As dispersion continues, this week pointed to concrete shifts rather than narrative noise. Aerodrome’s net income moved toward breakeven as emissions fell in line with revenue, while USDai’s TVL showed stepwise growth. At the same time, tokenized assets continued to scale across credit, Treasurys and commodities, while new trading infrastructure, from ultra-low latency chains (Fogo) to equity perpetuals, pushed closer to traditional market benchmarks.

Markets leaned risk-off over the past week, with dispersion widening across both traditional and digital assets. BTC slipped (-2.3%) while the Nasdaq 100 (-2.1%) and S&P 500 (-0.7%) also closed lower, reflecting a softening risk backdrop. Gold (+2.3%) stood out as one of the few macro hedges bid, suggesting incremental rotation toward defensives as positioning reset into year-end.

Crypto sector indices told a sharper story. On the upside, Memecoins (+16.0%) and L2s (+9.7%) dominated weekly gains, pointing to short-term speculative flows and renewed optimism around scaling narratives and higher beta players. AI (+1.3%), Lending (+1.0%), and Ethereum Ecosystem (+0.9%) also managed modest green prints. In contrast, weakness was pronounced across Solana Ecosystem (-10.5%), DePIN (-7.1%), RWAs (-7.0%), and Crypto Miners (-5.4%), underscoring pressure on structurally levered or capex-heavy themes. Launchpads (-2.3%) and DEXs (-2.8%) also lagged as volumes cooled.

While the L2 sector outperformed this week, under the hood, dispersion was notable. MERL was the standout, ripping higher into the week’s close and finishing well north of its peers. MNT also saw strong relative strength, grinding steadily higher and holding gains even as the rest of the complex chopped sideways. OP and ARB tracked closer to the index average, posting modest gains but failing to show the same upside convexity. On the lagging end, BLAST remained the clear underperformer, trending lower throughout the week.

— Marc 

How are DeFi and traditional rails actually converging?

Join this live Roundtable to hear voices from Blockdaemon, Aave, and Circle hash it out!

Takeaways from Friday's 0xResearch livestream:

• Cross portfolio margin on Hyperliquid: We examined Hyperliquid’s rollout of cross portfolio margin, framing it as a prerequisite for more efficient capital usage and delta neutral strategies similar to TradFi venues. We noted parallels to Solana experiments like Project Zero and argued this infrastructure was necessary before equity perps could scale meaningfully.

• Why equity perps over options: We analyzed equity perpetuals as a delta one instrument that offered simpler price exposure than options, especially for retail traders. We contrasted this with TradFi options complexity around expiry and implied volatility, noting that roughly 61% of S&P options volume already came from retail participants.

• Funding rates and use cases: We discussed how elevated funding rates on early equity perps made them unsuitable for long-term holding and positioned them primarily as short-term speculative or hedging tools. We noted funding rates reflected market-making difficulty and expected them to compress as liquidity deepened.

• Tokenized spot equities as a catalyst: We explored how onchain spot equity tokens could reduce reliance on TradFi oracles, especially on weekends and holidays. We argued this could tighten spreads, improve market making and enable cleaner arbitrage between spot and perps.

• Regulatory arbitrage window: We analyzed equity perps as a temporary regulatory arbitrage, given the difficulty of listing compliant equity derivatives in the US. We noted this created an opportunity to capture offshore retail flow from Europe and Asia before TradFi incumbents moved to 24/7 tokenized markets.

• Current equity perps landscape: We mapped the ecosystem around Hyperliquid, noting HIP-3 deployers dominated volumes, with Trade.xyz controlling an estimated 95% share and Felix differentiating via USDH fee rebates. We compared order book models to peer-to-pool designs like Ostium, highlighting execution versus LP risk tradeoffs.

• Private market perps skepticism: We examined pre-IPO and private market perps and questioned product-market fit due to illiquidity, opaque pricing and an inability to hedge. We highlighted funding rates near 50% annualized and internal pricing driving roughly half of price discovery as structural limitations.

• Revenue and scaling implications: We analyzed the market size opportunity, noting global equities traded roughly $86T vs. $1.6T in crypto notional during November. We modeled that capturing 0.5% of equity volume at 4 basis points could annualize to roughly $2B in revenue, implying equity perps could materially expand Hyperliquid’s fee base.

Watch the full episode on YouTube, Spotify, Apple Podcasts or X.

This summary was generated with assistance from AI tooling.

Charts of the week

Aerodrome’s weekly net income (protocol revenue minus token emissions) is transitioning from a prolonged period of heavy losses to near breakeven and occasional profitability. Throughout most of 2024, emissions materially exceeded revenue, with weekly net losses reaching as much as ~$20M at the trough, reflecting aggressive liquidity incentives. However, starting in early 2025, losses narrowed sharply as emissions declined and revenue stabilized, with recent weeks oscillating around zero and turning modestly positive at times. This inflection supports the view that Aerodrome’s unit economics are improving, with protocol revenue now broadly keeping pace with emissions for the first sustained period since launch.

USDai’s TVL trajectory reflects a classic step-function adoption curve consistent with institutional balance sheet deployment rather than organic retail inflows. TVL accelerated sharply in September as several large capital allocations entered the system. The discrete jumps suggest tranche-based deployments tied to predefined mandates. The plateauing of TVL above ~$550M into November implies capital stickiness and low redemption pressure, reinforcing the view that USDai is functioning as a balance sheet instrument rather than a pure trading vehicle. 

Tokenization has evolved from a niche experiment to a strategic priority for global financial institutions. Today’s tokenized asset market is composed of $300B in stablecoins, $17.4B in private credit, $8.2B in US government debt, $2.3B in commodities, and $1.4B in public equities. Estimates underscore the scale of this shift. A report by BCG and ADDX projects that up to $16T of real-world assets could be tokenized by 2030, spanning public equities, private markets, real estate and debt instruments. Similarly, Citi forecasts $4-5T in tokenized digital securities and an additional $5T in tokenized trade finance volume over the same period.

Fogo stands out with industry-leading 40ms block times and ~1-second finality, delivering materially faster execution than Solana’s 400ms blocks and far superior responsiveness compared to Ethereum’s multi-minute finality. While Hyperliquid and Solana post higher peak TPS figures on paper, Fogo’s combination of ultra-low latency and sub-second finality positions it closer to traditional financial market infrastructure, reinforcing its thesis as an institutional-grade trading chain rather than a broad consumer L1.

Outside of Root, the top nine subnets currently hold ~44% of all TAO staked across subnets and receive 37.4% of TAO emissions. This concentration has been steadily declining from a high of ~52% in May 2025 as more TAO flows into smaller or emerging subnets. The trend suggests a gradual broadening of participation and a healthier distribution of stake over time.

— Marc

As modular stacks and rollup-as-a-service providers like Gelato continue to support the full spectrum of decentralization, teams can deploy applications with their desired level of autonomy, composability, security, and cost-efficiency.

This trajectory signals a broader architectural realignment, with implications for how value, risk, and security are distributed across the next generation of rollups.