Upcoming Notable Crypto Projects for the Next Cycle (PART 1)

Bitcoin is down more than 50% from its all-time high. Projects are shutting down, trading volumes are falling, and hundreds of millions of dollars are still being lost to hacks. These are some of the defining signs of the current downtrend. Another season has passed, filled with market cycles, memorable moments, and the ups and downs of meme tokens. It was certainly a fun ride, but now may be the time to step back and take a closer look at what is still being built. Despite the broader downtrend, sectors such as RWA perps, perpetual DEXs, and stablecoins continue to show resilience and attract users, liquidity, and development. These trends may offer a glimpse into where the market could be heading next.

In this article, we take a look at some of the notable projects building in these sectors that could shape the next cycle.

Stablecoins are moving deeper into settlement infrastructure

Aggregate stablecoin supply has consolidated near $303B, yet under a base-case projection by Citi, the market is poised to scale to $1.9T by 2030. At this inflection point, annual on-chain settlement velocity is projected to approach $100T, driven by the deepening penetration of fiat-backed primitives into corporate treasury management, cross-border remittances, and institutional clearing corridors.

Consequently, the strategic focus for major issuers has expanded far beyond simple token issuance. Currently, assets like USDC and USDT circulate primarily across public blockchain networks where the core issuers monetize the underlying yield-bearing reserves, while much of the surrounding economic value and transaction fee layer are captured by the hosting protocols.

To mitigate this value leakage, top-tier issuers and fintech institutions are investing directly in proprietary blockchain infrastructure. Moving vertically into the custody, exchange, and settlement layer allows these entities to monetize the entire surface area of the transaction lifecycle. This structural economic incentive explains the acceleration of dedicated institutional networks, particularly as large-scale enterprise transactions necessitate a tighter, friction-free integration between fiat on-ramps, tokenized financial assets, and sovereign custody providers.

Perpetual markets are expanding beyond crypto

On-chain perpetual markets have continued to expand rapidly, with aggregate trading volume increasing 346% YoY from $1.5T in 2024 to $6.7T in 2025, while average monthly volume reached $611.6B in early 2026. At the same time, the range of tradable assets is broadening beyond crypto, giving traders on-chain exposure to FX, commodities, equity indices, and pre-IPO instruments through perpetual contracts.

As this asset universe expands, maintaining consistent liquidity becomes more difficult because crypto-focused DEXs can concentrate market-making depth across a relatively small group of major assets. Under these conditions, horizontal expansion becomes increasingly bottlenecked by the need to bootstrap independent liquidity and market-making capacity for each additional market.

The scale of RWA perpetual activity already reflects this expansion, with trading volume reaching $313B in 2025 before rising to $524.8B in Q1 2026 alone, representing a 17.6x increase from Q1 2025. As the category develops, differences in trading hours, liquidity conditions, volatility profiles, and oracle requirements increasingly favor purpose-built infrastructure tailored specifically to the distinct risk parameters of traditional assets.

Notable projects driving market infrastructure evolution

Arc and Tempo are approaching the stablecoin expansion through the lens of institutional settlement and payment orchestration, while Variational and Ostium are re-engineering decentralized exchange architecture to accommodate the horizontal expansion of perpetual trading into non-crypto primitives.

While their execution models diverge significantly, each serves as a critical case study demonstrating how infrastructural efficiency is being prioritized over retail speculation.

Arc

Arc is an institutional-grade Layer 1 blockchain developed by Circle, establishing a unified execution environment to streamline stablecoin velocity, asset tokenization, and on-chain FX workflows.

In Q2 2026, USDC circulation reached $73.3B alongside $14.8T in quarterly on-chain volume, providing an established asset and liquidity base prior to the launch of Arc as a proprietary settlement network.

The network’s go-to-market strategy relies on deep institutional alignment, anchored by more than 100 ecosystem builders and founding validators including BlackRock, DTCC, Visa, and Mastercard. This distribution network is backed by substantial capital injection, evidenced by a $222M ARC token presale that valued the network at a $3B fully diluted valuation (FDV), drawing commitments from top-tier allocators including a16z crypto, ARK Invest, and Apollo Funds.

Arc shifts Circle’s overarching business model from a single-asset issuer to a vertically integrated settlement layer. The network is architected to unify tokenized securities, foreign exchange, stablecoins, and institutional clearing corridors within a single, compliant execution environment. For institutional allocators, this consolidation mitigates system fragmentation by collapsing custody, transactional execution, and final settlement into a unified ledger infrastructure.

While institutional alliances grant Arc immediate distribution, its long-term viability depends on the velocity of liquidity migration from public L1/L2 networks. Because USDC already operates across established public chains with deep network effects, Arc must offer institutions a superior economic or operational value proposition such as enhanced capital efficiency or native regulatory compliance to justify migrating settlement activity away from legacy Web3 networks.

Tempo

Tempo is a high-throughput, payment-centric blockchain network purpose-built to facilitate high-frequency stablecoin settlement across fintech ecosystems and corporate treasury management frameworks.

To accommodate enterprise-grade demand, Tempo's core architecture prioritizes predictable transaction costs, deterministic latency, and high-sustained throughput. The project’s capital position is fortified by a $500M Series A at a $5B valuation, led by Thrive Capital and Greenoaks, with participation from Sequoia Capital and Ribbit Capital.

The protocol's structural competitive advantage stems from its direct integration into dominant traditional payment networks. To contextualize the scale of this opportunity, Visa’s stablecoin settlement volume has stabilized at an annualized run rate of $7B, while Stripe processed $1.9T in total payment volume (TPV) during 2025, capturing a peak load of 578M transactions within a single four-day window. Migrating even a nominal fraction of these traditional financial rails onto a blockchain infrastructure represents an immediate transaction volume influx that eclipses most active Web3 networks.

When evaluating Tempo, a clear distinction must be maintained between legacy payment volume and actual on-chain conversion velocity. Stripe’s merchant network and global distribution channels are well-established, but Tempo’s ultimate success depends on proving which transaction categories genuinely benefit from blockchain settlement versus traditional card rails, particularly given the regulatory and operational complexities of cross-border capital movement.

Variational

Variational operates as an institutional on-chain derivatives protocol, leveraging a Request-for-Quote (RFQ) liquidity mechanism to deliver deep order-book depth for perpetual swaps across 500+ digital and legacy financial instruments. To scale this infrastructure, Variational secured $61.8M in aggregate funding, featuring a $50M Series A backed by Dragonfly, Coinbase Ventures, and Bain Capital Crypto.

Rather than forcing market makers to commit resting liquidity to independent, illiquid order books for every individual asset, this architecture directly mitigates the capital inefficiencies associated with horizontal asset expansion. Market makers can price exotic instruments using external benchmark markets and dynamically hedge their directional risk on deep off-chain venues, eliminating the need to bootstrap deep, localized liquidity pools for every listed market.

The scalability of this model is validated by its current operational metrics. According to DeFiLlama data, the protocol has generated $209B in cumulative trading volume, recording $27.3B over the trailing 30 days.

Although the RFQ framework effectively resolves liquidity fragmentation across a vast asset universe, it introduces a structural dependence on specialized market makers. Execution quality and competitive spreads are entirely dependent on continuous market-maker participation. Consequently, the network remains exposed to counterparty risk and potential liquidity contraction during periods of extreme volatility, particularly for instruments where the underlying traditional markets are closed or experiencing illiquidity.

Ostium

Ostium is a specialized on-chain derivatives venue dedicated to Real-World Asset (RWA), with non-crypto instruments representing more than 95% of its aggregate open interest. This creates a highly concentrated market composition that distinguishes Ostium from general-purpose perpetual DEXs, where equities, commodities, and FX remain secondary to crypto-native trading pairs.

The protocol’s entire core architecture, including margin maintenance parameters, oracle ingestion systems, and liquidation risk models, is optimized for traditional assets. This programmatic specialization allows Ostium to streamline its liquidity relationships and product design specifically around institutional market participants seeking capital-efficient, on-chain exposure to macro asset classes.

DeFiLlama profiles Ostium as a dominant institutional venue within this niche, capturing $61.4B in cumulative trading volume and generating $20.45M in cumulative protocol revenue. Ostium's market positioning is supported by $23.5M in total funding, centered on a $20M Series A featuring institutional liquidity providers and venture leaders such as General Catalyst, Jump Trading, and Wintermute Ventures.

While specialization establishes Ostium as a dominant player in the RWA perp vertical, it exposes the protocol to exogenous structural constraints inherent to legacy finance. Traditional equities, commodities, and foreign exchange operate on rigid trading schedules and are prone to overnight gaps and external shocks. This operational mismatch makes oracle performance, real-time risk controls, and circuit-breaker mechanisms critical to maintaining solvency during off-market hours or severe macroeconomic stress events.

Conclusion

The projects covered here are approaching the next stage of the market from different angles. Arc and Tempo are building around the growing role of stablecoins in payments and settlement, while Variational and Ostium are expanding perpetual markets into a wider range of assets. What they have in common is a focus on solving infrastructure problems rather than simply adding another product to the market. Arc and Tempo need to turn their institutional and payment connections into real settlement activity. Variational and Ostium need to maintain reliable liquidity and risk management as they expand beyond crypto. That makes adoption, liquidity, and distribution the key things to watch as these projects move toward the next cycle.