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- The recovery fades
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Gm all, and happy Friday. The week closes out weak, with BTC trading fresh lows of $103.7K and most indices remaining negative over the past week. We’ve put together some weekend reading and a recap of the 0xResearch podcast, live from the Digital Asset Summit, to help take your mind off the price action.
While the week opened with a strong recovery from last Friday’s fat tail selloff, much of this strength has retraced. BTC traded to new lows of $103.7K, while our altcoin indices show broad weakness across the board. Over the past 24 hours, Gold is the top winner, while the AI sector is the top loser, retracing some of its earlier strength in the recovery.
Zooming out to the weekly, the AI sector remains our only altcoin index to post positive gains on the weekly, attributable solely to the strength in TAO. The only other winners on the week are Crypto Miners, up 11.9% with the data center capex boom as a tailwind, and Gold, up 4.5%. Gold has cleared a new all-time high every single day over the past week.
With coins down, volatility has returned in notable fashion across risk assets. BitMEX’s BTC historical volatility index has moved 200% higher to levels not seen since the spring tariff tantrum.
Gold, on the other hand, has demonstrated upside volatility. With the month just halfway through and Gold up 13%, this represents Gold’s most positive month of trading since 2011. Additionally, the Gold volatility index, GVZ, has made multiyear highs amid the upside strength.
Equities bear the burden as well. The VIX opened Friday at 28, levels not seen since the spring tariff tantrum, and has since traded lower to 24.
Across the board in risk assets, volatility is up. While Gold’s volatility is to the upside, BTC and altcoins show this variance to the downside. Careful and selective positioning is required to navigate this environment unscathed.
— Luke
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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).
Takeaways from Monday’s 0xResearch livestream:
Plasma’s early traction in stablecoin transfers: We examined how Plasma achieved $4-6 billion in daily USDT transfer volume within three weeks post-launch, attracting flows not only from Tron but also pulling capital from Ethereum. The platform also hosts the second-largest Aave instance after Ethereum mainnet, providing a robust base for DeFi functionality.
Strategic positioning against Tron and broader stablecoin ambitions: We explored Plasma's thesis that net new stablecoin flows largely avoid Tron, positioning Plasma to capture marginal inflows. We noted their pro-competitive stance in creating deep USDT liquidity and onboarding 13-14 stablecoins, while still maintaining a top-heavy focus on USDT due to its global dominance.
Plasma One as a consumer stablecoin product: We analyzed Plasma One as a staged-rollout, vertically integrated product designed to make stablecoins usable in emerging markets. We drew attention to their regulatory-first approach, including acquiring licenses and building compliance functions in regions like the Netherlands to support user onboarding and fiat ramps.
Expansion into local stablecoins and cross-border UX: We noted the emphasis on first-mile and last-mile infrastructure by onboarding non-USD stablecoins like the Turkish TRY through partnerships with local issuers such as B-Lira. These local stablecoins are intended to facilitate fiat on/off-ramps and reduce friction in stablecoin usage in volatile economies.
Plasma’s dual approach to stablecoin velocity and capital stickiness: We examined how Plasma is developing both transfer infrastructure and DeFi primitives as two interdependent components of the same strategy. Stablecoin lending via Aave and tapering of bootstrap incentives were key to driving early adoption, while maintaining capital efficiency and reducing dependency on emissions.
Native composable Bitcoin (pBTC) and spending behavior: We explored Plasma’s upcoming pBTC product, which aims to fulfill demand for saving in bitcoin while enabling spending in USD. The team sees this as an underdeveloped area in EVM ecosystems and is building to integrate this savings/spending split into Plasma One.
Ethena’s stablecoin-as-a-service momentum: From the Athena segment, we noted the rapid rise of white-labeled stablecoin demand post-USDH, with 4-5 major integrations (e.g., Meeth, Jupiter) and projections that 50% of apps and wallets may launch branded stablecoins soon. Ethena earns higher margins on these services versus direct issuance and sees this trend accelerating as interest income becomes a key revenue source.
Look for the full podcast on YouTube, Spotify, Apple Podcasts and X.
This summary was generated with assistance from AI tooling.
A1 Research and GSR released a blog post titled “State of the CLOB Wars: The Trillion‑Dollar Battle for Onchain Trading.” In it, they argue that in 2025, decentralized central limit order book (CLOB) DEXs now dominate perpetuals trading, accounting for ~92 % of volume (~$607 billion vs. ~$48 billion for non‑CLOBs). They highlight Hyperliquid as the leading protocol with record monthly volume and dominant open interest, thanks to low latency and zero gas fees. The piece also explores infrastructure trends, competitive dynamics and the growth potential of CLOBs capturing spot markets, emphasizing challenges around UX, liquidity and performance. Read more
ltrd published an article on X titled “Inside the Flash Crash: Market Microstructure Breakdown of October 10th,” offering a forensic analysis of crypto’s most severe modern-era flash crash. The post dissects Oct. 10’s cascading selloff driven by overleveraging, ADLs, evaporating liquidity and structural fragility. Through detailed charts and tick-level data, ltrd explains how liquidity vanished, stablecoins and margin systems failed to contain damage, and market infrastructure — especially on Binance — amplified the collapse. The piece stresses discipline over alpha-seeking, arguing survival is the true test in such engineered breakdowns. It’s a data-rich, cautionary reflection on systemic stress in modern crypto markets. Read more
Tencent Youtu Lab released a research report titled “Training-Free Group Relative Policy Optimization” introducing a novel reinforcement learning framework for LLM agents that requires no model parameter updates. The method, Training-Free GRPO, replaces gradient-based optimization with semantic evaluation and experiential knowledge distillation. It significantly improves out-of-domain performance for tasks like math reasoning and web search, outperforming fine-tuned 32B models using only ~100 samples and <$20 in training cost. The approach leverages context-space optimization, enabling frozen models like DeepSeek-V3.1-Terminus to adapt efficiently and maintain generalization without expensive fine-tuning. Read more
Galaxy published a research report titled “Crypto’s Most Violent Flash Crash Yet,” analyzing the Oct. 10 crypto crash through the lens of exchange risk mechanisms. It documents how massive liquidations and collateral collapse overwhelmed insurance funds, triggering auto‑deleveraging (ADL) to close profitable positions and stabilize the system. The report highlights the asymmetric stress on exchanges, especially Binance, where delta mismatches and execution latency exacerbated losses. Galaxy emphasizes that extreme volatility exposes latent structural vulnerabilities in margin systems and suggests reforms to risk protocols and collateral designs. Read more
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