The Castle Chronicle: Stablecoin Spotlight on HyperEVM, Innovative Protocols on Arbitrum
PLUS: Trading on Prediction Markets from X
Welcome to Edition 132 of The Castle Chronicle!
August is hot, but The Chronicle is even hotter! Prepare the sunscreen for another weekly summer issue!
Here’s what we have for you today:
🔍 Market Watch - Focus on continuing to new ATHs for $BTC
🔮 How to trade on onchain prediction markets from X
🪙 Understanding HyperEVM’s Stablecoin Landscape and Growth
💙🧡 ARB Corner - Exploring Nerite and Estate Protocol
🏰 Castle Reads - All of Castle’s research you might have missed
📖 Recommended Reads - The best reads from the best researchers on CT
🔍 Market Watch
Gm frens! It’s been a relatively boring week with lots of sideways price action and slow bleeds. That being said, $BTC is still in great HTF context, so it makes sense to sniff for opportunities.
Price Action
After reaching a new ATH, $BTC has once again started pulling back. The momentum cycle remains intact; therefore, I expect this to result in yet another re-accumulation and continuation towards new ATHs.
As long as we are above the 10/20/50 rising EMAs, there is absolutely no reason to be bearish. And once it finally breaks down, we’re again gonna wait on the sidelines for demand to show up.
Top Performers
The TOP 5 strongest outperformers this week are somewhat random and overall not impressive. Many of these coins are still stuck in sideways price action on the weekly timeframe, which does not interest me as a trend-following trader.
It is worth taking a look at $M, though, as it’s a new coin that tells a new story.
After the initial impulse, the price started pulling back and eventually found some balance, where it began moving sideways, which we would expect to be an accumulation phase. Now, we can see a clean breakout from the range, and all the EMAs are starting to rise. The expectation, therefore, is for continuation.
This is a great context, and it definitely makes sense to look for some setups.
Narrative Performance
All narratives are in the red this week, with Game-Fi showing the most resilience. The biggest losers are ICM and DeSci, both losing around 20%.
When $BTC is pulling back, this is completely natural and expected behavior, so I won’t draw any conclusions from it.
During this period, all I’m doing is waiting for big demand to come into the market. Be that in $BTC itself, which will raise the overall tide, and I’ll look for relatively stronger performers, or individual coins that get front-run by impatient demand. Either way, it’s mostly a waiting game.
Risk responsibly, and I’ll see y’all next time!
Courtesy of 0x_Vlad - trend-based trader and MentFX student
Not following what I’m talking about? Check out my quick cheatsheet to understand how I approach a chart.
🔮 How to trade on onchain prediction markets from X: Fliprbot
A good fren of mine, Pleb, recently shilled me an interesting project building ON TOP of a prediction market like Kalshi and Polymarket.
Simply put, Fliprbot is a DeFi platform focused on building a prediction market terminal with leverage, enabling users to bet on future events. Integrated with X, it allows users to trade markets, check odds, and place predictions directly within the X platform, enhancing accessibility.
With the recent news announcing the partnership between X and Polymarket, plus many big players like Coinbase eyeing the launch of their own prediction market, it rapidly became clear to me that the FLIPR bot idea was actually genius.
The first LIVE product of FLIPR is the Twitter bot, making it possible to directly trade different prediction markets on X.
The only thing needed is to connect the Twitter account with the dapp and fund the wallet associated with the account.
A future product update from FLIPR will be a complete Trading Terminal for this market. It could become the go-to tool for degens wishing to trade if «Trump is on the Epstein list» with 10x leverage, or for normie trad00rs who simply want to keep track of his prediction book.
The private beta just started, but this type of UI/UX leverage layer on top of the prediction market is something to keep an eye on, in my opinion.
On top of this, the integration that FLIPR is planning with X could open the door for many interesting features. We can think about the following:
It could utilize X's user-generated content to analyze sentiment around prediction market topics, enhancing market predictions and leverage strategies.
X could serve as a real-time feed for FLIPR users, providing instant updates on market movements and new features like leverage trading.
X's data could be integrated into FLIPR's algorithms to improve the accuracy of predictions, using tweet volume and sentiment as factors in determining market odds and leverage multipliers.
Many other ideas could come to fruition around this integration. By the way, an interesting post was even written by the FLIPR team on this topic.
And one last alpha, this FLIPR’s bot has a token on Solana.
Ticker: FLIPR (JCBKQBPvnjr7emdQGCNM8wtE8AZjyvJgh7JMvkfYxypm).
NFA, do what you feel is wiser with this information.
Anyway,
HAVE A GOOD WEEK CHICOS
From CL with LOVE
🪙 Understanding HyperEVM’s Stablecoin Landscape and Growth
The HYPErbolic Rise of HyperEVM
HyperEVM's growth has been exponential since its launch:
The chain’s TVL grew from $330M in April to over $2.56B at the beginning of August.
Liquid staking, dominated by $kHYPE (by Kinetiq) and $stHYPE (by stakedHYPE), now accounts for a staggering 43% of HyperEVM’s total value locked, signaling strong interest in LSTs and their point programs.
In today’s analysis, we will dive deeper into one of the two key components of HyperEVM’s DeFi: stablecoins.
The total supply of stablecoins grew by 22% in the past 30 days, now totaling $213M.
More specifically, we will focus on the growth and usage of stablecoins within the chain to better understand the current needs and interests of users.
The Stablecoin Landscape
First, we should understand the landscape we are dealing with.
Duh?!
HyperEVM is still a young ecosystem, and the total stablecoin supply remains relatively low compared to other ecosystems. However, the growth of yield-bearing stablecoins, lending markets, and looping strategies to maximize points has made a significant impact in the last two months.
In the past 30 days alone, stablecoins on HyperEVM added $38M to their market cap, now sitting at a combined valuation of $213.5M.
Let’s quickly take a look at the most capitalized stablecoins on HyperEVM:
USDT0, the chain-agnostic version of Tether USD (USDT), is the largest stablecoin on the chain with a staggering supply of $110M, claiming 52% of the market share. It is also the fastest-growing stablecoin.
feUSD, the flagship CDP stablecoin of Felix Protocol, is the third-largest lending market on the chain, with a market cap of $75M. Surprisingly, feUSD’s supply has not grown in the past 30 days.
USDe from Ethena Labs is the third-largest stablecoin, with a $14.5M market cap, and has solid demand from users on lending markets.
USDHL is another stablecoin built by Felix, backed by US Treasury Bonds, which saw a 48% decline in supply over the past 30 days, likely due to growing demand from LSTs and higher yields on other stablecoins.
USR by Resolv Labs is the last on this list, with recent inflows driven by new integrations.
Stablecoins and DeFi on HyperEVM
HyperEVM is inherently a DeFi chain, so 99.9% of stablecoins there are used to earn yield and points from protocols without a token.
Lending markets like Hyperlend and Felix, DEXes like Valantis and Project X, or yield aggregators like Hyperbeat have all played a major role in the growth of the stablecoin supply on the chain.
Here are a few examples:
hbUSDT is a yield-bearing stablecoin on Hyperbeat that lets you accumulate a 16% APY, plus points from 8 different platforms. This farm amassed $98M in deposits within weeks of its launch.
Looping strategies on Felix and Hyperlend pushed most of the stablecoin yields above 8/9%, with some even surpassing 10% per year, which is a solid opportunity for those seeking good yields with minimal effort.
To sum up, stablecoin growth on HyperEVM is primarily driven by:
New integrations and strategies on different protocols.
Points and yields across pools and platforms.
Other players (like Circle, Sky, etc.) stepping in and issuing their stablecoins on the chain.
HYPE LSTs expansion and usage.
On Future Growth
HyperEVM’s ecosystem is largely driven by HYPE and its LSTs, which could heavily influence the growth of stablecoins on the chain.
I believe that prolonged downward periods in HYPE’s price action, although typically harmful for any chain when the gas token dumps, could benefit stablecoin growth. Users might allocate part of their capital to stablecoins in order to preserve their purchasing power.
Nonetheless, stablecoins are the liquidity backbone of any chain, and they will continue to mature and grow in importance within HyperEVM.
Which one will attract the most liquidity in the future?
See you on the next one.
milady
Courtesy of Matt
💙 🧡 ARB Corner - Exploring Nerite and Estate Protocol
For this week’s Arbitrum corner we have decided to dive into two interesting protocols:
Estate Protocol
Nerite
But no spoilers, let’s find out what they do and why we’re happy to have them in the Arbitrum Ecosystem.
Estate Protocol
Estate wants to make real estate investments as easy as possible.
It focuses on tokenising real estate and bringing it onchain. This also opens up many new opportunities, such as fractional ownership of a property.
What are the advantages of tokenised real estate?
Real income from rent revenue
No middleman
Transparency from being onchain
In particular, they offer the possibility to benefit from rented apartments on Airbnb, which generate an average yield of about 14% APY, received in monthly USDC payments:
All the available opportunities are listed on their marketplace:
Currently, you can invest in two different apartments located in the US.
By clicking on them, you have access to in-depth information on the investment such as:
General overview
Property Details
All Documents
Buying Process
All in all, the approach is fairly seamless.
Every apartment is purchased and divided into tokens, each of which represents 250 USDC.
Looking to diversify your portfolio?
We might be very close to a whole new range of products that bring traditional finance products onchain, rather than the other way around.
This can only be beneficial for Arbitrum users, and an additional tool to attract institutional appetite.
Nerite
The Nerite protocol just went live on Arbitrum on July 14th!
Nerite’s native token is USND, a Liquity-style (with an exclusive license for Arbitrum) decentralised stablecoin, fully backed by different assets.
Compared to Liquity, Nerite adds additional features to USND:
Can be streamed thanks to Superfluid integration
Live on Arbitrum
Possibility to continue using ARB collateral within governance
Additional security features (e.g. debt limits)
Additional collateral options
In fact, users can mint USND by borrowing against:
ETH
wstETH (Wrapped Lido ETH)
rETH (Rocket Pool ETH)
tBTC (Threshold BTC)
rsETH (Kelp ETH)
weETH (Etherfi ETH)
ARB (Arbitrum)
COMP (Compound)
What are the main features of USND?
Yield bearing: thanks to borrowers’ interest rate, liquidations, and pool incentives
Non-fungible loans: issued as NFTs so they can be sold on the secondary market
Redeemable by $1 worth of collateral
Borrowers can set custom-interest rates
What can you do with USND?
Provide Liquidity on Bunni or Camelot
Get time-based fixed-rate loans on Teller
Rehypothecate USDC from the USDC/USND pool on Bunni for extra yield with Gearbox
Stream using Superfluid for grants, incentive programs, etc.
As the protocol just went live, further integrations are expected soon.
Nerite and USND are important additions to Arbitrum’s Defi ecosystem. The presence of a redeemable and yield-bearing token broadens the yield opportunities offered to users, who currently have limited options.
Food for thought
We’re incredibly excited to see new innovative protocols on Arbitrum.
In particular, it’s refreshing to see them strengthening verticals that have historically received less attention, such as CDPs, different stablecoin architectures and RWA-focused retail protocols.
In the upcoming weeks, we’ll be focusing on more unique protocols.
Stay tuned.
Welcome to Arbitrum August!
🏰 Castle Reads
Our Arbitrum DeFi Ecosystem Analysis, which we wrote together with DL Research, has proven to be valuable and was reposted by the Arbitrum team on X. Go read it:
@insomniac_ac wrote a banger post on what changed in Stablecoin Adoption and Usage between 2024 and 2025:
We recently explored Proof Of Play, a Web3 gaming studio which has been releasing very interesting blockchain games in 2025:
📖 Recommended Reads
Thoughts on the crypto attention economy and the latest InfoFi trend, by @howdymerry:
Understanding liquidity levels in crypto and how they expand, by @246_club:
10 signals to spot good airdrops, by @fipcrypto:
That’s it for today’s issue, we hope you enjoyed it.
You can check out our X for new research reports and weekly gigabrain content.
See you in the next issue,
The Castle Team
In our newsletter, we may discuss projects or tokens in which we hold positions. While we aim to provide informative content, our views are not financial advice. Please conduct your research and consult professionals before making investment decisions. Crypto markets are volatile, and past performance doesn't guarantee future results. Invest responsibly, and be aware of the risks. Your capital is at risk, and we do not accept liability for any losses.