Crypto Assets Management – Mereau Finance
Company registered as a DASP with the AMF under the number E2023-084
Trade and Companies Register of Nanterre: 894 424 902
Address: 35 rue Jean Jaurès, 92800 Puteaux
Date: April 29, 2025
DISCRETIONARY PORTFOLIO MANAGEMENT
OUR VISION
We are committed to supporting you on a personal level in your long-term digital asset investment. In this volatile and risky asset class, a calm and sustainable approach is essential.
«Digital assets are to the transfer and storage of value what the Internet was to the transfer and storage of information.»
OUR STRATEGY IS BASED ON TWO PILLARS
OUR INVESTMENT PHILOSOPHY
Our investment approach is based on identifying highly efficient projects with strong fundamentals. We meticulously analyze their tokenomics to spot potential market anomalies. Our selection focuses on top 200 projects by market capitalization, with a medium-to-long-term vision, covering various sectors of the crypto ecosystem.
Our thesis today is based on the following idea: Aave is currently the beating heart of DeFi. And as this finance structures itself, connects to the real world, and attracts institutional flows, Aave is ideally positioned to capture this value, placing the AAVE token at the center of this dynamic.
Fluid (FLUID) – Research Report
An already well-established project: Instadapp, a DeFi pioneer
Founded by the Instadapp team, Fluid is the continuation of a project already well established and recognized in the DeFi ecosystem. Since 2018, Instadapp has established itself as a key player, providing aggregation and optimization solutions that have allowed thousands of users to navigate more easily between major protocols like Aave, Compound, MakerDAO, Curve, or Uniswap.
Behind Instadapp are brothers Sowmay and Samyak Jain, two iconic figures in the crypto ecosystem who left their studies to dedicate themselves entirely to building tools that simplify access to DeFi. Their visionary approach quickly attracted support from prestigious investors, notably Pantera Capital, Naval Ravikant, and Balaji Srinivasan, with a $2.4 million fundraising round as early as 2019.
With over $7 billion in value having passed through its platform since its launch, Instadapp has established itself as one of the most powerful and flexible interfaces in the DeFi ecosystem. Its DeFi Smart Accounts system has allowed advanced users and institutions alike to manage complex positions (leverage, refinancings, arbitrates) smoothly and securely. Instadapp has often been at the forefront of innovation: it introduced multi-protocol integrations even before most aggregators came into existence, while developing a UX praised for its clarity and power. In 2022, the platform consistently ranked in the top 3 most-used dApps on Ethereum in terms of processed volume, with peaks exceeding 500 million dollars per day.
Building on this experience, the team decided to go further with Fluid, an integrated DeFi infrastructure that aims to overcome the current limits of the ecosystem. Where DeFi often suffers from fragmentation of separate pools and siloed strategies, leading to capital inefficiency, Fluid provides a systemic response by unifying the lending, borrowing, and swapping layers into a single architecture.
FLUID, an integrated DeFi infrastructure
Fluid stands out for an architecture designed to optimize each of its components. Each layer is conceived not as an isolated product, but as a complementary building block that amplifies the protocol's overall efficiency. Here are its main components:
Liquidity Layer
This strategic core unifies liquidity across all components of Fluid. Where other protocols segment pools and fragment funds, Fluid creates a common and flexible reservoir, allowing users and protocols to maximize capital utilization. This approach reduces inefficiencies, improves rates, and makes every dollar more productive.
Lending Protocol
Based on ERC4626-compliant fTokens, the lending module allows users to deposit their assets and generate interest. It is not just simple lending: the design relies on the Liquidity Layer, facilitating third-party integrations and increasing yield attractiveness, particularly for automated DeFi strategies.
Vault Protocol
The Vault Protocol offers flexible lending and borrowing options, integrating advanced liquidation mechanisms directly inspired by Uniswap v3 logic. As a result, gas fees are reduced, liquidations are more efficient, and users benefit from better protection against unexpected losses. This component makes Fluid particularly attractive for borrowers.
DEX Protocol :
The DEX module is one of Fluid’s major innovations, alongside the Smart Collateral and Smart Debt concepts. These mechanisms transform deposited assets and incurred debts into liquidity that can be directly utilized in trading pools. Concretely, this means that every position, whether on the asset or liability side, generates additional revenue through trading fees, creating a multi-layered yield without requiring additional capital deployment.
DEX PROTOCOL: a capital efficiency revolution in decentralized finance
The Fluid DEX Protocol marks a fundamental departure from traditional decentralized exchange models. Where classic DEXs are limited to liquidity pools funded by external LPs, Fluid integrates a radical innovation: the simultaneous use of collateral and debt as sources of liquidity, via its flagship concepts Smart Collateral and Smart Debt.
In practice, this means that every dollar deposited into Fluid can generate up to 39 dollars of effective liquidity, thanks to a multiplier effect combining borrowed capital and collateral deployed in the pools. This figure places Fluid at the pinnacle of capital efficiency, far surpassing current market standards.
Smart Collateral: Multifunctional Capital
With Smart Collateral, users can not only deposit assets to borrow, but also deploy them as active liquidity in the DEX's AMM (automated market maker). As a result, they accumulate both lending protocol interest and trading fees generated by swaps.
Smart Debt: transforming liabilities into a productive lever
Even bolder still, Smart Debt turns debt into a productive asset. Instead of simply sitting in storage or being used for speculative purposes, the borrowed funds directly feed the DEX's liquidity, generating fees that offset all or part of the borrowing cost. By reversing the traditional AMM logic, Fluid creates a synergy where more borrowing equals more productivity, rather than just a risky leverage.
Revenue streams and model resilience
The DEX Protocol brings at least three new revenue sources to the Fluid protocol:
- A percentage deducted from the trading fees
- Increased organic demand for certain borrowed assets (wstETH, weETH, etc.), increasing lending activity
- Additional fees applied to Smart Vaults, for example, 0.1% on Smart Debt for pairs such as USDC/USDT
Fluid's DEX Protocol has demonstrated remarkable efficiency in a very competitive segment: stablecoin trading. Thanks to its innovative architecture, it has managed to quickly capture significant market share on the main stable pairs of the Ethereum network.
On the USDe/USDT and USR/USDC pairs, the trading volume data is particularly revealing. Fluid, virtually non-existent in these markets until February 2025, managed in just a few weeks to surpass Curve and Uniswap, which historically dominated these trades. The chart below shows that Fluid now holds a majority position in these markets, with deep and constant liquidity.
Stable pairs, where margins are low but volumes are high, provide an ideal proving ground for evaluating the efficiency of an AMM. Fluid excels at this: its spreads are tighter, fees are better distributed, and the liquidity structure is more stable, which attracts traders, arbitrageurs, and market makers alike.
DEX PROTOCOL V2: an even more optimized version of the DEX protocol
Since the launch of its DEX, Fluid has shown remarkable growth in the decentralized exchange market. The chart below illustrates this trend: in the space of a few months, Fluid has gone from 0 % to nearly 20 % of market share in trading volume on Ethereum, progressively chipping away at the share of Uniswap, which was previously unchallenged in this area.
The team recently unveiled Fluid DEX v2, an ambitious version intended to push the limits of capital efficiency and introduce new order types such as Smart Range Collateral/Debt. This version aims to make the protocol even more modular, composable, and attractive for sophisticated traders and LPs.
The objective is clear: dethrone Uniswap on Ethereum, and become the biggest DEX in the entire ecosystem.
According to Fluid's COO, if everything goes according to plan, the protocol is expected to become the market leader in DEXs, and potentially reach +$100 million in annualized revenue.
A long-term vision
Fluid's roadmap doesn't stop at improving the current DEX. Here is what is planned for the coming months.
Deployment of Fluid DEX on L2s and cross-chain integration
Fluid plans to expand its architecture beyond the Ethereum mainnet, with strategic deployments on other Layer 2s in addition to Arbitrum and Base, and cross-chain integrations. This expansion will enable:
- Drastically reduced transaction costs for users
- Greater accessibility for new entrants, especially mobile ones
- Cross-chain liquidity depth, unified by Fluid's Liquidity Layer
Integration of new assets and vaults
One of Fluid's strengths lies in the flexibility of its vaults. In the coming months, the protocol plans to add:
- New algorithmic or collateral-backed stablecoins
- Assets linked to real-world assets (RWA), such as tokenized Treasury bonds or money market products
- Light versions of certain vaults (e.g., ETH Lite) to offer low-cost, low-risk alternatives
Hosting third-party protocols on the Fluid infrastructure
The Fluid model is designed as a foundational infrastructure on which other projects can build. In line with this approach, the team plans to open the protocol to:
- Derivative protocols (options, perpetuals)
- Credit or algorithmic stablecoin markets
- Decentralized forex applications, where Smart Debt would be used as a foundation to create an on-chain currency market
- A cross-chain bridge that would benefit from the Liquidity Layer's liquidity, making it one of the most efficient bridges on the market
A model already imitated by its competitors
The technical and economic success of Fluid has not gone unnoticed in the DeFi ecosystem. Several competing projects are beginning to openly draw inspiration from its architecture to apply it to their own protocol, starting with Euler, who is currently working on the integration of a DEX directly connected to its lending vaults.
This dynamic demonstrates an obvious fact: Fluid has pioneered a new path in DeFi infrastructure design, proving that the relationship between debt, collateral, and market liquidity can be transformed. Where the traditional approach separated these functions, Fluid has brought them together under a single logic, built on a unified liquidity layer.
According to the project team, this wave of imitation is not a direct threat; on the contrary, it validates the relevance of the model. The main reason for this confidence? Smart Debt. This technical building block, at the heart of Fluid's mechanics, makes it possible to transform debt into a productive asset. As long as no competitor has such a robust equivalent, the project retains a structural head start, since Smart Debt is very difficult to add if the protocol was not originally designed to work with it.
Indeed, Smart Debt does not merely improve borrower yields: it generates native, deep, and dynamic liquidity by using debts as a pool base within the DEX. This creates a unique strategic advantage: the more the platform is used, the more liquid it becomes, a virtuous circle that competing attempts struggle to replicate without this component.
Reasons to hold the FLUID token
Currently, about 40 % of the total FLUID token supply is in circulation, while the remaining 60 % are held in the protocol treasury. This distribution gives the DAO significant leeway in defining the future use of these tokens: funding development, supporting ecosystem growth, token burns, or redistribution. While this flexibility can be seen as an opportunity, it also implies an active, responsible, and transparent governance, which remains to be confirmed over the long term.
In the medium term, the economic value of the token relies largely on the activation of the buyback program, which will only be triggered once 10 million dollars in annual revenue is reached. This threshold, although realistic, has not yet been reached at the time of writing. The proposed mechanism (dynamic token buybacks based on revenue levels and the token's FDV) has the merit of aligning the token's valuation with the protocol's actual performance, but remains to be proven in an evolving market context.
For now, the FLUID token does not directly redistribute revenue, and holders must adopt a long-term vision, betting on the gradual growth of the ecosystem and the DAO's ability to activate these economic levers. It is a position that requires trust, but also vigilance.
In short, holding FLUID today means exposing oneself to growth in the making, driven by innovative infrastructure and an economic model still in its activation phase.The potential for value creation relies on rigorous strategic execution, the scaling up of revenue, and the governance's ability to effectively manage redistribution mechanisms. For an informed and patient investor, this is an opportunity to align early with a structured growth trajectory in an ecosystem seeking sustainability.
To monitor: an incident on the v1 DEX, awaiting a structural response with v2 DEX
At the time of writing this report, an incident affected the USDC/ETH pair on Fluid's DEX, resulting in losses for some liquidity providers (LPs). The team acknowledged the issue after the fact and announced compensation in the form of 500,000 FLUID tokens, distributed with a one-year vesting period. This compensation comes after the fact, rather than as a structural protection.
Although this episode does not challenge the overall thesis, notably the soundness of the architecture and the potential of the protocol, it highlights an important area of focus: the current version of the DEX (v1) still has room for improvement in certain risk management mechanisms, particularly for non-stable pairs, since liquidity ranges are defined automatically.
The release of DEX v2, announced as a complete overhaul with safer range order logic and enhanced protections, will be a key test to watch to see if this type of malfunction can be avoided in the future. In the meantime, this incident is a reminder that rapid innovation always comes with a break-in period, and that it is important to keep a critical eye, even on the most promising projects.
For more details on this incident, a community discussion has been opened on the Fluid governance forum.
Conclusion
At Crypto Asset Management, we see in Fluid, one of the most promising protocols of the new DeFi generation. By integrating lending, DEX, and liquidity into a unified architecture, the protocol offers a coherent response to the structural limitations of decentralized finance.
With innovative bricks like Smart Debt and an efficient Liquidity Layer, Fluid is already positioning itself as a credible technical foundation. Its governance endowed with a large treasury and its revenue-linked buyback strategy add interesting alignment with holders.
Nevertheless, certain aspects still need to be monitored. The economic structure of the $FLUID token would benefit from better formalizing value capture for holders, and the launch of the v2 DEX will be an important test, especially following the initial incidents on v1.
Despite these points to watch out for, we consider $FLUID as a strategic asset to monitor closely, at the crossroads of innovation, sustainability, and the building of a robust and scalable DeFi infrastructure.
If you would like to download the report as a PDF:
Author's note :
My name is LittleGhost. I spend my days studying DeFi, reading governance proposals, and figuring out how to build something truly sustainable in this booming ecosystem.
If you would like to continue following my work:
📺 YouTube : LittleGhost
🐦 Twitter/X : @0xLittleGhost
Thank you sincerely for taking the time to read this report, and see you very soon for new analyses.
Our service
At Crypto Assets Management, we offer discretionary portfolio management of digital assets, tailored to your profile. Our strategy is based on the analysis and management of Bitcoin cycles (historically 4 years), favoring investments in long term, monthly arbitrations, and a particular emphasis on tokenomics.
Our Rates
We are saved with the AMF under the registration number for digital asset buy/sell activities against legal tender and digital asset exchange against other digital assets: E2023-084.
— Warning —
This letter is not investment advice.
You are solely responsible for your investment decisions.
Investing in digital assets carries a risk of capital loss, partial or total.
