Research

Intro Lending is one of the oldest functions in finance. A lender lets a borrower turn $1 of collateral into more than $1 worth of financial exposure while charging interest for it. Homeowners do this with a home equity line of credit (HELOC), and options traders do this with margin. The modern economy relies on credit for various financial functions demonstrating a clear product-market fit. Crypto performs the same function through lending protocols. A user deposits an asset, borrows against it, and pays interest on the loan. Aave, the leading lending venue, accepts USDC, EUR, and gold-pegged assets as collateral and intermediates ~$10 billion in active loans. The base primitive supports cash-and-carry trades and long and short positions, and it has grown into curated vault products through protocols like Morpho which recently integrated with Coinbase. In structure these venues now resemble global FX markets. ...

Since the early days of GMX, the market has treated the token as the equity-like asset and the LP as the yield product. The token captures the narrative and gives investors a liquid claim on protocol growth. Meanwhile, the LP is usually evaluated on its APY. That framing misses the risk structure of the exchange. Every leveraged position creates exposure that has to be priced and resolved, and in pool-based designs, the LP carries that exposure. When the system prices risk well, trading revenue accrues to LP NAV. When it does not, trader P&L from toxic flow hits the LP first. LP NAV therefore becomes a live mark on the protocol’s underwriting quality. ...

Over the past year, trading platforms like Robinhood, Bybit, and Kraken have rolled out onchain protocols to extend their product offerings. By tapping into decentralized protocols they’re able to deliver new services at scale, ranging from tokenized equities to non-custodial trading. As this trend continues, the competition between Web2 and Web3 is converging into a race to build Superapps: platforms that combine mobile-first distribution with blockchain infrastructure. Mobile-first apps like Robinhood start from the top down: It already commands retail distribution and is now building on Arbitrum rails underneath to extend its product suite onchain. In contrast, Hyperliquid runs the opposite playbook: It specializes in perp infrastructure and lets other frontends - mobile or web - plug in through Builder Codes. ...