📚 0xResearch’s reading recs

Price discovery onchain

Charlie from Felix published a piece on onchain price discovery arguing that legacy markets are structurally inefficient because they’re open only a fraction of the week, forcing information to accumulate off-hours and then reprice via gaps, volatility spikes and thin after-hours liquidity that disproportionately harms retail traders. The piece points to evidence that much of the equity premium is earned “overnight,” that extended-hours trading is low-volume with wider spreads, and that geographic and private market fragmentation further worsens price discovery. The author proposes bringing markets onchain, enabling continuous 24/7 trading with near-instant settlement and transparent ownership. He highlights emerging equity perps venues built on Hyperliquid infrastructure as a concrete path to always-on global price discovery.

The future of financial infrastructure: Ethereum’s L2 landscape

Etheralize, Nethermind and L2Beat published a report on the Ethereum L2 landscape. The piece argues that L2s are where scalability and customization converge for high-volume finance. The report lays out the institutional pitch for L2s, highlighting control over execution, privacy and confidentiality (e.g., zk-based selective disclosure), compliance-ready design and order-of-magnitude cost reductions. The report also explains the L2 design space (optimistic vs. zk rollups, data-availability tradeoffs). It concludes with a practical framework for choosing between public and private L2 deployments, illustrated with case studies from JPMorgan, Visa and Société Générale.

The case for Avici

Zuccy published an investment report on Avici, a Solana-based neobank. The author argues Avici can differentiate its neobank offering by pairing crypto-funded cards and virtual USD/EUR accounts with planned zk-based trust scores that enable unsecured loans and mortgages backed by onchain capital. The piece highlights early traction, including 8,290 MAUs, 5,700 activated cards, and roughly $600K in monthly spend volumes. Despite limited public data, the author outlines Avici’s current revenue model (card sales, interchange and on/off-ramp fees), noting that the protocol generated about $30K in revenue in October. The report discusses the AVICI token sale on MetaDAO (no team allocation, ~$2.6M treasury), maps the competitive landscape and highlights lending and the monetization of the trust-score SDK as key catalysts. The conclusion is that Avici may be undervalued relative to larger crypto “neobank” tokens, but it needs clearer token value accrual and sustained KPI growth to justify a re-rating.

Understanding stablecoins

The IMF published a paper outlining the rapid growth of stablecoins. The paper notes that the market cap of stablecoins has doubled over the past two years, largely driven by crypto trading. However, it argues that future demand could expand into payments and broader asset tokenization if adequate legal and regulatory frameworks develop. It highlights potential upsides (more efficient, competitive payments via tokenization) but emphasizes substantial risks to macro-financial stability, operations, financial integrity and legal certainty. Such risks include currency substitution and higher capital-flow volatility, especially in high-inflation countries or those with weaker institutions. The paper reviews an evolving but still fragmented regulatory landscape, noting IMF/FSB policy recommendations and stressing that stablecoins’ global nature makes international coordination essential as they integrate further into the financial system.

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