Original author: Ignas
Compiled by: Yuliya, PANews
At present, the Memecoin carnival is boiling, and the encrypted social platforms are full of Memecoin and fat penguin NFT content. In this context, many important encryption innovations may be overlooked. Although the recent market consolidation provides a window period for in-depth research, this calm is fleeting. This article will focus on the technological breakthroughs and innovative developments of the 10 most noteworthy projects in the current encryption ecosystem.
1.Avalanche
Avalanche launches the largest upgrade in history, Avalanche 9000, which may completely change the game rules of the L1 ecosystem. In the new version, Avalanche completely subverts the operating logic of the traditional subnet model. By significantly reducing validator costs (from 2000 AVAX to 1.33 AVAX per month), ecological participation is greatly increased.
From the perspective of technical architecture, this upgrade is similar to the concept of Polkadot's parallel chain and Cosmos' sovereign chain. What is more noteworthy is that Avalanche draws on the core design of reducing Layer2 gas fees in Ethereum's EIP-4844 proposal (i.e. Proto-Danksharding technology), making its Layer1 deployment cost comparable to Celestia's Rollup solution, while also having unique advantages in cross-chain interoperability and system stability.
The new version supports Layer1 exclusive validator mechanism, and each Layer1 can flexibly choose consensus modes such as PoS or PoA according to needs. This flexibility not only optimizes the token economic model, but also improves the value capture capability.
To promote ecological prosperity, Avalanche simultaneously launched the Retro9000 incentive plan with a total amount of US$40 million, successfully attracting 700 projects to settle in, covering core tracks such as GameFi and DeFi. Through innovative asset tokenization solutions, Avalanche has successfully opened up the traditional financial market and harvested blockbuster projects such as OffTheGrid in the gaming field. In the public chain competition landscape dominated by Ethereum and Solana, Avalanche has successfully opened up a unique market space through differentiated positioning.
2.NEAR AI
With continuous product releases and attention from Virtuals and ai16z, Base and Solana have taken the lead in the field of AI agents, while NEAR Protocol is quietly carving out its own innovative path.
NEAR already supports on-chain AI agent functionality and plans to launch more tools and features. Its most notable feature is the native chain abstraction technology, which makes it easier for developers to build cross-chain interconnected AI agent systems.
In addition, NEAR Intents introduces a new transaction model that enables cross-chain settlement between AI agents, services, and end users. It is worth mentioning that NEAR’s cooperation with Infinex enables users to trade multiple cryptocurrencies such as BTC and XRP on a decentralized platform.
NEAR.ai launched by NEAR is an AI assistant that can connect to other AI agents on behalf of users and perform operations across Web2 and Web3 services. Users need NEAR wallet to log in and use it. Although NEAR's wallet experience was once unsatisfactory, it has now been significantly improved, and the Near Mobile wallet is worth recommending. The AI assistant’s functionality is similar to what Cortex Protocol is developing.
Interestingly, social agents based on NEAR have started hosting SPACE events on X (formerly Twitter). At the same time, NEAR has also launched a research center to explore new AI models and cooperated with Delphi to carry out AI accelerator projects to support builders in this field.
It is worth noting that the privacy computing blockchain project Nillion Network is being built on NEAR to provide privacy protection technology for private LLM training and reasoning of sensitive data. This technology is expected to unleash the full potential of user-autonomous AI.
3.Liquity v2
The price of LQTY tokens has recently increased by 120% in one month, mainly due to the overall positive market trend and the upcoming release of Liquity v2, which is now available on the testnet.
There are some problems with the traditional DeFi lending model:
Money markets like Compound and Aave set interest rates based on usage, making costs difficult to predict;
However, protocols that rely on governance, such as MakerDAO, are often constrained by the governance process when adjusting interest rates and are slow to respond;
Even LiquityV1’s fixed-fee model has difficulty adapting to market changes.
Liquity v2 solves these problems by introducing a user-defined interest rate mechanism and launching a new stablecoin, BOLD. Borrowers can set their own interest rates by opening "Troves" - they can choose a lower interest rate to save costs, or set a higher interest rate to avoid being redeemed. Troves with the lowest interest rates will be redeemed first.
The protocol supports a mortgage rate of up to 90% and a leverage of 11 times, significantly improving the efficiency of capital use. Borrowers can use not only ETH, but also liquid staking tokens (LST) such as wstETH and rETH as collateral to continue to earn staking benefits while lending out BOLD.
BOLD stablecoin is fully backed by ETH and LST, redeemable at any time, and not subject to traditional financial risks. Unlike USDC, which relies on real asset support, BOLD avoids counterparty risk and censorship risk. Its $1 anchor is maintained through the following mechanisms:
When BOLD falls below $1, arbitrage mechanism promotes ETH redemption
When BOLD exceeds $1, lower borrowing rates and increase supply
Stable pool depositors receive 75% of the protocol revenue (in the form of BOLD and ETH liquidation proceeds), and the remaining 25% of the fees are used for protocol incentive liquidity (PIL) to support BOLD’s liquidity in the DeFi ecosystem.
As one of the most frequently forked protocols in the DeFi space, Liquity v2 makes significant adjustments to fork economics. Now teams need permission to use Liquity code (and airdrop to LQTY holders), in return they will receive support from Liquity, access to the liquidity network, shared security resources, and potential LQTY rewards.
This win-win mechanism allows forked projects to get better support, while BOLD can expand on different chains without worrying about common hacker attacks or mismanagement risks. Currently, Liquityv2 is available on the Base Sepolia test network for user testing.
4. Pendle launches new protocol Boros
Pendle's latest Boros protocol has exceeded market expectations. Rather than being a V3 upgrade, it is a brand new breakthrough product designed specifically for margin yield trading.
Boros’ core innovation is to allow users to leverage funding rates. This is an important breakthrough because before this, the market lacked tools to effectively hedge or trade these rates.
Specifically, Boros provides users with two main functions:
Hedge funding rate risk and obtain stable returns
Use leverage to speculate on funding rate fluctuations
Take Ethena as an example. Its profit model relies heavily on funding rates. Through Boros, Ethena can hedge volatility and lock in stable returns. At the same time, speculators can take advantage of the ups and downs of funding rates to obtain higher returns.
Why choose funding rate as the entry point?
Perpetual swaps exchanges trade $150-200 billion per day, and funding rates are a core mechanism for these markets to operate. However, this opportunity has not been fully exploited in the DeFi space. Boros makes funding rates tradable, allowing protocols, market makers, and traders to integrate funding rate strategies into their portfolios.
Pendle is developing into a full-service yield trading platform:
V2 focuses on on-chain tokenized returns such as staking, RWA, and BTCFi
Boros focuses on funding rates and off-chain opportunities
It is worth noting that Pendle has maintained its usual simplicity and has not issued any new tokens. Both V2 and Boros use the same PENDLE and vePENDLE tokens. The revenue distribution model remains unchanged:
80% distributed to vePENDLE holders
10% goes into the agreement treasury
10% for operations
The launch of Boros comes at a time when the Points concept is cooling down, bringing new investment opportunities and innovative directions to the market.
5.Zircuit
Zircuit, the controversial L2, has turned to the hottest AI track after completing the first and second seasons of airdrops and issuing 300 million tokens. It launched the GudAI project, an alpha mining AI agent similar to AIXBT. The native token $GUD adopts a fair issuance mechanism of staking $ZRC.
Zircuit features Sequencer-Level Security (SLS), which can identify threats before transactions are put on the chain. In the trend of Ethereum re-staking, Zircuit's Liquidity Staking Token (LRT) has performed well, with a total locked value of more than $2 billion. Currently, the second phase of its mainnet has been launched, with the following main features:
The cross-chain bridge with Ethereum has fast transaction confirmation speed, which takes only a few minutes. Since its launch, net deposits have reached 300 million US dollars
Native DeFi application ecosystem, including lending platforms ZeroLend and Elara Labs, as well as Ocelex and Dodo for trading and liquidity mining
Recently distributed 2% of the token supply to over 190,000 EigenLayer stakers
It is reported that Zircuit has received support from top investment institutions such as Binance Labs, Pantera Capital and Dragonfly Capital. Although it has not yet been listed on Binance, the market generally expects that it may be listed in the future.
6.Starknet
Although the STRK token airdrop has encountered many doubts, Starknet’s recent technological progress cannot be ignored. As a leading Layer 2 solution, Starknet is constantly breaking through technological boundaries.
One of the important developments is the launch of the STRK native token staking mechanism. As the first L2 network to provide native staking, Starknet has received support from Bitwise, a crypto investment institution that manages $11 billion in assets. It is worth noting that Bitwise has accumulated more than $3.5 billion in assets in the field of Ethereum staking.
At the technical level, Starknet has made significant breakthroughs:
Contract deployment cost reduced to $5
Verification fee is less than $1
Through the efforts of multiple teams, the verification of SNARK proofs has been achieved. These advances have created conditions for developers to build practical applications based on zero-knowledge proofs, such as privacy identity authentication and secure document verification.
The latest v0.13.3 update brings significant performance improvements:
By optimizing the compression algorithm and block integration technology, the blob gas cost was reduced by 5 times
Effectively control transaction fees as Ethereum blob usage grows
More efficiency optimization upgrades are planned for the future, and these improvements have even won public praise from Ethereum founder Vitalik.
Another important development is the trustless Bitcoin bridge developed in cooperation with sCrypt (a proof-of-concept bridge based on OP_CAT). This breakthrough demonstrates the possibility of interoperability between Starknet and the Bitcoin network, opening up new possibilities for cross-chain application scenarios.
7.AI Mode
After completing the airdrop, Mode launched two important strategies: the veMODE governance model and the AIFi ecosystem, demonstrating its innovative layout in the Layer2 track.
As the first OP-stack Layer2 to introduce the voting custody (ve) governance model, Mode allows users to stake MODE tokens or MODE/ETH liquidity tokens to obtain voting rights through the veMODE mechanism. The longer the staking period, the higher the voting weight can be. Unlike the traditional model, veMODE focuses on voting at the protocol level and is committed to promoting the development of the entire ecosystem.
In the third quarter, Mode will distribute $2 million worth of OP incentives through this system. In the future, it also plans to introduce a bribe market and innovatively introduce AI agents to simplify the process of user participation in governance.
The most notable feature of Mode is its AIFi strategic layout. Backed by a $6 million grant from Optimism, Mode is bringing AI agents into the DeFi space to simplify and expand on-chain interactions. These AI agents can handle tasks such as revenue farming, risk management and governance, significantly reducing the need for manual operations.
Mode’s AIFi ecosystem is based on a three-layer architecture:
AI-secure L2 sorter: identifying and blocking malicious transactions before they go live
On-chain agent infrastructure: Deploy agents with partners such as Giza, Olas, and RPS AI, while enabling agents to learn and execute advanced policies through Mode’s DappIntents SDK
AI-driven interfaces: such as Mode’s AI wallet, which improves the accessibility of DeFi by simplifying interactions
To promote the development of the AIFi ecosystem, Mode launched the AI Agent App Store as a hub for discovering DeFi-specific AI agents. It includes several important applications:
Giza’s ARMA: Optimizing USDC Yields in Money Markets
Olas’ upcoming MODIUS: an AI-powered liquidity farming strategist
Brian: Simplifying DeFi operations through natural language interaction
Sturdy V2: AI-driven yield-optimizing vault
Mode, together with projects such as Near and Zircuit, has accurately grasped the opportunity for the development of AIFi and demonstrated its strategic vision in this emerging field.
8.Polkadot
The DOT token has risen by 75% in the past month. This significant increase is supported by multiple positive factors.
Network activity reaches new highs
In recent months, Polkadot network activity has reached all-time highs. Major indicators are rising across the board:
Monthly trading volume hits record high
Network fees increased by 300% year-on-year
The number of active users continues to rise
Transaction volume increased significantly
Polkadot 2.0 Leads the Change
The most significant change brought by the new version is the significant reduction in parachain operating costs. It originally cost about US$16,700 per month to operate a parachain, but in Polkadot 2.0, this cost dropped to between US$1,000-4,000. Projects can now rent block space using DOT, creating ongoing demand for the token. Depending on governance decisions, part of the revenue may be destroyed, thereby reducing the token supply, creating a virtuous cycle: DOT demand increases, supply may decrease, and the ecosystem as a whole strengthens.
Improved cross-chain interoperability
Through the deployment of Hyperbridge, Polkadot has achieved connections with mainstream blockchain networks such as Ethereum and BNB, enhancing cross-chain interaction capabilities and providing more possibilities for developers. In terms of network performance, the ability to process more than 3.3 million transactions per day demonstrates its potential to support large-scale applications (such as games).
DeFi ecosystem is booming
Hydration platform performed well:
Active users increased 50% since October
Fee income hits record high
Omnipool’s total locked value exceeds $68 million
USDT-USDC dual-currency pool has an annualized yield of up to 36% (including handling fees and vDOT rewards)
Hydration’s recently launched lending feature (based on the Aave V3 fork) introduced an innovative on-chain liquidation mechanism that prioritizes liquidations at the start of each block. This design:
Reduce borrower losses
Preventing front-running attacks
Convert liquidation penalties into protocol revenue
Benefits HDX stakers and governance participants
Together, these positive developments have driven DOT prices higher, demonstrating the vitality and potential of the Polkadot ecosystem.
9.dYdX
The perpetual contract decentralized exchange field is highly competitive, and the market leaders are constantly changing, from dYdX to GMX, Vertex, and the recent HyperLiquid. It is worth noting that this competitive landscape has a greater impact on centralized exchanges, because DEXs with fast innovation speed are eroding their market share.
While HyperLiquid has gained a lot of attention through its successful token airdrop, dYdX has chosen a development path that focuses more on retail users. They launched the dYdXUnlimited plan, which introduced three important features: instant market listing, Mega Vault mechanism, and affiliate program.
The instant market launch feature allows anyone to quickly create and trade new markets without tedious governance voting or long waits. Users only need to select the market, deposit USDC into MegaVault and start trading. This is an advantage that centralized exchanges cannot achieve.
Mega Vault is the core of the system, providing liquidity to all markets by pooling USDC. Depositors can earn passive income, as half of the dYdX protocol fees are allocated to Mega Vault, making it more attractive to provide liquidity. This design is quite similar to Jupiter's JLP Vault.
In addition, the affiliate program launched by dYdX provides lifetime USDC commissions to referrals. This model played an important role in Bybit’s rapid growth.
In terms of incentives, dYdX issues DYDX tokens worth $1.5 million per month as trading rewards, while providing a reward pool of up to 100,000 USDC for Mega Vault depositors.
These measures have achieved remarkable results: the deposit size of Mega Vault exceeds 40 million US dollars, and the annualized yield rate reaches 51%, which shows that dYdX's new strategy is gaining market recognition.
10.Apartments
As a blockchain platform based on the Move language, Aptos is developing rapidly following Sui's pace. Its total locked value (TVL) exceeded the $1 billion mark for the first time, a 19-fold year-on-year increase, showing strong development momentum.
Traditional Finance (TradFi) Layout
BlackRock expands its BUILD Fund to Aptos, making it the only supported non-EVM chain
Franklin Templeton Expands U.S. Government Money Fund to Aptos
Bitwise and Libre Launch Tokenized Fund on Aptos
Stablecoin Ecosystem Construction
Tether issued native USDT on Aptos in August, and the supply increased from about $20 million to $142 million
Circle announces native USDC and Cross-Chain Transfer Protocol (CCTP)
Stripe Provides Crypto Payment Product Support for Aptos
The injection of stablecoins has brought significant growth to the ecosystem, driving TVL to remain above $1 billion and attracting 1 million new users to join.
DeFi Ecosystem Highlights
Daily DEX trading volume on Aptos has increased by 2,700% (28 times) over the past year
Leading lending protocol Aries Markets hits record high TVL with total deposits exceeding $800 million and borrowings exceeding $450 million
emojicoin.fun attracted 16,700 unique addresses within 24 hours of mainnet launch
Aptos (APT) seems to be following Sui's successful trajectory. These emerging L1 public chains, including SUI, APT, etc., are competing with Solana at the execution level. Ethereum continues to maintain its unique market position.
