as a foundational layer: We examined how Kinetiq views liquid staking not as a final product but as a distribution wedge to build further infrastructure. For example, a single deposit into kHYPE recently exceeded 509,000 HYPE, surpassing the entire liquid staking ecosystem on Monad, illustrating Kinetiq’s scale on Hyperliquid.
kmHYPE as a revenue-sharing, co-ownership model: We explored how kmHYPE was launched as the first exchange-related liquid staking token that guarantees a share of perpetual exchange revenue. Over 500 participants seeded the product within 90 minutes, with participation gated by KNTQ holdings and all underlying HYPE staked and untouched, preserving capital integrity for holders.
Risk isolation across Kinetiq’s LST products: We detailed how Kinetiq isolates risk across kHYPE (general-purpose LST), vkHYPE (earn product), and kmHYPE (exchange-specific LST). This design prevents blended risk exposure, ensuring that users only opt into the risk profiles they explicitly choose, with kmHYPE backing the MARKETS exchange while kHYPE remains separate and DeFi-integrated.
MARKETS exchange strategy and infrastructure: We drew attention to how MARKETS is being built as an all-hours, onchain exchange with institutional-grade oracles via KO (used by CBOE, CFTC, SEC). USDH was selected as the quote asset for alignment with Hyperliquid, with institutional and broader non-crypto-native traders as the target audience beyond just Crypto Twitter.
Token design philosophy and revenue transparency: We noted Kinetiq’s commitment to a single-token model (KNTQ), explicitly ruling out a MARKETS token. KNTQ remains central to governance and access, and upcoming features like KB1 (staked KNTQ) will further integrate token holders into protocol economics. Treasury and revenue data will be made fully transparent onchain.
Security and audit culture within Kinetiq: We examined Kinetiq’s security practices, including six audits (two post-launch), $5M bug bounty programs, Hypernative monitoring, and a Safe Harbor white hat policy. These measures aim to build long-term trust with institutional stakers and support Kinetiq’s goal of routing capital from HyperCore to HyperEVM safely.
HyperEVM ecosystem evolution and Kinetiq’s strategic role: We analyzed how HyperEVM matured post-HYPE airdrop, with early tourist participants exiting and foundational protocols like Kinetiq solidifying. Kinetiq routes staking from VM to core, enabling institutional participation, and positions itself as one of the few original, non-forked HyperEVM-native protocols expanding into DeFi and exchange infrastructure.
This summary was generated with assistance from AI tooling.
Michael W. Green published a blog post titled “Taking a Step Back to Step Forward” that reframes US economic precarity through a structural and mathematical lens. Drawing on Ole Peters’ “Equation of Life,” Green argues that wealth naturally concentrates without redistribution (τ < 0), leading to systemic inequality. He critiques distorted CPI measures, technocratic complacency, and housing scarcity as mechanisms of economic extraction. With credit spreads artificially tight despite rising defaults, he warns of financial fragility. Green calls for civic engagement and institutional accountability, setting the stage for further essays and political interviews focused on systemic reform. Read more
Sky Frontier Foundation published a research report titled “Annual State of Sky Ecosystem” outlining the protocol’s major achievements and financial growth in 2025. The Sky Ecosystem saw an 86% increase in USDS supply (to $9.86B), outpacing the broader stablecoin market. Sky Protocol generated $435M in revenue and $168M in profits, with substantial SKY token buybacks and staking rewards. With new regulatory clarity via the GENIUS Act and multiple Sky Agent launches, the report projects strong institutional adoption and protocol expansion in 2026, positioning Sky as a leader in decentralized, yield-bearing stablecoins. Read more
Omid Malekan published a blog post titled “Beware the Lofty Promises of TradFi Firms Embracing Tokenization” that critiques traditional financial institutions (DTCC, Visa, SWIFT, Stripe, PayPal) for selectively embracing blockchain benefits while ignoring its existential threats to their legacy business models. Malekan argues these firms tout tokenization, but avoid decentralization, risking co-opting crypto’s core values. He warns that permissioned chains and regulatory lobbying may dilute crypto’s foundational principles. While he advocates engagement with TradFi, he urges the crypto community to defend public, permissionless networks and resist compromising decentralization for mainstream adoption. Read more
@DeFi_Cheetah on X published an article post titled “It’s Not ‘No One Wants Non‑USD Stables’ — It’s ‘No Banks Want Non‑USD Inventory’” arguing that the real barrier to non-USD stablecoin adoption is not demand, but structural limitations in the global banking system. The piece dissects how Basel III regulations, liquidity constraints, and G-SIB penalties discourage banks from holding non-USD inventories or servicing emerging market corridors. The result is a liquidity vacuum in non-USD FX markets. The author calls for DeFi-native solutions to bootstrap non-USD stable liquidity, warning that relying on traditional FX infrastructure will fail by design. Read more
The first generation of perp DEXs faced a binary choice: optimize for execution speed on isolated chains, or accept Ethereum's latency constraints to preserve composability.
ZKsync's Atlas architecture has collapsed this tradeoff. Grvt is evolving from a unified market layer into an accessible onchain private bank. Lighter has demonstrated that verifiable execution and zero retail fees can capture market-leading volume while settling on Ethereum.
