OVERVIEW

Shorts Got Liquidated, Alts Are Pumping, and I Smiled This Morning 🥳

Before we dive in, here’s today’s crypto market heatmap:

And here’s a look at crypto’s total market and altcoin market cap charts:

TECHNICAL ANALYSIS
So… AI Crypto Tickers Have Been Booming 🤯

In case you missed it - the most beaten down category in crypto has been doing very well over the last 2ish weeks. 👀

Fetch.ai

Could just be a dead cat bounce, but +40% last week and currently +25% this week? Not too shabby for $FET ( ▲ 22.93% )  .

Bittensor

Last week (+55.95%) was $TAO ( ▼ 1.95% ) ’s best week in over two years. The week of November 13, 2023 was last time it was this good. Follow through over the first two days of this week not as good at FET’s above, but let’s see what happens.

NEAR Protocol

$NEAR ( ▲ 9.13% ) maybe doesn’t seem like its in the AI category of crypto, but it definitely is. And while it didn’t have the big boom that FET and TAO did, it’s had three straight weeks of closing in the green and up +60% from the February 2026 lows.

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CARDANO
The Airdrop Was Yours Until Someone Voted That It Wasn't 😠

Cardano’s largest lending platform, $LQ ( ▲ 19.49% ), has a problem. It is a problem dressed up as governance, which is the most dangerous kind. ⚠️

When the $NIGHT ( ▲ 2.82% ) Glacier Drop snapshot hit on June 11, 2025, ADA deposited in Liqwid's lending pools was included. That $ADA ( ▲ 8.51% ) belonged to suppliers - people who parked their coins in the protocol to earn yield.

Liqwid Labs, acting as the DAO's technical operator, claimed roughly 18.8 million NIGHT tokens on behalf of the protocol. The team had previously confirmed - publicly, in writing, months before the snapshot - that 100% of those tokens would flow through to ADA suppliers pro rata.

Then the first thaw date arrived in early March 2026 and instead of distributing, Liqwid co-founder Dewayne Cameron posted a temperature check on the governance forum and vote over what to do with the NIGHT.

But ADA hodlers couldn’t vote, only LQ hodlers. Of which the top 5 LQ hodlers control 44%+ of the vote. So when the vote when in favor of the Liqwid DAO, people got pissed off.

So pissed that even Charles Hoskinson took to X to basically say, ‘maybe those who have a controlling interest in getting a bunch of stuffs should recuse themselves from the vote’.

And when daddy says you did something wrong, you better fix it. And so, earlier this afternoon, Liqwid comes out with a new vote.

The Walk Back

A new proposal simplifies the vote to two options: 100% to ADA suppliers, or "some other distribution" to be hashed out later. The core team says it will sit this one out with its vested LQ tokens.

But buried in the new proposal is a reframing of the timeline. The team now argues the snapshot predated the August 5 marketing commitment by nearly two months - so suppliers cannot claim they left ADA in the protocol based on promises that had not been made yet.

Still, this brings up some issues that are not singular to Liqwid Finance - this is an issue on other lending platforms, too: When the people who hold concentrated voting power and the people whose capital generated the airdrop are two entirely separate groups - and only one group gets a say - you do not have decentralized governance.

Whether this re-vote is accountability or damage control depends on how cynical you are feeling. 🤷

DEFI
So, About That $50M Swap… 🤔 

This an update to last Friday’s Cryptotwits newsletter, specifically the $50M swap that went bad (or as intended if it was a laundering scheme).

Both $AAVE ( ▲ 6.33% ) and $COW ( ▲ 7.27% ) DAO published post mortems on the March 12 incident where a user swapped $50.4 million in USDT for roughly $36,000 worth of AAVE. 📁

What Happened

A user on mobile submitted a fill-or-kill order for $50M of aUSDT into one of the thinnest liquidity pools in DeFi. The routing pulled USDT through UniswapV3's USDT/WETH pool into SushiSwap's AAVE/WETH pool, then deposited the output as aAAVE. The user received 327 aAAVE worth around $36K. Backrunners (MEV bots) in the same block recovered most of the remaining value.

CoW DAO's Account

CoW DAO identified a chain of compounding failures: a hardcoded 12M gas unit ceiling in their quote verification system rejected better-priced solver routes; the solver that won two consecutive auctions with a superior route never landed either transaction onchain, then abandoned the order entirely; and evidence suggests the winning transaction leaked from a private mempool to the public.

One fix is already deployed. The solver execution failure and mempool leak remain under investigation.

Aave's Account

Aave's framing centers on user confirmation: the user saw a "High price impact (99.9%)" warning, checked a box acknowledging "potential 100% value loss," and proceeded on mobile.

Aave draws a clean line between the swap widget (a third-party front-end integration) and the Aave Protocol itself, which was never at risk. They also disclosed collecting $110,368 in swap fees on the trade and said they'll return it if the user contacts them.

Where They Agree and Diverge

Both entities agree the user manually confirmed the warnings, that permissionless execution has legitimate emergency use cases, and that confirmation dialogs alone are inadequate guardrails at this scale of loss.

Where they split: CoW DAO takes broader ownership of the infrastructure failures that turned a bad situation into a catastrophic one. Aave leans heavier on user confirmation as the definitive moment and doesn't address the mempool leak at all.

Aave is deploying "Aave Shield," blocking swaps above 25% price impact by default and requiring users to manually disable it in settings. CoW DAO is addressing solver accountability and investigating the mempool leak. Neither has complete answers yet.

I’ll keep you updated as this continues to develop. 👍️

NEWS IN THREE SENTENCES
AI, Stablecoins, & Privacy News 🕵️

🏔️ Wyoming Issued the First State-Backed Stablecoin in U.S. History and It Actually Works

Win for HBAR: FRNT is a fully-reserved, dollar-backed stablecoin issued by the Wyoming Stable Token Commission - the first fiat-backed stable token from any public entity in the United States, live on Hedera with Fireblocks handling custody and LayerZero handling cross-chain transfers. Wyoming has done more for crypto infrastructure than the entire federal government for three years running. Hedera.

💵 Cardano Got USDC and the Ecosystem Didn't Wait for Permission to Put It to Work

Circle's USDCx launched on Cardano and within seven days 15M tokens were minted, a $6.67M pool was live on Minswap, and 3M was already deposited into Liqwid lending markets - no liquidity mining campaign required. USDCx now represents 37% of Cardano's stablecoin liquidity and DeFi TVL jumped from $127M to $142M in the same window. Cardano.

⏱️ Curve Fixed the Part Where Moving crvUSD Off an L2 Took Longer Than Filing a Tax Extension

FastBridge cuts crvUSD's seven-day L2 withdrawal window to roughly 15 minutes - a LayerZero message confirms a bridge transaction is in flight, an Ethereum-side vault releases pre-minted crvUSD immediately, and the canonical bridge settles in the background a week later like it was always going to. The real beneficiary is arbitrageurs who can now correct crvUSD price dislocations before the opportunity closes, tightening the peg automatically. Curve Finance.

NEWS IN THREE SENTENCES
Real World Asset Tokenization (RWA) News 🪙

💳 Private Credit Is the Second-Largest RWA Category Onchain and the Name Tells You Almost Nothing About What You're Buying

Private credit is direct lending from non-bank lenders to businesses - yield exists because borrowers pay a premium for flexible capital, and the income is contractual rather than dependent on a stock going up. Tokenizing it doesn't change the loan agreements - it removes the relationship-based gatekeeping that kept the asset class inside private equity networks. Plume Network.

NEWS IN THREE SENTENCES
Metaverse, NFT, & Gaming News 🎮️

🚀 CCP Games Moved Its Space Game to Sui and Will Pay $80K for Builders Who Want to Deploy Code Into a Live Universe

EVE Frontier migrated from Ethereum to Sui Testnet, opening Smart Assemblies - programmable in-game structures like turrets and stargates - to third-party developers for the first time, meaning your code deploys into the actual live universe where real players encounter it. The Sui Hackathon runs March 11-31 with $80K in prizes. zkLogin lets players sign in with email instead of a seed phrase, which is the single biggest indicator of whether anyone outside crypto will actually play it. Sui.

NEWS IN THREE SENTENCES
DeFi, DEX, & Lending News 🏦

📦 VeChain Cut Token Inflation in Half and Nearly Doubled Active Stakers - the Rare Upgrade That Does What It Promised

Three months after the Hayabusa hard fork, VeChain's StarGate platform cut VTHO emission by 50.2% by tying generation to actively delegated stake rather than rewarding wallets for existing. Active stakers nearly doubled in 13 weeks, 16,204 new NFTs minted across three new entry-level tiers, and delegated NFTs went from 1-in-2 to 4-in-5. There's still 1.6B VET sitting undelegated and earning nothing. VeChain.

🏦 DTCC Settled Repo Agreements in Five Seconds on a Blockchain and Found Out the Data Layer Was Half the Problem

DTCC's "Great Collateral Experiment" moved repo agreements onto blockchain rails and hit near-instant settlement, with The Graph's subgraphs handling real-time collateral queries fast enough to actually act on. The buried finding: the ledger and the data layer are equally load-bearing, and pilots that treat one as an afterthought tend to discover that in production. T+5 seconds instead of T+2 days also makes systemic risk detectable before it cascades to people who had no idea they were exposed. The Graph.

STOCKTWITS
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Author Disclosure: The author of this newsletter holds positions in AVAX, ADA, PUDGY, WLC, IMX, XTZ, NEAR, HBAR, ALGO, INJ, LTC, LINK, ZEC, XLM, and FET. 📋