As Memecoin cools down, it’s time to turn our attention to innovative practices in the crypto space.
Written by: Ignas
Compiled by: Luffy, Foresight News
I really like memecoin, but it has started to degrade. My Twitter feed is flooded with memecoin posts, drowning out many important crypto developments. In fact, I was happy about the recent market drop because it gave me time to study it all. However, the drop did not last.
In this post, I want to share 10 key developments in DeFi and the broader ecosystem that have caught my attention and that I believe you should follow closely too.
Avalanche 9000: Is L1 the new L2?
Avalanche just launched Avalanche9000, its biggest upgrade to date, making it easier, cheaper, and more flexible to create L1 blockchains.
L1 is the new L2? Gone is Avalanche’s past subnet model. Now, developers don’t need to validate the main network or stake 2,000 AVAX upfront. Instead, they only need to pay a small fee, significantly reducing costs.
Sounds like Polkadot and a bit like Cosmos, right?
Inspired by Ethereum’s EIP-4844 (Proto-Danksharding makes gas fees on L2 very cheap), it is Avalanche L1 that is as affordable as Celestia-based Rollups, but with better interoperability and reliability.
The upgrade also introduces L1-only validators, allowing each L1 to manage its own rules, whether it is a PoS (Proof of Stake) or PoA (Proof of Authority) blockchain. This means better token economics and value spillover.
It reduces the cost of running a validator from 2000 AVAX ($100,000) to 1.33 AVAX per month.
Avalanche also launched Retro9000, a $40 million grant program. 700 L1s are already in development, ranging from gaming to DeFi.
Avalanche is attracting TradFi partners through tokenization and has successfully attracted games such as Off The Grid. It seems to have found its niche in the competition between Solana and Ethereum.
NEAR AI
You could argue that Base and Solana are leading the AI agent trend with Virtuals and ai16z, but NEAR is quietly carving its own path in AI innovation.
NEAR already supports proxy-driven on-chain functionality and is developing more tools and features.
What makes it different is the native chain abstraction of multi-chain AI agents, making it easier for developers to build interconnected systems.
In addition to this, NEAR Intents introduces a new transaction model that enables cross-chain settlement between AI agents, services, and users. Personally, I think the coolest thing is the collaboration between Infinex and NEAR, where you can trade BTC, XRP, or anything else on a decentralized platform.
NEAR also launched NEAR.ai, an AI assistant that can perform certain actions on behalf of users by connecting to other AI agents and across web2 and web3 services. You need a NEAR wallet to log in.
To be honest, the wallet experience on NEAR used to be pretty bad, but it’s much better now (I recommend NEAR Mobile).
One interesting thing is that social proxies based on NEAR are starting to host X accounts for each other.
Additionally, NEAR has launched a research center to explore new AI models and partnered with Delphi on an AI accelerator program to support builders in this field.
It is worth noting that the blind computing blockchain Nillion Network is being built on NEAR to bring privacy protection to private LLM (large language model) training and sensitive data reasoning. This may unleash the full potential of user-owned AI.
Liquity v2 Launched
LQTY rose 120% in one month, what’s the reason?
A generally bullish market
V2 Release
Traditional DeFi lending models have their problems. Money markets like Compound and Aave set interest rates based on utilization, resulting in unpredictable costs. Governance-based interest rates like MakerDAO are slow to adjust. Even Liquity V1’s fixed-fee model can’t adapt to market changes.
Liquity v2 solves this problem with user-set interest rates and BOLD, a stablecoin focused on decentralization, user control, and yield.
Borrowers open Troves to set interest rates: lower rates for savings, higher rates for avoiding redemption. Troves with the lowest interest rates will be redeemed first.
Liquity V2 has an LTV (Note: LTV = loan / collateral value * 100%) of up to 90%, with a leverage of up to 11 times, which is extremely efficient.
Borrowers can use not only ETH but also LST such as wstETH and rETH as collateral to borrow BOLD while still receiving staking rewards. Therefore, BOLD is fully backed by ETH and LST, redeemable at any time, and not subject to TradFi risks.
Unlike USDC, BOLD does not rely on RWAs, thus avoiding counterparty and censorship risks. Its peg to $1 is maintained through a simple mechanism:
If $BOLD falls below $1, arbitrage will encourage redemption of ETH.
If $BOLD rises above $1, lower borrowing rates will increase supply.
Stablecoin liquidity pool depositors receive 75% of the protocol revenue from BOLD and ETH liquidations, while the remaining 25% will be used to incentivize BOLD liquidity in DeFi.
One huge change is the Forkonomics of Liquity V2, as Liquity is one of the most forked protocols in DeFi.
Now, fork teams need to obtain permission to use Liquity’s code (as well as airdrop to LQTY holders), but in return they receive support from Liquity, access to the liquidity network, shared security resources, and potential LQTY rewards.
This is a win-win situation: the forked protocol is better supported, and BOLD can scale across chains without the usual risks of hacking or mismanagement.
Liquity v2 is already being tested on the Base Sepolia testnet.
Pendle's new protocol: Boros
Most people thought Pendle V3 was just a minor update. It turns out that Pendle had something completely different in mind. Pendle launched Boros, a sister company founded by Pendle to take yield trading into new areas.
Boros is built for leveraged yield trading. Let me say it again: you can trade yield equity with leverage. It focuses on funding rates, which is the cost of borrowing or lending for perpetual contract positions.
What’s the problem? Until now, there hasn’t been an efficient way to hedge or trade these rates. That’s where Boros comes in. With it, traders can:
Hedge funding rate exposure for predictable returns
Using leverage to speculate on funding rate fluctuations
Take Ethena as an example, its profitability depends heavily on funding rates. With Boros, Ethena can hedge against volatility and lock in gains. At the same time, speculators can take advantage of the rise and fall of funding rates to make greater profits.
You may ask, why is it funding rate?
Perpetual swaps exchanges process $150-200 billion in volume per day, and funding rates are central to how these markets function. Yet they are overlooked in DeFi.
Boros makes funding rates tradable. This means protocols, market makers, and traders can now integrate funding rate strategies into their portfolios.
Pendle has now grown into a full-service yield trading platform. V2 and Boros complement each other perfectly:
V2 focuses on tokenized on-chain yields such as staking, RWA, and BTCfi
Boros focuses on funding rates and off-chain opportunities
As is typical with Pendle, they will not issue new tokens.
$PENDLE and vePENDLE tokens will power both V2 and Boros. Revenue distribution also remains the same: 80% to vePENDLE holders, 10% to the protocol treasury, and 10% for operations.
As the points airdrop gradually cools down, the launch of Boros comes at the perfect time.
Zircuit
This is probably the most confusing Ethereum L2.
Zircuit recently concluded their Season 1 and 2 airdrops on November 20th, distributing 300 million tokens. They were very generous in providing airdrops to each of their partner protocols.
What’s next for Zircuit? How can they keep users engaged and create real use cases for the token?
The answer seems to be the hottest topic right now: AI. Zircuit is developing a new product called Gud AI.
It is an AI agent similar to AIXBT that can mine alpha. There is also a native AI token $GUD, and users need to stake $ZRC to obtain tokens. This is a good strategy for new L2s.
Zircuit is L2, but it takes a new approach to L2 infrastructure. It doesn't just focus on scaling, it also focuses on security, efficiency, and availability.
One of Zircuit’s key features is Sequence-Level Security (SLS). While most blockchains detect malicious transactions only after they are executed, SLS can identify them even beforehand.
In the era of Ethereum restaking, LRT on Zircuit has been very notable, attracting over $2 billion in TVL. Zircuit’s Mainnet Phase 2 is accelerating and is now live:
Bridge to Ethereum. The cross-chain process takes only a few minutes, which is very fast. Since its launch, Zircuit's net deposits have jumped to $300 million.
Some native DeFi dApps such as ZeroLend and Elara Labs for lending, Ocelex and Dodo for trading and liquidity mining.
Recently, Zircuit distributed 2% of its supply to over 190,000 EigenLayer token holders.
Zircuit is backed by Binance Labs, Pantera Capital, and Dragonfly Capital, but is still not listed on Binance.
Starknet
The STRK airdrop was met with FUD, but it is undeniable that Starknet has made significant progress recently. They are pushing the boundaries of L2 technology and it is worth paying attention to.
A major move for Starknet is the launch of staking functionality for its native token, STRK. This is the first L2 to offer native staking functionality and is now live on the mainnet.
Bitwise, an asset management company with $11 billion in crypto assets under management and more than $3.5 billion in ETH staked, has also entered the Starknet ecosystem by supporting STRK staking.
From a technical perspective, the deployment cost is only $5 and the verification cost is less than $1. Moreover, through the joint efforts of multiple teams, it is possible to verify SNARK proofs. This provides developers with the opportunity to build real-world ZK-driven applications, such as private identity verification or secure document verification.
They also rolled out the v0.13.3 update, which reduced blob gas costs by 80% through smarter block compression. As Ethereum blob usage increases, Starknet can maintain low fees. Looking ahead, Starknet plans to make more efficiency upgrades, and even Vitalik is not stingy with his praise.
Another exciting development is the progress they have made on a trustless Bitcoin cross-chain bridge developed using sCrypt (a PoC bridge that supports OP_CAT.) This shows that connectivity between Starknet and Bitcoin is possible, which is a big step forward in interoperability and may unlock some interesting use cases.
AI Mode
After the airdrop, Mode took two more steps: veMODE and AIFi ecosystem.
Mode is the first OP Stack L2 to introduce the ve governance model through veMODE. You can stake MODE or MODE/ETH liquidity tokens to gain voting rights, and the longer you stake, the greater your voting power (up to 6x). veMODE does not vote for specific pools, but focuses on the protocol and aims to grow the entire ecosystem.
In Season 3, $2 million in OP rewards will be distributed through this system.
But what really sets Mode apart is its focus on AIFi.
With $6 million in funding from Optimism, Mode is bringing AI agents to DeFi to simplify and scale on-chain interactions. These agents can handle tasks such as yield farming, risk management, and even governance, all with minimal human input.
Mode’s AIFi ecosystem is built on three levels:
AI-secure L2 Collator: Detect and block malicious transactions before they enter the blockchain.
On-chain agent infrastructure: Partners such as Giza, Olas, and RPS AI help deploy agents, while Mode’s Dapp Intents SDK enables agents to learn and execute advanced policies.
AI Interfaces: Tools like Mode’s AI Wallet make DeFi more accessible by simplifying interactions.
To kickstart the AIFi ecosystem, Mode launched the AI Agent App Store, an application platform focused on AI agents in the DeFi space. Some of the standout agents include:
Giza’s ARMA: Optimizing USDC yields in money markets.
MODIUS by Olas (coming soon): AI-powered liquidity mining strategist.
Brian: Make using DeFi as easy as a conversation through natural language prompts.
Sturdy V2: An AI-powered yield library that optimizes returns.
Therefore, NEAR, Mode, and Zircuit seized the opportunity to enter the AIFi field.
Polka Dot
DOT is up 75% in a month, is there a reason?
Over the past few months, Polkadot network activity has reached new heights. The number of monthly transactions has reached an all-time high, and key metrics such as fees, active users, and transaction volume have also grown significantly. Fees alone have grown 300% year-over-year, and active users and transaction volume are also climbing.
A big reason for this momentum is Polkadot 2.0.
Previously, running a parachain was expensive, costing around $167,000 per month. With the launch of Polkadot 2.0, this cost will drop to $1,000 to $4,000. Now, projects use DOT to lease block space, creating a steady demand for the token.
Depending on governance, a portion of the revenue may be burned, reducing the token supply. This creates a virtuous cycle: demand for DOT increases, supply may decrease, and the ecosystem as a whole is stronger.
Polkadot is also building better connections with other blockchains.
Hyperbridge connects Polkadot to networks like Ethereum and BNB, facilitating cross-chain interactions and opening up new possibilities for developers. The network itself has proven to be robust, processing more than 3.3 million transactions in a single day, suggesting it can be used for large-scale applications such as gaming.
DeFi on Polkadot is growing.
Hydration is on the rise, with 50% more active users since October and fees doubling their all-time highs. If you're coming from ETH or Solana DeFi, you might like Hydration. It integrates trading, lending, and stablecoins into one application chain. Its Omnipool simplifies liquidity and supports one-sided deposits, with a TVL of more than $68 million. Hydration's Stablecoin 2 Pool (USDT-USDC) offers up to 36% APR and vDOT rewards.
Hydrationde1 Statistics Page
Hydration has just launched Borrowing, a fork of Aave V3 on Polkadot that features on-chain liquidation priority at the start of each block. This mechanism reduces borrowers' losses and prevents front-running attacks. Liquidation penalties will be converted into revenue for the protocol, benefiting HDX stakers.
dYdX
Competition in the perpetual contract DEX space is heating up, and the leaders have changed... dYdX, GMX, Vertex, and now HyperLiquid. However, I believe the real losers are the CEXs that lose to the fast-innovating emerging DEXs.
While Hyperliquid took the top spot after its successful airdrop, dYdX chose a more retail-friendly approach with the launch of dYdX Unlimited, which includes a host of new features: instant market listings, MegaVault, and an affiliate program.
With Instant Market Listings, anyone can create a market instantly, without governance approval or long waits. It’s simple: pick a market, deposit USDC into MegaVault, and start trading. This is a big advantage that CEXs can’t offer.
MegaVault is the core of the system, providing liquidity to all markets by pooling USDC.
MegaVault funds the market while depositors earn passive income. Half of dYdX protocol fees go to MegaVault, making liquidity provision profitable. This is very similar to Jupiter's JLP Vault.
dYdX also launched an affiliate program that gives lifetime USDC commissions to referrals. Bybit’s rapid growth was partly due to the referral reward program.
Trading rewards distribute $1.5 million in DYDX tokens per month, and offer a prize pool of up to 100,000 USDC for MegaVault depositors. Since then, dYdX has achieved some great results, with a TVL of over $40 million and an APY of 51%.
Apts
Aptos is the fastest growing MOVE language blockchain in TVL and DeFi after Sui, with its TVL exceeding $1 billion for the first time, a 19x year-over-year increase.
Riding the TradFi wave on Aptos, BlackRock launched the BUILD Fund on Aptos, which is the only non-EVM chain selected by BlackRock.
Franklin Templeton is also expanding its on-chain U.S. government money fund to Aptos, one of seven supported chains.
Bitwise and Libre have already launched their own tokenized funds on Aptos.
Tether launched its native stablecoin USDT on Aptos in August. Since then, the supply of USDT on Aptos has been increasing and currently stands at approximately $142 million.
Following Tether, Circle announced the launch of native USDC and Cross-Chain Transfer Protocol (CCTP), supported by Stripe’s crypto products on Aptos.
With the onboarding of native stablecoins to Aptos, ecosystem metrics are steadily rising, with TVL remaining above $1 billion and 1 million new users joining the ecosystem.
DeFi on Aptos has also made milestone progress:
Last year, daily DEX trading volume on Aptos grew 2,700%.
Aries Markets, the top lending protocol on Aptos, hit a new high in TVL with over $800 million in total deposits and over $450 million in lending volume.
emojicoin dot fun, a memcoin launchpad on Aptos, reported 16.7K unique addresses joining in the first 24 hours after mainnet launch.
My hunch is that APT is following SUI’s lead. I think SUI, APT, and other L1s are chasing Solana because they are all competing on the execution layer.
