Welcome to The Protocol, CoinDesk’s weekly wrap of an important tales in cryptocurrency tech growth. I’m Margaux Nijkerk, a reporter at CoinDesk.

On this subject:

• Hyperliquid Unveils HIP-3 Development Mode, Slashing Charges by 90% to Enhance New Markets
• Main Base DEX Aerodrome Merges Into Aero in Main Overhaul
• Cloudflare Outage Sends Shockwaves By Crypto, Renewing Push for DePIN
• DYdX Governance Approves Buyback Enhance to 75% of Protocol Income

Community Information

HYPERLIQUID INTRODUCES HIP-3 PROPOSAL: On-chain decentralized change Hyperliquid launched a function that lets anybody permissionlessly deploy new markets at ultra-low charges in a bid to spice up liquidity to incentivize new market makers. The improve, referred to as HIP-3 progress mode, slashes all-in taker charges by over 90% for newly launched markets, and might be activated on a per-asset foundation by deployers, permissionlessly and with out centralized gatekeeping. Beneath the improve, all-in taker charges plummet from the same old 0.045% to as little as 0.0045%-0.009%. At high staking and quantity tiers, charges can shrink even additional, reaching a shoestring 0.00144%-0.00288%, in accordance with an official publish. The improve basically lowers obstacles to entry and buying and selling prices with an goal to deepen liquidity and broaden asset choices on Hyperliquid, strengthening its place as a competitor to centralized avenues.Taker charges are fees collected from merchants who take away liquidity from the market by executing orders that instantly match present orders on the order e book. To qualify, deployers should set their charge scale – the portion of consumer buying and selling charges they maintain earlier than any reductions, comparable to these from aligned stablecoin collateral – between 0 and 1. As well as, progress mode markets should keep away from overlap with any present validator-operated perpetuals, stopping “parasitic” quantity, and should be distinct property. Examples excluded are crypto perpetuals, crypto indexes, ETFs and property intently monitoring present markets just like the PAXG-USDC gold perp. The expansion mode, as soon as switched on for an asset, locks for 30 days earlier than adjustments might be made, making certain market stability. The announcement has spurred pleasure on crypto social media, with customers calling the expansion mode “insanely bullish.” — Omkar Godbole Learn extra.

AERODROME TO PURSUE MAJOR OVERHAUL: Dromos Labs, the core developer behind decentralized exchanges (DEX) Aerodrome on Base and Velodrome on Optimism, introduced a serious overhaul of its decentralized change infrastructure with the launch of Aero, a unified buying and selling system that can exchange and merge its present platforms throughout each networks, in addition to broaden to different Ethereum chains. Aerodrome is the main change on Base by quantity and costs, and with Aero’s growth to the Ethereum mainnet within the second quarter of 2026, in addition to Circle’s Arc, Dromos Labs goals to place the platform as a central liquidity hub for the broader ecosystem. Aero, which is about to deliver sooner and cheaper charges onchain, will deal with Base as its central hub, whereas extending liquidity and buying and selling capabilities to different chains. “Simply because the world got here on-line, it’s now coming onchain. Aero is on the vanguard of a monetary system higher, sooner, and cheaper than the incumbent,” stated Alexander Cutler, the CEO of Dromos Labs. — Margaux Nijkerk Learn extra.

CLOUDFLARE OUTAGE RENEWS DECENTRALIZATION PUSH: Cloudflare skilled a serious outage that cascaded into widespread service disruptions throughout hundreds of internet sites and functions. A number of massive centralized crypto providers depend on Cloudflare to assist with heavy visitors. BitMEX confronted an outage and there was additionally important downtime for Telegram-linked blockchain Toncoin. However the outage unfold past crypto, with platforms like X and ChatGPT additionally taking place, affecting hundreds of thousands of individuals. The episode got here simply weeks after Amazon Internet Providers (AWS) had an outage that took down entry to main blockchains like Coinbase’s Base chain in addition to Infura which powers loads of blockchains. The outage reignited the dialog round needing to decentralize infrastructure to maintain the web working. Some within the crypto world have referred to as for DePIN to be extra broadly adopted to fight such points. DePIN, or Decentralized Bodily Infrastructure Networks, makes use of blockchain incentives to coordinate and reward folks for constructing and sustaining real-world infrastructure. This may be something from wi-fi networks to sensors to power programs; the aim is to not depend on a central firm. Customers thus contribute {hardware} or providers and earn tokens in return, creating an open, community-run infrastructure layer. — Margaux Nijkerk Learn extra.

DYDX GOVERNANCE APPROVES BUYBACK INCREASE: The dYdX group voted in favor of an up to date buy-back program on its governance discussion board. Beneath earlier governance, 25 % of internet protocol income was allotted to repurchasing DYDX on the open market after which staking the tokens. The brand new proposal #313, which 59.38% of the group accredited, charts a course to boost the buy-back allocation to 75% of internet protocol charges. This marks a shift in how protocol income is distributed and signifies the group’s intention to tie token-economic incentives extra on to platform efficiency. Along with the 75%, protocol income sharing will embrace 5% going to Treasury SubDAO, and 5% to the MegaVault. DYdX had already launched a buy-back program in March 2025 and token emissions had been scheduled to say no in June. The elevated allocation is subsequently a part of a broader tokenomics refinement aimed toward tightening circulating provide and enhancing community safety. – Margaux Nijkerk Learn extra.

In Different Information

• BlackRock’s spot bitcoin ETF, IBIT, recorded its largest one-day outflow because the begin of buying and selling in January 2024 throughout a month already marked by file November outflows, in accordance with Farside information. The ETF notched $523.2 million in internet withdrawals on Tuesday, despite the fact that its worth rose greater than 1% as bitcoin superior above $93,000. Franklin Templeton’s ETF, EZBC, and Grayscale’s Bitcoin Mini Belief, BTC, introduced in $10.8 million and $139.6 million in inflows, respectively. Nonetheless, in complete the change traded funds noticed a internet outflow of $372.8 million in a fifth straight buying and selling day of internet redemptions. November has produced solely three days of internet inflows and bitcoin is buying and selling close to $90,000, down roughly 30% from its October all time excessive. Complete internet inflows since launch now stand at $58.2 billion. — James Van Straten Learn extra.
• Crypto change Kraken raised $800 million in recent funding, together with $200 in an funding from Citadel Securities, to speed up its efforts to deliver conventional monetary markets onto blockchain infrastructure, the corporate stated. The spherical was break up throughout two tranches, with the primary one led by institutional traders together with Jane Avenue, DRW Enterprise Capital, HSG, Oppenheimer Various Funding Administration and Tribe Capital. A follow-on $200 million funding got here from market-making big Citadel Securities, valuing Kraken at $20 billion. Kraken, based in 2011, operates a regulated buying and selling platform providing spot and derivatives markets, tokenized property, staking, and cost providers. Its infrastructure is vertically built-in — protecting custody, clearing, matching, settlement and pockets providers — which permits the corporate to roll out new monetary merchandise shortly whereas sustaining compliance requirements. — Helene Braun Learn extra.

Regulatory and Coverage

• U.S. senators are in shut negotiations on the language to arrange regulated crypto markets, and whereas they debate the small print, Senator Elizabeth Warren is looking for to proceed illuminating President Donald Trump’s private crypto ties. The Massachusetts lawmaker, who’s the rating Democrat on the Senate Banking Committee, and a frequent ally, Senator Jack Reed, despatched a letter to Treasury Secretary Scott Bessent and Legal professional Common Pam Bondi requesting data on studies that Trump-linked World Liberty Monetary Inc. bought tokens to “North Korea, Russia and different illicit actors.” Warren and another Democrats in each the Senate and Home of Representatives have focused the president’s enterprise connections with WLFI, saying they pose a big battle of curiosity as his administration seeks crypto-friendly insurance policies that can straight profit Trump’s monetary pursuits. — Jesse Hamilton Learn extra.
• Canada’s authorities managed to cross its federal finances in parliament that will — amongst many different issues — institute a stablecoin coverage. Parliament narrowly handed Prime Minister Mark Carney’s first finances earlier this week. Deep within the prolonged doc is a bit that will govern the issuance of stablecoins, overseen by the Financial institution of Canada. There stay different procedural hurdles for the finances’s particular provisions, however this marked a serious win for the brand new authorities. In an echo of most of the factors from the current U.S. regulation regulating issuers of U.S. dollar-backed stablecoins, issuers in Canada should keep one-to-one reserves “composed solely of the reference foreign money or different high-quality liquid property,” permit speedy redemptions and meet a set of necessities on danger administration, cybersecurity, disclosures and administration in instances of failure. The Financial institution of Canada will supervise and keep the registry of accredited candidates. — Jesse Hamilton Learn extra.

Calendar

• Nov. 17-22: Devconnect, Buenos Aires
• Dec. 11-13: Solana Breakpoint, Abu Dhabi
• Feb. 10-12, 2026: Consensus, Hong Kong
• Feb. 17-21, 2026: EthDenver, Denver
• Mar. 30-Apr. 2, 2026: EthCC, Cannes
• Apr.15-16, 2026: Paris Blockchain Week, Paris
• Might 5-7, 2026: Consensus, Miami