Casey Wagner

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Thanks to the early signs of a trade deal with China and a better-than-expected <a href="https://blockworks.co/news/inflation-april-rose-less-tariff-impact">April CPI print</a>, Big Tech (and just about everything else) is up this week.&nbsp;



The S&amp;P 500 North American tech sector index is up 8.4% over the past five trading days. The Nasdaq Composite has gained 6.3% in that time.&nbsp;



Even Microsoft and Nvidia — despite their respective headwinds (which we’ll get into later) — are in the green. They’re up 3% and 13%, respectively, in the past five days.&nbsp;



The way I see it, there are two main forces poised to significantly impact Big Tech: tariffs and AI. These two forces just so happen to be intertwined.&nbsp;



In an overgeneralized nutshell, higher tariffs mean many Big Tech companies may have to raise prices. While most consumer electronics are currently exempt from tariffs, Trump insists the relief is temporary.&nbsp;



On the AI side, tariff-fueled <a href="https://blockworks.co/news/tariff-supply-chain-effects-summer">supply chain disruptions</a> for semiconductors and other infrastructure also make investing in AI more expensive. Still, the biggest names in the space say they’re forging ahead with massive AI budgets.&nbsp;



Alphabet plans to spend $75 billion on AI and data center infrastructure, marking a 43% increase from 2024. Meta similarly upped its AI budget by 44% — bringing its 2025 target range between $60 billion and $65 billion.&nbsp;



Microsoft, which revealed on Tuesday it would cut ~3% of its global workforce, said it will have spent $80 billion on AI expansion by June (when the company’s fiscal year ends).&nbsp;



Grain of salt here. If tariffs make the tools to build out AI operations more expensive, of course the budgets will have to increase. But the budgets are growing by a lot. This signals companies are still on the offensive and see scaling AI models as an essential part of their businesses, even though this now costs much more.&nbsp;



Nvidia shares have gained more than 10% since Monday’s open, on news that the US and China had reached a temporary truce in the trade war. The chipmaker’s market cap is back above $3 trillion for the first time since February, even as its AI server maker, Foxconn, <a href="https://www.foxconn.com/en-us/press-center/press-releases/latest-news/1595">downgraded</a> its 2025 outlook.&nbsp;



A prominent theory in recent years has been that AI will improve productivity, and a new <a href="https://www.stlouisfed.org/on-the-economy/2025/may/industry-level-growth-ai-use-us-postpandemic-recovery">report</a> published by the St. Louis Fed yesterday backs this up.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXesxtiaEEbxAw5-yYJXc6LKLo3Dxx20dphVOAQd2iszJVWxGczZL3cO9ZBimoozh3EKIURqWaAjNYKsZKoPqPa-5I4A6-rSWyzCOGG9_JQTvQtlP7j3W29AjT2223zmBOf0CeyZQQ?key=hXsPwiTivyY4kmJktT1tYg" alt=""/></figure>



See “Information” on that chart? That’s technology, and according to the St. Louis Fed, the industry has become about 5% more productive each year between 2019 and 2024.&nbsp;



But what about the labor force? Isn’t AI coming for jobs? Yes and no. General consensus seems to be that AI will both create and destroy jobs. For now, I’d argue the biggest impact the Big Tech push into AI has had on the labor market isn’t that humans are being replaced by machines. It’s that their salaries are being redirected to fund those machines.&nbsp;



The St. Louis Fed’s report notes that manufacturing jobs now make up a smaller share of overall employment, but productivity has increased. Economic growth happens when either more people are employed or when productivity increases. In a perfect world, we get both.&nbsp;



Also, in a perfect world, ChatGPT doesn’t come for this journalist’s job. Here’s hoping.



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Big Tech stocks extend rally on Chinese tariff pause

Katherine Ross

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire" target="_blank" rel="noreferrer noopener">subscribe</a>.



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M&amp;A szn’s still going strong — and this morning’s announcement that Trident and IntoTheBlock are merging is yet another sign of the consolidation we’re seeing.



If you’re not familiar with the two, IntoTheBlock is a financial services platform designed for institutional DeFi investors, and Trident Digital offers services from lending to advisory.&nbsp;



The firms will now become Sentora, and the goal of the new joint entity is to cater to funds, treasuries, and other institutional investors in DeFi. Basically, they want to create an ecosystem focused on the needs of institutions to push into DeFi.&nbsp;



Trident’s Anthony DeMartino will take the helm of Sentora. (If he sounds familiar to you, he was also former head of risk strategies at Coinbase.)



“Through our strategic partnerships with industry leaders, we are developing a suite of products that address the key blockers preventing institutional adoption of DeFi,” DeMartino said.&nbsp;



“The future of finance is decentralized — but not disorganized,” he added. And, honestly, what a fun way to put it.



Meanwhile, IntoTheBlock’s CEO Jesús Rodríguez will take the helm as CTO.&nbsp;



But the merger isn’t the only news they announced. They also raised $25 million in a Series A funding round led by New Form Capital, with Joint Effects and Tribe Capital. Ripple was noted as a strategic ecosystem investor.&nbsp;



&#8220;Institutional capital won’t move into DeFi without strong risk management and compliance frameworks. Sentora provides both — without sacrificing performance,&#8221; New Form’s Alex Marinier noted.



So let’s zoom out.



We’re seeing a rise in these types of M&amp;A deals, in which crypto firms are looking to create a platform that can cater to multiple needs for clients, like institutional investors. We’re also just plain seeing an uptick in M&amp;A activity. That’s a trend I wouldn’t expect to go away anytime soon.



Let’s take a look at some (<a href="https://x.com/blockworksres/status/1919481758183260325">brand-spanking-new</a>) data from Blockworks Research, shall we?



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfwy0RBOW-brdt4fgSNttwVC-m9rUnbQBJdxJVO6LRGBKoXIOtGQpywSmcg0DoI6XI8uOlC4X2HG11Z3Pq5MxFbdJWPa8WD1RPPQYImVh22yJ6jJ6A0HBJISxwdb6XwwFGl0pHG?key=7zUD8Y_viE1QdBy1hh8N1dFR" alt=""/><figcaption class="wp-element-caption">No, literally. This is fresh out the oven as of yesterday afternoon. Yay.</figcaption></figure>



You can see above that finance is one of the top sectors to consolidate. This makes sense because we’re going to see a lot more competition as this space heats up and institutional investors look to find a platform that can meet most of their needs.&nbsp;



Who wants to have multiple platforms when you can find one that fulfills your needs, right? It simplifies it, and projects will cater to what the market’s looking for (see the deal above).&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdMqwDaV-JckDFHj01fpyyQxWJXr41l7D6DVKukfdZJa7Dsb-Wuq0_GzUlIwwoT1cGKobjExxHXFzxLZIadja2rHngqq2iuuaXBCtXyiNwoRrxx70GsTM4GLmp86UHRi0wyVxN6Vw?key=7zUD8Y_viE1QdBy1hh8N1dFR" alt=""/></figure>



As you can see, crypto deal activity is starting to pick up. Just remember: we’re likely going to stay a ways off from those crazy 2021 levels for a while.&nbsp;



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Empire Newsletter

IntoTheBlock and Trident announce merger, raise $25M for new firm

Kate Irwin

This is a segment from The Drop newsletter. To read full editions, <a href="https://blockworks.co/newsletter/thedrop" target="_blank" rel="noreferrer noopener">subscribe</a>.



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RTFKT, Nike’s abandoned digital brand pronounced “artifact,” lost its CloneX art overnight.



The art for all 19,500 Ethereum NFTs in the <a href="https://opensea.io/collection/clonex">collection</a> was replaced with a black background with white text that reads: “This content has been restricted. Using Cloudflare&#8217;s basic service in this manner is a violation of the Terms of Service. Please visit cfl.re/tos for more.”



That URL redirects to a Cloudflare terms page that states that a more basic Cloudflare plan does not allow clients to stream videos. “We limited your ability to use our services to deliver video bits from our network to your visitors. This is because every second of a typical video requires as much bandwidth as loading a full web page,” the <a href="https://developers.cloudflare.com/fundamentals/reference/policies-compliances/delivering-videos-with-cloudflare/">page</a> reads.



“Unfortunately, while most people respect these limitations and understand they exist to ensure high quality of service for all Cloudflare customers, some users attempt to misconfigure our service to stream video in violation of our Terms of Service,” the post continues.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdfvd2JkMDLC6hbrKHNdJJRmnXEWQFlI5FM6F_Cq4BMek12obe0vtvZXCfI-TePWufGyR_r9S8zSVguX-5GWg8119F9ClOHnN0Uc2dGhi38BAlTnAZ31l15oKQa_ZDp8kNt4VZVug?key=QkJpWubnKckpolBGsq0DbuvZ" alt=""/></figure>



The issue, then, appears to be due to the fact that the CloneX NFT data was not being hosted on an adequate Cloudflare plan. Others, like Yuga Labs blockchain lead 0xQuit, speculated that RTFKT may have <a href="https://x.com/0xQuit/status/1915413726091747477">forgotten</a> to pay their Cloudflare bill and saw their service cancelled (RTFKT lead Samuel Cardillo <a href="https://x.com/cardillosamuel/status/1915439803442548782?s=46">told</a> me it has “nothing to do” with an unpaid bill).



Other RTFKT collections — like its NFTs with artist Fewocious, its Animus Eggs, and its Nike Dunk Cryptokicks — still had visible video art live as of Thursday at 10:30am ET white the CloneX art was gone.



The CloneX shakeup appears to have happened overnight, when several X users noticed the issue and flagged it on social media.



“And some of you thought this was the next @cryptopunksnfts since it was abandoned,” Ape Ventures founder Xeer <a href="https://x.com/Xeer/status/1915338336991842742">wrote</a> early Thursday morning. Unlike most NFT collections, CryptoPunks art is <a href="https://www.larvalabs.com/blog/2021-8-18-18-0/on-chain-cryptopunks">stored</a> fully onchain on Ethereum.



Because NFTs can use art or visual data that’s hosted by a centralized company — like Cloudflare or AWS — they are inherently more mutable and censorable than decentralized data storage options. The tokens will still exist — but the art associated with it can vanish or be altered.



By 11:15 am ET on Thursday, however, some of the CloneX NFT art had reappeared, suggesting the issue with Cloudflare had been resolved (By 12:30pm ET, the art had reappeared).&nbsp;



So what happened? RTFKT Head of Tech Samuel Cardillo <a href="https://x.com/CardilloSamuel/status/1915371853075669391">said</a> the CloneX and Animus NFTs are moving to decentralized blockchain storage platform Arweave. Cardillo added that their Cloudflare plan will end at the end of April. The team had been trying to switch their storage infrastructure since December, but the switch took longer “because of internal corpo [sic] process.”



“Somehow this morning Cloudflare decided to move to the Free plan [a] few days before the end of the contract which also triggered that bug in which Cloudflare refuses to stream images and videos,” Cardillo said.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeUFQXAP2Lz1SdZAlIiUcMVroVnqMwOshzIhT1GGzicD4yWvJNJgDLCd3IF6lhXJx8bg3J7537Oz33wR7rh_fFmg_GCPXYBn6o_mNH0ffTFwjctx0eQGuVKUQ-yYwPelNw-9jdpQQ?key=QkJpWubnKckpolBGsq0DbuvZ" alt=""/></figure>



RTFKT shut down operations in December, spurring a slew of over 3,300 CloneX sales in one day as traders gave up hope on the future of the collection.



RTFKT’s post about its shutdown at the time didn’t offer much of an explanation. It instead claimed the shutdown was “a new chapter” for the company.



“RTFKT isn’t ending. It’s becoming what it was always meant to be — an artifact of cultural revolution,” the <a href="https://x.com/RTFKT/status/1863621178532773928">post</a> read.



It’s a bitter end for those who lost money on the NFTs as well as those who had longer-term hopes for the December 2021 collection. The CloneX floor price hit an all-time low earlier this month, with NFTs selling for roughly $230 worth of ETH, per NFTPriceFloor <a href="https://nftpricefloor.com/clonex">data</a>.&nbsp;



In April 2022, RTFKT CloneX NFTs had a floor price of over $60,000 per NFT. Rarer CloneX NFTs have <a href="https://www.cryptoslam.io/clonex?tab=top_sales&amp;period=all">sold</a> for prices as high as $1.25 million.&nbsp;



Blockworks has reached out to Cloudflare for comment.



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NFTs

Cloudflare removes RTFKT CloneX NFT art due to Terms of Service violation

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Here’s a Tuesday morning exclusive for you: Chronicle raised $12 million in seed funding.&nbsp;



The round was led by Strobe (which <a href="https://blockworks.co/news/former-blocktower-vcs-new-fund">used to be known as Blocktower Venture Capital</a>) with participation from Brevan Howard, 6th Man Ventures and more.



Chronicle is the first oracle on Ethereum, and it’s headed up by a group — including founder Niklas Kunkel — who were part of the founding team at MakerDAO (now Sky).&nbsp;



If you don’t know what an oracle is, Kunkel explains it as putting your phone on airplane mode. Your apps then mostly become useless.



“The utility of apps that we&#8217;ve come to expect … comes from the ability to send and receive data outside of just this sandbox of a phone, and Oracle&#8217;s allow blockchains to do the same things.”



Chronicle is also a data infrastructure provider for tokenized assets, so it has built-in exposure both to DeFi and RWAs. It has its own RWA oracle called verified asset. If you’re curious about who’s using Chronicle, I’m told the list includes the likes of M^0, Centrifuge, Superstate and Securitize.



It may seem odd that the project is catering to two very different audiences. But Kunkel wishes to carry on what he saw at Sky and merge the two client bases — as I called them — given the overlap he sees.



As Kunkel noted: “If you&#8217;re a DeFi protocol, your revenue is so boom, bust with every bull and bear cycle, and it&#8217;s hard to sustainably run a company continuously like that, right?”&nbsp;



But the trend he sees is more projects using products similar to traditional finance fixed income that would help smooth out the revenue.&nbsp;



Kunkel feels that Chronicle’s in a “prime position” to help institutions as they get into the RWA space. Clearly, with the increase in interest for such products as well as the changing tide from the administration, this was the “ideal” time to scale the product.&nbsp;



While Kunkel couldn’t give specifics, he said that there’s a “general trend” among the top 50 financial institutions looking to gain exposure to RWAs (and given Fidelity’s move this weekend, are we even surprised?). It’s a big focus for the team over the next 12 to 18 months.&nbsp;



“We’re just going to see a huge wave of products coming online in Q2, Q3, Q4 … even going into next year. I think Chronicle is uniquely positioned to take advantage of that. We&#8217;re the exclusive oracle for anyone who wants to have any kind of [Sky] or buy-side action on their token item. And fortunately for us, [Sky formerly Maker] is the biggest buy-side owner of tokenized assets.”



The raise will go toward product build and research development. Kunkel had nothing but praise for the team over at Sky and noted that one of the best moves the team made back when it was Maker was to fund research. Kunkel says allowing folks to research areas of interest related — but not tied to — what the project is doing can “pay dividends for years afterward.”



While oracles in the past have been rather difficult to scale, Chronicle’s looking to build “essential infrastructure” to safely bring on TradFi. Now we’ll just have to see who walks in the door.



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Chronicle raises $12M from Strobe, Brevan Howard

David Canellis

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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If a thriving blockchain ecosystem were a recipe, the ingredients would go something like this:



<ul class="wp-block-list">
<li>One consensus mechanism</li>



<li>Four DeFi apps*</li>



<li>A driven founder/figurehead</li>



<li>One native stablecoin (at least)</li>



<li>Two legal entities (dev studio and foundation)</li>



<li>One token bridge (minimum)</li>



<li>Three terminally online reply guys</li>
</ul>



The secret ingredient would be one or more of the following: funding rounds, mid-cap memecoins, NFT collections, active VC funds and third-party validator clients.



*Minimum required DeFi apps: DEX w/ token launchpads, lending/collateralized debt, liquid staking, oracle



So, while there are now hundreds of smart contract platforms with halfway decent market capitalizations, not all are buzzing to quite the same degree as the majors — Ethereum, Solana and BNB.



Case in point: XRPL, which has all but $63 million <a href="https://defillama.com/chain/XRPL">TVL</a> in its onchain apps. Ripple Labs is right now working hard on finishing its own recipe, more than 12 years after its launch.



Starting easy, XRPL does have the consensus mechanism, albeit without the usual staking or mining, instead relying on trusted validators. And it already has a few token bridges.



There are also two legal entities: the San Francisco-headquartered Ripple Labs and the Estonian non-profit XRP Ledger Foundation, which was recently <a href="https://xrpl.org/blog/2024/evolving-the-xrp-ledger">rebranded</a> to the Inclusive Financial Technology Foundation.



Ripple Labs CEO Brad Garlinghouse obviously ticks the box for driven founder-slash-figurehead.



As for the reply guys, David Schwartz, Ripple Labs’ long-serving CTO, has built a following on solid <a href="https://x.com/JoelKatz/with_replies">reply</a> guy energy (check).



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcjHp4yM7YokZsMXlYr7xqLGcxzwWDssl8W-bNLlnUo36AzSf-FdkUXxBaK46uiE-Gx6KuuraefqfKPb5Gk0ZGZaNk7ZUg_dq2WQro1mR39myFjtvfWE4mzHVdJ6jwox5aF11FNuA?key=3EbJpl66pmtt39sBTheYnS8N" alt=""/><figcaption class="wp-element-caption">Every major blockchain could do with a David Schwartz</figcaption></figure>



And anyone who has ever tweeted anything remotely critique-adjacent has likely been visited by the XRP Army — which together truly harnesses the power of much more than just two reply guys (check check).



That leaves the four DeFi apps and a native stablecoin.&nbsp;



XRPL currently has <a href="https://dappradar.com/rankings/protocol/xrpl">four</a> DeFi apps with 100 unique active wallets interacting with them daily right now — but three of them are DEXs and one is an NFT marketplace. As of last month, it does have a <a href="https://xrpl.org/docs/concepts/decentralized-storage/price-oracles">native</a> oracle, which should help to attract builders.



And conveniently, XRPL is the exception to the rule (with no direct staking XRP as part of consensus), so it can do without the liquid staking app in any case.



The only ingredients then left are a bustling lending protocol and a native stablecoin.



Luckily, a stablecoin is very much on the way: Ripple USD (RLUSD), which the New York State Department of Financial Services just <a href="https://x.com/bgarlinghouse/status/1866571228464460215">approved</a> for offering.



It’ll be structured similarly to Circle’s USDT and Tether’s USDT, backed by cash and equivalents (mostly short-dated US Treasurys).



With XRPL so close to acquiring all the necessary ingredients to really pop, it’s no surprise then that DeFi veteran Robert Leshner is now <a href="https://www.dlnews.com/articles/defi/robert-leshner-is-looking-to-back-defi-projects-on-ripple/">open</a> to backing projects building out the Ripple ecosystem via his fund (VC bonus point get!).



The pièce de résistance for XRPL would then be a roster of its own mid-cap memecoins, as is traditional fare.&nbsp;



Like it or not, those are <a href="https://dexscreener.com/xrpl?rankBy=trendingScoreH24&amp;order=desc">cooking</a> too, although the biggest of which is an XRP Army-themed coin with a $45 million market cap (still too small).&nbsp;



The bright side: Only $15 million in tokens were <a href="https://dexscreener.com/xrpl?rankBy=trendingScoreH24&amp;order=desc">traded</a> on XRPL in the past day. Should RLUSD find decent traction, watch that number only go up from here to fully round out the recipe.&nbsp;



Bellisimo!



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Ripple could still nail this magic blockchain recipe

Jack Kubinec

Jeff Albus

Hiya!



Markets may be down slightly, but that’s not the main thing bumming me out today. Last night, I took a train all the way up to Queens just to see the Mets blow a 9th-inning lead. What even is a “Phillie?”



Anyways, let’s talk Solana.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading">Pandora’s Box of L2s</h2>



Solana’s lack of layer-2s has long been a point of pride for some Solana supporters.&nbsp;



Rather than relying on a fragmented and expanding network of blockchains to scale à la Ethereum, why not just move to a blockchain fast and cheap enough to keep everyone in the same building?



But since fast things can always be faster, and cheap things cheaper, the layer-2 bug appears to be coming for Solana.&nbsp;



Zeta Markets announced a $5 million raise Tuesday, partially to build a DeFi layer-2 on Solana. Electric Capital led the round, which added to the $8.5 million Zeta Markets raised in a 2021 seed round led by Jump Capital.&nbsp;



Zeta Markets currently runs a regular derivatives DEX — the fifth-largest on Solana, <a href="https://defillama.com/protocols/Derivatives/Solana">according</a> to DefiLlama. By adding a layer-2 to the mix, it wants to make its DEX as fast as a CEX.



Zeta Markets founder Tristan Frizza told me that he’s always been a “monolithic chain maxi,” but when you’re letting traders take big leverage on derivatives, market makers want to see some really low latency.



“Solana does what, 400 millisecond block times? But these guys are used to like 10 milliseconds on Binance,” Frizza said.



Off-chain centralized exchanges can basically figure out the price of assets faster than decentralized exchanges, which are slowed down by the underlying blockchain’s throughput. In some cases, savvy arbitrageurs can exploit the momentary differences in price — <a href="https://blockworks.co/news/bell-curve-lvr-defi-liquidity-providers-unfair">to the detriment</a> of DEX liquidity providers.&nbsp;



So, there are justifiable reasons beyond snake oil sales for why Solana would want to build layer-2s. Still, it bears notice that Solana co-founder Anatoly Yakovenko — who invested in this Zeta Markets round — <a href="https://blockworks.co/news/lightspeed-yakovenko-layer-2-scaling">appeared on Lightspeed</a> in August asserting that having too many layer-2s can create massive composability and user experience problems. Other notable Solana ecosystem angel investors also took part in Zeta’s round.



Perhaps this signals that Solana’s thought leaders are softening toward rollups.&nbsp;



Zeta’s layer-2 is set to launch in the first quarter 2025, The Block <a href="https://www.theblock.co/post/294284/solana-dex-zeta-markets-token-funding-round">reported</a>. By then, I wouldn’t be surprised to see other Solana projects following suit.



— Jack Kubinec



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading">Zero In</h2>



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1600" height="963" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png" alt="" class="wp-image-85890" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=434 434w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=364 364w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/image-3.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Solana&#8217;s fee generation looks to be rapidly closing the gap with Uniswap. Over the past year, Uniswap&#8217;s fees stand at $751.193 million, while Solana&#8217;s reach $185.173 million; that&#8217;s about $14.446 million and $3.562 million per week, respectively.&nbsp;



However, Solana&#8217;s fees have risen sharply over the past week to $10.078 million, nearly matching Uniswap&#8217;s $12.260 million. Interest in the Solana network continues to increase, thanks at least in part to Solana&#8217;s high network uptime, low transaction fees, and ever-increasing user adoption in the DeFi and NFT segments.&nbsp;



If this trend continues, Solana could soon surpass Uniswap in fee generation. This rise suggests growing network usage and transaction volume, which — while positive for Solana&#8217;s ecosystem — could also mean higher costs for users​.



— Jeffrey Albus



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading">The Pulse</h2>



If you&#8217;ve ever spent time exploring Solanaland, you&#8217;ve probably come across the term OPOS — Only Possible on Solana. And while this may sound exaggerated to the uninitiated, it is true that certain innovations are indeed only achievable within the Solana ecosystem. Well, for the most part&#8230; kind of&#8230; at least for now.



The idea isn&#8217;t so much that other blockchains can&#8217;t do what Solana is capable of, full stop. It&#8217;s more that there are a lot of things that other chains just can&#8217;t do quite so well.&nbsp;



For instance, Solana&#8217;s state compression technology drastically reduces the cost of storing data on-chain. That makes large-scale transactions far more feasible, and is why projects like Drip Haus are able to affordably distribute millions of NFTs to users across the ecosystem. Other blockchains, which famously struggle with scalability and high fees, would have a tough time developing similar projects.



Projects like Hivemapper and Helium also benefit from Solana&#8217;s high throughput and low costs in support of their decentralized mapping and community-powered 5G services. This is yet another area where transaction speeds and costs hinder the practical implementation of such large-scale decentralized applications for most other chains.



But while Solana holds the advantage in these areas for now, there is little reason to believe it will stay that way forever. Competing networks are assuredly taking notes on what is and isn&#8217;t working across Web3, and may soon develop similar or even superior capabilities. So the question is: Will Solana be able to keep up with these challenges over the long term? Anything is possible.



— Jeffrey Albus



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading">One Good DM</h2>



An excerpt of our chat with Sam Lehman, principal at Symbolic Capital:



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="550" height="628" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png" alt="" class="wp-image-85886" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=550 550w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=263 263w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=225 225w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=229 229w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=192 192w, https://blockworks-co.imgix.net/wp-content/uploads/2024/05/Screenshot-2024-05-14-at-11.48.57-AM.png?w=70 70w" sizes="auto, (max-width: 550px) 100vw, 550px" /></figure>



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Funding

Lightspeed Newsletter: Solana caught the layer-2 bug

Bessie Liu

Antonio Villaraigosa, the former mayor of Los Angeles, has been hired as a policy adviser for Coinbase.



Villaraigosa, who served as the mayor of LA between 2005 and 2013, will join the cryptocurrency exchange’s global advisory council.



Faryar Shirzad, the chief policy officer at Coinbase, <a href="https://twitter.com/faryarshirzad/status/1785680450410750328">wrote in a post on X </a>that Villaraigosa will advise the leadership team at Coinbase to advance “economic freedom around the world.”&nbsp;



“When 18% of America is underbanked, including 25% of Black &amp; Hispanic households, it means the traditional financial system doesn&#8217;t work for everyone. It&#8217;s time to update the system,” Shirzad wrote.



According to the LA Times, Villaraigosa will not lobby on behalf of the global exchange but will only advise the company on developing a fair and robust regulatory framework so that it can provide services for US-based customers, noting that crypto participants “need regulatory protection.”



<h2 class="wp-block-heading">Paradigm special counsel leaves&nbsp;</h2>



Rodrigo Seira, the special counsel of the crypto-focused venture capital firm Paradigm, has resigned and returned to Cooley LLP, a law firm where he previously worked.



Seira served at Paradigm for two and a half years and helped spearhead the company’s policy lab. He was also a founding member of blockchain and crypto-focused law firm DLX Law.



<h2 class="wp-block-heading">Former Citibank executive joins BitGo</h2>



Brett Reeves, a former Citibank executive who has been in the banking industry for over two decades, will join BitGo, a scalable wallet solution, to expand EMEA Sales.



Reeves most recently held the position of head of business development at Bequant, a digital asset prime broker. He previously held roles at Citibank, Nomura and Standard Chartered Bank in Singapore.



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BitGo

Hiring roundup: Former LA mayor joins Coinbase

“It is time” for <a href="https://blockworks.co/tag/blockfi">BlockFi</a> creditors to know what BlockFi was and who former CEO “Zac Prince truly is,” BlockFi’s Official Committee of Unsecured Creditors said in a new court filing.&nbsp;



The UCC is pushing for the court to either appoint a Chapter 11 trustee, terminate the exclusivity periods for the debtors or convert the cases to Chapter 7 proceedings.&nbsp;



Voyager, Celsius and even FTX customers understand the majority of what happened to the respective companies through the collapses. However, the UCC argues, BlockFi customers do not yet have a clear understanding of <a href="https://blockworks.co/news/blockfi-bankruptcy-exit-plan">what happened which is “facilitating case mischief.”</a>



$16 million per month is being burned on BlockFi’s cases, according to the filing.



A Chapter 11 trustee is necessary, the UCC says, because “the Investigative Report reveals, in great detail, that BlockFi (Mr. Prince in particular) perpetrated a fraud on customers.”



Read More: <a href="https://blockworks.co/news/how-blockfi-went-from-tech-unicorn-to-crypto-burnout">How BlockFi Went From Tech Unicorn to Crypto Burnout</a>



BlockFi’s debtors also “broke their own promises to customers by liquidating nearly $240 million in customers’ crypto.”



However, the Court could also open up the plan exclusivity. The UCC claims that BlockFi took too long to propose a plan — with the cases lasting seven months, with <a href="https://blockworks.co/news/blockfi-reorganization-plan-approval">two plans “dead on arrival.”</a>



The UCC also claims that the debtors “resorted to their illegal and utterly cockamamie solicitation (smear) campaign a month ago” which “spread lies” to the customer base — spanning over 600,000 investors — and skirted the UCC.



And, finally, the court could convert the case to a Chapter 7 case. 



A Chapter 7 would allow for the liquidation of a “debtor’s nonexempt property and the distribution of the proceeds to creditors,” <a href="https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics">according</a> to the US courts. 



UCC says that mediations have now failed, and both the debtors and the UCC are “at a complete standstill” and the debtors “shill” for the insiders — which would include Prince.



This is not the first time that the <a href="https://blockworks.co/news/blockfi-halts-plan-to-return-crypto">debtors and creditors have had public disagreements</a>. In February, debtors accused the creditors of being “divorced from reality” and the creditors accused the debtors of throwing a “temper tantrum.”



Last week, the <a href="https://blockworks.co/news/sec-foregoes-blockfi-penalty">SEC announced that it would</a> “forego” the $30 million penalty from BlockFi until investors have been repaid. The bankrupt lender <a href="https://blockworks.co/news/blockfi-customer-withdrawals-summer">plans to open up customer withdrawals</a> sometime this summer. 



BlockFi <a href="https://blockworks.co/news/blockfi-files-for-bankruptcy">filed for bankruptcy in November of last year</a> after FTX collapsed.



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bankruptcy

BlockFi’s UCC claims former CEO Zac Prince ‘personally profited’ from company

Michael Bodley

In its latest foray into the cryptocurrency industry, asset management giant Franklin Templeton is exploring the world of blockchain private equity.



An SEC filing on Tuesday registered the Franklin Templeton Blockchain Fund II with the US financial regulator — one key indicator that the firm is looking to raise institutional capital for the new commingled vehicle.&nbsp;



Franklin Templeton representatives designated the vehicle as a private equity fund with the SEC. This is a separate categorization from a liquid cryptocurrency hedge fund setup, for instance. The private equity fund also differs from a blockchain-focused venture capital vehicle, which <a href="https://blockworks.co/news/franklin-templeton-prepping-blockchain-fund">the asset manager previously established</a> in the fourth quarter of 2021.



A spokesperson for Franklin Templeton declined to comment on Wednesday, citing private placement regulations.&nbsp;



This is the latest move into institutional crypto products by the firm’s institutional investment arm. Its <a href="https://blockworks.co/news/franklin-templeton-preps-first-institutional-crypto-accounts">crypto separately managed account (SMA) push</a> started taking shape in the fourth quarter of 2022.&nbsp;



Franklin Templeton, which oversees some $1.4 trillion in assets under management, has also gotten involved in other crypto-related products, including <a href="https://blockworks.co/news/stellar-foundation-head-bullish-stablecoin-law">its money-market fund that taps the Stellar blockchain’s tech stack</a>. More recently, the asset manager moved to tokenize one of its funds on Polygon, The Defiant <a href="https://thedefiant.io/templeton-money-fund-polygon">reported</a>. 



Specific strategy details and fundraising aspirations of the private equity-focused Franklin Templeton Blockchain Fund II remain under wraps. However, the SEC filing indicates that the vehicle imposes a $100,000 minimum on its investors.&nbsp;



Interest in industry private equity plays more broadly appears to be holding strong on the heels of <a href="https://blockworks.co/news/10t-tapiero-launching-crypto-firm">a number of substantial new raises earlier this year</a>.&nbsp;



Generally speaking, limited partners in private equity investments often exceed minimum investment amounts in their contributions. However, the six-figure minimum investment for Franklin Templeton Blockchain Fund II is relatively modest compared to traditional asset classes in conventional private equity.



That said, cryptocurrency market capitalizations and related private investment opportunities point to opportunities to deploy relatively small sums of capital for potentially outsized returns, industry participants say.&nbsp;



Franklin Templeton’s fund, according to the filing, is not intended to remain open for longer than a 12 month period.&nbsp;



It comes as crypto markets, on the whole, have continued to mark a 2023 upswing.



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Franklin Templeton

Blockchain Private Equity Fund Franklin Templeton’s Latest Crypto Ambition

Sebastian Sinclair

Bitcoin sprung to life Wednesday, pushing the majority of holders into profit — and propelling traders into the green across derivative and spot cryptocurrency plays.



Digital assets’ direction has been pivoting with regulation in the works, digital asset services firm Bit0oda told Blockworks. It&#8217;s not the only factor at play. 



“On the long-term path toward realizing crypto’s long-term potential, the crypto ecosystem could see regulatory volatility through 2023,” the firm said in a statement.&nbsp;



Not to mention that earnings season has slowed with the February Federal Reserve meeting fading into the rearview mirror. And then there’s the matter of trader chatter kicking up around Hong Kong’s move to bring crypto service providers into the same regulatory fold as traditional financial players.  



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">On June 1st, 2023, Hong Kong will officially make crypto purchase &amp; sell, trading, fully legal for all of its citizens Expect a huge influx of big money from the East Asian currency based stablecoin coming out of HK will be a certainty as well&mdash; Crypto熊猫 (@NoodleofBinance) <a href="https://twitter.com/NoodleofBinance/status/1625941125487017989?ref_src=twsrc%5Etfw">February 15, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Bullish sentiment related to Hong Kong and spreading appears to be based on publicly available information from December. Hong Kong regulators have <a href="https://www.coindesk.com/policy/2023/01/11/hong-kong-to-propose-approved-set-of-crypto-tokens-for-retail-trading-reuters/" target="_blank" rel="noreferrer noopener">rolled</a> out a <a href="https://www.coindesk.com/consensus-magazine/2023/01/25/asia-crypto-regulation/" target="_blank" rel="noreferrer noopener">number</a> of other crypto initiatives — including a<a href="https://blockworks.co/news/hong-kong-contemplates-ban-on-algorithmic-stablecoins"> proposal to ban algorithmic stablecoins</a>. That centered on the government’s legislative <a href="https://www.info.gov.hk/gia/general/202301/09/P2023010900250.htm" target="_blank" rel="noreferrer noopener">framework</a>, slated to take effect June 1, which seeks to allow certain crypto service providers under the same <a href="https://www.cr.gov.hk/en/publications/docs/es32022262516-e.pdf" target="_blank" rel="noreferrer noopener">regulatory</a> umbrella as banks.&nbsp;&nbsp;



It comes as US-based Interactive Brokers has <a href="https://www.coindesk.com/business/2023/02/15/interactive-brokers-rolls-out-btc-eth-trading-to-professional-investors-in-hong-kong/" target="_blank" rel="noreferrer noopener">moved</a> to team up with crypto exchange OSL Digital Securities in a joint Hong Kong crypto push.&nbsp; Regional bitcoin flows from North America to Eastern Asia rose to $7.7 million over a seven-day average, indicating some traders had begun to move assets from region to region, Chanalysis <a href="https://markets.chainalysis.com/?range=30&amp;asset=BTC#demand-exchange-flows" target="_blank" rel="noreferrer noopener">data</a> show.



The industry’s total market cap spiked 6.8% on Wednesday alone, according to <a href="https://www.coingecko.com/en/global-charts" target="_blank" rel="noreferrer noopener">CoinGecko</a> data — from around $1.07 billion to $1.15 billion on the day.



<h3 class="wp-block-heading">Options, options</h3>



There’s also been a significant increase in aggregate open interest following the release of the US CPI data this week, according to Toby Chapple, head of trading at Zerocap of Australia.&nbsp;



<a href="https://blockworks.co/price/btc">BTC’s</a> open interest alone has risen by over $1 billion from $7.5 billion to $8.5 billion.



<figure class="wp-block-image"><img decoding="async" src="https://lh6.googleusercontent.com/dAxLzdazapXQrznSh-8GNpMvQDAw4MhquI5SXC44PqhCXaAdbZE1Nw2lzBZxwOEtmBQxTD6etSIl-ulENT1Lqi9TWGeMN5cRfZ_Lbj8vGS_RFWWrYHUNRflJ-Bl-q5_sZxOjgvjInHXl89Hp4OT3mNA" alt=""/></figure>



“The most telling market dynamic is the inverted put-call skew in the options market,” Chapple told Blockworks. “The seven-day calls option implied volatility vs put option is showing a very large swing to call buying, implying that the market has swung very hard to a bullish stance by market participants.”



According to data from <a href="https://markets.chainalysis.com/?range=30&amp;asset=BTC#demand-exchange-flows" target="_blank" rel="noreferrer noopener">Chainalysis</a>, BTC&#8217;s total flows recorded its highest one-day increase in over 70 days, surging from 85,800 BTC to around 139,400 BTC.&nbsp;



Data from crypto intelligence firm <a href="https://app.intotheblock.com/coin/DOGE/deep-dive?group=all&amp;chart=all" target="_blank" rel="noreferrer noopener">IntoTheBlock</a> show, of roughly 29.2 million wallet addresses holding the asset, around 66% are in the money. Just 22% of those addresses are posting losses.



A majority bought in at an average of $18,800 — good for an increase of around 30% to bitcoin’s current floor.&nbsp;



Trade volume across all assets rose to $120 billion — the highest point in more than six days — data provided by <a href="https://sigdev.thetie.io/coins" target="_blank" rel="noreferrer noopener">TheTie</a> show.



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Federal Reserve

As Traders Eye Hong Kong’s Crypto Moves, Bitcoin Breaks Above $24K

John Gilbert

<div class="wp-block-group"><div class="wp-block-group__inner-container is-layout-flow wp-block-group-is-layout-flow">
<h2 class="wp-block-heading">Introducing Reserve</h2>



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/JOy0wCVhnwM" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen=""></iframe>



<h2 class="wp-block-heading">Series Table of Contents</h2>



Part 1:&nbsp;<a href="https://blockworks.co/news/how-broken-monetary-policy-fuels-instability">What’s broken</a> Why unstable money isn’t safe for the world and how to understand monetary policy Part 2:&nbsp;<a href="https://blockworks.co/news/the-investors-guide-to-stablecoins">What are people doing today about it?</a> A dive deep into the types of monetary policy alternatives that stablecoins offer Part 3:&nbsp;<a href="https://blockworks.co/news/what-is-an-inflation-hedge-finding-stability-in-todays-market">What is the right way forward?</a> A guide to the various inflation hedging tactics and how they can be used in stablecoins Part 4:&nbsp;<a href="https://blockworks.co/news/what-it-takes-to-tokenize-the-world">What will the future look like?</a> A look at how tokenization will change the stablecoin ecosystem About our sponsor:&nbsp;<a href="https://blockworks.co/news/about-our-sponsor-reserve">Reserve</a> A video explaining the Reserve Protocol



<h2 class="wp-block-heading">The protocol and services</h2>
</div></div>



The <a href="https://reserve.org/">Reserve protocol</a> is a self-service, permissionless factory where anyone can build, deploy and govern their own asset-backed stablecoins (RTokens), which can be integrated within DeFi and real world commerce.



Their long-term goal is to create non-inflationary currencies that remains stable both month-to-month as well as century-to-century. In addition to their protocol, Reserve also launched a pay app called the <a href="https://reserve.org/en/app/about_app/">Reserve App</a>. It is a user-friendly way for ordinary people to buy RTokens with their local currencies and use them in locally. More than $300m a month is transacted on the platform, mainly real people and companies using Reserve to escape inflation.

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