Weekly DeFi Watch: Perps Competition Intensifies, Established DeFi Projects Join In

In the past week, after the Fusaka upgrade, I personally am bearish on third-party DA, changes with Aave, break-up with Sky, new partnership with Maple, Perps trend continues, HyENA.

1. $ETH One of the major data changes after the Fusaka upgrade is that the blob base fee has significantly increased. Detailed analysis post is here 👉.

It’s worth mentioning the competitive landscape with third-party DA.

(1) First, in terms of price competition:

Compared to third-party DA, especially solutions like Celestia, Ethereum’s native blob is definitely more expensive. This is determined by the underlying blockchain consensus and economic security. The core issue here is the trade-off between security and cost.

So, the future ecosystem pattern will be: specialized L2s, enterprise-level L2s, or projects with relatively strong funding and ample budgets will choose blobs. For small teams and projects, when budget is limited and initial scale is small, they will definitely favor third-party DA solutions.

(2) So we need to make some judgments about the future:

What kind of entrepreneurs and projects will dominate the future of L2? I believe it’s highly likely to be focused on specialized needs by formal project teams. Small teams, low budgets, or even cold-start projects are more likely to choose to build a protocol first, rather than an L2. At the same time, Ethereum will continue to scale L2s in the future; for professional teams, the trend is that this cost won’t be lower than third parties, but will become negligible—in other words, “there’s no need to save this money.”

From this perspective, in the long term, I am not optimistic about the development of third-party DA, though it will exist in the market to meet a small portion of demand, but it will not become mainstream.

2. Aave proposal to remove USDS and DAI as collateral, officially breaking up with Sky. Meanwhile, Maple’s syrupUSDT is now live on Aave. From the trend, this could be a long-term binding relationship similar to Ethena.

This event predicts the next phase of DeFi development: top protocols are starting to expand their business horizontally, unless there is a strategically long-term interest alignment, most will turn from partners into competitors.

For example, Aave is also launching a stablecoin business, MakerDAO is entering the lending market. DeFi composability will increasingly tend toward internal composability. This first appeared in the Curve ecosystem, where Curve-related projects are usually closely tied together at both the protocol and community levels, forming a culture.

This phenomenon has both pros and cons; it’s also a result of gradual commercialization. In the future, there may be several large ecosystems dividing the market, each with its own standout business, but also covering almost all DeFi tools and directions. While business is isolated, risk is also somewhat isolated.

Maple’s syrupUSDC/USDT currently offers about 6% yield, so it was quickly filled as collateral on Aave. I expect Maple will be long-term bound to Aave, becoming the second major TVL driver for Aave after Ethena.

3. Perps trend continues

(1) Ethena has deployed its own Perps market on Hyperliquid HIP3.

(2) Rumor has it the next version of Fluid DEX will also feature Perps.

Hyperliquid can make about $1 billion a year, making it one of the most profitable DeFi projects currently—so everyone wants a piece of this pie. The first round was a hot direction for new projects and point farming. This round is old DeFi projects positioning themselves to leverage their existing brands to expand revenue. Even at just 10% of Hyperliquid’s scale, the additional revenue is substantial. (Ethena’s income in the past year was around $400 million.)

But this market is hard to grow and requires incentive measures; without subsidies, it’s nearly impossible to attract users from elsewhere.

I expect Ethena’s HyENA will definitely have incentives, so it’s worth farming for short-term gains—even if it’s just using tokens to buy trading volume.

The problem with this sector is that only on-chain users are participating, like myself who doesn’t really use CEX—so Hyperliquid is the first choice. But users on CEX, especially those who rarely come on-chain, are hard to attract. In the long run, the penetration rate and user education will be the key to how high the ceiling for Perps can go.

4. Will MSTR sell coins?

MSTR announced the establishment of a $1.44 billion cash reserve to pay dividends. Regarding selling coins, I think subjectively MSTR definitely doesn’t want to sell. In the short term, they’re already building up cash reserves, so the likelihood of selling is low. However, at a recent BBW event, Saylor mentioned that if there is a negative premium, they might sell BTC derivatives or BTC.

I think this is to leave themselves an out. Realistically, a perpetual machine that never sells is impossible. In case of extreme situations requiring a sale, they don’t want MSTR to be too passive.

5. Stablecoin issuance, my thoughts

The unique aspect of the tokenomics design is using $USDT as both gas and settlement asset. $STABLE is used for staking and governance. Staking earns a share of USDT.

The only advantage of this design is that it benefits USDT users, as there’s no need to prepare extra gas, which is convenient. My expectations are relatively low, mainly due to various questionable moves by early projects—seriousness is in doubt.

At the same time, the entire project aims to capture more USDT market share, but Plasma has already proven that the existing USDT market is very fixed. It will be hard to grab a share here, so the key is the story told by both stablecoin projects: attracting more enterprise demand. Whether this can be done is crucial and worth evaluating. If they can’t expand the external market and can’t gain a share of the existing market, then they’ll have to rely on subsidies to survive. Once token rewards end, volume dries up.

6. Others

(1) Curve starts deploying forex markets

Swiss Franc <-> USD, current liquidity is low. Worth watching for future deployments and data.

(2) Aerodrome has bought back 800K tokens

So far, over 150 million AERO has been bought and locked. Worth watching, especially since some AERO positions were added during the recent crash.

(3) Revert now supports Uniswap V4

A very useful LP data tool I’ve been using.