Diphunter ¤
@Diphunter18
Member of @FraxForce | all tweets are my opinion and never a financial advice.
243 Following 488 Followers
The ONCHAIN CA$H app brings everything around $frxUSD together in one place, from pool data and liquidity to the latest show episodes and educational content.
The Studio section is especially useful if you want to create clean visuals using up-to-date data.
For example, this visual shows the $frxUSD / $crvUSD PegKeeper pool on @CurveFinance, including its 5.4% APR, $16.6M TVL, $809K in 24h volume and the pool’s token composition.
Built by the community, for the community🔥
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1/ Today we upgraded the ONCHAIN CA$H app.
We refined and extended a lot: the frxUSD hub, PegKeeper dashboard and a brand new Content Studio.
Essentially all the data you need around $frxUSD in one place, with even more already in the pipeline…
Built by the community, for the community!
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One of the biggest changes within @aeroxyz is how $AERO rewards get allocated.
Under the old Aerodrome model, veAERO holders voted weekly on which liquidity pools should receive emissions. Aero replaces that system with Predictive Allocation. sAERO holders can now direct AERO rewards toward pools where they expect those rewards to create the most economic value.
Look at a simple example.
Imagine a new ETH/USDC pool needs deeper liquidity to attract traders. AERO rewards can incentivize liquidity providers to deposit capital into that pool. More liquidity can improve execution, reduce slippage and make the pool more competitive, helping it attract trading volume.
As traders swap, the pool generates exchange revenue through trading fees. Projects can also offer separate Liquidity Payments to incentivize sAERO holders to allocate rewards toward their pools.
With Predictive Allocation, sAERO holders direct AERO rewards toward pools they believe can generate meaningful revenue. In return, they earn a pro-rata share of the exchange revenue generated by the pools they support, alongside any applicable Liquidity Payments.
That turns reward allocation into an actual economic decision.
A pool offering large incentives may attract liquidity, but incentives alone do not guarantee sustainable trading activity. A pool that attracts genuine volume and generates exchange revenue can offer a stronger economic case for continued rewards. sAERO holders are effectively making a prediction about where liquidity incentives will be most productive.
If their chosen pools generate revenue, they can benefit from that activity. If those pools fail to attract trading, the expected return may not materialize.
Aero also introduces Gauge Caps, which limit the value of AERO rewards a pool can receive based on its projected revenue. Rewards above the cap are never minted. The caps use revenue projections, while the longer-term target is for each pool’s reward value to land around 1.2x its realized trading fees. The aim is to keep emissions more closely tied to actual economic activity.
That is the bigger idea here. Liquidity incentives, trading activity and exchange revenue become connected parts of the same system.
For $AERO, this matters because emissions have an economic cost. If rewards can be directed more efficiently toward productive pools, Aero can incentivize liquidity while keeping token issuance more closely tied to the revenue the ecosystem generates.
Predictive Allocation puts that decision in the hands of sAERO holders. The real test will be whether the system consistently directs rewards toward pools that sustain genuine trading activity over time.
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Slipstream V3 is one of the upgrades I want to understand better as I explore @aeroxyz.
An AMM does more than facilitate swaps. It determines how efficiently liquidity is used, how trading fees are generated and how value from trading activity can be distributed.
Take an ETH/USDC pool as an example.
With concentrated liquidity, LPs choose a price range in which their capital is active instead of spreading it across the entire price curve. If ETH trades between $3,000 and $3,500, an LP can concentrate liquidity around that range, making more capital available where trading is happening. This can improve capital efficiency and reduce slippage for traders. The trade-off is that if ETH moves outside the selected range, the position stops providing active liquidity until the price returns or the LP adjusts it. Greater capital efficiency also does not guarantee higher returns, as LPs remain exposed to market risk.
Capital efficiency alone, however, does not determine how well a pool performs. Market conditions change, and a fixed trading fee may not adequately reflect the risks LPs face as prices move.
That is where dynamic fees come in.
Slipstream V3 uses dynamic fees designed to respond to changing market conditions. When volatility rises, fees can increase, helping LPs capture more revenue during periods when arbitrage activity and the risk of loss-versus-rebalancing (LVR) can be greater. LVR describes the value LPs can lose when arbitrageurs trade against pool prices that have fallen behind the wider market.
In calmer conditions, lower fees can help a pool remain competitive and attract trading volume. Higher fees can generate more revenue per swap, but they can also make a pool less attractive if traders can get better execution elsewhere. The goal is to balance LP compensation with competitive pricing, rather than simply charging more.
Slipstream V3 also introduces protocol-level MEV capture, addressing another source of value around swaps.
When a large trade moves a pool's price away from prices on other markets, it can create arbitrage opportunities. MEV can also involve sandwich attacks, where a bot places transactions before and after a user's swap to profit from its price impact.
Slipstream V3 introduces an internal mechanism designed to capture some of this value within the protocol instead of leaving it entirely to external searchers. The intended benefit is to bring more of the economic value generated around trading activity back into the pool's fee model.
This does not eliminate MEV or guarantee additional income. The actual benefit depends on how the mechanism operates, the activity in each pool and how captured value is distributed.
Together, these mechanisms address different parts of the same system. Concentrated liquidity makes capital more efficient, dynamic fees adapt trading costs to market conditions, and MEV capture aims to retain more of the value generated around swaps.
If these improvements help Aero attract liquidity and sustain competitive trading volume, while allowing liquidity providers and other participants to benefit from the economic activity they support, they could strengthen the foundations of the ecosystem.
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Slipstream V3 is one of the upgrades I want to understand better as I explore @aeroxyz.
An AMM does more than facilitate swaps. It determines how efficiently liquidity is used, how trading fees are generated and how value from trading activity can be distributed.
Take an ETH/USDC pool as an example.
With concentrated liquidity, LPs choose a price range in which their capital is active instead of spreading it across the entire price curve. If ETH trades between $3,000 and $3,500, an LP can concentrate liquidity around that range, making more capital available where trading is happening. This can improve capital efficiency and reduce slippage for traders. The trade-off is that if ETH moves outside the selected range, the position stops providing active liquidity until the price returns or the LP adjusts it. Greater capital efficiency also does not guarantee higher returns, as LPs remain exposed to market risk.
Capital efficiency alone, however, does not determine how well a pool performs. Market conditions change, and a fixed trading fee may not adequately reflect the risks LPs face as prices move.
That is where dynamic fees come in.
Slipstream V3 uses dynamic fees designed to respond to changing market conditions. When volatility rises, fees can increase, helping LPs capture more revenue during periods when arbitrage activity and the risk of loss-versus-rebalancing (LVR) can be greater. LVR describes the value LPs can lose when arbitrageurs trade against pool prices that have fallen behind the wider market.
In calmer conditions, lower fees can help a pool remain competitive and attract trading volume. Higher fees can generate more revenue per swap, but they can also make a pool less attractive if traders can get better execution elsewhere. The goal is to balance LP compensation with competitive pricing, rather than simply charging more.
Slipstream V3 also introduces protocol-level MEV capture, addressing another source of value around swaps.
When a large trade moves a pool's price away from prices on other markets, it can create arbitrage opportunities. MEV can also involve sandwich attacks, where a bot places transactions before and after a user's swap to profit from its price impact.
Slipstream V3 introduces an internal mechanism designed to capture some of this value within the protocol instead of leaving it entirely to external searchers. The intended benefit is to bring more of the economic value generated around trading activity back into the pool's fee model.
This does not eliminate MEV or guarantee additional income. The actual benefit depends on how the mechanism operates, the activity in each pool and how captured value is distributed.
Together, these mechanisms address different parts of the same system. Concentrated liquidity makes capital more efficient, dynamic fees adapt trading costs to market conditions, and MEV capture aims to retain more of the value generated around swaps.
If these improvements help Aero attract liquidity and sustain competitive trading volume, while allowing liquidity providers and other participants to benefit from the economic activity they support, they could strengthen the foundations of the ecosystem.
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I want to take a closer look at @aeroxyz.
From Predictive Allocation and real-time rewards to Slipstream V3, tokenized stocks, onchain Forex and more, there's plenty to explore.
I'll be breaking down these features one by one, looking at how they work, what makes them useful and what could get interesting as the ecosystem evolves.
Real mechanisms, actual use cases and the economics behind them.
Let's dive in.
$AERO 🌊
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$Aave is a special bread.
Very special.
And it’s still very early days to join the historic ride on 21st century Finance.
.@fraxfinance and @GearboxProtocol are putting tokenized real-world assets to work onchain.
Gearbox’s Institutional RWA markets use $frxUSD as their lending asset, with Midas assets mF-ONE and mGLOBAL providing exposure to institutional credit strategies managed by Fasanara Capital.
Frax approved an allocation cap of $5M for this market through its $sfrxUSD strategy framework.
The live dashboard shows $2.55M supplied to the $frxUSD pool, alongside $1.17M in mGLOBAL/frxUSD and $1.19M in mF-ONE/frxUSD leverage markets.
The key mechanism is how the structure connects stablecoin liquidity with tokenized credit. Idle $frxUSD earns Treasury yield, while utilized liquidity can generate additional borrower interest.
A concrete example of DeFi infrastructure connecting stablecoin liquidity with institutional RWA markets.
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Aerodrome is entering a new phase, and the next step in its growth could have major implications for base:0x940181a94a35a4569e4529a3cdfb74e38fd98631’s long-term potential.
Liquidity incentives have been central to Aerodrome’s growth. They help attract capital to pools, give new markets a way to compete for liquidity and support trading activity across the ecosystem.
The next step is making that capital work even harder.
Aero is introducing new mechanisms around Gauge Caps and Predictive Allocation, aimed at improving how incentives are distributed across markets. The idea is to make liquidity allocation more responsive to expected market activity and the revenue those markets can generate.
That matters because liquidity and revenue are two different things. A pool can attract substantial capital, but its long-term value depends on whether traders actually use it.
Frax is already positioning itself for this expansion. It plans to migrate its protocol-owned ethereum:0x3432b6a60d23ca0dfca7761b7ab56459d9c964d0 and ethereum:0x5e8422345238f34275888049021821e8e08caa1f liquidity to Aero, while six new $frxUSD pairs against local-currency stablecoins have launched on Aerodrome.
These FX markets add another use case to the ecosystem. With $frxUSD serving as the dollar side for currencies such as the Brazilian real, Canadian dollar, British pound and Australian dollar, Aerodrome can support more than conventional token swaps.
At the same time, bringing Aerodrome and Velodrome together creates an opportunity to connect liquidity and trading activity across a broader ecosystem.
For base:0x940181a94a35a4569e4529a3cdfb74e38fd98631, the combination is promising. More markets can create additional demand for liquidity, while better incentive allocation could help turn that expansion into more sustainable trading activity and revenue.
The key is execution, but Aerodrome already has an established liquidity and fee model to build on. The next phase is about extending that model to more markets and making the economics work at a larger scale.
I like @aeroxyz
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Big step for $LIT if this goes through.
Lighter already has distribution through Robinhood Wallet. Getting regulatory approval to enter the US market could take that partnership to another level.
[ ZOOMER ]
LIGHTER TO APPLY FOR A US LICENSE NEXT MONTH, SAY THEY WILL INTEGRATE INTO ROBINHOOD'S US OFFERING ONCE APPROVED: INVESTOR CALL
The financial system is running on outdated rails
Aave is changing that
Full episode tomorrow
Aerodrome is entering a new phase, and the next step in its growth could have major implications for base:0x940181a94a35a4569e4529a3cdfb74e38fd98631’s long-term potential.
Liquidity incentives have been central to Aerodrome’s growth. They help attract capital to pools, give new markets a way to compete for liquidity and support trading activity across the ecosystem.
The next step is making that capital work even harder.
Aero is introducing new mechanisms around Gauge Caps and Predictive Allocation, aimed at improving how incentives are distributed across markets. The idea is to make liquidity allocation more responsive to expected market activity and the revenue those markets can generate.
That matters because liquidity and revenue are two different things. A pool can attract substantial capital, but its long-term value depends on whether traders actually use it.
Frax is already positioning itself for this expansion. It plans to migrate its protocol-owned ethereum:0x3432b6a60d23ca0dfca7761b7ab56459d9c964d0 and ethereum:0x5e8422345238f34275888049021821e8e08caa1f liquidity to Aero, while six new $frxUSD pairs against local-currency stablecoins have launched on Aerodrome.
These FX markets add another use case to the ecosystem. With $frxUSD serving as the dollar side for currencies such as the Brazilian real, Canadian dollar, British pound and Australian dollar, Aerodrome can support more than conventional token swaps.
At the same time, bringing Aerodrome and Velodrome together creates an opportunity to connect liquidity and trading activity across a broader ecosystem.
For base:0x940181a94a35a4569e4529a3cdfb74e38fd98631, the combination is promising. More markets can create additional demand for liquidity, while better incentive allocation could help turn that expansion into more sustainable trading activity and revenue.
The key is execution, but Aerodrome already has an established liquidity and fee model to build on. The next phase is about extending that model to more markets and making the economics work at a larger scale.
I like @aeroxyz
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“A federal framework for payment stablecoins in the digital age.”
The GENIUS Act sets real standards for payment stablecoins: how they’re backed, how they’re redeemed, how risk is managed.
Once that switch flips on January 18, 2027, compliant payment stablecoins naturally become the default.
That’s why we keep pointing at ethereum:0xcacd6fd266af91b8aed52accc382b4e165586e29. Fully backed, always fiat-redeemable, designed to meet the GENIUS standard from day one.
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Citi is looking at @aave through a different lens.
In its latest research, Citi positions Aave as a collateral mobility protocol for tokenized capital markets, calling collateral mobility one of tokenization’s most important use cases.
I think this is an important distinction.
Tokenizing a stock, bond or money market fund gives it a digital representation. The next question is what its owner can actually do with it.
In traditional finance, securities-backed lending, repo and securities lending already move enormous amounts of capital. Aave Labs estimates that U.S. repo alone averages around $12.6T in daily exposures, while securities lending had around $4.6T of assets on loan in 2025.
These markets already exist. The opportunity is to bring parts of their financing and collateral infrastructure onchain.
A tokenized asset can become more useful when its owner can post it as collateral, borrow stablecoins against it and keep the underlying investment exposure. That creates access to liquidity without forcing a sale, while the collateral supports another financial transaction.
Aave is building toward this through several parts of its ecosystem.
Horizon already allows eligible institutions to borrow stablecoins against approved tokenized real-world assets. Aave V4 takes the architecture further with a Hub and Spoke design, allowing markets to be built around different collateral types, liquidity needs and risk parameters.
That structure matters because tokenized Treasury funds, equities and private credit do not carry the same risks. Each needs suitable collateral factors, liquidity assumptions and liquidation mechanisms before it can support borrowing at scale.
The potential extends beyond individual loans. If tokenized assets can be financed and collateral can move more efficiently between markets, Aave could serve as part of the infrastructure connecting tokenized capital to onchain liquidity.
Citi’s reference to functions worth tens of trillions of dollars points to the scale of traditional finance that could eventually move onchain. It does not mean Aave is positioned to capture that entire market. The real opportunity is to capture specific financing flows as tokenization expands.
That is why I think collateral mobility deserves more attention. Issuing assets onchain is one step. Making them useful across lending, financing and liquidity markets is where the economic activity can grow and Aave is building toward that layer of tokenized finance.
$AAVE will win.
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Six local-currency stablecoins now trade against $frxUSD on @aeroxyz, with DFB providing the FX infrastructure.
The new markets cover BRZ for the Brazilian real, CADD for the Canadian dollar, tGBP for the British pound, IDRX for the Indonesian rupiah, ZARP for the South African rand and AUDF for the Australian dollar.
Each pair gives a local-currency stablecoin a direct market against frxUSD. That creates a common dollar side across currencies that would otherwise need separate liquidity routes.
The real opportunity is making currency conversion part of the onchain financial stack.
A payment app could use these markets to convert between local-currency tokens and dollar liquidity. A treasury could rebalance between currencies onchain. Traders could swap between the pairs without relying on traditional FX venues for every step.
The infrastructure builds on Frax’s earlier FX deployment on Polygon, where Curve and DFB use frxUSD as the common dollar pair across markets including BRZ, IDRX, tGBP and AUDF.
@base extends that model to Aerodrome and adds CADD and ZARP to the lineup.
This also gives $frxUSD another role in DeFi. It can serve as the dollar asset connecting multiple currency markets, backed by reserves designed to maintain its dollar value.
The key question now is whether these markets attract sustained trading and deeper liquidity. Launching the pools establishes the infrastructure; consistent usage is what can turn it into a meaningful FX venue.
That is the direction I like here.
Frax is expanding and building more markets around $frxUSD. If those markets gain traction, the same dollar liquidity can support more currency pairs, payment routes and onchain financial activity.
Making onchain FX more usable with $frxUSD at the center is a big opportunity👀
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Frax is bringing $frxUSD into a growing network of onchain FX markets on @0xPolygon.
In May, @fraxfinance, Polygon, @CurveFinance and @DFB_DeFi launched a set of onchain FX markets on Polygon, pairing frxUSD with currencies including the Brazilian real, Indonesian rupiah, British pound, Australian dollar and Korean won.
The setup has a clear purpose. Curve’s FXSwap pools provide the trading infrastructure, DFB supports market-making and liquidity, and Polygon handles settlement. Frax brings the dollar liquidity that connects these markets.
This matters because moving money between currencies remains fragmented and can be expensive. Onchain FX can bring currency conversion closer to where funds are already held and used. For that to work at scale, though, markets need enough liquidity to keep spreads and slippage under control.
Frax is also developing the economic side of this model. The reserves backing $frxUSD include tokenized US Treasury funds, and Frax has described using reserve yield to support liquidity incentives. That can help bootstrap markets while they build trading activity of their own.
In October, another piece came together with the launch of an EURe/frxUSD pool on Uniswap v3 on Polygon, involving Monerium and Capa.
EURe represents euros onchain, while $frxUSD provides the dollar side. Monerium connects EURe to its SEPA banking infrastructure, creating a route between traditional euro payments and onchain dollar liquidity. The pool gives applications another way to integrate currency conversion into their workflows.
There is also a lending angle. On Polygon, Morpho markets allow users to borrow Brazilian real-denominated BRZ against collateral including $sfrxUSD. Another market lets BRZ holders borrow frxUSD. This connects dollar-denominated assets with local-currency borrowing, while leaving users exposed to borrowing costs and liquidation risk.
These integrations serve different purposes, but they build on the same foundation. frxUSD can act as the dollar leg in FX markets, connect euro and dollar liquidity, and be used as collateral in lending markets.
For Frax, each integration creates another potential use case for $frxUSD. For Polygon, these markets provide another route for FX trading, lending and payment-related activity to take place onchain.
The next question is how much recurring demand these markets can attract beyond initial incentives. If trading and borrowing activity grows, the infrastructure can support more than a collection of isolated stablecoin pools.
Frax is putting its dollar liquidity to work across more markets, while Polygon provides the network those markets can run on👀
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Tokenized stocks are opening up a new market for Aero.
With pools like USDC/AMZNc and USDC/MSTRc, @aeroxyz is giving tokenized equities a place in DeFi where trading activity can generate fees and liquidity providers can compete for returns.
That also matters for veAERO voters. They direct emissions toward pools and earn a share of eligible exchange revenue, connecting their returns to the markets they choose to support.
As these stock markets grow, more trading activity can mean more fees flowing through Aero. And the assets themselves have uses beyond trading.
Coinbase’s tokenized equities are now accepted as collateral on Aave V4 on Base, allowing eligible users to borrow USDC against holdings such as AMZNc. That gives these assets another role in the DeFi economy, with the usual borrowing costs and liquidation risks.
The opportunity here goes beyond putting familiar stocks onchain. It’s about building markets around them, generating fees from their use, and making them composable with the rest of DeFi.
Aero can benefit from that shift as tokenized assets move from simply being held onchain to being actively used.
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LlamaLend V2 just unlocked a new use case for Curve LPs.
The first LP-backed lending market is now live, pairing reUSD/sfrxUSD from @ResupplyFi and @fraxfinance.
Users can provide liquidity to the Curve pool, then use the LP token as collateral to borrow $crvUSD. Their position continues earning pool fees while backing the loan.
The market launched with a 3M crvUSD borrowing cap, and 10% of borrower interest goes to the Curve DAO.
The lending gauge has also been added to the GaugeController. Once it receives veCRV votes, lenders can become eligible for $CRV rewards.
This brings liquidity provision and lending together in one position. Curve LPs can now put their positions to work beyond earning trading fees.
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This is the first-ever borrowing against Curve pool LP on Curve
Aerodrome is entering a new phase.
On October 21, Aerodrome and Velodrome are set to unite as Aero, bringing liquidity across seven EVM chains under one protocol and one token, $AERO.
The bigger change is the incentive model.
Predictive Allocation will allow $sAERO holders to direct $AERO rewards to pools across the network in real time, while earning a share of exchange revenue as it accrues.
This connects liquidity incentives more closely to trading activity and gives projects a way to attract liquidity across a much broader network.
Aerodrome has built a strong position on Base. The challenge now is turning that foundation into a connected liquidity layer across the wider EVM ecosystem.
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Tokenized assets need more than an onchain wrapper. They need access to liquidity.
@fraxfinance and @GearboxProtocol are building that connection through automated RWA leverage using $frxUSD, starting with Midas mF-ONE, managed by Fasanara Capital and curated by kpk.
KYC-verified borrowers can access frxUSD liquidity against tokenized real-world asset collateral, while borrowed funds remain restricted to approved strategies.
For Frax, this creates a concrete use case for frxUSD in institutional RWA lending. The market has also been added to the $sfrxUSD strategy framework, with an initial allocation cap of $5 million.
As tokenized funds move further onchain, borrowing against these assets could become an important part of the infrastructure. Frax is positioning $frxUSD to play a role in that market.
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