(44/52) Weekly Market Insight | November Week 2 | Liquidity Constraints and “Reopening”

Headline News: Liquidity Constraints and “Reopening”

• Bitcoin’s price declined 5.26% last week, initially pressured by signs of liquidity constraints evident in the Standing Repo Facility (SRF) and SOFR markets. However, these stresses proved temporary and subsided as the week progressed. Separately, market sentiment was aided by optimistic public comments from bipartisan US senators, who indicated a potential deal to fund the government through January 30, 2026, is within reach.

Macro-Outlook: Better Than Expected ADP

• The US ADP employment added 42,000 jobs in October, above the market forecasts of 25,000. The market expects approximately 67% probability of a 25bsp rate cut in the December FOMC meeting.
• The US ISM manufacturing PMI slightly decreased to 48.7 in October, below market expectations of 49.5. The US ISM services PMI slightly increased to 52.4 in October, above market expectations of 50.8.
• The Michigan consumer sentiment dropped to 50.3 in November, well below market forecasts of 53.2.
• According to Kalshi, the market expects the US government to reopen this week, with the highest probability (83%) on Tuesday. A reopening would potentially reintroduce liquidity to the market through Treasury General Account (TGA) payments and spending. This would also keep key roles (such as air traffic control) in place before the holiday season, allow for the release of economic data from the BLS, and potentially advance altcoin spot ETF applications.
• The US Senate votes 60-40 to advance the funding bill on Monday, which will then lead to the final vote on the passage of the bill. After that, the exact same bill must be passed by the House of Representatives and later signed by the president.
• President Trump announced a $2,000 tariff dividend per American, excluding “high income people”.

Weekly-Cryptos-Overview: DeFi Risk Reminder: Don’t Trust, Verify

• Gemini crypto exchange reportedly plans to offer prediction market contracts on its platform.
• Google integrated prediction markets data from Polymarket and Kalshi into Google Finance.
• CFTC stated the agency is working with registered exchanges including CME, Cboe, ICE and Coinbase to launch leveraged spot crypto products by 2026.
• Japan’s Financial Services Agency announced a pilot program in which MUFG, SMBC and Mizuho will jointly issue a yen-stablecoin this month.

Layer 1 and Layer 2s

• Ripple acquired Palisade, a wallet-as-a-service platform. Palisade is the fourth major acquisition by Ripple after Hidden Road (Prime Broker), GTreasury (Treasury Management) and Rail (Stablecoin Payment).
• Mastercard partnered with Ripple and Gemini to explore using RLUSD to settle traditional credit card transactions.
• Mantle partnered with Bybit and BackedFi to launch tokenised equities to the network with deep liquidity.
• Tether-backed stablecoin network, Stable, launched its public testnet.
• Starknet launched S-two on the mainnet, enabling 100x faster, cheaper and more efficient ZK proving on the network. The fast proving speed also opens the path for Starknet to decentralise its sequencer layer.
• Pi Squared, a decentralised universal settlement layer that enables language-agnostic support and interoperability across different blockchains, launched its Devnet 2.0.

Dapps

• Balancer V2 was exploited for over $128 million. Hackers compromised the invariants that control the pricing in liquidity pools and swapped out tokens with wildly favourable prices. Berachain hard-forked the network to recover $12.8 million from the BEX/Balancer v2 exploit and returned the funds to users.
• The Elixir stablecoin deUSD depegged and collapsed after its largest counterparty, Stream Finance, disclosed a $93 million loss from an external fund manager, which caused Stream to default on its $68 million loan from Elixir, effectively wiping out 65% of deUSD’s backing.
• Lido partnered with Mellow launching stRATEGY, a set of curated DeFi strategy vaults surrounding stETH with bonus Mellow points.
• Aerodrome launched Slipstream V2, introducing dynamic fees based on market volatility.
• The tokenised Treasury fund by VanEck, VBILL, went live on Aave’s Horizon RWA market.
• Chainlink partnered with FTSE Russell to launch institutional-grade index data onchain via DataLink , including Russell 2000, FTSE 100 index and more. Chainlink also announced Chainlink Runtime Environment (CRE) an end-to-end layer to build institutional-grade smart contracts, including Chainlink Confidential Compute which enables private smart contracts.
• Cookie DAO announced its new roadmap, including a stricter algorithm, Cookie Alpha (token launchpad for lower FDV protocols), token station, Cookie Launchpad (capital launchpad), and Global SNAPS.
• RedStone launched HyperStone, HIP-3 dedicated oracle that powers permissionless perpetual market launch. Redstone’s Credora went live, providing transparent risk ratings across DeFi.
• Zama, the leading FHE protocol, acquired the zkVM protocol Kakarot as part of its strategic technology integration before Zama mainnet launch.
• Zora launched a fully encrypted messaging function powered by XMTP, allowing users to send messages and tokens with their friends.
• Neutrl launched its mainnet, introducing a new yield strategy, NUSD, by acquiring OTC discounted altcoins and hedging against the holdings.
• Arx Research raised $6.1 million led by Castle Island, aiming to launch its Burner Terminal this month, a point-of-sale device that lets consumers spend crypto seamlessly.
• The Graph introduced Amp, enabling real-time, verifiable, cross-chain SQL queries with enterprise-grade security and zero-local-setup.
• Trendle, a prediction market where traders can trade the mindshare of protocols, is now live. The liquidity on the platform is powered by Azuro Protocol.

Governance and Upcoming Alpha

• Injective Altria upgrade is expected on November 11, activating high-performance, permissionless EVM layer, unifying the existing Wasm applications seamlessly on one chain.
• Allora Network, a decentralised AI protocol where multiple models compete to produce predictions for applications, is expected to launch its mainnet on November 11.
• Cardano is holding Cardano Summit from November 12 to 13 in Berlin.
• Avalanche is expected to launch the Granite upgrade on November 19, introducing more reliable cross-chain messaging, native biometric authentication support and dynamic block times for faster transaction.
• The founder of ZKsync introduced new ZK tokenomics, adding on-chain interoperability fees and offchain enterprise licensing fees to ZK governance for staking rewards, token burn or ecosystem funding.
• The founder of Internet Computer introduced a new vision of Internet Computer 2.0 that focuses on “self-writing apps” where non-technical users could easily create applications on-chain, new DFINITY 2.0 by restructuring the foundation to become more agile and aims to reduce ICP inflation by 70%, and Caffeine, which is a for-profit venture to accelerate the new vision.
• The perpetual liquidity layer protocol Orderly Network started its token buyback with 60% of the protocol fees.
• Hyperliquid community proposed HIP-5, creating Assistance Fund 2 (AF-2), a stake-governed buyback pool using 1 to 5% of protocol fees to purchase Hyperliquid ecosystem tokens. Some community members suggested the proposal would introduce bribery and value extraction from the DAO.
• The Hyperliquid team is also experimenting with a native borrowing and lending market on Hypercore, BorrowLendingProtocol.
• Starknet proposed Ztarknet, a Layer-2 on top of ZCash, creating a private programmability layer.

Token Unlock

• LAYER token unlocks on November 11, amount representing 12.00% of the token supply.
• BB token unlocks on November 14, amount representing 10.9% of the token supply.
• ZKC token unlocks on November 16, amount representing 7.46% of the token supply.
• STBL token unlocks on November 17, amount representing 46.2% of the token supply.
• ZRO token unlocks on November 21, amount representing 10.3% of the token supply.
• KAITO token unlocks on November 21, amount representing 6.91% of the token supply.
• PLUME token unlocks on November 21, amount representing 3.25% of the token supply.
• SCR token unlocks on November 22, amount representing 5.73% of the token supply.
• TURTLE token unlocks on November 22, amount representing 7.82% of the token supply.
• NIL token unlocks on November 24, amount representing 4.16% of the token supply.
• XPL token unlocks on November 25, amount representing 4.94% of the token supply.
• WCT token unlocks on November 26, amount representing 68.8% of the token supply.