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Hyperliquid introduces proposal to cut fees

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Welcome to Protocol, Coindesk’s weekly roundup of the most important cryptocurrency tech development stories. I’m Margaux Nijkerk, a reporter at Coindesk.

In this issue:

Hyperliquid opens
Top base dex aerodrome combined with aero in major overhaul
Cloudflare Outage Sends Shockwaves Through Crypto, Renewing Push For Depin
DYDX management approved the purchase increase to 75% of protocol revenue

Network News

Hyperliquid introduces the hip-3 proposal: On-chain decentralized exchange Hyperliquid has introduced a feature that allows anyone permission to deploy new markets at ultra-low fees in a bid to boost liquidity to signal new market makers. The upgrade, called Hip-3 Growth Mode, slows all taker fees by more than 90% for newly launched markets, and can be activated on a per-asset basis by deployers, with no permissions and no centralized gatekeeping. Under the upgrade, all taker fees drop from the standard 0.045% to less than 0.0045%-0.009%. At the top tiers of staking and volume, fees can shrink even more, reaching a shoestring 0.00144%-0.00288%, according to an official post. The upgrade essentially lowers barriers to entry and trading costs with the aim of deepening liquidity and expanding hyperliquid property offerings, strengthening its position as a competitor in centralized avenues. Taker fees are charges collected from traders who remove liquidity from the market by executing orders that immediately match existing orders in the order book. To qualify, deployers must set their scale scale—the portion of user trading fees they keep before any discounts, such as those from aligned stablecoin collateral—between 0 and 1. In addition, the growth mode markets must avoid overlap with any existing validator-operated continuous avoidance, which prevents “parasitic” volume, and must have unique properties. Examples that are not included are crypto Perpetuals, crypto indexes, ETFs and assets that closely track existing markets such as PAXG-USDC Gold Perp. The growth mode, once turned on for an asset, lOcks for 30 days before changes are made, ensuring market stability. The announcement caused an uproar on crypto social media, with users calling the growth mode “insanely bullish.” – Omkar Godbole Read more.

Aerodrome to pursue major overhaul: Dromos Labs, the main developer behind the decentralized exchange (DEX) aerodrome in base and velodrome in optimism, announced a major overhaul of its decentralized exchange infrastructure with the launch of Aero, a unified trading system that will replace and integrate existing platforms across networks, as well as expand to other Ethereum chains. Aerodrome is the leading exchange on the base by volume and fees, and with Aero’s expansion to the Ethereum mainnet in the second quarter of 2026, as well as Circle’s arc, Dromos Labs aims to position the platform as a central liquidity hub for the wider ecosystem. Aero, which is set to bring faster and cheaper payments to the onchain, will focus on the base as its central hub, while expanding liquidity and trading capabilities to other chains. “As it came to the online world, it is coming now. – Margaux Nijkerk Read more.

Cloudflare outage renews push for decentralization: Cloudflare experienced a major outage which cascaded into widespread service disruptions across thousands of websites and applications. Many large centralized crypto services rely on Cloudflare to handle heavy traffic. Bitmex is facing an influx and there is also significant downtime for Telegram related blockchain toncoin. But the influx has spread beyond crypto, with platforms like X and Chatgpt also going down, affecting millions of people. The The episode comes a few weeks after Amazon Web Services (AWS) has had a surge in access to major blockchains such as Coinbase’s base chain as well as the infura that powers many blockchains. The outage reignited the conversation around the need to decentralize the infrastructure to keep the internet running. Some in the crypto world have called for Depin to be more widely adopted to combat such issues. Depin, o Decentralized physical infrastructure networksuses blockchain incentives to coordinate and reward people for building and maintaining real-world infrastructure. It can be anything from wireless networks to sensors to energy systems; The goal is not to rely on a middle company. Users thereby contribute hardware or services and earn tokens in return, creating an open, community-driven infrastructure layer. – Margaux Nijkerk Read more.

DYDX management approved the purchase increase: The DYDX community has voted in favor of an updated buy-back program in its management forum. Under the previous management, 25 % of the net protocol revenue was allocated to repurchase DYDX on the open market and then the tokens pulsed. The new one Proposition #313which is 59.38% of the community approved, chart a course to raise the back-back purchase to 75% of net protocol fees. This marks a shift in how the protocol’s revenue is distributed and indicates the community’s desire to tie token-economic incentives more directly to platform performance. In addition to the 75%, the protocol’s revenue sharing will include 5% going to Treasury Subdao, and 5% to Megavault. Dydx had Launched A buy-back program in March 2025 and token issuances are set to decline in June. The increase in allocation is therefore part of a wider refinement of tokenomics aimed at restricting circulating supply and improving network security. – Margaux Nijkerk Read more.

In other news

BlackRock’s Bitcoin ETF spot, IBIT, recorded its biggest one-day inflow since trading began in January 2024 in a month marked by Record November flowsaccording to Farside data. The ETF gave up $523.2 million in net withdrawals on Tuesday, even as its price rose more than 1% as Bitcoin is advanced above $93,000. Franklin Templeton’s ETF, EZBC, and Bitcoin Mini Trust, BTC, brought in $10.8 million and $139.6 million in inflows, respectively. However, in total the exchange-traded funds saw a net outflow of $372.8 million in a fifth straight trading day of net redemptions. November produced just three days of net inflows and Bitcoin is trading near $90,000, down nearly 30% from its October high. Total net inflows since launch today stand at $58.2 billion. – James Van Straten Read more.
Crypto exchange Kraken has raised $800 million in fresh funding, including $200 in an investment from Citadel Securities, to accelerate efforts to bring traditional financial markets to Blockchain Infrastructure, the Company said. The round was split into two arms, with the main one led by institutional investors including Jane Street, DRW Venture Capital, HSG, Oppenheimer Alternative Investment Management and Tribe Capital. A follow-on $200 million investment came from manufacturing giant Citadel Securities, valuing Kraken at $20 billion. Kraken, founded in 2011, operates a regulated trading platform that offers market places and derivatives, tokenized assets, staking, and payment services. Its infrastructure is vertically integrated – covering custody, clearing, matching, settlement and wallet services – allowing the company to roll out new financial products while maintaining compliance standards. – Helen Braun Read more.

Regulation and Policy

US senators are closely negotiating the language to set up regulated market markets, and while they debate the details, Senator Elizabeth Warren seeks to continue lighting President Donald Trump’s personal tie. The Massachusetts lawmaker, who is the ranking Democrat on the Senate Banking Committee, and a frequent ally, Senator Jack Reed, Sent a letter to Treasury Secretary Scott Bessent and Attorney General Pam Bondi Requests information on reports Trump sold related to World Liberty Financial Inc. the tokens to “North Korea, Russia and other proscribed actors.” Warren and several other Democrats in both the Senate and House of Representatives have targeted the president’s business connections to WLFI, which they say cause a significant conflict of interest As his administration seeks crypto-friendly policies that will directly benefit Trump’s financial interests. – Jesse Hamilton Read more.
The Canadian government has managed to pass the federal budget in parliament that wants – among many other things – to institute a StableCoin policy. Parliament narrowly passed Prime Minister Mark Carney’s first budget earlier this week. Deep in the lengthy document is a section that will govern the issuance of StableCoins, overseen by the Bank of Canada. Other procedural hurdles remain for specific budget provisions, but this marks a major win for the new government. In an echo of many of the points from the recent United States law regulating dollar-backed issuers, Canadian issuers must maintain one-to-one reserves “consisting exclusively of the reference currency or other high-quality liquid assets,” allow immediate redemption and meet a suite of risk management, cybersecurity, disclosure and management requirements in times of failure. The Bank of Canada will oversee and maintain a registry of approved applicants. – Jesse Hamilton Read more.