“Forgive me, Father, for I have sinned.”

I really enjoy memecoins, but the degeneracy is reaching a boiling point.

My Crypto X mindshare and feed are flooded with memecoin posts (and Pudgy Penguins), burying many great crypto developments. I was actually happy with the recent market dip as it gave time to research all of this. Yet the dip didn’t last.

In this post, I want to share 10 crypto developments in DeFi and the broader ecosystem that have caught my attention and believe you should follow closely too.

In fact, we just launched a Telegram channel where you can get the insight on what’s happening in crypto.

Avalanche 9000: L1s are the new L2s?

Avalanche just launched Avalanche9000, its biggest upgrade yet, making it easier, cheaper, and more flexible to create L1 blockchains.

L1s are the new L2s? The old Subnet model is gone.

Now, developers don’t need to validate the main network or stake 2000 AVAX upfront. Instead, they pay a small ongoing fee, cutting costs significantly.

Sounds like Polkadot, and a bit like Cosmos, right?

Inspired by Ethereum’s EIP-4844 (Proto-Danksharding that made gas fees on L2s very cheap) it makes Avalanche L1s 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’s PoS or Proof-of-Authority blockchain. It means better tokenomics and value premium.

It reduces the cost of running a validator from 2K AVAX ($100k USD) to 1.33 AVAX per month.

Avalanche launched Retro9000, a $40M grant program. 700 L1s are already in development, from gaming to DeFi.

Avalanche is successfully onboarding TradFi partners through tokenization and attracting games like Off The Grid. It appears to have found its niche in the Solana vs. Ethereum competition.

NEAR AI

You can argue that Base and Solana are leading the AI agent space with constant launches and FOMO from Virtuals and ai16z, but NEAR is quietly carving its own path in AI innovation.

NEAR already supports agent-driven onchain capabilities, with more tools and features in the pipeline.

What makes it different is native Chain Abstraction for multichain AI agents, making it easier for dev to build interconnected systems.

On top of that, NEAR Intents introduced a new transaction model that enables cross-chain settlement between AI agents, services, and end users. Personally, the coolest partnership is between Infinex and Near so you could trade BTC, XRP or anything in one decentralized platform.

NEAR introduced NEAR.ai, an AI assistant that can act on the user’s behalf by connecting with other AI agents and across web2 and web3 services. You’ll need a Near wallet to sign in.

To be honest, wallet experience on Near used to be quite bad, but now situation is much improved (I can recommend Near Mobile).

This AI assistant is something similar to what Cortex Protocol is building so check them out too.

Interestingly, NEAR-based social agents started hosting X spaces with each other.

Plus, NEAR has launched a research hub to explore new AI models and partnered with Delphi on an AI accelerator program to support builders in this space.

Notably, the blind compute blockchain, Nillion Network is building on NEAR, bringing privacy-preserving tech for private LLM training and inference on sensitive data.

This could unlock the full potential of user-owned AI.

Liquity v2 Launch

LQTY is up by 120% in a month. Why?

1. General bullish market
2. The V2 launch

Try the testnet here.

Traditional DeFi borrowing models have their issues.

• Money markets like Compound and Aave set rates based on utilization, leading to unpredictable costs.
• Governance-based protocols like MakerDAO are slow to adjust, with rates often stuck in governance delays.

Even Liquity V1’s fixed-fee model couldn’t adapt to market changes.

Liquity V2 fixes this with user-set interest rates and BOLD, a stablecoin focused on decentralization, user control, and yield.

Borrowers open “Troves” to set their rates—lower for savings or higher to avoid redemptions. Troves with the lowest rates get redeemed first.

With up to 90% LTV and up to 11x leverage, Liquity V2 is highly efficient.

Borrowers can use not only ETH but also LSTs like wstETH and rETH as collateral, borrowing BOLD while still earning staking rewards.

BOLD is, therefore, fully backed by ETH and LSTs, redeemable anytime, and free of TradFi risks.

Unlike USDC, it doesn’t rely on RWAs, avoiding counterparty and censorship risks. Its $1 peg is maintained through simple mechanisms:

• If $BOLD dips below $1, arbitrage encourages redemptions for ETH.
• If $BOLD rises above $1, lower borrowing rates increase supply.

Stability Pool depositors earn 75% of protocol revenue in BOLD and ETH liquidation gains, while 25% of fees go toward Protocol-Incentivized Liquidity (PIL) to support BOLD liquidity across DeFi.

A big change is the Liquity V2’s Forkonomics as Liquity is one of the most forked protocols in DeFi.

Now, teams need permission to use Liquity’s code (and some airdrop to LQTY holders), but in return, they get support from Liquity, access to liquidity networks, shared security resources, and potential LQTY rewards.

This is a win-win: forks are better supported, and BOLD expands across chains without the usual risks of hacks or mismanagement.

Liquity v2 is already live on Sepolia Testnet for testing.

Pendle’s New Protocol - Boros

Most people thought Pendle V3 would just be another fork or a minor update. Turns out, Pendle had something completely different in mind.

Pendle introduced Boros, a Pendle-brother built to take yield trading into new territory.

Boros is built specifically for margin yield trading.

I repeat: you can trade yield with leverage.

It focuses on funding rates, which are the cost of borrowing or lending in leveraged perpetual positions.

The catch? Until now, there hasn’t been a good way to hedge or trade these rates effectively. That’s where Boros comes in. With it, traders can:

• Hedge funding rate exposure for predictable returns.
• Speculate on funding rate fluctuations using leverage

Take Ethena as an example. It relies heavily on funding rates for profitability. With Boros, Ethena can hedge against volatility and lock in stable returns. Meanwhile, speculators can play the ups and downs of funding rates, potentially scoring bigger profits.

You may ask, why funding rates?

Perp exchanges handle $150–200 billion in daily trading volume, and funding rates are at the core of how these markets operate. Yet, they’ve been largely 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 is now shaping up as a full-spectrum platform for yield trading. V2 and Boros complement each other perfectly:

• V2 focuses on tokenized on-chain yields like staking, RWAs, and BTCfi.
• Boros dives into funding rates and off-chain opportunities.

And in classic Pendle fashion, they’ve kept things simple for the community. There’s no new token.

The same $PENDLE and vePENDLE tokens power both V2 and Boros. Revenue distribution stays unchanged too—80% to vePENDLE holders, 10% to the protocol treasury, and 10% for operations.

Boros arrived just on time as Points meta cooled down.

Zircuit

Perhaps the most confusing L2 in crypto.

Zircuit recently wrapped up its Season 1 and Season 2 airdrops on November 20, distributing 300 million tokens for claiming. They gave airdrop seemingly to every partner protocol quite generously.

What’s next for Zircuit? How do they plan to keep users engaged and create real use cases for their tokens?

The answer seems to be the hottest narrative right now: AI.

Zircuit is working on a new product, called Gud AI.

It’s an AI agent like AIXBT that uncovers alpha. You can follow it on X here. There’s also a native AI token $GUD with a fair launch that requires to stake $ZRC.

You can start staking here.

It’s a good strategy for a new L2.

Zircuit is a Layer 2, but it is taking another approach to Layer 2 infrastructure. Rather than focusing solely on scaling, it focuses on security, efficiency, and usability.

One of Zircuit’s key features is Sequencer-Level Security (SLS). While most blockchains detect malicious transactions after they’ve been executed, SLS identifies threats before they even reach the chain.

LRTs on Zircuit were worth noting during the restaking era on Ethereum, attracting over $2B in TVL. Zircuit is gaining momentum for its Mainnet Phase 2 which is now live with:

• Bridge from and to Ethereum. The bridging works surprisingly fast within just a few minutes. Net deposits to Zircuit jumped to $300M since the launch.
• Some native DeFi dApps like ZeroLend and Elara Labs for lending, Ocelex and Dodo for swapping and liquidity mining.

Recently, Zircuit distributed 2% of its supply to over 190,000 EigenLayer restakers.

Zircuit is backed by Binance Labs, Pantera Capital, and Dragonfly Capital.

But still not listed on Binance :) I think they will list it eventually.

Starknet

The STRK airdrop was FUDded to the ground but there’s no denying that Starknet has been making serious progress lately.

They’re pushing the boundaries of what Layer 2s can do, and it’s worth taking a closer look.

One of the big moves is the launch of staking for its native token, STRK. It’s the first L2 to offer native staking, now live on Mainnet.

Bitwise, a $11B crypto asset manager with over $3.5B in staked ETH, is also entering the Starknet ecosystem by supporting STRK staking.

On the technical side, deployments now cost just $5, and verification is under $1. And with efforts from different teams it’s even possible to verify SNARK proofs. This opens up opportunities for developers to build real-world ZK-powered apps, like private identity checks or secure document verification.

Deployments now cost just $5, and verification is under $1. This opens up opportunities for developers to build real-world ZK-powered apps like private identity checks or secure document verification.

They’ve also introduced a v0.13.3 update, which cuts blob gas costs by 5x thanks to smarter compression and block squashing. This keeps fees low as Ethereum’s blob usage grows. Looking ahead, Starknet plans even more efficiency upgrades in it. Even Vitalik is not shy to give compliments.

Another exciting step is their progress on a trustless Bitcoin bridge (OP_CAT-enabled PoC bridge) developed with sCrypt. This shows it’s possible to connect Starknet and Bitcoin—a huge step for interoperability that could unlock some interesting use cases.

Mode AI

After the airdrops, Mode is stepping up with two big moves: veMODE and the AIFi ecosystem.

Mode is the first OP-stack Layer 2 to introduce a vote escrow (ve) governance model through veMODE. You can stake MODE or MODE/ETH liquidity tokens to gain voting power, which increases the longer they stake (up to 6x).

Instead of voting for specific pools, veMODE focuses on protocols, aiming to grow the entire ecosystem.

In Season 3, $2M in OP incentives will be distributed through this system. Future plans include bribe markets and even AI agents to simplify participation, allowing AI to vote for users.

But what really sets Mode apart is its focus on AIFi.

Backed by a $6M grant from Optimism, Mode is bringing AI agents into DeFi to simplify and scale onchain interactions. These agents can handle tasks like yield farming, risk management, and even governance—all with minimal human input.

Mode’s AIFi ecosystem is built on three layers:

1. AI-Secured L2 Sequencer: Detects and blocks malicious transactions before they hit the blockchain.
2. Onchain Agent Infrastructure: Partners like Giza, Olas, and RPS AI help deploy agents, while Mode’s Dapp Intents SDK enables agents to learn and execute advanced strategies.
3. AI-Powered Interfaces: Tools like Mode’s AI-powered wallet make DeFi more accessible by simplifying interactions.

To kickstart the AIFi ecosystem, Mode launched the AI Agent App Store, a hub for discovering AI agents designed for DeFi. Some of the standout agents include:

• ARMA by Giza: Optimizes USDC yields across money markets.
• MODIUS by Olas (coming soon): An AI-driven liquidity farming strategist.
• Brian: Makes DeFi feel conversational with natural language prompts.
• Sturdy V2: AI-powered yield vaults that optimize returns.

So, Near, Mode, Zircuit are entering the AIFi meta quite on time.

Polkadot

DOT is up by 75% in a month. Why?

In the last few months, activity on the network has reached new heights. The number of monthly transactions is at an ATH, and key metrics like fees, active users, and trading volume have pumped—fees alone have increased by 300% annually, with active users and trading volume climbing up.

One big reason for this momentum is Polkadot 2.0.

Previously, running a parachain was expensive, costing about $16.7K per month. With Polkadot 2.0, that cost drops to as little as $1K to $4K. Projects now lease block space with DOT, creating a steady demand for the token.

Depending on governance, some of this revenue could be burned, reducing the token supply. This creates a positive loop—higher demand for $DOT, a potentially lower supply, and a stronger ecosystem overall.

https://x.com/Toni_Bitcoin/status/1678101717202931712

Polkadot is also becoming better connected to the broader blockchains.

Hyperbridge linked Polkadot with networks like Ethereum and BNB, boosting cross-chain interactions and opening new possibilities for developers. The network itself is proving to be robust, processing over 3.3 million transactions in a single day—showing it’s ready for large-scale applications like gaming and beyond.

DeFi on Polkadot is seeing growth.

Hydration is on the rise, with active users up 50% since October and fees doubling their all-time high.

If you come from ETH or Solana DeFi, you’ll probably like Hydration. It combines trading, borrowing, and a stablecoin into one app-chain.

Its Omnipool simplifies liquidity and supports single-sided deposits, with TVL reaching over $68 million. Hydration’s stablecoin 2-pool (USDT-USDC) offers up to 36% APR in fees and vDOT rewards.

Hydration stats page

Hydration has just launched Borrowing, a fork of Aave V3 on Polkadot with prioritized on-chain liquidations that happen at the start of each block.

This mechanism reduces losses for borrowers and prevents frontrunning attacks. Liquidation penalties are turned into revenue for the protocol, benefiting HDX stakers and governance decisions.

dYdX

The perp DEX sector has seen a fierce competition and a change of leaders… dydx, GMX, Vertex, now HyperLiquid.

Yet I believe the real losers would be CEXs that are losing to emerging DEXs that innovate fast.

While Hyperliquid’s mindshare is topped after its successful airdrop, dYdX chose a more retail approach by launching dYdX Unlimited with a series of new feature: Instant Market Listing, MegaVault and Affiliate Program.

With Instant Market Listings, anyone can create and trade markets instantly—no need for governance approvals or long waits. It’s straightforward: pick a market, deposit USDC into MegaVault, and start trading.

This is a major advantage that CEXs cannot offer.

MegaVault is at the core of this system by pooling USDC to provide liquidity for all markets.

It funds the markets while depositors earn passive income. Half of dYdX’s protocol fees go to MegaVault, making liquidity provision rewarding. It’s quite similar to Jupiter’s JLP Vault.

dYdX also introduced the Affiliates Program which pays lifetime USDC commissions for referrals. Bybit managed to grow fast partly because of the affiliate program :)

Trading Rewards, with $1.5M in DYDX tokens distributed monthly, and up to 100,000 USDC prize pool for MegaVault depositors.

Since, dYdX achieved some good numbers, over $40M with 51% APY.

Aptos

Following Sui, Aptos is also a fast-growing Move-based blockchain in TVL and DeFi, with the TVL passing $1B for the first time and is up 19x YoY.

Starting with the wave of TradFi on Aptos, BlackRock, expanded its BUILD fund on Aptos, which is the only non-EVM chain to be integrated.

Franklin Templeton also expanded its onchain U.S. Government Money Fund to Aptos, one of seven supported chains.

Bitwise and Libre have launched their tokenized funds on the blockchain.

Tether launched native USDt on Aptos in August. Since then, USDT supply on Aptos is up only. The USDT supply is up from ~$20m to ~$142m since the start.

After Tether, Circle also announced the launch of native USDC and Cross-Chain Transfer Protocol (CCTP), with support from Stripe crypto products on Aptos.

With native stablecoins getting injected into Aptos, the ecosystem is getting positive metrics with TVL continuing to hold above $1B and 1M new users joining the ecosystem.

Some DeFi milestones on Aptos:

Daily DEX volume on Aptos up 2,700% (28x) in the last year.

• Aries Markets, the top lending protocol on Aptos hit a new high TVL with over $800 million in total deposits and more than $450 million borrowed.
• emojicoin dot fun, a pumpdotfun on Aptos, launched its mainnet, reporting 16.7K unique addresses in the first 24 hours after launch.

My hunch is that APT is following SUI steps, which performed extremely well. I think SUI, APT and other L1s are coming after Solana’s lunch as they all compete on execution layer, while ETH… is ETH!

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