LayerZero Launches “Zero” L1 as Citadel and Ark Buy ZRO

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Good Morning.

The White House meeting on stablecoin rewards ended without resolution, and banks are pushing for broad restrictions that go beyond the current bill draft. If stablecoin yield gets heavily restricted, it reshapes how on-chain dollars compete with bank deposits, and that has massive implications for DeFi, tokenized assets, and the future of crypto market structure in the US.

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In Today's Email:

• What Matters: LayerZero Launches “Zero” L1 as Citadel and Ark Buy ZRO 👀 

• Case Study: Stablecoin Yield Talks Stall 🔎 

• Governance & Features: Robinhood Opens Testnet 🚀 

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WHAT MATTERS

LayerZero Launches “Zero” L1 as Citadel and Ark Buy ZRO

State of play: LayerZero is launching its own Layer 1 blockchain called Zero, while securing strategic backing from Citadel Securities and Ark Invest through ZRO token purchases. Ark also took an equity stake in LayerZero Labs.

• Citadel says it will help with market structure expertise, focusing on trading, clearing, and settlement use cases.

• Direct token buys are not typical for Citadel, and the firm has previously pushed the SEC to regulate DeFi protocols.

• LayerZero announced partnerships with Google Cloud and DTCC, framing the pitch around reliable infra for on-chain activity and tokenized traditional assets.

• ICE, the NYSE parent, said it plans to explore how Zero could support 24/7 trading.

Why it matters: LayerZero is moving from “cross chain messaging” to “owning the whole rail” with a new L1, and the Citadel plus Ark involvement makes it feel more like real market plumbing than a typical L1 launch.

Our take: The direction is clear: more institutional, more compliance-friendly infrastructure.

For builders and investors: We should watch how easy Zero is to build on and how permissionless it stays.

CASE STUDY

Stablecoin Yield Talks Stall

A White House meeting between major crypto firms and big banks ended without a resolution on stablecoin rewards, keeping a key market structure bill issue stuck.

• Banks reportedly came in with “prohibition principles” that go beyond the latest draft, pushing for a wide ban on any benefits tied to stablecoins.

• Banks also want strict enforcement, anti evasion rules, and tight marketing limits.

• Crypto attendees pushed back hard, arguing the bank stance is overly restrictive and would choke innovation.

• Ripple and Coinbase framed the session as productive, with next steps likely shifting back to trade groups and the Senate Banking Committee.

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INSIGHTS

Hyperliquid Metals Perps Spike

State of play: Hyperliquid’s HIP-3 just had a breakout moment in non crypto perps.
On Feb 5, permissionless markets did $5.2B in daily volume, a new record.
Most of it was traders riding silver and gold volatility, via one dominant deployer.

• Record $5.2B daily volume on Feb 5, the highest since the Oct 2025 launch.

• TradeXYZ captured nearly 90% of HIP-3 volume across metals, indices, and stocks.

• Silver perps alone did $4.09B, about 68% of the day’s activity.

• Open interest peaked at $1.06B before the metals crash, now about $665M, up 88% month over month.

• Gold and silver volume briefly reached about 1% of COMEX, pushing Hyperliquid toward a “full asset” trading narrative.

FEATURES & GOVERNANCE UPDATE

Robinhood Opens Testnet for Arbitrum Based Chain

Robinhood just dropped a public testnet for its own chain. It’s an Ethereum L2 built on Arbitrum, and it’s basically their bet that tokenized stocks and RWAs are the next big product surface.

• Testnet is live now, main goal is to shake out bugs before a mainnet launch.

• Built on Arbitrum, with Offchain Labs backing the story and the infra.

• Devs can mess around with testnet Stock Tokens and plug straight into Robinhood Wallet for testing.

• This fits with their EU tokenized stocks launch in June 2025, those tokens already run on Arbitrum One.

• Crypto trading revenue is cooling off, so launching a chain feels like “own the rails” and expand the business, not just ship another feature.

Other notable feature updates:

• Lighter unveiled Lighter EVM.

• Lido Finance launched Lido V3.

• Superform launched its mobile app.

• Jupiter launches Airdrop Season Rewards.

• Pendle Finance is launching sPENDLE buybacks.

• MegaETH announces the deployment of Bungee Exchange.

• Aave DAO votes to shut down three L2 deployments (zkSync, Metis, Soneium).

QUICK BITES

• Tether makes 'strategic investment' into LayerZero Labs.

• Hyperliquid’s permissionless perps hit $5B daily volume.

• White House session on stablecoin rewards ends in impasse.

• Citadel and Ark Invest back LayerZero as it launches blockchain.

• Robinhood launches public testnet for blockchain built on Arbitrum.

• European Union considering a ban on crypto transactions with Russia.

• South Korea launches probe into Bithumb over $43B fat-finger incident.

• Robinhood shares fall after earnings as crypto revenue slides 38% in Q4.

• Franklin Templeton and Binance launch tokenized fund collateral program.

NOTEWORTHY READS & MEME

• Knower’s read on The problem with crypto isn't crypto.

• Eric’s read on How To Off Ramp Crypto Without Paying Taxes.

• Predictefy’s read on The Kalshi Insider Who Was Caught and Punished.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.