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Hi all, happy Wednesday. With rate cuts priced in, a friendlier regulatory environment and deeper liquidity, it’s not surprising to see certain speculative assets getting a bid. 

Cross-sector crypto performance diverged over the past week, with L2 tokens leading the pack, climbing nearly 20% WoW. Meme tokens also saw a sharp rally, peaking above 20% before correcting, while gaming assets trailed with steadier but more muted gains. By contrast, BTC remained relatively flat, trading in a narrow range around its baseline and significantly underperforming sector-specific indices. The dispersion highlights speculative rotation into higher-beta narratives, while BTC decides whether to break its ATH or not.

MNT was the standout among L2 majors over the past seven days, up ~24%. Onchain activity accelerated, as Mantle’s chain dashboard shows a 219% WoW increase in DEX volume and a nearly 7.5% rise in stablecoin float, indicating deeper liquidity and increased transactional demand on the network. That improved plumbing, plus ongoing ecosystem narratives (e.g., tighter Bybit integration, FBTC growth), kept flows pointed toward MNT. Thanks to this, trading volumes have hit ATHs while MNT also printed fresh highs this month, reinforcing momentum. Unlike Arbitrum and Optimism, Mantle has flown under the radar, but the past week shows it can capture attention when the growth story changes. Its tokenomics (DAO treasury backing, ecosystem incentives) remain a narrative support.

Immutable’s IMX token jumped about +33% on the week, making it the standout in the gaming index. This price action can be attributed to the SEC formally closing its investigation into Immutable without enforcement action. This removes a significant overhang and resets risk perception. Immutable has lined up partnerships with heavyweights like Ubisoft (Might & Magic: Fates) and other AAA publishers. These launches give IMX exposure to mainstream user bases rather than relying solely on crypto-native gamers. Immutable zkEVM has shown steady transaction counts, which, coupled with Immutable’s $50 million “Main Quest” developer rewards program, provide tangible incentives for studio adoption. The biggest question is user conversion, whether these IP launches drive onchain MAUs to match token momentum. If the Ubisoft pipeline delivers and zkEVM adoption sticks, IMX could transition from speculative beta to a more gaming-anchored trade.

Pepe rallied about +13% this week, outperforming most of the meme sector and remaining a liquid high-beta proxy for crypto risk. PEPE continues to print ~$1 billion in 24h spot volume, cementing its role as the most tradable meme outside of DOGE and SHIB. This liquidity and attention have drawn in speculative capital and sustained tighter spreads for both retail and institutional traders. With rate-cut expectations firming, speculative assets are catching a bid. PEPE benefits disproportionately from macro beta, as traders rotate into higher-volatility plays when monetary conditions loosen. Meanwhile, open interest in PEPE perpetuals has remained strong. Elevated funding rates signal aggressive long participation, which can amplify rallies but also heighten reversal risk. 

— Marc

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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).

HIP-4 and building new frontiers

One of the key things I like to track in crypto is a subjective criterion I call “where are new interesting developments and proposals taking place.” There are plenty of dashboards and analytics sites for this, the most popular being the Electric Capital site. The issue is that it still shows Polkadot as having a lot of developers. (At Blockworks we solved the noise problem with active users; maybe we can try the same for active developers.) Because of this noise, I prefer to track two simple observations:

• What is the velocity of new products launching, and how much mindshare are these products capturing?

• Are many people getting nerdsniped into discussing the novelties and intricacies of the chain?

A related point is the caliber of people being attracted to new ecosystems.

For example, over the past few years, Solana (and Ethereum) attracted the majority of talent. Talent generally goes where:

• It can solve interesting problems or create interesting projects.

• It can make a lot of money.

In a podcast I did with Icebergy about a year ago, we discussed how crypto still wasn’t attracting talent at the levels AI was, despite offering faster exits and more money. AI was (and probably still is) more interesting to most talent and seen as more prestigious. After FTX, crypto lost a lot of credibility and has only recently started recovering as larger institutional players re-entered. Apart from FTX, crypto has also been criticized for being full of low-effort forks and limited utility products. This dynamic isn’t unique to crypto though. Many AI companies are also just building wrappers around GPT, which is as uninteresting as some projects in crypto.

Anyway, to the point: Historically, Solana has captured the majority of attention from talent and developers. Regardless of personal views, launchpads, internet capital markets (RIP), creator capital markets, TCGs and prop AMMs have been popular over the past year, drawing developers to the ecosystem. They offer opportunities to solve problems, build products, and make money.

Solana continues to attract talent. There’s still a lot of money on the chain, high velocity of that money, and constant issuance of new tokens. Developers want to capture some of that revenue by building something unique, slightly different, or just a variation with new incentives. Ethereum has had this dynamic too, and still does. Many new AMM structures were first developed on Ethereum and by Ethereum-native founders. More recently, interest has grown in prediction markets. Many who once focused on perpetual markets have shifted to writing about prediction markets as well.

Beyond this, the main point of today’s note is that Hyperliquid has been gaining increasing attention from builders and talent. In a recent podcast with Charlie from Felix, we talked about how many of the basic elements of the L1 HyperEVM have already been built. A common criticism Charlie recognized is that most HyperEVM projects are forks or ports of existing products. This criticism is common for new chains, and it makes sense: Every new chain needs certain basic elements to function properly, such as lending markets, AMMs, bridges and so on. Still, aside from the HyperEVM, we’re also seeing growing interest in Hypercore from both talent and researchers.

This is reinforced by the large number of articles and research written on HIP-3.  Bedlam Research has also discussed HIP-3 implementations previously, specifically discussing:

• Risk tranching and delegated staking: Builders can pool HYPE from multiple holders, letting them share in fees while managing exposure through senior and junior tranches that take on different levels of slashing risk.

• Fees and fee structure experiments: Instead of only rewarding stakers, fees can incentivize liquidity providers and takers, or be tokenized into yield streams; alternative fee schedules like charging only on winning trades are also possible.

• New market types: HIP-3 allows deployment of markets beyond crypto, including equities, commodities, leveraged tokens, asset baskets, pair trades, event-contingent markets and even markets tied to DEX fee performance.

• Collateral management: Since HIP-3 DEXs are siloed, collateral cannot easily move across venues; prime brokerage-style services could emerge to consolidate risk, transfer collateral, and provide margin financing across multiple DEXs.

In its HIP-4 proposal posted yesterday, Bedlam discussed how to extend builder-deployed perps into a format suited for prediction markets. It proposes Event Perpetuals as a way to address HIP-3’s limitations, since continuous oracles and capped price adjustments do not work for binary events that resolve instantly. The design represents probabilities directly on the order book, with values between 0 and 1 reflecting the likelihood of a “YES” outcome.

In practice, it operates like this:

• Binary payoff, settling at either 0 or 1 once the event resolves.

• No continuous oracle or funding, prices set only by trading.

• Isolated 1x margining, with collateral depending on buying YES or NO.

• Opening auction to determine the first market price before trading begins.

• Continuous trading within bands of 0.001 to 0.999, no leverage.

• Resolution through a single oracle update, with optional dispute window.

• Settlement by halting trading, canceling orders, and closing positions.

• Builders stake 1 million HYPE to deploy markets and define event details.

• Markets can be recycled after resolution, and builders can set extra fees.

I highly recommend that anybody reading today’s newsletter check out Bedlam Research. I also encourage you to think about what edge your ecosystem or chain really has. As more chains have launched and gotten faster, differentiation is less about raw tech and more about something else. Many chains fail simply because they are designed to fail. They launch with an “innovation” that is irrelevant (15K TPS vs. 13K is not innovation) or uninteresting (for example, another restaking-focused chain).

Ask yourself: Are you investing in products, applications or tokens on chains that are actually nerdsniping developers and talent? Are there interesting, novel applications and features being discussed? If not, take a step back and ask why. Why is talent ignoring your chain?

Crypto is one of the easiest ways for developers and engineers to make money. If talent doesn’t think they can make money on a chain, consider two things: (1) will this change in the future? (2) are you looking in the wrong places?

— Boccaccio

1. RWA Report 2025 (Dune x RWA,xyz) 

Crypto is entering a new chapter as institutional adoption takes hold and spot bitcoin ETFs bring fresh inflows into the market. Tokenization of real-world assets is gaining momentum, while regulatory clarity abroad is helping build investor confidence. Yet, challenges remain as US regulatory uncertainty, macro headwinds and volatility stand to slow the pace.

2. Google releases AI payments protocol

Google unveiled an open-source AI payments protocol that supports both traditional rails and stablecoins, partnering with Coinbase, Salesforce, and the Ethereum Foundation. Designed for AI “agents” to transact securely with each other, the move underscores Big Tech’s growing embrace of stablecoins as Apple, Meta, Airbnb and Shopify explore similar integrations.

3. HIP-4 - Event Perpetuals

Bedlam Research published a proposal introducing HIP-4 Event Perpetuals, a new design for prediction markets on Hyperliquid. Unlike traditional perpetuals, Event Perpetuals have no continuous oracle or funding; prices reflect probabilities set by traders until a single oracle update resolves the market to 0 or 1. The design includes binary payoffs, isolated margining, an opening auction and permissionless deployment. It addresses HIP-3’s limitations for prediction markets, aiming to enable scalable, decentralized venues where builders can list event-based markets with transparent settlement.

The convergence of AI, crypto, and capital is turning IP into the next real-world asset class, and the race to unlock it has already begun.

Join Story and Blockworks at Origin Summit, where this new market takes shape.

Use promo code: BWNL50 for 50% off your ticket.