Data & Insights: Airdrop VARiant; Passive Base

Airdrop VAR-iant

• Last Wednesday, Variational made up ~23% of all perp DEX volume, a record high for the platform on the same day it published tokenomics for its upcoming VAR token
  • Variational’s market share for perp DEX volume had doubled in the three days leading up to this.
  • The platform’s September volume so far stands at over $48 billion, its best month to date, already ~60% higher than August.
• We’ve seen this exact playbook twice before, with Hyperliquid spearheading the points-to-airdrop template in 2024, followed by Lighter in 2025/26.
  • The market has seemingly decided Variational is next in line, with the tokenomics announcement adding fuel to the fire.
  • 32% of the VAR supply is set to be allocated for the genesis airdrop, fully unlocked at a Q4 TGE, with 150K points paid out every week until then.
• Much like our analysis on Kalshi perps last week, Variational shows similar signs of high-churn perps activity on its platform.
  • 30-day volume stands at ~$50 billion with ~$1.07 billion of OI, a high 47x turnover implying cycled “quick in and out” positioning, which, in fairness, is expected considering the airdrop points program and incentives.
  • We can expect Variational’s volume and OI metrics to continue to rise over the coming months ahead of its TGE.
  • However, the last two instances, Hyperliquid and Lighter, don’t support its bull case.
  • Lighter, for example, had a 25% market share for volume at its peak farming periods, prior to its TGE in December 2025, before falling drastically post-TGE, and it has stayed at ~10% ever since.
  • The real metric to watch is Variational's share in the first full month after TGE, whether flows stay on the platform or move to airdrop opportunities elsewhere.

Base-ically Passive

• Total value locked (TVL) on Base chain stands at an all-time high of ~$6.28 billion per Sunday, up 52% from the end of June.
  • TVL on the chain added ~$680 million in the past two weeks alone.
• On the surface, it may seem like a comeback moment for Base, but a different story lies underneath.
  • Stablecoin supply, the cleanest reading on fresh capital inflows, grew just ~4.3% in the same time that TVL grew 52%
  • Nearly all of that stablecoin growth came from Ethena’s USDe, which went from just $1 million in early June to ~$393 million.
  • Meanwhile, TVL growth can also be attributed to the price of ETH rallying by over 70% since late June, as Base TVL is stacked with ETH and BTC collateral.
  • On the bright side, outstanding loans on Base hit a record $2.75 billion on September 10th, driven by Morpho, which accounts for ~$3.9 billion of Base’s TVL.
• In terms of the chain’s user metrics, daily active accounts averaged ~320K this month, down 73% from last year.
  • DEX volume averaged ~$875 million per day, down roughly 50% from a year ago.
  • Daily transaction count on the chain has actually fared well over the past year, consistently flat around the ~10 million per day mark.
  • Digesting all this, the optics look bad for Base, as losing three-quarters of its users while transaction counts held flat implies bots have been doing most of the work.

Is DeFi Back?

• DeFi total value locked has been recovering, up nearly 40% from August and now at roughly $160 billion.
  • Growth has been anchored by liquid staking and lending protocols, which suffered the largest drawdowns throughout the year. If you recall, KelpDAO suffered an exploit that spooked users and led them to withdraw from multiple other liquid staking protocols as well.
  • Liquid staking and lending TVL has accounted for roughly 70% of total TVL, while DEX TVL has remained relatively stable at roughly 10%. As volume grows, it generally incentivizes liquidity providers to deploy more capital into DEX pools to capture fees.
• The recovery has been shadowed by ongoing exploits in DeFi as protocols face an increase in attack vectors, some of which are becoming easier to scale with AI.
  • Attackers can use AI to produce more convincing phishing messages, impersonations, and fake interfaces at greater frequency, increasing the odds that users are tricked into signing malicious transactions or handing over sensitive information.
  • The result is that the attack surface is no longer limited to vulnerabilities in smart-contract code. Front ends, social accounts, governance processes, wallets, and individual users can all become points of failure.
• The recovering DeFi TVL is an encouraging sign that despite the year of exploits, participants are still willing to deploy capital onchain. The sustainability of the growth depends on continued incentives and improving security practices.

Decentralized Challengers

• While the stablecoin space has been a two-horse race, there's growing pressure from the margins. One of the challengers has been Ethena, the protocol behind USDe. Since the start of the bull market, Ethena has added around $1 billion in USDe supply.
  • Unlike USDC or USDT, Ethena issues synthetic stablecoins backed by crypto collateral and delta-neutral derivative hedges. This structure allows the protocol to generate yield from derivatives funding.
  • By using a delta-neutral strategy, Ethena can pay a competitive yield, often matching or beating Treasury rates, giving users an incentive that traditional fiat-backed stablecoins generally do not provide directly.
• USDe supply now sits at roughly $5 billion, still far from its all-time peak of nearly $15 billion, when much of the supply was looped through lending protocols.
  • At just 1.7% of stablecoin market share, Ethena still has a long way to go before it can challenge the incumbents at scale. The key question is whether its yield remains attractive and sustainable across different market environments, particularly when funding rates compress or turn negative.
  • Ethena has already expanded beyond crypto assets to tokenized stocks.
• By virtue of paying any yield, Ethena already makes a strong case for itself. As long as Circle and Tether retain yield without passing it to holders, yield-bearing alternatives like USDe have a clear opening.
  • While USDe may not challenge USDC or USDT in the near future, it can carve out market share among users who are willing to accept the structural risk in return for yield on their stablecoins.

Are ETFs Back?

• Spot Bitcoin ETFs have seen inflows of $2.56 billion and turned positive on the year after being down as much as $5.6 billion.
  • Monday the 21st was the largest inflow day this year, with around $1 billion.
• The recent surge in inflows has been accompanied by strong Bitcoin price performance and growth across nearly all tokens. Total market cap is up roughly $700 billion, nearing the 2021 $3 trillion watermark.
  • As prices recover, growing inflows into spot crypto ETFs suggest investors are willing and eager to gain exposure through these regulated vehicles. Bitcoin ETF volume as a percentage of total spot volume has trended up as investors weigh the trade-offs of holding ETFs versus spot.
• Spot crypto ETFs may present some unique challenges this cycle. The crypto space previously used metrics like Google search volume and app store rankings to gauge where we are in a cycle. But with the addition of crypto ETFs, some of this attention is now contained within tradfi investment platforms, and these flows aren’t easily discernible onchain or through app rankings.
  • While ETFs may dampen some of the signal from these metrics, they can still help measure broad sentiment. Our house favorite metric of using Coinbase app store ranking to measure retail participation will likely continue to be relevant for altcoins and measuring peak market euphoria.