This week I’ll be taking a closer look at:

Let’s jump in.

I’ve been following this team for quite a while now. Ever since Samyak Jain walked myself and DeFi Dad through the vision for Fluid DEX V1, I’ve been pretty hooked.

DeFi Dad’s been close with the team for much longer, going back to the early Instadapp days. So there’s a lot of familiarity here, and part of my conviction comes from the people building it.

At the end of the day, I think a lot of investing comes down to betting on people. These are people I’ve been happy to keep betting on.

What originally clicked for me was how they were combining a DEX and lending market to make the capital inside both venues work harder. It was one of the first times I’d heard that idea explained in a way that really made sense to me.

I’m sure someone will tell me another team tried it first, but I had never seen this attempted and thought it was quite novel.

And yes, I’ve been holding since this was still called INST.

So is some of this bag bias? Team bias? Have I held it long enough that I just really want to see these guys win?

Probably a bit of all three, but I haven’t stopped following them and they haven’t stopped building. Things have just taken longer to come to fruition and I’ll explain that as well.

I recently dug up an internal memo I wrote for my old fund in October 2023 about why I was bullish on Instadapp. Looking back, the analysis was a bit on the bullish side (surprise surprise!). The funny thing is I hadn’t even factored the DEX into it at this time:

I’m including this partly to laugh at myself, but also because there’s so much more to Fluid than I was considering back then. Some of the biggest reasons I’ve stayed bullish finally look close to playing out. And in fairness to my bullish past self, it did go from ~$1.25 to $10 in about 1 year after I wrote this memo. So only 5x away from my upper price target 😂

Fast forward to today, and there are several different businesses developing around the underlying Fluid infrastructure. There’s much more happening here now.

Looking through what’s already generating revenue and what’s getting closer to launch, I still think there’s a pretty compelling case for FLUID.

Let me walk through it.

The basic idea behind Fluid is that lending, borrowing and trading can use capital more efficiently when they’re designed together.

Two of its more interesting features are:

There’s more going on underneath, but that’s the part that originally got my attention.

Your collateral has another job. Even your debt can help generate income. Jupiter’s implementation now uses these same concepts through its Smart Vaults.

Fluid found a strong use case in correlated pairs. By that I mean stablecoins trading against other stablecoins, where prices generally move within a relatively narrow range.

As yield bearing stablecoins kept multiplying, Fluid had an interesting product for trading between them.

Volatile pairs proved to be much harder in the V1 implementation.

In its analysis of the ETH/USDC pool, the team explained that sharp price moves triggered rebalancing losses that could outweigh the fees LPs earned. A pool could attract plenty of trading activity while still producing disappointing results for its liquidity providers.

In it’s original form, V1 wasn’t compelling enough for volatile pairs, but V2 looks to improve this.

V2 was announced in April 2025 with a June to July launch target. We’ve blown way past that timeline.

The Resolv incident added a major setback. Fluid reported roughly $21 million in bad debt, with the resolution including $8.2 million from the treasury and $1.5 million from the team, alongside Resolv’s contribution. The team’s portion is to be reimbursed from future protocol revenue.

Between the October 2025 ADL event, Resolv and the wave of hacks and exploits that followed, DeFi went through one of the roughest stretches I can remember.

The team at this point put everything on hold and went back to first principles hardening the protocol and all their internal OpSec. They pushed stronger oracle controls, additional safeguards and continued audits and formal verification. This reaction made total sense to me and was the correct response. There’s literally no point in releasing a massive new implementation of the protocol if the foundation isn’t sturdy.

Fluid and all of DeFi were facing existential threats and it was not a time to bury your head in the sand and continue with the status quo.

They’re now on the frontier of DeFi preparedness IMO:

My high level understanding is that they are throwing a lot of customization at LPs and giving them the power to design effective strategies. Savvy DeFi users will love this, but for those who don’t want to build their own LP strategies, I think we see a wave of LP curators flocking to Fluid with V2 👀

Essentially, DEX V2 gives LPs incredible control and fine tuning over how they provide liquidity, including for volatile pairs.

Some of the main additions are:

Put simply, LPs get more tools to build a position that suits the market they’re trading.

This is a big change from V1 which had a more rigid rebalancing approach. The team specifically identified V2’s flexibility and dynamic fees as part of its response to the volatile pair problem.

This doesn’t mean impermanent loss is solved. LPs can still lose money, and bad strategies can still perform badly. But V2 gives LPs and curators more control over strategy design. Much like on Morpho, I think who you trust to manage that strategy becomes a bigger part of the decision. It also reminds me a bit of what we’re seeing with Metric, but likely more asset flexibility on both the borrow and lend side.

If V2 makes Fluid competitive across a much wider set of pairs, that opens up substantially more trading activity than the correlated markets where V1 found its strongest footing.

As big as the correlated markets got, I’d imagine there’s even more fee potential in volatile pairs. If Fluid can make those markets competitive and worthwhile for LPs, that could open up a much bigger revenue opportunity.

There’s now a concrete governance step toward bringing this online.

IGP-141 passed its vote and, as of October 27, is awaiting execution. It sets initial $50,000 withdrawal and borrowing limits for ETH, USDC, USDT and WBTC on the new DEX V2 and Money Market contracts, ahead of a private beta.

So we’re still talking about a controlled start. I wouldn’t describe this as V2 being fully open and operating at scale yet. My guess is the rollout looks something like what Aave did with V4.

Alongside DEX V2, Fluid is introducing it’s new Money Market. I don’t know a ton about it yet, but it appears like they’ve built cross margin into the protocol.

The easiest way I understand this is that supported collateral, debt and LP positions can sit together in an account with a shared health factor.

Instead of having spare collateral sitting in one isolated position while another position needs support, the system can assess them together.

That could make a meaningful difference for people running more involved borrowing or LP strategies. It also gives other teams more flexibility to build products on top. Here’s Beeshal’s explanation:

There’s a tradeoff, of course. Sharing collateral also connects the risks. If one part of the account takes a major hit, it can affect the rest.

I asked Beeshal what he’d most like to see built on it. Here’s what he said:

I love all this, it sounds really bullish. I’m not going to pretend I’m smart enough to connect all the potential dots, but I get the gut feeling that there’s a lot possible here.

DEX V2 and the Money Market are a big part of why I’m bullish. But there are several other parts of the business worth paying attention to.

Some are already generating revenue. Others are earlier opportunities that still need to prove themselves.

One of the strongest parts of the thesis, IMO, is Jupiter Lend.

Fluid provides the infrastructure, Jupiter brings its distribution, and the partnership has a 50/50 revenue share.

And revenue is starting to trend up:

That gives Fluid a way to reach users who may never visit Fluid’s own app.

Earlier this month, the team reported that Jupiter Lend had crossed $1 billion in active loans, with $2.5 billion in TVL. Its AMM subsequently passed $1 billion in volume, around two months after launch with five active pairs:

Those are big numbers and hard to carve out exactly what that means for value accrual to Fluid, but I love to see it. Jupiter Lend success is now correlated to Fluid success.

It’s essentially proving this expansion model for Fluid and also reminds me a bit of HIP-3 mechanics, but for Fluid. You bring the users, we’ll bring the world class infrastructure.

Fluid doesn’t need to acquire every user itself for the protocol to benefit.

Liquidity as a Service, or LaaS, is another business line I’m watching.

Say you’re launching a stablecoin. Getting it issued is one thing. Making sure people can actually trade it at a decent price is another.

Fluid offers to arrange and manage that DEX liquidity for a flat fee.

The capital comes from a dedicated USDC Lite pool, separate from its main shared Liquidity Layer. The issuer doesn’t have to supply and actively manage the entire LP position itself. Fluid handles that side of things.

The underlying risks still exist. They’re being managed and priced into a service.

Recent announcements include USDG on Arbitrum and USDGO through Jupiter Lend’s AMM.

I think this could become a useful business as more stablecoins and tokenized assets come onchain.

Every issuer wants its asset to be liquid. Most probably don’t want to spend their entire day managing DEX positions.

For FLUID, the thing to watch is how much recurring revenue these arrangements actually produce after the costs and risks of providing the service.

There’s also Fluid’s involvement with Hashi on Sui. When I first heard about this, I honestly thought it was sort of bearish. I personally don’t see the appeal to Sui. However, in talking to some people closer to Sui and what’s happening here, it does seem to make sense.

The way I see it, the Fluid team are making some contrarian bets on ecosystems and building out some bespoke products for these partners.

So what is Hashi?

Hashi is building infrastructure for using Bitcoin as collateral while the BTC remains on Bitcoin. Its announced coalition includes Anchorage Digital, with Fluid participating in the lending and vault infrastructure.

Sui announced more than $500 million in capital commitments across the coalition. Of course commitments and what actually happens are two different things, but it’s definitely interesting.

What especially interests me is the potential distribution.

Fluid could reach borrowers through custody and institutional relationships that would take a long time to build through a DeFi interface alone.

If that turns into a meaningful lending business, it gives Fluid another source of activity and revenue outside its existing markets.

AGI3 is another development worth watching.

The proposed partnership would create permissioned markets powered by Fluid, with a 50/50 revenue split between Fluid and AGI3.

The proposal also describes Kinetic’s ( parent company of AGI3 and a regulated asset manager based in the UAE) intention to acquire up to 10% of FLUID supply through market purchases, OTC deals and other arrangements. Those tokens would come from outside the DAO treasury and team allocation.

That’s potentially interesting from both the business and token sides.

There could be another revenue source for Fluid, alongside a significant buyer of the token. However, I haven’t seen a lot of transparency as to the plans for these major token purchases just yet. I have no ideas if they’ve started already or not.

As with Hashi, I want to see the commercial plans turn into actual customers, activity and revenue. There’s plenty of ambition here, I just hope it all bears fruit.

Before getting too carried away with everything coming, here’s the current starting point.

Token Terminal’s snapshot on October 27 shows:

TVL - $3.7B

Active Loans - $1.6B

Trading Volume (30D) - $3.8B

Revenue (30D) - $628.9K

Using Token Terminal again and looking at the last 365 day revenue for Fluid you get $9.1M. The token currently trades at a $220M FDV so it’s effectively trading at a 24x P/S at the moment. For example, Uniswap is trading at 72x P/S and Aero is at 18x P/S.

I initially thought more of V2 was already priced in. However, FLUID sits between AERO and UNI in this comparison, much closer to AERO. Maybe it’s a touch expensive for what it is today, but I’m extremely bullish on what it could become if these new business lines start firing.

I think FLUID is well positioned if some or all of these new revenue lines prove their worth. The team has described Fluid as fully governed by tokenholders, with no material equity behind the protocol. Revenue flows to the DAO treasury, which FLUID holders control through governance. That’s an important part of the thesis for me. We don’t have the dual token + equity problem here.

Fluid has already shown a willingness to buy back tokens, but the program was paused after Resolv to rebuild the treasury. I haven’t found a confirmed restart date or a clear condition that automatically switches it back on.

Personally, I don’t think we’re there yet anyway. I want to see DEX V2 prove itself in the wild and generate meaningful revenue before pushing for buybacks.

The interesting thing is there are more ways for this to work now. DEX V2 could be a home run. LaaS, Hashi and AGI3 could become meaningful businesses alongside it. We don’t need every one of these to hit for Fluid’s revenue picture to look quite different.

And then there’s Jupiter, which already looks like a great partnership to me. I’m optimistic that one keeps growing and benefiting both sides.

There are a few things I want to see:

If V2 launches and several months later there’s little improvement in usage, LP outcomes or revenue, I’ll have to reassess.

The same goes for all these partnerships. At some point, the announcements need to show up in the numbers.

But I still think there’s a lot here and I’m willing to give this team more time to cook.

Fluid already has lending and trading activity, a working distribution partnership with Jupiter and several additional ways to earn revenue. V2 and the Money Market could give that infrastructure a much wider set of uses.

I’ve been bullish for a long time, and I know wanting a team to succeed can cloud your judgment.

But DEX V2 has been one of the biggest reasons I’ve held FLUID. I haven’t wanted to sell before seeing what the product I’ve been waiting on can actually do.

I still think my patience will be rewarded. After all this waiting, we finally get to find out.

7 day benchmark stablecoin rates from Portals: 3.28%:

Here’s the top yields on stablecoins (real yields) for the past 30 days:

7 day benchmark ETH staking rates from Portals: 2.29%

Here’s the top yields on ETH & BTC (real yields) for the past 30 days:

Here’s a snapshot of the front page of looping this week from yieldz.io (30d APY):

Taking a look at the front page of Stablecoin yields and RWA yields this week on Pendle:

Stablecoins

RWA

Thanks for reading!

DISCLAIMER: Nothing written in The Edge Newsletter or said on The Edge Podcast is a recommendation to buy or sell tokens or securities. This content is for educational and entertainment purposes only. Nothing shared here is financial advice. Any views expressed in our content are solely the opinion of that writer, host, or guest. Always do your own research. DeFi Dad, Nomatic, and guests may have positions in the assets or other matters discussed in this content.