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With an easy $6 billy in TVL, Ethena is the project that just can’t stop cooking. Meanwhile, Ethereum is setting the stage for 2025 growth, with developers signaling readiness for a 36M gas limit as they finalize Pectra upgrade plans. Then, we’ve got some thousand-% yield APYs on Usual today.

Ethena passes $6 billion in TVL:

Ethena’s TVL crossed $6 billion for the first time this week after its USDe stablecoin surpassed Sky’s DAI and USDS’ combined market cap of $5.56 billion. 

In a bullish environment where traders are chasing leverage, USDe has been an attractive asset of choice for degen traders to pursue a lending/borrow loop trade. Aave’s supply of sUSDe is presently at its supply cap of $1.14 billion, while sUSDe’s latest yields are at 12%.

While Ethena has enjoyed extraordinary success with USDe in a very short time, USDe’s scalability is limited to growth in bull market conditions due to its design’s reliance on CEX positive funding rates. To mitigate that weakness, the team is turning to the traditional stablecoin + RWA playbook. 

Ethena launched earlier this week a new stablecoin USDtb ($70.4 million in market cap), which is currently 90% reserve-backed by BlackRock’s tokenized RWA fund, BUIDL, with $550 million in assets.

In a bearish market, this allows the team to flip to an RWA strategy by allocating USDe to USDtb. It creates an artificial T-bill-equivalent APY floor for USDe. This does not necessarily make it a more attractive yield option compared to stablecoin competitors like DAI or USDC that have similar RWA levers, but it does enable USDe to maintain a competitive floor in a bear market.

Finally, Ethena is partnering with Usual to bolster its new USDtb product. USDtb will be allocated to back Usual’s USD0 “onchain Tether” stablecoin, thereby accruing more value into USDtb itself.

— Donovan Choy (X: @donovanchoy | Farcaster: @donovan)

Ethereum tees up gas limit rise and Devnet 5

Ethereum All-Core Devs (ACD) held their final call of 2024 yesterday, which offered key updates on plans to raise the gas limit and progress toward the Pectra upgrade. Discussions revealed the community’s ongoing efforts to balance execution-layer changes, consensus-layer coordination and EIP implementation, reflecting Ethereum’s commitment to “build-in-public” iterative improvement.

In a bold but measured move, Ethereum developers are preparing for a gas limit increase, mirroring a 20% rise seen over three years ago. This time, the proposed increase aims for 36 million gas, though significant technical constraints temper enthusiasm for higher thresholds. The primary limitation is the consensus layer’s "GOSSIP_MAX_SIZE," which restricts validator block transmission to 10 MiB, equivalent to roughly 10.48 MB. 

On the Mekong testnet — used for Pectra fork testing — the gas limit has already increased to 36 million, offering a stable testing ground for network performance under higher limits.

While the Mekong testnet runs stably with these changes, developers cautioned against increasing the mainnet gas limit beyond 40 million without addressing the gossip-layer constraints. Validator clients, such as Prysm, face challenges in dynamically adjusting gas limits, which underlines the need for further development.

An increase to the gas limit does not need to wait for a hard fork but can be signaled by validators in support of such a change. To date, only 16.8% have done so, but the trend is up. Campaigns like PumpTheGas.org aim to build more momentum.

The Pectra upgrade remains a centerpiece of Ethereum’s 2025 roadmap. It’s on track for a Q1 release, with developers targeting a Devnet-5 launch by year-end. Changes discussed on the call include replacing EIP-7742 with EIP-7840 to offer more flexibility in managing "blob counts" — a key element for scaling Ethereum and supporting layer-2 rollups. 

By allowing developers to set maximum and target blob counts independently, the network can balance scalability (by allowing more data blobs) with stability (by maintaining operational safety limits). This separation makes it easier to optimize block capacity without overloading the network.

Additionally, EIP-2537 focuses on gas repricing for BLS (Boneh-Lynn-Shacham) precompile operations, which are essential for cryptographic computations in Ethereum. The proposal adjusts gas costs for specific mathematical operations, ensuring that resource-intensive tasks are priced fairly while removing inefficiencies like redundant operations. These updates enhance network efficiency, optimize resource usage and improve cost fairness for developers.

An EVM resource pricing working group will launch in January. This group will work on harmonizing gas cost calculations across various operations, aiming to improve efficiency and fairness in Ethereum's fee structure.

EIP-4444, which schedules the rollout of pre-Merge history expiry for May 1, 2025, requires additional testing to finalize. 

The call also underscored the need for clearer validator node requirements, with developers seeking community feedback. A further proposal to redefine “Meta” EIPs as solely process-related could simplify hardfork management. 

Ethereum’s deliberate and collaborative approach to development was evident throughout the discussions. The Pectra upgrade and proposed gas limit increase reflect the network’s ambition to expand its technical capabilities while prioritizing stability.

— Macauley Peterson (X: @yeluacaM | Farcaster: @Macauley)

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SKALE, the gas-free invisible blockchain, is “Built Different” for mass adoption: high-throughput, scalable, and fair. As a network of interoperable EVM-compatible L1s, SKALE’s user experience focus has accelerated a strong ecosystem across gaming, AI, and more. Due to SKALE’s gas-free nature, blockchain can be integrated invisibly, creating accessible Web2-like experiences for users and developers.

SKALE has:

• Over 50M UAWs

• 9 Games on the Epic Games Store

• Saved Users over $9.5B on Gas Fees

Pudgy Penguins’ next step:

Why did PENGU issue on Solana?

Ryan Connor: The reality is that asset issuers want to launch their token on chains where they think they're going to get the highest valuation. Same reason why Alibaba wanted to issue stock in the United States — it was the best capital market for them. PENGU is an insight into how highly intelligent asset issuers are thinking today.

Why aren’t perps working onchain?

Ryan Connor: I think it’s quite clear that marker makers do not like making markets onchain due to the costs of submitting and cancelling orders. And market makers, or HFTs, are the biggest value drivers of REV on blockchains. When thinking of token valuations, it’s key to think where market makers and HFTs can participate the most.

Danny Knettel: A few teams on Solana are exploring L2-based solutions for perps, such as Zeta, Phoenix, Ellipsis Labs. It’s interesting in the context of developments like Magic Block, which is building out ephemeral rollups.

dYdX has long been at the forefront of DeFi as one of the primary innovators of onchain perpetual futures.

With the launch of dYdX Unlimited on Nov. 19, 2024, the protocol has brought new functionality to the platform that aims to diversify their product suite.

Relative valuation metrics suggest dYdX could be undervalued compared to market leaders, analyst Daniel Shapiro writes in the most recent Blockworks Research report. This indicates that the market is not yet fully appreciating the impact of these recent developments.

Launched in August 2024, Usual is a decentralized stablecoin issuer that seeks to replicate Tether’s lucrative business onchain. In the span of a few months, Usual’s USD0 stablecoin has grown to a $1.32 billion market cap.

Usual’s business model differs from Tether’s in that stablecoin holders are compensated in yield from treasury yields and native USUAL token emissions.

By locking up USD0 for four years, users can receive $USD0++, a liquid staking token that is currently dishing out 79% in APY. This yield, in turn, comes from a variable yield rate in USUAL emissions, as well as the risk-free yield of 5-7% from the underlying collateral backing USD0. Stakers can choose to break the four-year period and redeem USD0 beforehand, but it comes at the price of foregoing the chunk of yield in USUAL.

Investors who may want to lock in a higher yield rate on $USD0++ can also look to Pendle. For instance, a Pendle $USD0++ market (matures in 40 days) is currently offering a 46% APY, but you’d forgo rewards in USUAL. For more, see yesterday’s edition of 0xResearch.

USUAL saw its genesis airdrop this week to a sub $350 million marketcap, and staking it for USUALx is currently offering an eye-popping yield of 1,683%, according to its website.

Usual is also launching a vault for Ethena’s sUSDe collateral this week, which enables $USD0++ holders to gain additional exposure to sUSDe APY. Swaps between USDtb to USD0 and sUSDe will be set at zero fees. It’s a win-win relationship for two of the most promising stablecoin issuance protocols to enter DeFi this year.

— Donovan Choy

• Malachite, a newly open source BFT consensus engine in Rust, offers flexibility, reliability and high performance. Designed to decentralize systems like Starknet sequencers and social networks, it leverages Tendermint logic, achieves 50k TPS and supports diverse applications. Developers can explore the repo, join discussions or collaborate on its evolving ecosystem.

• Gelato launched 1-Click Modular Bridging for Abundance ABC Stack, powered by Hyperlane and Decent. This enables Celestia-native sovereign rollups to seamlessly connect with Solana, Ethereum, Base and 100+ chains. By removing enshrined L2 bridges, Gelato aims to enhance EVM performance, simplify cross-chain interoperability, and set a new benchmark for modular blockchain scalability.

• Swell has rolled out its long-planned Optimistic rollup, Swellchain. The chain, focused on Ethereum staking, is supported by Ethena, EigenLayer and Symbiotic. It integrates USDe and sUSDe, incentivizing liquidity providers and DeFi builders. Swell plans to accumulate USDe as protocol-owned liquidity, and will bring USDe and sUSDe to Swellchain with the launch of Tempest Finance.

• Uniswap Labs partnered with Blockaid to launch a token warning feature, powered by Blockaid’s onchain detection and response (ODR) platform, which processed 2.41 billion transactions in 2024. The feature highlights malicious tokens, working to address risks like scams and high-fee tokens. Blockaid also unveiled its State of the Chain dashboard, offering insights into onchain trends, token legitimacy, and security threats.