Alpha Recap #4: Farming Variational, Stream Finance Collapse, and Thesis on On-chain Yield Managers

The Alpha Recap aims to present the most important crypto market Alphas of the week. Every Friday, we provide a condensed version of the most valuable information from our Alpha Feed.

Reserved for OAK Premium members, the Alpha Feed gathers insights, yield and airdrop strategies, and key market information. In short, what defines OAK Research: delivering filtered content that goes beyond the market noise.

Focus on Variational: one of the only perp DEXs worth farming

This week, we covered Variational, a derivatives trading protocol that launched its DEX on Arbitrum, Omni.

It’s no secret that the perpetual DEX market is saturated, with most projects trying to ride the narrative introduced by Hyperliquid. As a result, points campaigns are everywhere, making it increasingly difficult to secure a meaningful airdrop.

The mainnet of Variational was launched in January 2025, with an access procedure deliberately limiting the number of new entrants. At the time of writing, the protocol is still accessible only by invitation.

If Variational is interesting to farm, it’s precisely because the invitation-based access mechanism mechanically limits the overfarming activity seen on most DEXs that plan an airdrop.

As for the airdrop itself, Variational has already confirmed the upcoming launch of a token under the ticker VAR. The TGE plans for 50% of the supply to be distributed to the community, which clearly increases the interest in farming it.

In our dedicated Alpha, we explained how to position yourself effectively on this still relatively under-the-radar protocol.

Stream: the xUSD stablecoin collapses and raises questions about DeFi transparency

The DeFi protocol Stream made headlines this week, as its stablecoin xUSD completely collapsed.

We broke down the protocol’s structure to explain why its model was inherently unsustainable.

Behind marketing terms such as “Competitive TradFi,” “Capital Efficiency,” or “Dynamically hedged HFT” lay a completely different reality: xUSD was totally undercollateralized, as Stream minted it using an extremely risky looping strategy.

The protocol was hit hard by the Balancer hack, unable to withstand the pace of withdrawals from panicked users. At the same time, and this remains a point that needs clarification, Stream announced that an “external manager” had lost $98 million of its funds, marking the end of the project.

However, the repercussions went far beyond Stream Finance’s scope, as several protocols integrating xUSD were forced to freeze the affected pools, partly because the stablecoin’s price was hardcoded, preventing liquidations. More than ever, the role of curators has been called into question.

In short, a debacle that reminds us how transparency in DeFi should never be negotiable.

The “on-chain yield managers” narrative: introduction to the thesis and strategy

Crypto market narratives evolve quickly, and it’s essential to anticipate movements in order to position yourself ahead of other investors. This is precisely one of the most important focuses of our Alpha Feed.

This week, we presented our thesis on “on-chain yield managers,” which could form the next major narrative.

We believe that in the coming years, most of the capital in on-chain finance will be composed of stablecoins, and that the main use case will be yield generation. Specialized actors will emerge to simplify access, for both professionals and retail users.

The term “on-chain yield manager” doesn’t officially exist, but we coined it because it perfectly describes the role of these actors. These are protocols that act as an additional layer on top of DeFi to offer automated yield generation strategies.

In our dedicated thesis, we explain why the emergence of this type of actor makes sense, what to expect from it, and above all, how to get exposure, as some of them are already hinting at airdrops.

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