Arsenal Fan Token

Byron Gilliam

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“It looks a little bit like crypto keeps playing a prank on the stock market, and the stock market keeps falling for it.” — Matt Levine on bitcoin treasury companies
</blockquote>



Q: Will you let Worldcoin scan your eyeballs?



Now that it’s finally <a href="https://blockworks.co/news/sam-altman-worldcoin-orb-mini-eye-scan">available in the US</a>, I will — enthusiastically.&nbsp;



That might put me in the minority because Worldcoin has gotten a chilly reception in crypto circles, mostly because its eyeball-scanning orb looks like surveillance tech straight out of Minority Report.



But how else are you going to prove you’re human?



In the coming age of AI-generated fake news, deepfake videos, financial scams and <a href="https://www.cnbc.com/2025/04/08/fake-job-seekers-use-ai-to-interview-for-remote-jobs-tech-ceos-say.html">fake job applicants</a>, someone will need to store a proof that you’re human.



You will only have three options to choose from: a government, a corporation or a decentralized crypto protocol.&nbsp;



Seems like an easy choice.



Vitalik has <a href="https://vitalik.ca/general/2023/07/24/biometric.html">explained</a> that “proof of personhood is valuable because it solves a lot of anti-spam and anti-concentration-of-power problems that many people have, in a way that avoids dependence on centralized authorities and reveals the minimal information possible.”



But even non-crypto people will likely agree that identity on the internet should be decentralized, sybil-resistant, provable and open source.



Last night, Sam Altman reassured us that Worldcoin’s technology was “a way to make sure humans remained central and special in a world where the internet had a lot of AI-driven content.”



Altman is admittedly proposing to solve a problem that he himself has created, but he’s right that proving unique humanness is about to become mission critical — and CAPTCHAs are not going to do it.



So far, Worldcoin is the only plausible solution for proof-of-personhood I&#8217;ve seen (or can even imagine, really) — and it proves that personhood in a most crypto-native way: by turning your iris scan into a hash and storing it on a decentralized blockchain.



It’s not even your full iris data that’s stored, just a mathematical representation of it that can be used to check for uniqueness.



Don’t we all want to be unique?



And anonymous?



Seems like something true crypto cypherpunks should embrace.



Q: Should stablecoins be allowed to pay interest?



I’d like to receive interest on mine, but paying interest turns stablecoins into narrow banks and there’s a reason why the Federal Reserve doesn’t give bank charters to narrow banks — the banking system is supposed to intermediate between savers and risk takers, not savers and the government.&nbsp;



Narrow banks take money from savers and park it in risk-free T-bills and reverse repos, which is neither economically productive nor socially desirable.&nbsp;



But banking has been getting more narrow ever since the introduction of money market funds in the 1970s (which Paul Volcker argued against as a dangerous kind of regulatory arbitrage).



And now, brokerages like Fidelity and Vanguard let you pay bills out of those high-yielding money market funds.



Seeing as that’s allowed, why not let stablecoins pay interest, too?



Seems intuitive enough, but <a href="https://x.com/CampbellJAustin/status/1917581563598102830">Austin Campbell</a> makes an even simpler case for why stablecoins should pay interest: “If you are banning interest payment on stablecoins, that interest doesn’t go away. It just goes into the pockets of corporate executives.”



The pockets at Tether HQ are particularly overflowing at the moment: Per their <a href="https://tether.io/news/tether-approaching-120b-in-u-s-treasuries-confirms-quarterly-operating-profit-over-1b-and-strengthens-global-usdt-demand-in-q1-2025/">Q1 attestation</a> released this morning, Tether’s owners paid themselves $2.347 billion last quarter.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe9B61csnKZqUxIheGk3CUOEkq7kUUcjasfd65td3_Ij3hyTQpYddtEE84n6m_EeaYSkh3BErtJWgPLU3e61pN-IIynlYMSlSLylnhhA9rP2c9uqrD0CrPvuRYCeIiIk-zxlbNVxg?key=g-zCDNtssgzQwZk0A6w2WfUO" alt=""/></figure>



That is quite the payday considering that Tether reportedly has as few as five owners — four top executives plus Cantor Fitzgerald who recently took a <a href="https://www.wsj.com/finance/currencies/howard-lutnick-giancarlo-devasini-tether-cryptocurrency-3d0a961c">5% stake</a> (for reasons obviously unrelated to Tether’s non-existent need for capital).



The Cantor investment valued Tether at $12 billion, which means the owners just received a quarterly dividend of 19.5%.&nbsp;



Tether’s operating profit for the quarter was just $1 billion, so the $2.3 billion dividend cuts into their “equity” buffer and they won’t be doing that every quarter.&nbsp;



Still, though, 19.5%!&nbsp;



You can see why Circle <a href="https://www.bloomberg.com/news/articles/2025-04-30/ripple-is-said-to-have-offered-to-buy-stablecoin-rival-circle">reportedly</a> turned down an offer of $5 billion from Ripple this week.



Q: How is the president’s stablecoin doing?



Right.&nbsp;



Another reason that Congress may prevent stablecoins from paying interest is that the president happens to own a stablecoin issuer.



On stage at Token 2049 today, it was <a href="https://www.nytimes.com/2025/05/01/us/politics/trump-cryptocurrency-usd1-dubai-conference-announcement.html">announced</a> that a $2 billion transaction between Binance and the state-backed Emirati investment firm MGX would be made in USD1, the Trump family stablecoin.



That represents about $80 million of annualized revenue going into the pockets of the issuer for as long as the money stays there.



“Virtually every detail of [the] announcement, made during a conference panel with Mr. Trump’s second-eldest son, contained a conflict of interest,” the New York Times reported.&nbsp;



Ugh.



Q: What&#8217;s it mean when a SPAC trades at $50?



It means people are losing their minds again.



The SPAC mania of 2021 revealed what happens when price discovery is left to retail investors: Deals that would never have made it past the first IPO roadshow meeting were rapturously received as “SPACs.”



Special Purpose Acquisition Companies (SPACs) are publicly traded pools of capital created to acquire a private company and take it public — an alternative to the traditional IPO process.



SPAC shares are customarily issued at $10 per share and usually trade somewhere around that level while the managers of the SPAC go looking for a deal.&nbsp;



After a deal is announced, SPAC shares will trade higher or lower depending on how the deal is perceived by investors.&nbsp;



Roughly speaking, if a SPAC trades at $11 after announcing a deal, it means that investors expect their stake in that deal will instantly be worth 10% more than the money they’re contributing to it — a reasonable assumption to make.



In the 2021 mania, however, it became common for SPAC shares to trade at $20, $30 or more.



That wasn’t a reasonable assumption to make because it implied that the company the SPAC managers found to buy would be worth far more on the stock exchange than it was a private company.



They almost never were — few SPACs ended up justifying their $10 issue price, let alone the wildly inflated post-deal prices investors insisted on paying in 2021.



It’s hard for me to imagine that it will go any better for the investors currently paying $50 for the Cantor Equity Partners (CEP) SPAC.



Last week, CEP <a href="https://www.businesswire.com/news/home/20250423962305/en/Tether-SoftBank-Group-and-Jack-Mallers-Launch-Twenty-One-a-Bitcoin-native-Company-Through-a-Business-Combination-With-Cantor-Equity-Partners">reached a deal</a> with Tether and Softbank to form a new “bitcoin-native company,” Twenty One.



Like Strategy, Twenty One will basically just be a pile of bitcoin with Tether and Softbank’s ownership stake based on how much bitcoin they contribute to the pile.



Current holders of CEP will receive a 2.9% share of that pile in return for their $100 million pot of cash.



This makes the math very simple: Today’s $50 price of CEP implies that investors believe that $100 million of bitcoin is worth $500 million on the stock exchange.



That feels about as crazy as anything that happened in 2021 — which I never expected to see again.



Are we really letting Tether quintuple the value of its bitcoin like that?



Contributing our crypto to bitcoin treasury companies seems like approximately the least cypherpunk thing we could do.



But crypto people are just as excited about it as stock market people.



Number go up, I guess.



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



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The Breakdown Newsletter

Thursday Mailbag: Is it cypherpunk to contribute crypto to bitcoin treasury companies?

Jack Kubinec

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



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Over the past few months, people involved in Solana DeFi have been asking questions about SolFi, a DEX that sprang up in November and almost immediately captured over 20% market share on swaps between stablecoins and SOL.



SolFi was able to quote better prices than competitors, but at least one business partner I spoke to didn’t know who was behind the new exchange before today. In general, few seemed to be in the loop as to how SolFi was achieving such good prices.



Today, Ellipsis Labs — a DeFi shop currently building an Ethereum layer-2 that uses Solana’s software called Atlas — publicly claimed credit for developing SolFi.&nbsp;



In an announcement on X, Ellipsis Labs co-founder Eugene Chen said the DEX “came from our deep understanding of the market structure on Solana.” Prior to building Atlas, Ellipsis created an orderbook Solana DEX called Phoenix.&nbsp;



SolFi has no frontend, but Chen added that the DEX had partnered with Jupiter Exchange to bring the product to retail traders. SolFi is one of 51 DEXs that are part of Jupiter’s swap aggregator, but it currently makes up for 25% of Jupiter volume — far more than any other DEX — according to a Dune <a href="https://dune.com/ilemi/jupiter-aggregator-solana">dashboard</a>.&nbsp;



The Solana rumor mill tended to reason that SolFi’s creators had to be someone with roots in the network, and Ellipsis certainly seems to have the technical chops to fit the bill.



“The Ellipsis Labs team are some of the most talented SVM developers in the ecosystem. It should be no surprise, given what they’ve built with Phoenix and Atlas, that they’ve also been able to find success with SolFi,” Switchboard co-founder Chris Hermida said.



SolFi isn’t the only anonymous Solana DEX. Orbic and ZeroFi are other newer Solana DEXs that have commanded significant trading volumes without publicly disclosing who their developers are.



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
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DEXs

Ellipsis Labs claims credit for mysterious top Solana DEX

Ben Strack

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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Forward Guidance has covered <a href="https://blockworks.co/news/meta-microsoft-earnings-q1-stocks-higher">Mag 7</a> and <a href="https://blockworks.co/news/gm-stock-earnings-release-auto-tariffs">automaker earnings</a>. But let’s jump to Robinhood, which is looking to wade deeper into crypto.



The trading platform’s transaction revenues amounted to $583 million in Q1. Roughly 43% of that ($252 million) came from crypto trading.



The $252 million total is less than last quarter’s record crypto transaction revenue of $358 million, Robinhood reported — but up 100% year over year.&nbsp;



It appears concerns around the health of Robinhood&#8217;s user base after April&#8217;s <a href="https://blockworks.co/news/tariff-markets-crypto-drop">market selloff</a> have dissipated. After all, Compass Point analysts Ed Engel and Joe Flynn noted that net deposits accelerated last month ($6.5 billion) and margin balances “fared OK” ($8.4 billion).&nbsp;



“Equities trading is at a four-year high,” Robinhood CFO Jason Warnick said on yesterday’s earnings call. “Options are in the zone of an all-time high, and crypto trading is north of $8 billion.”&nbsp;



Compass Point increased its HOOD price target to $64. Robinhood shares were trading for around $47 at 2 pm ET — down nearly 4% on the day.



Robinhood CEO Vlad Tenev said that while the company seeks to make itself less reliant on crypto transaction volumes, it also looks to diversify the crypto business itself.&nbsp;&nbsp;&nbsp;



We’ll be watching for product news that might come out of Robinhood’s June crypto rendez-vous in France. &nbsp;



“Regulatory ambiguity has deterred HOOD from launching staking in the US, as well as listing a wider range of tokens,” Engel and Flynn wrote in a note. “With the SEC moving <a href="https://blockworks.co/news/sec-actions-timeline">faster than expected</a>, we see a chance that Robinhood announces staking and new token listings at the June event.”&nbsp;



Tenev called clarity on listing crypto asset securities “a big opportunity,” adding: “We&#8217;re just in the early innings of having this technology permeate the financial system.”&nbsp;



The CEO reiterated, too, that tokenizing private equities would be a huge unlock for individuals and companies. That is one of Robinhood’s top policy priorities.



And don’t forget about <a href="https://blockworks.co/news/robinhood-bitstamp-institutional-clients">Robinhood’s acquisition</a> of crypto exchange Bitstamp, which remains on track to close mid-year.&nbsp;&nbsp;



It’s clearly a crypto-linked stock to keep an eye on.



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



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<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
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Equities

Robinhood eyes crypto diversification as trading strength persists

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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Stocks were back in the green after Magnificent 7 giants Meta and Microsoft reported better-than-expected Q1 reports after the close yesterday.&nbsp;



Following their respective earnings releases, shares of Microsoft gained as much as 7.8%, and Meta stock surged more than 5% in after-hours trading Wednesday night. At 2:15 pm ET Thursday, Meta was trading 5.2% higher, while Microsoft was up 9%.&nbsp;



Meta reported earnings per share of $6.43 on revenue of $42.3 billion — coming in ahead of projections calling for $5.25 EPS on $36.4 billion in revenue. Executives also calmed investors by saying they’re not concerned about tariffs impacting ad revenue.&nbsp;



“I think we’re well-positioned to weather the macroeconomic uncertainty,” CEO Mark Zuckerberg said on Wednesday’s call.&nbsp;



In a rare move this earnings season, Meta also provided some positive guidance, upping its intended capital spend. Most of that is earmarked for AI investments.&nbsp;



Microsoft also beat on EPS and revenue. The company reported EPS of $3.46 on $70 billion in revenue vs. the expected $3.22 EPS on $68.4 billion in revenue.&nbsp;



Microsoft, like Meta, will also continue its investments in AI. Capital expenditures for the first quarter came in at $16.7 billion, slightly higher than projections.&nbsp;



Microsoft execs uttered the word “tariff” just once on yesterday’s call, which shareholders surely loved.&nbsp;



Overall, it’s two solid reports. But economic conditions still pose a threat for both firms.&nbsp;



Next on the docket are Amazon and Apple, scheduled to post earnings this afternoon. Nvidia, the last of the Mag 7 to report, is scheduled to release on May 28.



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



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Economy

Meta, Microsoft earnings beat send stocks higher

Felix Jauvin

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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This week is one of the biggest we’ve had in a while for economic data releases.



In the spirit of all this data, let’s run through some charts and takeaways.&nbsp;



<h2 class="wp-block-heading">JOLTS report</h2>



On Tuesday we received the Job Openings and Labor Turnover Survey (JOLTS) report. It was a mixed one.



On one side, we saw job openings miss to the downside and begin to roll over after a few months of positive surprises:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdDaL2OJDnn3r36agPhI_jUSvNsO7hXsMg0UejpL3dLheBxLmQKp93qa1q-JW957arsogfe4USbzEpwiuLTui0LMHZ9ZrrFaWUOT2kLEWcYqK-9xrZArSP24ixL_RFxHWQFBWnoYQ?key=90IYwOw3SLKy-ekNe1rwF0Vl" alt=""/></figure>



On the other side, we saw the quits rate actually increase, hinting at increased confidence in the jobs market by individuals willing to quit their jobs and find something better elsewhere:&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcELLxRE2bP81fjPy9t6XP712Ykd5iUBZ2FxBBeFnIiUWuP6CAWwF4MbHHwaZvHQwaKYVVKqFuaxnSael5VJciXp9O-5F_RT-cqwby4duOFc1H68rKg5QPNj068SBOfH6XbKer2?key=90IYwOw3SLKy-ekNe1rwF0Vl" alt=""/></figure>



It’s pretty rare to see these two prints diverge. I think we’ll need to see the jobs report on Friday to get a cleaner read on the direction of the labor market, which is a key driver of the Fed’s reaction function.&nbsp;



<h2 class="wp-block-heading">GDP print</h2>



As mentioned in <a href="https://forward-guidance.beehiiv.com/p/greatly-disappointing-print">yesterday’s newsletter</a>, we received the first look at Q1’s GDP print, which was also quite mixed. The topline number of -0.3% quarter over quarter hid some interesting insights:



The big driver was net exports crashing lower, primarily due to a huge increase in imports. That mechanically lowers GDP growth. 



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="427" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=1024&amp;h=1024" alt="" class="wp-image-101447" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



However, looking at the more important components of GDP, consumption held up decently, and investment actually surged!



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf9SXvl6WS4nt_dH7l2sh2PD2flD1RjKSPo5HWmi8mc6Nl_9F5RR8XxCjibX98yqGJ52x7xeJD7p8685nvzVfAat-DNfOMuXFvK4xVvSisRxcbTFuQGvD4yt2N2ak75QQryWcIywA?key=90IYwOw3SLKy-ekNe1rwF0Vl" alt=""/></figure>



This hints at something I’ve been thinking a lot about recently, which is that tariffs could be creating a mirage in the hard data. This mirage creates the appearance of a strong economy because of all the tariff frontrunning that occurs from both consumers and businesses trying to buy goods before the tariffs truly begin.&nbsp;



<h2 class="wp-block-heading">Core PCE print</h2>



We also got the Core Personal Consumption Expenditures (PCE) print, which came in at 0% month over month (vs. consensus expectations of 0.1%)!



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="996" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=1024&amp;h=1024" alt="" class="wp-image-101448" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=413 413w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=419 419w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=352 352w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



This kind of data shines a light on how, if it weren’t for the fear of tariff-induced inflation, inflation would be on a fast track back to target and the Fed would be cutting interest rates like mad.&nbsp;



<h2 class="wp-block-heading">ISM survey</h2>



Finally, today saw the ISM Manufacturing PMI survey results, which provide a leading look into how the economy is digesting the <a href="https://blockworks.co/news/trump-sell-us-assets-trade-deficit">tariff war</a>.&nbsp;



Overall, we’re seeing it hold strong, and I think this validates the notion that a lot of manufacturing activity has been frontloaded due to tariffs:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc9bme6dNflh9HIshm1LDj1E1jz0Atsj96Kxm6Jxkif6_EENC7kHMX5deQnnaPNNDJQLRUE-Fm0t6zqE9NGQfEUayoIE6XROcwzGDfa5h9tPSSn9zomSGzZqoNXL_TlBHJhP3LBaQ?key=90IYwOw3SLKy-ekNe1rwF0Vl" alt=""/></figure>



Out of the subcomponents, the aspect that continues to be of more interest to me is the prices-paid component, which continues to surge:&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfCjRXyVpzq2JWE1Uv6xNrQM7TeflEqYSRSdLK96I4kt9g_5kf6WsJFl1NCCEVjV2N6gumKY3BfN7le7uwjmozRZeNwfJO-e1TsDxD74IH9R8aLXMZQJd5W_fuUYmvswuVe902HIw?key=90IYwOw3SLKy-ekNe1rwF0Vl" alt=""/></figure>



As one of the most leading indicators of inflation, this kind of uptick in prices paid does not bode well for the trajectory of rate cuts expected from the Fed.



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<li><a href="https://blockworks.co/newsletter/daily">Blockworks Daily</a>: Unpacking crypto and the markets.</li>



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Unpacking a big week for US economic data

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>.



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



Crypto accelerator <a href="https://alliance.xyz/">Alliance</a> DAO has announced its latest cohort of 20 startups: the ALL14. They received over 1,700 applications this time around.&nbsp;



Accepted startups will join the three-month accelerator to further build their businesses. The first two weeks are in-person, and the remaining weeks occur remotely.



Typically, accelerators offer connections, networking and guidance in exchange for some equity in the startup that is accelerated. This accelerator includes lectures, one-to-one mentorship, weekly check–ins and a demo day.



Alliance DAO, formerly known as DeFi Alliance, counts other founders, lawyers, liquidity providers and auditors among its members.



“We only require a $450k investment in your company (at unparalleled, founder-friendly terms). We&#8217;ve learned that our best performing teams actually do want us to have skin-in-the-game,” the group’s website states.



Alliance says its median startup raises $3.5 million after the program. VCs like Paradigm, Dragonfly, and Multicoin have invested in Alliance-accelerated startups in the past.



<h2 class="wp-block-heading">About the cohort</h2>



Solana and Ethereum were the most-used chains by startups that applied to ALL14, and Base was the most-used L2.



35% of admitted teams are focused on AI, while 30% are focused on stablecoin innovations, a sign that both are continuing to trend in the startup world.



Alliance’s latest cohort offers an interesting glimpse into the future of crypto, AI, and where things might go from here.



Whet your appetite with some of these names:



<ul class="wp-block-list">
<li>Slop Club </li>



<li>Poof</li>



<li>Wootzapp</li>
</ul>



Some of the teams’ pedigrees are pretty impressive, though. Think founders that are also Stanford engineers, have had stints at billion-dollar firms, or have worked at prior startups with top Silicon Valley investors before starting their new thing.&nbsp;



A list of the crypto-focused:



<ul class="wp-block-list">
<li>8020 (Moonshot for Asia)</li>



<li>Zabio (P2P stablecoin exchange for LATAM)</li>



<li>Lemonade Payments (Crypto payments in Africa)</li>



<li>Zynk Labs (Instant crypto settlements)</li>



<li>Fido (DeFi-powered neobank)</li>



<li>Guess.best (opinion-based betting market)</li>



<li>Junction (cross-chain DeFi toolkit)</li>



<li>Ripe (stablecoin payments for Asia)</li>



<li>Orbit (AI assistant for DeFi trading)</li>



<li>Poof (vibe coding for dApps)</li>



<li>Seismic (encrypted blockchain)</li>



<li>Offline protocol (communication, payments without internet)</li>



<li>GrandmAIsters (AI agent chess arena game)</li>



<li>FactCheck (stablecoin-incentivized fact-checking)</li>
</ul>



Others in the cohort:



<ul class="wp-block-list">
<li>Slop Club (Tiktok for AI videos)</li>



<li>Freedom GPT (Pagerank for AI)</li>



<li>Wootzapp (Private data crowdsourcing for AI training)</li>



<li>Afterschool (AI tutor)</li>



<li>CollectiveScience (Academic peer review tool)</li>



<li>CreatorGen (AI avatar marketplace)</li>
</ul>



Alliance also hosted an IRL event this week:



<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">Yesterday was demo day at <a href="https://twitter.com/alliancedao?ref_src=twsrc%5Etfw">@alliancedao</a>. It’s been a pleasure to be part of ALL14 full of such incredible people with the best energy and vibes. Super grateful to <a href="https://twitter.com/QwQiao?ref_src=twsrc%5Etfw">@QwQiao</a>’s who’s original post of wanting to invest in subversive tech made me apply and his consequent vote of… <a href="https://t.co/K7pc2cjeux">pic.twitter.com/K7pc2cjeux</a>&mdash; satvik (@sxtvik) <a href="https://twitter.com/sxtvik/status/1917576094078640361?ref_src=twsrc%5Etfw">April 30, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The application window for the next cohort closes on May 28.



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



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DAOs

Alliance DAO unveils cohort of startups for 3-month accelerator

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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Worldcoin — usable via the World mobile app — is finally launching in the US and making a big splash with a slew of big integrations.



World cofounder and OpenAI CEO Sam Altman briefly took the stage during the live event Wednesday night and declared: “I am a very proud American.”&nbsp;



Thanks for that, Sam.



<h2 class="wp-block-heading">Orbs in America</h2>



US residents can now <a href="https://blockworks.co/news/worldcoin-eyeballs-scan-brooklyn">get their irises scanned</a> to claim some WLD tokens as part of an ongoing airdrop. Iris-scanning Orbs are being set up in Atlanta, Austin, Los Angeles, Miami, Nashville and San Francisco to start (sorry, New Yorkers).&nbsp;



Those in the US who pre-registered for World have also been airdropped 150 WLD, which is about $150.



The for-profit firm Tools for Humanity is the developer of World, and the nonprofit World Foundation is behind the Worldcoin token.



TFH’s goal is to “verify” as many humans as possible and get people set up with World IDs so that humans can discern between AI or bot accounts and real human-run accounts. Users can get verified World IDs by getting their irises scanned by a metallic Orb (if this sounds dystopian to you, you’re not wrong).



The next step in this vision is the Orb Mini, revealed Wednesday night. It looks like an eyephone with Apple Vision sockets on the back, if you ask me:



<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">NEW: the Orb Mini can scan to verify humans for the World Network <a href="https://t.co/LbnuzU8OlO">pic.twitter.com/LbnuzU8OlO</a>&mdash; The Drop (@thedropnft) <a href="https://twitter.com/thedropnft/status/1917769725318177029?ref_src=twsrc%5Etfw">May 1, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The Orb Mini’s main purpose is to make scanning people’s irises easier, but at some point, it’s expected to also serve as a point-of-sale terminal.



“We tried everything not to build a hardware device,” said Tools for Humanity CEO Alex Blania on developing the Orb concept. He also noted the company has spent “millions” on developing the Orbs.



The Orb Mini as a point-of-sale would mean you could buy items using just your eyeballs, and the Orb would deduct the amount to be paid from your World wallet. Sounds like a Black Mirror episode — or like Amazon’s pay-with-your-palm thing.



Until that day comes, you can pay for items with a World Visa card instead that pulls directly from your World wallet.



The standard-size Orb has also been updated, which we knew about previously, and they’ve made a point of reminding us there’s <a href="https://www.pcmag.com/news/sam-altman-worldcoin-launches-deep-face-new-eye-scanning-orb">an Nvidia chip</a> in there.



Orb manufacturing is being spun up in Texas, too.



<h2 class="wp-block-heading">World 4.0</h2>



The World app received another big update with its 4.0 edition. Verified profile pictures and a Stripe integration are also being added.&nbsp;



Within the World app, there’s now a prediction markets mini-app called Kalsi available to US residents where users can make predictions with WLD. Morpho, another miniapp, enables DeFi lending for World wallet users to borrow against crypto held in that wallet (Morpho’s also available for the US).



Circle’s USDC is also being added natively to the World app, with plans for a Euro stablecoin to be added at some point.



TFH is <a href="https://blockworks.co/news/world-id-verification-gaming">continuing its gaming plans</a> with a “League of Humans” tournament with gaming tech firm Razer, will put Orbs in Razer stores, and may add its “Deep Face” tech to Razer webcams for deepfake prevention and human verification.&nbsp;



During a press conference, the TFH team said South Korea is also a big focus for them because of the country’s strong presence in the gaming world.



World ID badges on Tinder, Hinge, and Match will be piloted in Japan to verify dating profiles in the country.



TFH says there are a total of 26 million World accounts now with 12 million verified users. Over 350 million World crypto wallet transactions have occurred in total.



Despite all this news, the WLD token price didn’t do much — it climbed from about $1.02 at the start of the live event, rose to $1.16, and then fell back to $1.05 by the end of the night.



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</ul>

sam altman

Sam Altman’s Worldcoin gets new Orb Mini and US launch

Donovan Choy

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



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



Privacy on the blockchain is a nice idea, but it’s hard to build.



Applications like <a href="https://blockworks.co/news/defi-privacy-zero-knowledge-proofs">Railgun</a> on Ethereum enable that today, but it’s computationally expensive. You could opt for a chain like <a href="https://blockworks.co/tag/monero">Monero</a>, but it lacks smart-contract programmability.



So the holy grail of onchain privacy looks a little like this: opt-in privacy, native smart-contract programmability and, ideally, a bridge into the EVM world of DeFi. All while keeping the protocol decentralized.



The Aztec team may be closest to cracking that code.



Enter Aztec Network, a zk rollup built on Ethereum (not to be confused with Aztec Connect, which was sunset in 2023). The public testnet launches today.



By leveraging zero-knowledge technology, user balances and transactions on the L2 are encrypted to ensure privacy around details such as the sender, recipient or the transaction itself.



Aztec’s programmability is enabled by <a href="https://blockworks.co/news/dappicom-web3-gaming-nintendo">Noir</a>, the company’s Rust-like language for zero-knowledge circuits. Noir lets developers write smart contracts that can perform shielded loans or private voting without needing to learn cryptography.



&#8220;Developers can use Aztec to build dapps with privacy features that seamlessly blend with Ethereum&#8217;s existing infrastructure, and they won&#8217;t need to struggle implementing complex cryptography,” said Aztec Network co-founder Zachary Williamson in a press release.



<h2 class="wp-block-heading">Aztec’s differentiation</h2>



Unlike most L2s (one exception is <a href="https://blockworks.co/news/arbitrum-stylus-testnet">Arbitrum’s WASM</a>), Aztec makes some significant modifications to the chain’s execution layer.



Public transactions on Aztec are executed through its custom Aztec Virtual Machine (AVM). Private transactions, however, are offloaded to a client-side environment known as the <a href="https://docs.aztec.network/aztec/concepts/pxe">Private eXecution Environment</a>. PXE is used to generate proofs and run smart contract logic privately.



Transaction proofs are then aggregated into single proofs for Ethereum settlement.



Client-side generation of <a href="https://blockworks.co/news/brief-history-zk-tech">zk proofs</a> is typically expensive. Yet, Aztec’s new L2 keeps costs down. That’s largely thanks to its PLONK proving system, which makes it “simpler to generate client-side proofs on expensive hardware,” according to the company’s&nbsp; <a href="https://aztec.network/blog/history-of-aztec-pioneering-privacy-in-web3#:~:text=In%20tandem%2C%20the%20team%20also,%E2%80%9Cmakes%20the%20blockchain%20real%2C%E2%80%9D%20bringing">blog</a>. PLONK was <a href="https://vitalik.eth.limo/general/2019/09/22/plonk.html">co-invented</a> by Aztec co-founder and CEO Zachary Williamson himself.



“Our client-side Prover incorporates the latest in PLONK research with the Protogalaxy folding scheme and a unique technique we call Goblin Plonk to accelerate recursion. We also built our own programming language, Noir, from scratch to compile programs directly into zero-knowledge circuits, which allows us to bypass the overheads seen with zero-knowledge virtual machines,” Williamson told Blockworks.



Contrary to popular belief, most zk rollups do not actually leverage zero-knowledge tech for the purposes of privacy encryption, making it somewhat of a misnomer. Zk rollups today use the tech primarily for the size compression of transactions —&nbsp;<a href="https://blockworks.co/news/zk-rollups-cheaper-with-scale">for scaling throughput</a> — without encrypting user data.



Aztec applies zk proofs not just for verification, but also to enable end-to-end encryption of transaction metadata. Privacy is optional, however, tying into Aztec’s goals of developing a chain that has flexible privacy and selective disclosure.



That architecture is not possible on the Ethereum L1 today, where all details would be publicly exposed. Neither is it possible on other L1 chains like Monero or Zcash, which allow for private payments but lack smart contract programmability.



&#8220;We currently view blockchain privacy as all or nothing, but it doesn’t have to be,&#8221; Williamson said.



Aztec’s testnet already has over 100 sequencers in its Devnet and Provernet networks, paving the way for decentralization starting from day one.



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

0xResearch Newsletter

ZK rollup Aztec launches testnet today

David Canellis

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



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



Thirty-two years ago this week, in May 1993, WIRED released its second-ever print edition featuring three legendary cypherpunks on the cover: Tim May, Eric Hughes and John Gilmore.



Steven Levy’s piece, “<a href="https://www.wired.com/1993/02/crypto-rebels/">Crypto Rebels</a>,” handily documents the genesis of the Cypherpunk movement, starting almost two decades earlier in 1975, when Whitfield Diffie led the creation of public-key cryptography alongside Martin Hellman and Ralph Merkle.



Until then, the US government codebreakers had dominated cryptography through the National Security Agency (NSA). Cryptographic tools were considered weapons under the Arms Regulation law, “right alongside tanks and bomber planes,” Levy wrote.



The act of giving regular citizens access to “military-grade” privacy tech like public-key cryptography — which would allow information to be stored trustlessly and sent securely over unsecure networks — was then a brave act of defiance for personal liberty. A fight against government tyranny.



Public-key cryptography would go on to be a cornerstone of the modern internet, protecting emails, bank accounts, website interactions, many other online matters, and, of course, everyone’s bitcoin.



Or as late The Codebreakers author David Kahn wrote, public-key cryptography was the “most revolutionary new concept in the field since…the Renaissance.”&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd3eI8nlufJatICA1Q805iDNciY0hVaE0tNaucD2tyAVbeVroSBSvABh0r-nflKE-61NP4_b2mL3uJV6Fjl8zqJQMP3Of8UmCkXJfU77YaLGoOePM5XjvKKaOixrOaTLVowutElVA?key=7vIqJnFhH6Y8sg0_EjaADRk9" alt=""/><figcaption class="wp-element-caption">Satoshi, is that you?</figcaption></figure>



Around the same time, MIT scientists Rivest, Shamir and Adleman developed a separate public-key method, RSA, which had far greater potential than the government-created Data Encryption Standard, which didn’t use public keys at all.



WIRED’s article also detailed the plight of cryptographer Phil Zimmermann in the wake of his invention of Pretty Good Privacy (PGP) — a mighty, free alternative to RSA that utilized RSA patented technology without permission.



Zimmermann went to great lengths to build PGP, missing five mortgage payments and “coming within an inch” of losing his home. But he wasn’t selling the software — he simply released it into the wild (internet bulletin boards), “like thousands of dandelion seeds blowing in the wind,” he wrote.



Still, the US government made Zimmermann the target of a criminal investigation for munitions export without a license, which was still ongoing at the time of WIRED’s piece.&nbsp;



Two years later, Zimmermann published the entire PGP source code in a hardback book released by MIT Press — allowing anyone in the world to build their own privacy tech all by themselves.&nbsp;



Exporting books is a First Amendment right that should trump any restrictions on the exportation of cryptographic software. The investigation was eventually closed and the Feds brought no charges.



<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">Cypherpunk history &#8211; Wired Magazine issue #2 May 1993, Crypto Rebels. Gilmore, May, Hughes, Zimmerman, Chaum&#39;s &quot;anonymous digital money&quot;. &quot;Cypherpunks write code. Crypto Anarchy is inevitable. It&#39;s already happening&quot; READ: <a href="https://t.co/J5FnbfvSqw">https://t.co/J5FnbfvSqw</a> Photos: an internet premier. <a href="https://t.co/GcXbvn6fNe">pic.twitter.com/GcXbvn6fNe</a>&mdash; FRANCIS &#8211; BULLBITCOIN.COM (@francispouliot_) <a href="https://twitter.com/francispouliot_/status/1046141148786577408?ref_src=twsrc%5Etfw">September 29, 2018</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>







To say that there might be no Bitcoin without the Cypherpunks is a severe understatement. Satoshi Nakamoto himself may very well be underneath one of the many masks featured in WIRED’s article.



Here’s how deep the parallels go: at multiple points in Levy’s writing, one could easily sub Bitcoin-related terms into any number of sentences describing the fight for accessible cryptography:



“Diffie recognized that the solution rested in a decentralized system in which each person held the literal key to his or her own <s>privacy</s> financial sovereignty.”



“In the Cypherpunk mind, <s>cryptography</s> money is too important to leave to governments or even well-meaning companies.”



&#8220;You can have my <s>encryption algorithm</s>… bitcoins, when you pry my cold dead fingers from my private key.&#8221;



I’ll leave you to read the <a href="https://www.wired.com/1993/02/crypto-rebels/">full piece</a>, which is still available online, if nothing more than to reinforce the significance of the “crypto” in “cryptocurrency.” 



After all, very real individuals fought years for its existence.



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Cybersecurity

Crypto in 1993: WIRED cover story on Cypherpunks turns 32

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>.



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



It’s been a busy week for VC raises, and some of the projects have caught heat around social media for being infra plays.&nbsp;



Like Unto Labs, for example. 



“We definitely got bucketed into the whole ‘another L1, oh no’ [discourse]. We felt a little sad about that, but we’ll just have to prove it. Because, in some ways, it’s true,” cofounder Will Yoo told me.&nbsp;



But both Yoo and cofounder Liam Heeger said they’re up to the challenge because they’ve both “done this before,” whereas other teams haven’t “built systems that are supposed to perform at extremely high levels of scale.”&nbsp;



“We love Solana and we think they’re going to be an incredible competitor. We’d be honored to compete with them,” Yoo said. They’ll be “ripping” out the Solana virtual machine with Thru, and they argue that they won’t be competing with Jump’s Solana client — something that’s literally <a href="https://x.com/whosknave/status/1897396270639251537">held up</a> in court.&nbsp;



Heeger is ex-Jump Crypto, but he didn’t leave without making some waves. Jump <a href="https://blockworks.co/news/jump-sues-former-solana-client-engineer">filed a suit </a>against Heeger after he departed Firedancer to start Unto with Yoo. The case was <a href="https://x.com/whosknave/status/1889001063199711610">dismissed</a> in February, and the two told me that they had a term sheet from Electric Capital, which led their seed round, the next day.&nbsp;



They wouldn’t comment further on the litigation.



The $14.4 million rounds are a combined pre-seed and seed raises. Framework Ventures led their pre-seed.&nbsp;



The capital will go towards building out the core infrastructure on Thru and the ecosystem around it, which they expect to be “capital-intensive, but because [Thru’s] going first-party rather than third-party, we believe we can be capital-efficient.”



The two, in Thru’s <a href="https://www.thru.xyz/">manifesto</a>, argued that blockchains “have lost their way.”



“Thru&#8217;s consensus scales through competition, not accumulation. Operators earn their spot with uptime, throughput, and by relentlessly pushing fees toward zero, not by how much stake they can attract,” it said. The goal is to not only compete with other Web3 projects, but also to compete with Web2. 



Lofty ambitions, right?&nbsp;



I asked Yoo and Heeger where they think they’ll be in a year, and they told me they want to “spend the amount of time necessary to create something incredible.”



So it may take some time, but the two think they can stand out in the long term.



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blockchain

How Unto plans to compete with Solana

This is a segment from the Blockworks Daily newsletter. To read full editions,&nbsp;<a href="https://blockworks.co/newsletter/daily">subscribe</a>.



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



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“It is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption. The very contrary is the truth.”



— William Stanley Jevons
</blockquote>



When people hoped that more efficient steam engines would help conserve England’s limited reserves of coal, William Jevons warned of just the opposite: Greater efficiency, he predicted, would lead to even greater consumption.&nbsp;



He was right, of course, and his prediction became known as the Jevons paradox, which is often invoked whenever efficiency gains inspire people to use more of something.



When cars got more fuel-efficient, people drove more; when lightbulbs got more efficient, people installed more of them; when HVAC got more efficient, people built bigger houses.



But these are better described as examples of a “rebound effect,” where some, but not all, of the expected savings from efficiency are offset by increased usage.



It wasn’t until the digital revolution that the Jevons paradox truly came into its own: As fast as Moore’s law has decreased the cost of computing, our use of computers has increased even faster.



As a result, things like semiconductors and cloud computing — where costs are in perpetual decline — have been both great businesses and great investments.&nbsp;&nbsp;



The current craze for investing in AI is similarly predicated on more efficient GPUs enabling a disproportionately large expansion of usage.



Microsoft’s Satya Nadella is confident that it will: “Jevons paradox strikes again,” he <a href="https://x.com/satyanadella/status/1883753899255046301">posted</a> on X in response to investors briefly worrying that the advent of DeepSeek would reduce demand for both GPUs and cloud services.&nbsp;



So far, he seems to be right — the efficiency gains from DeepSeek and other more efficient LLMs seem to have been more than offset by increased demand.&nbsp;



But any investor in either airline or telecommunication stocks can tell you that it doesn’t always work out that way.



In both cases, efficiency rose, costs fell and usage increased disproportionately — but investors still lost.



Airline traffic, for example, has increased exponentially since people started flying commercially in the 1950s (and with only the smallest of cyclical downturns):



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeaBqOYzu0azaYsc84h_iGgfy9C1_Sw_XDCvkh9OyRPlO95ws6ItZ2fHf4i7_mCqVgPs7K3i1U0kqLs6ycMeLno8ohYQmdFLOaDXi8FuiSBFyYIyEoi6uq1EqWvvHaM-Y_Tksj_PA?key=WRLkgfDF6uV-2-i6m20KfNva" alt=""/></figure>



That looks like a highly investable chart and the Jevons paradox-related <a href="https://www.iata.org/en/iata-repository/publications/economic-reports/global-air-passenger-markets-riding-out-periods-of-turbulence/">numbers</a> are even better: Since 1970, the real cost of air travel has fallen by 1.7% per year, on average, while the underlying rate of air traffic has grown 4.4% per year.



Anyone who had those numbers in advance would likely have started an airline or at least invested in airline stocks — but they’d have come to regret it: Warren Buffett calls airlines the “worst sort of business” and airline stocks a “deathtrap for investors.”



Similarly, lots of people who correctly predicted the explosion of internet traffic in the 1990s — or underpredicted it even — lost money buying stock in the companies that hosted that traffic.&nbsp;



Internet traffic grew 127% per year between 1997 and 2003 — at the end of which period investors in the likes of Level 3 Communications, Global Crossing and WorldCom were more or less wiped out.



Now consider crypto.



Much of crypto investing is predicated on the assumption that more efficient, lower-cost blockspace will lead to an exponential increase in demand for that blockspace.&nbsp;



The results have been mixed so far.



Cheaper blockspace has led to an explosion of activity on blockchains like Solana and Ethereum layer-2s like Base.



But that’s mostly been thanks to memecoin trading, which is presumably not a decades-long growth story — it’s hard to imagine that even cheaper blockspace will lead to even more memecoin trading.



(Let’s hope not, at least.)&nbsp;



For what the elasticity of blockspace demand looks like without memecoins, we might only have to look at Ethereum.



Early hopes that moving execution off-chain would lead to Ethereum collecting more fees in settlement and data availability than it lost in execution have been disappointed.



On Ethereum itself, the cost of transacting has fallen over 90% from its 2021 peak — but, per data from <a href="https://app.blockworksresearch.com/analytics/ethereum?dashboard=82">Blockworks Research</a>, the number of transactions is close to unchanged.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXckG13181CJJ6hp1eT5_CxwQ1OQ22M-LWXTUxqM9NLqXKTvX-wG3nGzrKLHB9pjoR7n-WdGs1qz0BRBWOx7lpMxEZYFS39Is5p7pbIHfmoOcUPZNDmeb2WeC1zrOX06bvdtt2OdSg?key=WRLkgfDF6uV-2-i6m20KfNva" alt=""/></figure>



Worse still, the combined fees paid on all Ethereum-aligned layer-2 blockchains does not offset the loss of fees on layer-1 Ethereum — so the ecosystem as a whole does not appear to be an instance of the Jevons paradox.



That does not mean that it’s headed for failure.&nbsp;



The airline and telecommunication industries have been extremely useful to the world, providing positive externalities for society far in excess of the negative internalities that shareholders have suffered.



But that is a lesson to be learned: You can be right about the Jevons paradox and still lose money investing in it.



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investors

What crypto investors can learn from Jevons paradox

Jeff Albus

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



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Solana is stalled sideways, with the broader crypto market hitting some light turbulence. SOL is trading at $145.45 midweek, down 2.5% from last Wednesday and now drifting crabwise after a month-long rally that pushed it up nearly 30% from April lows.&nbsp;



Despite the modest cooling of momentum, Solana <a href="https://app.blockworksresearch.com/assets/sol?tags=sol&amp;interval=1w">continues</a> to print usage at speed. Over the past 30 days, transaction fees have hit an annualized $432.9 million, with SOL burn running at an annualized $216.5 million pace.



Besides macro headwinds, we can probably trace some of the cautious price action to the looming FTX liquidation, where over 60% of the estate&#8217;s onchain assets are in SOL. The first wave of creditor repayments is scheduled for May 30 — funded by prior asset sales, including FTX’s March SOL deals — which may still weigh on sentiment even if the tokens themselves are no longer in play. SOL&#8217;s market cap has slipped to $75.3 billion, and while 24-hour volume remains strong at $3.49 billion, buyers can&#8217;t seem to stop peeking over their shoulders.



The last round of FTX estate unlocks <a href="https://blockworks.co/news/sol-investors-shrug-off-unlocks">kicked off March 1</a> — right before a drawdown in SOL’s price, although there were obviously <a href="https://blockworks.co/news/tariff-fears-wipe-out-sol-gains">other factors involved</a>.&nbsp;



Bitcoin, meanwhile, had a little gut punch this morning due to macro. On Wednesday, BTC <a href="https://blockworks.co/price/btc">dropped</a> to $92,910 after US GDP data showed a <a href="https://forward-guidance.beehiiv.com/p/greatly-disappointing-print">0.3% contraction in Q1</a> — its first in three years. Analysts were quick to cite the sudden impact of Trump&#8217;s revived tariff policy, with imports surging and dragging down the GDP print. Stocks sold off, recession chatter kicked up, and bitcoin dipped. As is tradition, the price rebounded within hours to $94,000, buoyed by strong spot demand and resilient ETF inflows, including over $3 billion in net new capital through April 29.&nbsp;



Last weekend&#8217;s <a href="https://blockworks.co/news/crypto-solana-community-istanbul-turkey-conference">Crossroads event in Istanbul</a> allowed the Solana community to take stock of direction. It was a lot of builders comparing notes, investors checking pulse, and variant teams workshopping infrastructure that still has a shot at scaling mainstream demand — lots of honest conversations about payments, gaming, DePIN and the gaps that still need filling.



So far, though, the resulting confidence of those discussions has not translated into price. For now, conviction is expensive. The market is still frozen by what-ifs. What if the market prices in the FTX overhang? What if bitcoin fails to clear $96K and drags everything else with it? What if global retaliation hits US tech exports, and risk assets feel the heat?&nbsp;



Once these questions have answers, folks will either step up or step aside. And that&#8217;s when the market&#8217;ll start moving again&#8230;ready or not.



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FTX repayments loom over Solana

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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We have a more specific date on when Galaxy Digital intends to (finally) go public in the US. And speaking of crypto-related equities, Grayscale’s launched a new ETF.



First, on Galaxy: The firm is eyeing May 16 for its Nasdaq listing. We reported earlier this month that the SEC <a href="https://blockworks.co/news/galaxy-sec-listing-nasdaq-ipo-market-crypto">“declared effective”</a> the company’s registration statement to do so. There’s still that shareholder meeting to approve the move on May 9.



Galaxy shares have traded on the Toronto Stock Exchange since 2020 and will continue to do so “for a period of time” if and when the Nasdaq listing is finalized, the company says. The new listing will “enable us to attract a broader investor base,” CEO Mike Novogratz said in a statement.&nbsp;



It would seem he’s right given financial pros like to see cash flows, balance sheets, etc. — things bitcoin alone doesn’t offer. And as noted before we’re keeping an eye on the other segment players looking to <a href="https://blockworks.co/news/circle-ipo-stablecoin-competition-investors">soon go public</a> (looking at you, Circle and <a href="https://blockworks.co/news/crypto-ipo-boom-etoro-kraken">eToro</a>).



On to the Grayscale update, the firm has launched an ETF that invests in companies adopting bitcoin as a treasury asset. Galaxy’s TSX-listed shares are actually the fund’s seventh-largest holding out of the gate. Its top two holdings are Strategy and Tesla, with ~27% and ~17% positions, respectively.&nbsp;



Bitwise launched a similar product in March. That one, too, skews heavily toward MSTR (also at nearly 27%) but opts for Marathon Digital and Riot Platforms as its next-biggest holdings (~11% and ~9%). Less than 2% of the fund’s assets currently go toward Tesla. 



That Bitwise offering has just $5 million in AUM after nearly two months on the market; still, these funds’ investable universes are <a href="https://blockworks.co/news/corporate-bitcoin-adoption-boom-inevitable-kraken">expected to grow quickly</a>. We’ll see what kind of impact that has on the demand for them.



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ETFs

Another crypto equity ETF launches ahead of Galaxy’s US public listing

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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A household name is teaming up with a stablecoin platform in a bid to bring tokenized dollars into everyday life.



That would be payments giant Visa, which is now launching stablecoin-linked cards.&nbsp;



What does that even mean? Essentially, fintech developers using Bridge can offer these cards to their customers, who can then make purchases at any merchant location that accepts Visa.&nbsp;



Bridge deducts funds from the cardholder’s stablecoin balance and converts the balance into fiat so the merchant gets paid in their local currency. The card programs are starting in Argentina, Colombia, Ecuador, Mexico, Peru and Chile.



Stablecoins are a roughly $230 billion market. We’ve <a href="https://blockworks.co/news/yield-bearing-settlement-network-tokenization">written before</a> about how industry watchers expect this space to multiply into the trillions of dollars in the coming years.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd2HTSPpxI8_NcY_wNScbXJ-Q_3sVDe_HLuRRGOnfPuNjWFSRF1lPr2Ls3BICr2nf5dvtq9_GBlWLBJ2poNappI2Q2v1_o8g8P4RUKkaF9uuRCMgq8ra1WRUEDkOwQsN823jKIL?key=bliKFCbrz6MFZ2hPLgJRCh01" alt=""/></figure>



Why this space is poised to grow substantially doesn’t seem too difficult a concept.



“By enabling fast, cheap, global payments, among other uses, stablecoins have become one of crypto’s most obvious killer apps,” a16z noted in a 2024 State of Crypto <a href="https://a16zcrypto.com/posts/article/state-of-crypto-report-2024/">report</a>.



More people than ever seem to be <a href="https://blockworks.co/news/stablecoins-tokenization-blackrock-galaxy-das">paying attention now</a>, especially as tokenized money market funds — viewed by some as a sort of yield-bearing alternative to stablecoins — <a href="https://blockworks.co/news/tokenized-yield-funds-complement-stablecoins">also gain steam</a>.



A look at a Treasury Borrowing Advisory Committee <a href="https://home.treasury.gov/system/files/221/TBACCharge2Q22025.pdf">presentation</a> (dated today) discusses stablecoins’ potential to “catalyse structural changes” across bank deposits, the Treasury market and monetary supply.&nbsp;



<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">Another 20 page presentation at <a href="https://twitter.com/USTreasury?ref_src=twsrc%5Etfw">@USTreasury</a> regarding stablecoins. The most comprehensive I&#39;ve seen to date. cc <a href="https://twitter.com/nic__carter?ref_src=twsrc%5Etfw">@nic__carter</a> <a href="https://t.co/4SbarnGOwX">pic.twitter.com/4SbarnGOwX</a>&mdash; Quinn Thompson (@qthomp) <a href="https://twitter.com/qthomp/status/1917619129676357692?ref_src=twsrc%5Etfw">April 30, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



You might remember Bridge being in the news last October, when Stripe said it would <a href="https://blockworks.co/news/stripe-bridge-acquisition-stablecoin-infrastructure">acquire the company</a>. The $1.1 billion deal closed in February.



Architect Partners’ Eric Risley called the deal “the most important M&amp;A transaction to date for our industry” at the time. It offered more evidence that stablecoin-based payments have compelling benefits even to non-crypto companies, he added.&nbsp;



It would seem integrating stablecoins into Visa’s existing network furthers that narrative.&nbsp;



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Bridge

Visa-Bridge link-up extends the stablecoin adoption narrative

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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The US economy contracted in the year’s first three months. It’s the first quarterly decline since 2022.&nbsp;



Today’s advanced GDP estimate for Q1 showed a 0.3% annualized decline, sending stocks lower, and Treasury yields and gold higher. Analysts had expected GDP to grow 0.4% in the first quarter.&nbsp;



The report comes a day after President Trump marked <a href="https://blockworks.co/news/trump-first-100-days-crypto-policy">100 days in office</a>, during which time the S&amp;P 500 notched its worst performance (-7.3% since Inauguration Day) since the first 100 days of President Nixon’s second term. The Nasdaq Composite lost 11%, which is the biggest drop since President Bush’s first term in 2001.&nbsp;



In a Truth Social post Wednesday, Trump insisted that “This is Biden’s stock market, not Trump’s.”&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfc1IoHcsGz19_gnIcx4nixhvqbb9R1Kmj6keCI1ugHw9EH6wPqAX8ELsmtIPwYrP2MAxeb3uoVh_dMTwHhBog_dI5F9Dqqa9GPFDj-R0uby1Cy6zcYQLJ82UEwMUgwiNEwORnG2g?key=bliKFCbrz6MFZ2hPLgJRCh01" alt=""/></figure>



While the “Liberation Day” <a href="https://blockworks.co/news/tariffs-effect-economy-recession-gdp-trump">tariffs came</a> at the beginning of the second quarter, the Q1 data suggested that consumers and businesses started preparing for more aggressive trade policies at the beginning of the year. The first quarter saw an increase in imports alongside declines in consumer and government spending — the perfect recipe for a negative print.&nbsp;



Imports were up more than 41% in Q1, compared with a 1.9% decline in the last quarter of 2024. Goods imports were up more than 50%, showing that consumers and businesses were in a rush to secure larger purchases and increase inventories ahead of expected tariffs.&nbsp;



The GDP print, as expected, falls between projections from the Atlanta Fed’s GDPNow (-1.9%) and the New York Fed’s Nowcast (2.6%).



Also today, the Treasury Department announced plans to revamp its buyback program. There could be “possible enhancements” made to the purchase amounts, scheduling and frequency, Treasury said in a <a href="https://www.bloomberg.com/news/articles/2025-04-30/us-keeps-long-term-debt-sales-guidance-may-enhance-its-buybacks">statement</a>.&nbsp;



The update comes after <a href="https://blockworks.co/news/trade-war-hits-treasurys">Treasurys sold off</a> earlier this month, <a href="https://blockworks.co/news/global-markets-recalibration">sending yields higher</a> and raising concerns about a slowing economy and tightening financial conditions. The surge in yields, Trump said, was concerning enough for him to pivot on some of his tariff policies; he issued the 90-day pause on most countries just a week after Liberation Day.&nbsp;



Now investors are waiting for signs that the administration is inking trade deals with other countries. After comments from Treasury Secretary Scott Bessent that the situation with <a href="https://blockworks.co/news/global-trade-us-china-deal?utm_source=mail.blockworks.com&amp;utm_medium=newsletter&amp;utm_campaign=fed-independence-may-be-the-next-major-loser">China is “unsustainable,”</a> stocks felt some short-term relief, but have since faltered on the recovery path.&nbsp;



The GDP print also comes a day after the Conference Board released the latest consumer confidence figures, which surprise, surprise, were very bleak. The index fell 7.9 points, marking the eighth straight monthly decline and the lowest reading since 2020.&nbsp;



As Sevens Report Research founder Tom Essaye wrote in a note this morning, the report emphatically proves that investors and consumers are certain that the future looks bleak.&nbsp;



Apologies for ending on a negative note, but the numbers just don’t lie! We’ll be back tomorrow with hopefully some better news.



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Donald Trump

US economy shrank in first 3 months of the year as fears of tariff impact grow

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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Remember the “interoperability” gaming dream?&nbsp;



Ubisoft is spinning up a Decentralized Verification Network (DVN) to verify crypto assets that are being moved or bridged from one blockchain to another.&nbsp;



The company is using LayerZero’s tech — more specifically, its codebase and omnichain messaging protocol — in the deal. The game studio is running its own clients and nodes for its network, however.



The DVN means Ubisoft can let players move their NFTs and in-game currencies from one chain to another, which makes them usable with other Ubisoft crypto games (or external games or platforms). It could also make complete migrations from one chain to another easier if Ubisoft ever decided to move one of its blockchain games.



Ubisoft may enable cross-chain bridging soon for its fantasy turn-based RPG Champions Tactics: Grimoria Chronicles, which launched using the Oasys <a href="https://www.coinbase.com/learn/crypto-glossary/what-is-the-ethereum-virtual-machine">EVM</a> blockchain in October 2024. Last year — months before the game launched — LayerZero <a href="https://x.com/LayerZero_Core/status/1778136368025313532">said it was adding support</a> for Oasys with the end goal of making Champions Tactics “omnichain.”



Now, it sounds like that’s actually possible.



LayerZero’s tech turns assets in transit into Omnichain NFTs (<a href="https://docs.layerzero.network/v2/developers/evm/oft/quickstart">ONFTs</a>) or Omnichain fungible tokens (OFTs). ONFTs could be assets like in-game items, while OFTs could be used for in-game currencies.&nbsp;



Ubisoft will be able to decide the cost of bridging assets for users, LayerZero Labs CEO and cofounder Bryan Pellegrino told Blockworks in an interview. LayerZero tech makes all costs upfront, so that no surprise tokens are required for bridging.



The DVN is intended to be easier to use than a traditional crypto bridge, which can require multiple currencies across multiple chains and anywhere from a few minutes to a week to complete bridging an asset depending on the chain.



Pellegrino believes crypto gaming is moving toward becoming a “broader, much more liquid ecosystem,” and that enabling more asset movement between chains is a step toward that vision.



We don’t yet know which chains Ubisoft plans to support with its DVN. But given its existing and upcoming games use Oasys and Immutable zkEVM, respectively, those may be two of the options if Ubisoft adds a bridging feature to Champions Tactics, for example. LayerZero currently supports over 130 blockchains including Ethereum and Solana.



Ubisoft’s Nicolas Pouard, VP of the studio’s Strategic Innovation Lab, has previously said their goal is to be chain-agnostic — which a DVN supporting dozens to over a hundred chains would certainly enable.



After I previously <a href="https://blockworks.co/news/immutable-teases-potential-ubisoft-collab">reported</a> that Ubisoft’s next crypto game is likely a trading card game (TCG) using Immutable’s zkEVM, Ubisoft and Immutable <a href="https://blockworks.co/news/immutable-ubisoft-tcg-might-and-magic">announced</a> that they’re rebooting Might and Magic as a crypto TCG.



“Long term, the goal is that, you know, the user doesn’t think about a chain at all. They don’t think about gas at all. Their wallets are just dollar-denominated. Everything is just abstracted in the backend,” Pellegrino said, adding: “Users aren’t going to think about chains and <a href="https://help.coinbase.com/en/coinbase/getting-started/crypto-education/glossary/rpc-node">RPCs</a> for too much longer.”



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Arsenal Fan TokenAFC

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