Hyperliquid is a decentralized trading protocol designed to replicate the user experience of centralized exchanges while providing a fully on-chain order book for trading spot, derivatives, and prelaunch markets. Built on its own Layer 1 (L1) blockchain, Hyperliquid has attracted over 200,000 users and processed more than $300 billion in cumulative transaction volume. The platform has seen consistent daily trading volumes exceeding $1 billion, with over 8,000 unique traders participating. The protocol allows users to engage in perpetual futures trading with leverage of up to 50x, as well as spot trading through its on-chain order book. The evolution of on-chain trading over the past six years has led to various models, including Automated Market Makers (AMMs), peer-to-pool systems, and hybrid order book-AMM models. Each of these models has its advantages and disadvantages, particularly concerning liquidity provision and price discovery. AMMs, which dominate on-chain spot trading, utilize smart contracts to manage liquidity pools and automate market-making processes. While they enable permissionless trading and asset listing, they often expose liquidity providers to losses due to price slippage and impermanent loss (IL). The passive nature of AMMs means they do not adjust prices proactively, leading to stale pricing that can be exploited by arbitrageurs. In contrast, peer-to-pool derivatives exchanges, like GMX, have seen a decline in trading volumes. These platforms allow traders to interact directly with liquidity pools rather than matching with other traders. While they offer benefits such as consistent liquidity and reduced slippage, they also face risks related to oracle price feeds and potential manipulation. Hyperliquid's architecture is designed to overcome the limitations of existing models by implementing a high-performance consensus mechanism called HyperBFT, which significantly enhances throughput and reduces latency. This allows the platform to process millions of orders per second, providing a user experience comparable to centralized exchanges. The Hyperliquid team, composed of experienced engineers from prestigious institutions, initially focused on proprietary crypto market making before transitioning to DeFi. Their goal is to create a seamless trading experience that addresses the shortcomings of existing decentralized platforms. The urgency to develop a decentralized perpetual DEX was heightened by the collapse of FTX, emphasizing the need for reliable alternatives. Hyperliquid's order book and clearing house are integral to its functionality, ensuring transparency and efficient margin management. The platform employs custom-built oracles to maintain accurate pricing, which is crucial for margin calculations and liquidations. Users can set leverage levels and manage their positions through cross-margin or isolated margin options. The Hyperliquid Liquidity Provider (HLP) program democratizes market-making by allowing everyday users to provide liquidity and share in the profits. This initiative aims to create a more equitable trading environment, contrasting with traditional market-making agreements that often disadvantage token projects. The platform's future development includes the launch of a native Ethereum Virtual Machine (EVM), which will enable broader application support and enhance the ecosystem's composability. Hyperliquid's spot markets have shown promising performance, and the anticipated launch of the HyperEVM is expected to attract new projects and liquidity. Despite its potential, Hyperliquid faces challenges, including competition from other decentralized exchanges and regulatory scrutiny. The platform's success will depend on its ability to maintain user engagement and adapt to the evolving landscape of decentralized finance. The narrative surrounding Hyperliquid emphasizes its community-first approach and commitment to a fair launch, positioning it as a viable alternative to traditional centralized exchanges.

Over the past year, Hyperliquid has grown to host 150,000 users and over $220 billion in volume. Traders at all levels and across Crypto Twitter like the platform, and it has found product/market fit. Over 95% of Hyperliquid users are down on their trades but continue to use the platform, creating a community moat.

Limitless, a novel protocol, is aiming to replicate Uniswap's impact on DeFi in the area of leverage trading. Leveraging Uniswap's Automated Market Maker for asset pricing, Limitless eliminates reliance on oracles for price feeds and instead provides yield-earning opportunities for liquidity providers while cutting counterparty risk. This opens up the possibility of having permissionless, perpetual market launches for all new tokens, instead of having to wait for them to be listed on a CEX, and offers liquidation-free leverage trading, potentially revolutionizing the DeFi derivatives landscape.

Liquid crypto, defined as funds investing in already liquid assets without encumbrances, presents a significant investment opportunity but faces challenges including fund performance volatility and reputational risks from potential asset theft. Despite the rise of low-fee ETF alternatives, liquid funds may continue to be dominated by proprietary capital from Chicago and Asia due to these complexities and the need for strong risk tolerance from top management.

Royco enables efficient liquidity coordination for crypto, which today is inexact and done through airdrops, liquidity mining, and other un-optimized methods. Royco's Liquidity Coordinator allows programmability and order books to create liquidity negotiation, allowing providers to know exactly what they will get in return. Since every position is tokenized, users can sell or exchange positions, providing flexibility for locked assets.

This paper describes a pioneering design for Automated Market Makers called Auction-Managed AMMs. Addressing informed trader loss and uninformed trader fee revenue optimization issues, this concept allows players to bid to manage pools and dynamically adjust swap fees. The design optimizes transaction fees, benefiting liquidity providers and retail investors and potentially attracting more liquidity than traditional AMMs, thereby enhancing efficiency on DeFi platforms.

Fluid's DEX introduces Smart Collateral, allowing users to borrow against collateral and deploy it as AMM liquidity to earn trading and lending fees. Its Smart Debt uses debt as trading liquidity, allowing fees to reduce the borrowing APR. Users can leverage their LP positions and earn up to 39x higher trading fees. It is scheduled to launch by the end of July.

Chaos Labs has unveiled the Edge Oracle Network, a risk-aware, decentralized oracle protocol that is the primary oracle for Solana's Jupiter Exchange. Edge integrates risk management, security, and real-time market context earlier in the data pipeline, allowing for precision during black swan events where traditional oracles often falter. Chaos Labs plans to fully decentralize the network in the coming weeks.

1intro, Solana’s first Liquidity Bootstrapping Platform, aims to alleviate current problems faced by Solana users, specifically addressing unfair launches, token liquidity issues, and the prevalence of scams. Designed for fair token distribution and price discovery, 1intro plans to evolve into a comprehensive DEX platform, offering trading functionalities and tools with a community-focused strategy. It has introduced features like "Refer and Earn" to boost user engagement.

On September 24, OnchainKit announced the release of their upgraded Swap Component, version 0.33.1, which introduces several new features aimed at enhancing user experience in token swapping. Key updates include support for low liquidity tokens on the Base network, configurable maximum slippage, and the display of token values in USD, allowing users to make more informed trading decisions. The new slippage configuration options empower users to set their preferred slippage tolerance, ensuring that trades execute according to their individual risk preferences. Additionally, the one-click swap feature, which utilizes atomic batching, streamlines the swapping process, reducing the number of clicks required from three to one. Another significant enhancement is the introduction of gasless swaps, which allows users with smart wallets to conduct transactions without needing to pay gas fees upfront. This is facilitated by a Paymaster service that can sponsor these transactions. Furthermore, the update includes an app interface fee feature, enabling applications to charge a fee when users swap tokens through their interface. This opens up new revenue streams for developers and is currently in private beta, inviting interested parties to reach out for participation. OnchainKit emphasizes its commitment to community involvement by encouraging feedback and contributions through their GitHub page. They also maintain an open-source design philosophy, inviting designers to join their Figma community and customize the design elements for their own projects. Overall, these updates reflect OnchainKit's goal of simplifying the development of on-chain applications and enhancing user experiences in the decentralized finance space.

MacroHFT is a new approach to high-frequency trading (HFT) in cryptocurrency markets that leverages reinforcement learning to improve decision-making and profitability.

Decentralized social graph Lens Protocol is creating a network for social spaces. It will leverage zkSync's tech stack to create a hybrid and modular system that will ultimately use a Validium, or off-chain data availability, for social transactions and a ZK rollup for financial activities. It plans to support private social activities, account abstraction, and near-instant finality.

Liquid restaking tokens comprise 73% of EigenLayer deposits and are the next evolution of liquid staking protocols like Lido or Jito. With a 7-day withdrawal period on EigenLayer, the barrier to exit is high, making liquidity and price pegging to ETH critical to the success of LRTs. This article analyzes the liquidity, volatility, and volume of the top 5 LRTS – Ether.fi, Renzo, Puffer, Swell, and Kelp DAO – finding that they are not incredibly liquid but have been slowly improving. The LRT market has winner-take-most characteristics since liquidity and integrations are critical to an LRT’s broader success.

Uniswap Labs has recently highlighted the challenges faced by intents-based systems in the decentralized finance (DeFi) space, particularly their fragmentation and lack of a unified cross-chain standard. To address these issues, Uniswap has collaborated with Across Protocol to propose ERC-7683, a new standard aimed at creating a universal filler network that enhances the user experience across various applications. The mechanics of ERC-7683 involve users signing a cross-chain order, with their funds being held in escrow within a settlement contract. Multiple fillers then compete to fulfill the order at the destination, and the successful filler executes the action, releasing the funds. This standard is designed to streamline the process for applications, fillers, and users alike. Applications can route intents to a broader network, fillers face lower barriers to entry, and users benefit from quicker fills and reduced gas fees. Importantly, the implementation of ERC-7683 is open to anyone, promoting widespread adoption and innovation. In addition to this proposal, Uniswap has been actively enhancing its platform with features like limit orders, which allow users to buy and sell tokens at predetermined prices without constant market monitoring. The limit orders are gas-free and can be set for any swap size, providing flexibility and ease of use. Uniswap has also introduced UniswapX, a new auction-based protocol that aggregates trading across various automated market makers (AMMs) and liquidity sources. This initiative aims to improve liquidity, pricing, and transaction efficiency while offering protection against miner extractable value (MEV) and eliminating costs for failed transactions. The ongoing development of Uniswap, including the introduction of hooks in version 4, allows for greater customization of liquidity pools. These hooks enable developers to innovate by adding new functionalities, such as dynamic fee adjustments and custom order types, thereby enhancing the platform's capabilities. Overall, Uniswap is positioning itself as a core financial infrastructure within the DeFi ecosystem, focusing on community engagement and feedback to drive its evolution. The introduction of standards like ERC-7683 and features like limit orders and UniswapX reflects a commitment to improving user experience and fostering a competitive environment for liquidity providers and traders alike.

Light is a new approach meant to address the fragmentation of user experience across EVM chains. The tool enables users to interact with any EVM chain, including L2s and L3s, as if using one network. It functions like network abstraction, cross-chain asset management, and batch transaction execution. Light is fully open source and aligns with open standards such as ERC-4337 and ERC-7579.

Nearly half of the $25 billion in orderflow volume over the past month on Ethereum has come from private or proprietary applications. The trend started with DeFi summer, when transaction aggregators, wallet swaps, Telegram bots, and solver networks launched. This development supports the fat app thesis, where applications controlling user attention and order flow would accrue the most value in the ecosystem.

Hyperlane has expanded to the Solana and Eclipse blockchains, improving cross-VM interoperability within the Solana Virtual Machine ecosystem. This includes live routes for token transfers between Solana, Eclipse, and Ethereum, positioning Hyperlane to facilitate the growth of multi-chain applications.

Uniswap, DyDx, and Lido had great technology and their mindshare caused them to establish themselves as premier DeFi protocols. Uniswap generated a memorable brand by focusing on design simplicity and user experience. dYdX listened to its customers from the beginning and was not afraid to pivot from a dApp to its own L2 and finally migrate to a sovereign chain. Lido's bias for action, exemplified by its use of permissioned validator sets to start, allowed it to ship quickly and integrate rapidly with various other protocols.

A new DEX, similar to Uniswap v2 but with a unique fee structure, has quickly gained attention, reaching $27 million. Users must create their own tokens, while the DEX provides a "Launch" function, distributing LP tokens in exchange for new tokens and ETH, with fixed buy/sell fees that reward LP providers and the token creator.

By incentivizing users to stay liquid and continuously bid, NFT marketplace Blur may have had the lowest floors, but at the cost of incrementally devaluing NFTs on its platform. Activity on the marketplace, which rewards users with BLUR tokens, was an effective strategy to capture market share and volume in the short term, but it was not strong enough to keep competitor Magic Eden from doubling its daily trading volume and becoming the leading NFT marketplace by revenue. Part of this is due to Magic Eden’s adoption of Bitcoin Ordinals instead of Blur’s focus on Ethereum mainnet.

BullpenFi's first product, a highly advanced Telegram trading bot, was designed as an all-encompassing platform for retail on-chain trading. The platform includes a mobile-first wallet that simplifies security with passkeys and recovery email, a trading interface that streamlines project evaluation and trading, and generative insights that filter and present relevant crypto discussions (especially from Crypto Twitter) directly within Telegram.

Ramon Recuero introduces Musubi, a new platform designed for seamless asset swaps across the Ethereum network without the need for custodial wallets. Musubi aims to address the issue of fragmented liquidity within the Ethereum ecosystem, allowing users to swap assets as if they were on a single chain. This initiative is part of a broader effort to create a more integrated and cohesive DeFi environment. The platform emphasizes that creating Layer 2 solutions that replicate existing liquidity pools is counterproductive. Instead, Musubi seeks to enhance the user experience by aligning incentives across the ecosystem and promoting integration. The name "Musubi" reflects a deeper philosophical concept of interconnectedness, which resonates with the Kinto brand's mission. Key features of Musubi include non-custodial chain-abstracted swaps, ensuring that assets remain insured within the Kinto wallet. The platform is designed to work for users, finding the best liquidity across chains and executing swaps efficiently. Security is a priority, with Kinto's identity layer minimizing fraud and providing enterprise-grade security through wallet insurance and advanced user experience features. Users can expect benefits such as reduced slippage, lower gas fees, and simplified access to liquidity without needing to navigate complex bridging processes. The swapping process is streamlined, allowing users to complete transactions in under a minute. Musubi has partnered with several leading companies to enhance its functionality, including Socket for chain abstraction and Turnkey for non-custodial wallets. The platform is not limited to swaps; it plans to extend its capabilities to other DeFi primitives like lending, borrowing, and real-world assets, all while maintaining a seamless user experience. In summary, Musubi aims to unify fragmented liquidity within the Ethereum ecosystem, promoting a more efficient and user-friendly approach to asset swaps. The initiative is positioned as a significant step towards a more interconnected financial system on the blockchain, with a focus on security and user experience. Users are encouraged to try Musubi and participate in the transition to a chain-less future in Ethereum finance.

OKX, a major cryptocurrency exchange, has launched its own Ethereum layer-2 scaling network called X Layer, built using Polygon's AggLayer solution. X Layer aims to provide faster and cheaper transactions, as well as seamless interoperability across different blockchains. The launch positions OKX as a competitor to Coinbase's Base, another layer-2 network built on Optimism's OP Stack.

Solana's approach to minimizing MEV is to maximize competition between block producers, which involves having multiple leaders users can choose from for transaction inclusion. This post details the technical aspects of configuring several leaders, including block transmission, merging concurrent blocks, and managing transaction ordering. The proposal for multiple leaders aims to create a global permissionless price discovery engine competitive with CEXs.

Uniswap Labs argues that the protocol fully complies with US law and that the decentralized exchange does not fall under the “securities exchange” or “broker” definition. It notes that over 90% of trading volume is on commodities pairs, stablecoins, or out of the country, expanding beyond the SEC's jurisdiction. Lawyers for the Ripple and Grayscale cases are providing outside counsel, and Uniswap is confident it will win if forced to litigate.

Cross-L2 interoperability problems require considerable effort, but we should quickly achieve a seamless UX across Ethereum-based rollups. Work is being done on chain-specific addresses, cross-L2 sends using liquidity providers, L2 light clients, and replayable account state updates. In Phase 2 of the roadmap, shared key management and proof aggregation will further improve the experience.

With the restaking narrative growing, protocols like EtherFi and Renzo continue with points programs to reward stakers with tokens. Swell, Eigenpie, Puffer, and Kelp have yet to release a token, though Swell targets an October launch. Mellow Protocol, the liquid restaking protocol for Symbiotic, has grown to over $650M in TVL and 40% of Symbiotic's TVL. Bedrock is offering liquid restaking for Babylon with WBTC.

$ORDER staking and claims have gone live, allowing users to participate in staking, claim their airdrops, and earn rewards for trading and market making on the platform.

Starknet has released plans to settle simultaneously on Bitcoin and Ethereum, becoming a single self-custodial decentralized L2. StarkWare is launching a $1 million fund to spur the development and introduction of OP_CAT, the Bitcoin opcode needed to make a trustless L2 possible. Beyond scaling Bitcoin to thousands of transactions per second, simultaneous settlement would allow for BTC/ETH atomic swaps and private BTC transactions, along with many other possibilities.

Pendle has seen extreme growth driven by airdrop points programs, and boasted an ATH TVL of $6.7B. The much-anticipated V3 upgrade will help it become the centralized exchange of interest rate derivatives, being the first of its kind even among traditional finance. With the interest rate swap market being worth $500 trillion, and blockchain providing the backbone for trustless, guaranteed swap delivery, Pendle's TVL could skyrocket. In the short term, permissionless market listing, new L1 listings, and Bitcoin restaking could usher in new highs for Pendle.