Beyond the Meme Frenzy: An Overview of the Innovative Progress of the Top 10 Tech Projects in the Crypto Ecosystem

Original Author: Ignas

Compiled by: Yuliya, PANews

Currently, the Memecoin frenzy is in full swing, with crypto social platforms flooded with content about Memecoins and fat penguin NFTs. In this context, many important crypto innovations may be overlooked. The recent market consolidation provides a window for in-depth research, but this calm is fleeting. This article will focus on the 10 most noteworthy projects in the current crypto ecosystem regarding their technological breakthroughs and innovative developments.

1. Avalanche

Avalanche has launched the largest upgrade in its history, Avalanche9000, which could fundamentally change the game rules of the L1 ecosystem. In the new version, Avalanche completely overturns the operational logic of traditional subnet models. By significantly reducing validator costs (from 2000 AVAX to 1.33 AVAX per month), it greatly enhances ecosystem participation.

From a technical architecture perspective, this upgrade is reminiscent of the parallel chain concept of Polkadot and the sovereign chain idea of Cosmos. More notably, Avalanche has drawn on the core design of Ethereum's EIP-4844 proposal (i.e., Proto-Danksharding technology) to reduce Layer2 gas fees, making its Layer1 deployment costs comparable to the Rollup solutions in the Celestia ecosystem, while also possessing unique advantages in cross-chain interoperability and system stability.

The new version supports a Layer1 exclusive validator mechanism, allowing each Layer1 to flexibly choose consensus modes such as PoS or PoA based on their needs. This flexibility not only optimizes the token economic model but also enhances value capture capabilities.

To promote ecological prosperity, Avalanche has simultaneously launched the Retro9000 incentive program with a total of $40 million, successfully attracting 700 projects covering core sectors such as GameFi and DeFi. Through innovative asset tokenization schemes, Avalanche has successfully bridged traditional financial markets and has gained significant projects in the gaming sector, such as "OffTheGrid." In the competitive landscape dominated by Ethereum and Solana, Avalanche has successfully carved out a unique market space through differentiated positioning.

2. NEAR AI

With continuous product releases and backing from Virtuals and ai16z, Base and Solana are leading in the AI agent field, while the NEAR protocol is quietly carving out its own innovative path.

NEAR has already supported on-chain AI agent functionalities and plans to launch more tools and features. Its most notable feature is the native Chain Abstraction technology, which enables developers to more easily build cross-chain interconnected AI agent systems.

Additionally, NEAR Intents introduces a new transaction model that enables cross-chain settlement between AI agents, services, and end users. Notably, NEAR's collaboration with Infinex allows users to trade various cryptocurrencies like BTC and XRP on a decentralized platform.

NEAR's NEAR.ai is an AI assistant that can connect users to other AI agents and perform operations across Web2 and Web3 services. Users need a NEAR wallet to log in. Although the NEAR wallet experience was previously unsatisfactory, it has significantly improved, with the Near Mobile wallet being particularly recommended. The functionality of this AI assistant is similar to the products being developed by Cortex Protocol.

Interestingly, NEAR-based social agents have begun hosting SPACE events on X (formerly Twitter). At the same time, NEAR has launched a research center to explore new AI models and has partnered with Delphi to conduct an AI accelerator project to support builders in this field.

It is worth noting that the privacy computing blockchain project Nillion Network is building on NEAR to provide privacy protection technology for sensitive data's private LLM training and inference. This technology is expected to unleash the full potential of user-owned AI.

3. Liquity v2

Recently, the price of the LQTY token has risen by 120% within a month, mainly due to the overall positive market trend and the upcoming release of Liquity v2. The v2 version is now live on the testnet.

Traditional DeFi lending models have some issues:

• Currency markets like Compound and Aave set interest rates based on utilization, making costs unpredictable;
• Protocols like MakerDAO that rely on governance often face delays in adjusting interest rates due to governance processes;

Even Liquity V1's fixed fee model struggles to adapt to market changes.

Liquity v2 addresses these issues by introducing a user-defined interest rate mechanism and launching a new stablecoin, BOLD. Borrowers can set their own interest rates by opening "Troves"—they can choose a lower rate to save costs or set a higher rate to avoid being liquidated. Troves with the lowest rates will be prioritized for liquidation.

The protocol supports up to 90% collateralization and 11x leverage, significantly improving capital efficiency. Borrowers can use not only ETH but also liquid staking tokens (LST) like wstETH and rETH as collateral while continuing to earn staking rewards when borrowing BOLD.

The BOLD stablecoin is fully backed by ETH and LST, redeemable at any time, and unaffected by traditional financial risks. Unlike USDC, which relies on real asset backing, BOLD avoids counterparty risk and censorship risk. Its $1 peg is maintained through the following mechanisms:

• When BOLD falls below $1, an arbitrage mechanism promotes ETH redemption.
• When BOLD exceeds $1, borrowing rates are lowered to increase supply.

Stable pool depositors can earn 75% of the protocol's revenue (in the form of BOLD and ETH liquidation proceeds), with the remaining 25% used for protocol incentive liquidity (PIL), supporting BOLD's liquidity in the DeFi ecosystem.

As one of the most frequently forked protocols in DeFi, Liquity v2 has made significant adjustments to fork economics. Now, teams need permission to use Liquity's code (and airdrop to LQTY holders), in return for which they will receive Liquity's support, access to liquidity networks, shared security resources, and potential LQTY rewards.

This win-win mechanism allows forked projects to receive better support while BOLD can expand across different chains without worrying about common hacking or mismanagement risks. Currently, Liquity v2 is live on the Base Sepolia testnet for user testing.

4. Pendle Launches New Protocol Boros

Pendle's latest launch, the Boros protocol, has exceeded market expectations. Rather than being a V3 upgrade, it is more of a groundbreaking new product designed specifically for margin yield trading.

The core innovation of Boros lies in allowing users to trade funding rates with leverage. This is a significant breakthrough, as the market previously lacked effective tools to hedge or trade these rates.

Specifically, Boros provides users with two main functionalities:

• Hedge funding rate risk and obtain stable returns.
• Speculate on funding rate fluctuations using leverage.

Taking Ethena as an example, its profit model largely relies on funding rates. Through Boros, Ethena can hedge volatility and lock in stable returns. Meanwhile, speculators can take advantage of the ups and downs of funding rates for higher returns.

Why Choose Funding Rates as an Entry Point?

Perpetual contract exchanges have daily trading volumes of up to $150-200 billion, and funding rates are the core mechanism of these markets. However, this opportunity has not been fully developed in the DeFi space. Boros makes funding rates tradable, allowing protocols, market makers, and traders to integrate funding rate strategies into their portfolios.

Pendle is evolving into a comprehensive yield trading platform:

• V2 focuses on on-chain tokenized yields, such as staking, RWA, and BTCFi.
• Boros focuses on funding rates and off-chain opportunities.

Notably, Pendle has maintained its consistent simplicity, not issuing new tokens. Both V2 and Boros use the same PENDLE and vePENDLE tokens. The revenue distribution model remains unchanged:

• 80% allocated to vePENDLE holders.
• 10% goes to the protocol treasury.
• 10% for operations.

The launch of Boros comes at a time when the Points concept is cooling down, bringing new investment opportunities and innovative directions to the market.

5. Zircuit

The controversial L2 Zircuit has shifted its focus to the hottest AI track after completing its first and second season airdrops and distributing 300 million tokens. It launched the GudAI project, similar to AIXBT, to discover AI agents. The native token $GUD adopts a fair issuance mechanism by staking $ZRC.

Zircuit's feature is Sequencer-Level Security (SLS), which can identify threats before transactions go on-chain. Amid the Ethereum restaking trend, Zircuit's liquid staking tokens (LRT) have performed impressively, with a total locked value exceeding $2 billion. Its mainnet's second phase has now launched, featuring:

• A cross-chain bridge with Ethereum, allowing fast transaction confirmations in just a few minutes. Since its launch, net deposits have reached $300 million.
• A native DeFi application ecosystem, including lending platforms ZeroLend and Elara Labs, as well as trading and liquidity mining platforms Ocelex and Dodo.
• Recently, 2% of the token supply was distributed to over 190,000 EigenLayer stakers.

Reportedly, Zircuit has received support from top investment institutions such as Binance Labs, Pantera Capital, and Dragonfly Capital. Although it has not yet been listed on Binance, the market generally expects it to go live in the future.

6. Starknet

Despite facing skepticism regarding the STRK token airdrop, Starknet's recent technological advancements are noteworthy. As a leading Layer2 solution, Starknet continues to push the boundaries of technology.

One significant advancement is the launch of the STRK native token staking mechanism. As the first L2 network to offer native staking, Starknet has gained support from Bitwise, a crypto investment firm managing $11 billion in assets. Notably, Bitwise has accumulated over $3.5 billion in assets in Ethereum staking.

On the technical front, Starknet has achieved remarkable breakthroughs:

• Contract deployment costs have been reduced to $5.
• Verification fees are below $1.
• Through the efforts of multiple teams, the verification of SNARK proofs has been achieved, creating conditions for developers to build practical applications based on zero-knowledge proofs, such as privacy authentication and secure document verification.

The recently released v0.13.3 update brought significant performance improvements:

• By optimizing compression algorithms and block integration techniques, blob gas costs were reduced by 5 times.
• Effectively controlled transaction fees amid the growing usage of Ethereum blobs.
• More efficiency optimization upgrades are planned for the future, and these improvements have even received public praise from Ethereum founder Vitalik.

Another important advancement is the development of a trustless Bitcoin bridge in collaboration with sCrypt (based on the OP_CAT proof-of-concept bridge). This breakthrough demonstrates the potential for Starknet to interoperate with the Bitcoin network, opening up new possibilities for cross-chain application scenarios.

7. Mode AI

After completing its airdrop, Mode launched two important strategies: the veMODE governance model and the AIFi ecosystem, showcasing its innovative layout in the Layer2 space.

As the first OP-stack Layer2 to introduce a voting escrow (ve) governance model, Mode allows users to stake MODE tokens or MODE/ETH liquidity tokens to gain voting rights through the veMODE mechanism. The longer the staking period, the voting weight can increase up to 6 times. Unlike traditional models, veMODE focuses voting on the protocol level, aiming to promote the development of the entire ecosystem.

In the third quarter, Mode will distribute $2 million worth of OP incentives through this system. Future plans also include introducing a bribery market and innovatively incorporating AI agents to simplify user participation in governance.

Mode's most notable feature lies in its AIFi strategic layout. With support from Optimism's $6 million grant, Mode is bringing AI agents into the DeFi space to simplify and expand on-chain interactions. These AI agents can handle tasks such as yield farming, risk management, and governance, significantly reducing the need for manual operations.

Mode's AIFi ecosystem is based on a three-layer architecture:

• AI-secure L2 sequencer: Identifies and blocks malicious transactions before they go on-chain.
• On-chain agent infrastructure: Deploys agents in collaboration with partners like Giza, Olas, and RPS AI, while enabling agents to learn and execute advanced strategies through Mode's DappIntents SDK.
• AI-driven interface: Such as Mode's AI wallet, which enhances DeFi accessibility by simplifying interaction methods.

To promote the development of the AIFi ecosystem, Mode has launched an AI Agent App Store as a hub for discovering DeFi-specific AI agents. This includes several important applications:

• Giza's ARMA: Optimizes USDC yields in money markets.
• Olas's upcoming MODIUS: An AI-driven liquidity farming strategist.
• Brian: Simplifies DeFi operations through natural language interaction.
• Sturdy V2: An AI-driven yield optimization vault.

Mode, along with projects like Near and Zircuit, has accurately seized the timing of AIFi development, demonstrating strategic foresight in this emerging field.

8. Polkadot

The DOT token has risen by 75% over the past month, supported by multiple favorable factors.

Network Activity Hits New Highs

In recent months, Polkadot's network activity has reached an all-time high. Key metrics have seen a comprehensive increase:

• Monthly transaction volume has hit a record high.
• Network fees have increased by 300% year-on-year.
• The number of active users continues to rise.
• Transaction volume has significantly increased.

Polkadot 2.0 Leads the Transformation

The most significant change brought by the new version is the substantial reduction in the operational costs of parallel chains. Previously, operating a parallel chain cost about $16,700 per month, while in Polkadot 2.0, this cost has dropped to between $1,000 and $4,000. Projects can now rent block space using DOT, creating sustained demand for the token. According to governance decisions, part of the revenue may be burned, thereby reducing token supply and forming a virtuous cycle: increased DOT demand, potential supply reduction, and overall enhancement of the ecosystem.

Enhanced Cross-Chain Interoperability

With the deployment of Hyperbridge, Polkadot has achieved connectivity with mainstream blockchain networks like Ethereum and BNB, enhancing cross-chain interaction capabilities and providing developers with more possibilities. In terms of network performance, it can handle over 3.3 million transactions per day, showcasing its potential to support large-scale applications (such as games).

Thriving DeFi Ecosystem

The Hydration platform has performed impressively:

• Active users have increased by 50% since October.
• Fee revenue has reached an all-time high.
• The total locked value in the Omnipool exceeds $68 million.
• The USDT-USDC dual currency pool has an annualized yield of up to 36% (including fees and vDOT rewards).

The recently launched lending feature on Hydration (based on an Aave V3 fork) introduces an innovative on-chain liquidation mechanism that prioritizes liquidations at the start of each block. This design:

• Reduces borrower losses.
• Prevents front-running attacks.
• Converts liquidation penalties into protocol revenue.
• Benefits HDX stakers and governance participants.

These positive developments have collectively driven the rise in DOT prices, showcasing the vitality and potential of the Polkadot ecosystem.

9. dYdX

The decentralized exchange (DEX) space for perpetual contracts is highly competitive, with market leaders constantly changing from dYdX to GMX, Vertex, and most recently HyperLiquid. Notably, this competitive landscape has a greater impact on centralized exchanges, as rapidly innovating DEXs are eating into their market share.

While HyperLiquid gained significant attention through a successful token airdrop, dYdX has chosen a development path that focuses more on retail users. They have launched the dYdX Unlimited program, introducing three key features: Instant Market Launch, Mega Vault Mechanism, and Affiliate Program.

• The Instant Market Launch feature allows anyone to quickly create and trade new markets without going through cumbersome governance votes or long waits. Users simply select a market and deposit USDC into the Mega Vault to start trading. This is an advantage that centralized exchanges find hard to match.

• The Mega Vault, as the core of the system, provides liquidity for all markets by concentrating USDC. Depositors can earn passive income, as half of the dYdX protocol fees are allocated to the Mega Vault, making liquidity provision more attractive. This design is quite similar to Jupiter's JLP Vault.

  

• Additionally, the Affiliate Program launched by dYdX offers lifetime USDC commissions to referrers. This model has played a significant role in Bybit's rapid growth.

In terms of incentives, dYdX distributes $1.5 million worth of DYDX tokens monthly as trading rewards, while also providing a reward pool of up to $100,000 for Mega Vault depositors.

These initiatives have already yielded significant results: the Mega Vault's deposit scale has exceeded $40 million, with an annualized yield of 51%. This indicates that dYdX's new strategy is gaining market recognition.

10. Aptos

As a blockchain platform based on the Move language, Aptos is rapidly developing in the footsteps of Sui. Its total locked value (TVL) has first surpassed the $1 billion mark, growing 19 times year-on-year, showcasing strong development momentum.

Traditional Finance (TradFi) Layout

• BlackRock has expanded its BUILD fund to Aptos, making it the only supported non-EVM chain.
• Franklin Templeton has extended its U.S. government money market fund to Aptos.
• Bitwise and Libre have launched tokenized funds on Aptos.

Stablecoin Ecosystem Development

• Tether issued native USDT on Aptos in August, with supply growing from about $20 million to $142 million.
• Circle announced the launch of native USDC and a cross-chain transfer protocol (CCTP).
• Stripe provides support for crypto payment products on Aptos.

The injection of stablecoins has brought significant growth to the ecosystem, keeping TVL consistently above $1 billion and attracting 1 million new users.

DeFi Ecosystem Highlights

• Daily DEX trading volume on Aptos has grown by 2700% (28 times) over the past year.
• The leading lending protocol Aries Markets has reached a new high in TVL, with total deposits exceeding $800 million and borrowings over $450 million.
• Emojicoin.fun attracted 16,700 unique addresses to participate within 24 hours of its mainnet launch.

Aptos (APT) seems to be following in the successful footsteps of Sui. These emerging L1 public chains, including SUI and APT, are competing with Solana on the execution layer, while Ethereum continues to maintain its unique market position.