Alien Base

Katherine Ross

David Canellis

Today, enjoy the Empire newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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



<h2 class="wp-block-heading">Old dogs, new tricks</h2>



Step aside, boys, there’s a new venture fund in town.&nbsp;



VanEck Ventures was officially announced last week. It’s a $30 million early-stage fund, which is meant to be a “fintech vehicle very much at the center of crypto and AI,” general partner Wyatt Lonergan told me.&nbsp;



“Those two components are very much like horizontal technologies. And I say that because crypto is like the value layer and AI is where you can now take financial services that are typically performed by people, represent them in code and start to automate things,” he said.&nbsp;



Lonergan teased that the fund’s made a couple of investments so far, but VanEck isn’t quite ready to divulge any deets just yet. Sad. What we do know is that they plan to make up to 35 investments, and the checks can range from $500,000 to $1 million.&nbsp;



The goal is to focus on early-stage (pre-seed and seed), but Lonergan’s not looking to completely shut the door on participating in a Series A if the right project comes around.&nbsp;



“We need to be opportunistic. If we see something that we missed because we weren&#8217;t around a year ago, they&#8217;re raising enough ground and it&#8217;s attractive — we&#8217;ll look at it. But we are always price-sensitive. When you have a small fund, you have a concentrated fund structure, the idea is that any one investment could return the fund multiple times. That&#8217;s very important,” he said.



Both Lonergan and his partner Juan Lopez came from Circle Ventures. Lonergan helped launch Circle Ventures back in 2021 before he left for VanEck.&nbsp;



The fund will still have a keen interest in stablecoins, which shouldn’t be a huge surprise given Lonergan’s past and VanEck’s own interest. While the firm itself doesn’t have a stablecoin, it invested in the stablecoin firm Agora, which is helmed by Nick Van Eck, the son of VanEck CEO Jan Van Eck.



But it’s not just personal interests that pique both Lonergan and the 69-year-old investment management firm.



At the “core,” Lonergan said, “are stablecoins and … within that, we kind of believe the underlying blockchains are more or less being commoditized to a point that there&#8217;s enough great technology out there. That&#8217;s best exemplified by [the fact that] you can go onto any crypto wallet or Coinbase today and upload dollars for free, send it across the world.”



Lonergan’s tone came off as bullish, given his belief that stablecoins, in particular, could see regulatory clarity in the next two years. Building upon the regulation that could be coming “very soon,” the thought is that legal stablecoins could draw in fintech firms.



As always, there’s a bit of a catch. Lonergan reasoned that the door opening for fintechs to use stablecoins won’t be a very obvious crypto use case. Basically, it wouldn’t be surprising if the crypto connections weren’t wildly obvious to those adopting stablecoins.



“It won&#8217;t be this crypto thing. If you&#8217;re not investing in this category, [and] it could be a weird tagline, but I think it could be that kind of ChatGPT moment for crypto, because [stablecoins] are the one technology that businesses will consume at scale, right? AI was not apparent until you had chat,” Lonergan said.



If we’re looking at the most popular use cases for crypto at this moment, he may very well be on to something. Polymarket, when mentioned in non-crypto media, isn’t flaunted as “crypto,” though we know it is.



For now, perhaps flying a little under the radar might be the best thing for potential killer apps.



— Katherine Ross



<h2 class="wp-block-heading">Data Center</h2>



<ul class="wp-block-list">
<li>BTC and ETH are taking it easy after yesterday’s push, now up 1% and 2% apiece in the past day. (BTC: $65,500; ETH: 2,600.)</li>



<li>HNT has given up most of its gains made in the past two months, having fallen nearly 30% from its six-month peak in September.</li>



<li>Sui leads Base and Solana for weekly DEX volume <a href="https://defillama.com/dexs/chains">growth</a>, up 41.6% to $227.9 million.</li>



<li>Base and Solana have otherwise grown 20% and 14.6% week-on-week, processing $1.1 billion and $1.76 billion, respectively.</li>



<li>Avalanche has gained about $100 million in <a href="https://defillama.com/stablecoins/chains">stablecoins</a> in the past seven days, rising 4.5% — the most of any chain with $350 million supplies or more.</li>
</ul>



<h2 class="wp-block-heading">A stable indicator</h2>



Rising stablecoin supplies are sometimes viewed as bullish indicators for individual coins.



More stablecoins on a network imply increased onchain activity, leading to more value accrual for the native token, and, eventually, converting to higher prices.



But how true is it?



After mapping stablecoin supplies against token performance for most of the top blockchains, I’m not entirely sold.



Ten out of the top 16 blockchains by stablecoin supplies — which includes any network with $250 million or more native <a href="https://defillama.com/stablecoins/chains">supplies</a> right now — indeed showed a fairly clear correlation between the amount of stablecoins minted onchain and token prices.



In almost every case, though, it was token prices that shot first, often weeks or months in advance, before stablecoin supplies started really taking off.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXczjzB2ruexQa9NRW0ge_fIBDiOeAqnpfjr0kNi7RjNRA1rx9LWT5OWAJQiZcIxFZiIp1dXd_Kv1apAAky8yUGHljzp9uJTsEHXlM5zgBVAw6unNVzYx-NYLlFEiszTEekVVaJj5nIZSYKl2zcLej9jQBcb?key=wCv5NmLSPh_S0kPauR7BbA" alt=""/><figcaption class="wp-element-caption">Price has led stablecoin growth in most cases</figcaption></figure>



SOL, for instance, began rallying hard at the end of last September, as bitcoin was heating up for an ETF-hype-fueled bull run.&nbsp;



Solana’s stablecoin supplies, as shown by the purple-shaded area in the background above, had been stagnant for six months, at around $1.5 billion, leading up to that rally.&nbsp;



It wasn’t until December that Solana’s stablecoin supplies rose in any meaningful way, during which time SOL had rallied over 300%. NEAR showed an almost identical lag.



Similar patterns can be seen in aptos, toncoin, near, avalanche and, to a lesser degree, ether, although prices and stablecoin supplies decoupled during recent consolidation for the former two.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcft7Dv8LiXmszPZOsQ564OKFRm1dr6n_sWyNyHe4hi4Nl1uhU3sMoVEiqiRjA5e9mhwrl6oDsuZFCHflymG5DFw7L1jbcjBRRg1r8i9L4iGiaZ26eNOoB4rHaNJ3FSwx_vGLYK05pNDxVlNLeY60STdnwN?key=wCv5NmLSPh_S0kPauR7BbA" alt=""/><figcaption class="wp-element-caption">SUI has showed tight correlation while APT has lagged behind Aptos’ stablecoin supplies</figcaption></figure>



Stablecoin supplies on Ethereum layer-2s also rose massively well after their own price rallies, but that correlation has also died off for now.&nbsp;



The extent to which L2 activity accrues to their base assets — let alone ETH — is however an <a href="https://blockworks.co/podcast/bellcurve/eeab0b9a-8521-11ef-b118-8f1e8c202670">ongoing debate</a>, so it’s probably better to focus only on layer-1s.



In any case, there were exceptions: BNB, MATIC, FTM and CELO didn’t really show a clear correlation either way. Token prices stayed flat while stablecoins increased, or prices went up despite stablecoin supplies hardly budging or even shrinking.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXekA0TS3ZGQv-q6yNRObXUT1LdgXjPmgarv4kMrB3b1nlvjRhEbixjhSAcF-F3Gv-1ToGKm9JhTKpVDLo7Udqe3J5Wp5ocBjxFt2t8gwb3DAXAJfdIwaGPH5GQjei26yZCMvh_o0KrYafq4-DV9b7fp0THA?key=wCv5NmLSPh_S0kPauR7BbA" alt=""/><figcaption class="wp-element-caption">The price of bitcoin jumped in Q4 2023 — bringing stablecoin supplies along with it</figcaption></figure>



And besides, bitcoin itself front-ran the current rally in global stablecoin supplies. But the amount of stablecoins in the crypto ecosystem has gone up during bitcoin’s sideways action, which has now persisted since March.



The real question is then: Are stablecoins front-running the next bitcoin rally? Who knows, but that would certainly align with calls for bulls to take control for the next eight-to-10 months.&nbsp;



— David Canellis



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



<ul class="wp-block-list">
<li>As part of its multibillion-dollar settlement, TD Bank failed to <a href="https://blockworks.co/news/fincen-td-bank-suspicious-crypto-transactions">disclose</a> ‘suspicious’ transactions related to crypto. </li>



<li>The man who accidentally dumped a hard drive with 8,000 bitcoin (worth $522 million) is now <a href="https://www.walesonline.co.uk/news/wales-news/im-suing-council-495m-because-30106009">suing</a> his local city council to let him search for the missing BTC.</li>



<li>Coinbase’s Base has <a href="https://www.dlnews.com/articles/defi/coinbase-chain-base-beats-arbitrum-as-top-ethereum-layer-2/">stolen</a> Arbitrum’s title of the largest rollup by total value locked. </li>



<li>TD Cowen <a href="https://www.theblock.co/post/320969/sen-hagertys-draft-stablecoin-bill-could-shape-legislation-in-2025-td-cowen-says?utm_source=rss&amp;utm_medium=rss">thinks</a> that the draft stablecoin legislation from Sen. Bill Hagerty could shape the regulatory framework for stablecoins.</li>



<li>Tether’s considering potentially lending billions to commodities traders, Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-10-14/tether-talking-to-commodity-traders-about-lending-its-crypto-billions-usdt">reported</a>.</li>
</ul>



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



Q: Will crypto ever move on from Tether?



Pockets of the space will probably adopt alternatives.&nbsp;



Yield-bearing stablecoins could become the default asset for some DeFi apps, or even wallets, leading to increased usage.



I’d be on the lookout for these kinds of partnerships moving forward, especially for newer layer-1 networks still building out their LEGO infrastructure.



Failing a doomsday scenario involving police intervention or other such drastic regulatory action against Tether and its executives, it would take a catastrophic failure of the firm’s own doing to unravel at this point.&nbsp;



Realistically, the only thing that has ever mattered to the market is whether Tether can <a href="https://blockworks.co/news/the-historic-significance-of-tether-16b-bank-run">redeem their tokens</a> for real dollars. And despite all the oddities in Tether’s history, there’s been no publicly disclosed instance of failing to process those requests.



Whether crypto is prepared for that possibility, say by ensuring there’s infrastructure in place to support sudden mass exodus from USDT into alternatives, is another story altogether.&nbsp;



From a risk management perspective, it could be wise. More likely, though, is that crypto would be reactive to such a situation than proactive.



— David Canellis



Crypto in general? Probably not. It’s too baked in.&nbsp;



But will we see a bit of a shift in power dynamics due to the regulatory environment? I’m leaning toward yes at this stage.&nbsp;



Look, if Tether isn’t able to operate in the EU and if the US were to ever follow in similar tracks, then that does make USDC the go-to when it comes to major players in those two environments.&nbsp;



But outside of the US and EU, I think Tether will maintain its dominance. It’s solving one of the biggest issues that crypto wanted to take care of: allowing access to something like a dollar digitally (that’s the easiest, most crass way to put it though we could argue that it’s not entirely true).&nbsp;



It’s not really a sexy use case, but it’s a damn good one.&nbsp;



If we were to turn all of this on its head and say that Tether is suddenly MiCA compliant and fully accepted by the US government, then I think the crown is practically soldered on its head, and Tether will reign over the other offerings.&nbsp;



As usual, I’m left with a desire to grab some popcorn and watch this play out.



— Katherine Ross



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



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Are stablecoins a leading indicator for major rallies?

Ben Strack

Bitcoin has historically experienced strong gains in October, and this trend seems to be holding, with BTC surpassing $66,000 and ETH reaching a two-week high.



After eclipsing that level, bitcoin’s price had settled around $65,850 by 4 pm ET — up 4.8% from 24 hours prior. Ether was trading at about $2,620 at that time, a 6% gain from a day ago.&nbsp;



Seasonal trend analysis continues to point to the so-called “Uptober” narrative and strong fourth quarter performance despite the month’s “patchy” first couple of weeks, according to LMAX Group market strategist Joel Kruger.



Read more: <a href="https://blockworks.co/news/btc-uptober-market-odds">As BTC rallies after jobs report, what are the ‘Uptober’ odds?</a>



“Bitcoin and crypto assets overall have actually held up quite well of late when considering a wave of broad-based demand for the US dollar in recent weeks on the back of a repricing of Fed expectations,” Kruger told Blockworks.



Bitcoin has pushed back toward its recent resistance level at roughly $66,550, he said, adding: “A break back above this level should open the door for <a href="https://blockworks.co/news/0xresearch-newsletter-btc-bullish-reversal">a more direct retest</a> of the record high from earlier this year.”



Despite bitcoin <a href="https://blockworks.co/news/bitcoin-all-time-high">breaking its 2021 high</a> earlier this year (above $73,000), ETH has yet to surpass the nearly $4,900 mark it hit three years ago.



There is “important resistance” in ETH’s price around $2,820, Kruger noted — a break above which would suggest crypto assets are set for a more significant run.&nbsp;



“This has already been a breakthrough year for the asset class given the friendlier <a href="https://blockworks.co/news/political-candidates-cannot-ignore-crypto-voters">regulatory climate</a>, wider adoption and introduction of the bitcoin and ETH ETFs in the US,” he explained. “All of this suggests the market should be wanting to push for a big breakout in the weeks ahead and we will be keeping an eye on those <a href="https://blockworks.co/news/btc-levels-to-watch-after-selloff">already mentioned key levels</a> in bitcoin and ETH for confirmation.&#8221;



<h2 class="wp-block-heading">The factors at play</h2>



China Finance Minister Lan Foan said Saturday that the government <a href="https://www.reuters.com/world/china/china-says-will-significantly-increase-debt-revive-economic-growth-2024-10-12/">plans</a> to ramp up debt issuance to revive economic activity — a potential positive for risk assets like BTC.&nbsp;



“Whilst no details were provided on the exact size, strong commitments to ‘significantly increase’ debt to support the economy boosted local equity markets,” Wintermute OTC trader Jake Ostrovskis said in an email.&nbsp;



That came after the chief executive of the world’s largest asset manager — BlackRock’s Larry Fink — said Friday that “the utilization of digital assets [is] going to become <a href="https://blockworks.co/news/on-the-margin-newsletter-inevitable-institutional-digital-assets-involvement">more and more of a reality worldwide</a>.”



<a href="https://blockworks.co/tag/blackrock">BlackRock</a>, with more than $11 trillion assets under management, has waded into the crypto segment via its launch of spot bitcoin and ether ETFs this year.&nbsp;



“If we can create more acceptability, more transparency, more analytics related to these assets, then it will be expanded,” Fink said of the crypto asset class during an earnings call last week.



The CEO also questioned how the US could look to digitize the dollar, noting “all of that is going to be under discussion.”



<a href="https://blockworks.co/tag/larry-fink">Fink</a> added: “We believe the technology of these blockchains are going to become very additive, and then it will overlay AI and [have] better data analytics. The applicability and the broadening of these markets will occur.”



US spot bitcoin ETFs tallied $349 million of net inflows from Oct. 7 to Oct. 11, Farside Investors <a href="https://farside.co.uk/bitcoin-etf-flow-all-data/">data</a> shows.



Investor decisions are likely being driven more by the upcoming US elections than by monetary policy forecasts, according to CoinShares research head James Butterfill in a recent blog post.



“This trend is evident in the fact that <a href="https://blockworks.co/news/forward-guidance-newsletter-crypto-etfs-permissionless">stronger-than-expected</a> economic data had little impact on stemming outflows, whereas the recent US vice presidential debate and a subsequent shift in polling towards the Republicans, perceived as more supportive of digital assets, led to an immediate boost in inflows and prices,” he added.



Further, the <a href="https://blockworks.co/news/election-impact-bitcoin-bull-market">current lack of clarity</a> around the US election outcome and global liquidity conditions are “preventing the market from establishing a clearer directional trend,” notes FalconX’s David Lawant.&nbsp;



“As uncertainty surrounding these factors diminishes, ETF flows may re-emerge as a more significant driver of price action,” Lawant explained in a research note.



A portion of expected selling pressure looks to be off the table for now given the one-year deadline <a href="https://www.mtgox.com/img/pdf/20241010_1b5ee10e-cf5b-420e-9e41-43ccd9e515e5_announcement_en.pdf">extension</a> for Mt. Gox repayments — from Oct. 31, 2024 to Oct. 31, 2025.&nbsp;



Read more: <a href="https://blockworks.co/news/mt-gox-bitcoin-final-boss">Bitcoin bulls meet their third final boss after US and Germany: Mt. Gox</a>



A belief in recent months has been that Mt. Gox creditors, who have long awaited the return of their funds, could opt to sell their crypto and drive prices down.



<h2 class="wp-block-heading">Price predictions</h2>



Dan Tapiero, founder of 1RoundTable Partners and 10T Holdings, said during a panel discussion last week that he expects BTC to hit between $150,000 and $180,000 in two years or so.&nbsp;



The upper end of that would be a 3x gain from the $60,000 level bitcoin has hovered around for a while now, he said, noting BTC’s similar rise in early 2021.



Fellow panelist Pantera Capital CEO Dan Morehead gave a more exact price and timeline, projecting BTC could hit $117,000 by August 2025. This, he said, is based on previous post-halving price patterns.&nbsp;



While there was plenty of talk at Permissionless about how much the election (now nearly three weeks away) will impact crypto’s trajectory one way or another, Tapiero seems to prefer looking at the grander picture.



The 10T founder said: “This move toward putting all value on a blockchain is bigger than one election.”&nbsp;



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

As BTC passes $66K, is ‘Uptober’ finally upon us?

Casey Wagner

Today, enjoy the Forward Guidance newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. <a href="https://blockworks.co/newsletter/forwardguidance">Subscribe to the Forward Guidance newsletter</a>.



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



<h2 class="wp-block-heading">On the up and up?</h2>



Bitcoin breached $66,000 on Monday, while ETH recently hit a two-week high. It seems Blockworks’ Permissionless conference in Salt Lake City last week <a href="https://blockworks.co/news/permissionless-3-day-one-vibes">got</a> <a href="https://blockworks.co/news/forward-guidance-newsletter-vaneck-vc-fund?utm_source=forward-guidance.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=where-we-stand-after-66-grand&amp;_bhlid=5b1fe95af156df4a89fb363dc5a7ebfa7a66e2fc">everyone</a> <a href="https://blockworks.co/news/empire-newsletter-permissionless-crypto-regulation">excited</a>.&nbsp;



Jokes aside, there are a few potential catalysts at play — and updates to catch up on, as the Forward Guidance team was a bit busier than usual last week.&nbsp;



You probably know by now (especially if you’re a regular Forward Guidance/Blockworks reader) that bitcoin typically sees above-average gains in October.&nbsp;



Seasonal trend analysis continues to point to this so-called <a href="https://blockworks.co/news/btc-uptober-market-odds">“Uptober” narrative</a> and strong Q4 performance despite the month’s “patchy” first couple of weeks, according to LMAX Group market strategist Joel Kruger.



After eclipsing $66k, BTC had settled around $65,580 by 2 pm ET — up 4.4% from 24 hours prior.



“Bitcoin and crypto assets overall have actually held up quite well of late when considering a wave of broad-based demand for the US dollar in recent weeks on the back of a repricing of Fed expectations,” Kruger told Blockworks.



Bitcoin has pushed back toward its recent resistance level at roughly $66,550, he said, adding: “A break back above this level should open the door for a more <a href="https://blockworks.co/news/0xresearch-newsletter-btc-bullish-reversal">direct retest</a> of the <a href="https://blockworks.co/news/bitcoin-all-time-high">record high</a> from earlier this year.”



<h2 class="wp-block-heading">The factors at play</h2>



First, it’s worth noting China’s latest fiscal announcement: Finance Minister Lan Foan said Saturday that the government <a href="https://www.reuters.com/world/china/china-says-will-significantly-increase-debt-revive-economic-growth-2024-10-12/">plans</a> to ramp up debt issuance to revive economic activity.&nbsp;



“Whilst no details were provided on the exact size, strong commitments to ‘significantly increase’ debt to support the economy boosted local equity markets,” Wintermute OTC trader Jake Ostrovskis said in an email.&nbsp;



<a href="https://blockworks.co/news/on-the-margin-newsletter-china-stimulus-stagnation">Stimulus</a> is typically good for risk assets like BTC, though we’ll have to keep an eye on this.&nbsp;&nbsp;&nbsp;



There was also the biggest asset manager’s chief executive — BlackRock’s Larry Fink — saying Friday that “the utilization of digital assets [is] going to become <a href="https://blockworks.co/news/on-the-margin-newsletter-inevitable-institutional-digital-assets-involvement">more and more</a> of a reality worldwide.”



We know about BlackRock’s belief in the crypto segment given its launch of spot bitcoin and ether ETFs this year. But Fink commenting on crypto assets is always bullish because, well, he runs a financial giant with more than $11 trillion assets under management.&nbsp;



“If we can create more acceptability, more transparency, more analytics related to these assets, then it will be expanded,” he said of the crypto asset class during an earnings call last week.



Fink also questioned how the US could look to digitize the dollar, noting “all of that is going to be under discussion.”



The CEO added: “We believe the technology of these blockchains are going to become very additive, and then it will overlay AI and [have] better data analytics. The applicability and the broadening of these markets will occur.”



Because we mentioned BlackRock, ETF flows are worth noting as well. US spot bitcoin ETFs tallied $349 million of net inflows from Oct. 7 to Oct. 11, Farside Investors <a href="https://farside.co.uk/bitcoin-etf-flow-all-data/">data</a> shows.



Investor decisions have likely been more influenced by the upcoming US elections than by monetary policy outlooks, CoinShares research head James Butterfill said in a blog post.&nbsp;&nbsp;



“This trend is evident in the fact that stronger-than-expected economic data had little impact on stemming outflows, whereas the recent US vice presidential debate and a subsequent shift in polling towards the Republicans, perceived as more supportive of digital assets, led to an immediate boost in inflows and prices,” he added.



Further, the current <a href="https://blockworks.co/news/election-impact-bitcoin-bull-market">lack of clarity</a> around the US election outcome and global liquidity conditions are “preventing the market from establishing a clearer directional trend,” notes FalconX’s David Lawant.&nbsp;



“As uncertainty surrounding these factors diminishes, ETF flows may re-emerge as a more significant driver of price action,” he explained in a research note.



One other thing is that a portion of expected selling pressure looks to be off the table for now given the one-year deadline <a href="https://www.mtgox.com/img/pdf/20241010_1b5ee10e-cf5b-420e-9e41-43ccd9e515e5_announcement_en.pdf">extension</a> for Mt. Gox repayments — from Oct. 31, 2024 to Oct. 31, 2025.&nbsp;



A belief in recent months has been that Mt. Gox creditors who have long awaited the return of their funds could opt to sell their crypto and <a href="https://blockworks.co/news/mt-gox-bitcoin-final-boss">drive prices down</a>. So such potential negative impacts of these repayments are abated in the short term.&nbsp;



<h2 class="wp-block-heading">Price predictions</h2>



Given the latest crypto price rise, let’s conclude with some predictions from two Dans with a long track record in this space.&nbsp;



Dan Tapiero, founder of 1RoundTable Partners and 10T Holdings, said during a panel discussion last week that he expects BTC to hit between $150,000 and $180,000 in two years or so.&nbsp;



The upper end of that would be a 3x gain from the $60,000 level bitcoin has hovered around for a while now, he said, noting BTC’s similar rise in early 2021.



Fellow panelist Pantera Capital CEO Dan Morehead gave a more exact price and timeline, projecting BTC could hit $117,000 by August 2025. This, he said, is based on previous post-halving price patterns.&nbsp;



While there was <a href="https://blockworks.co/news/permissionless-day-two-vibes">plenty of talk</a> at Permissionless about how much the election (now nearly three weeks away) will impact crypto’s trajectory one way or another, Tapiero seems to prefer looking at the grander picture.



The 10T founder said: “This move toward putting all value on a blockchain is bigger than one election.”&nbsp;



— Ben Strack



<h3 class="wp-block-heading">565%</h3>



The growth in <a href="https://blockworks.co/news/empire-newsletter-polymarket-d8x-offerings">prediction markets</a> during the third quarter, according to a CoinGecko <a href="https://www.coingecko.com/research/publications/2024-q3-crypto-report">report </a>published Monday.&nbsp;



Volume on the top three prediction markets rose from roughly $466 million to $3.1 billion quarter over quarter — with Polymarket accounting for 99% of market share in September.



“Some $1.7 billion of bets have been placed on the ‘US Presidential Election Winner’ since the start of 2024, accounting for [about] 46% of Polymarket’s yearly volume,” the report added.&nbsp;



<h2 class="wp-block-heading">EU DLT pilot regime gets the green light</h2>



Nineteen months after the European Union launched its DLT Pilot Regime, the first platform has received authorization and is set to debut next month.&nbsp;



The Central Securities Depository Prague, the Czech Republic’s post-trade services provider, is expected to launch its DLT settlement system on Nov. 18. Prague’s CSD is unique in that it services institutions as well as individuals, and officials said both will have access to the DLT program.



Businesses in Prague can use the service to manage their cap tables (including employee stock ownership plans) and fundraise, Ondřej Dusílek, CEO of CDCP, said in a <a href="https://www.cdcp.cz/csd-prague-receives-first-european-dlt-register-approval/?lang=en">statement</a>.&nbsp;



The approval of the first DLT Pilot Regime applicant comes after months of frustration surrounding the program. In April, the European Securities and Market Authority (ESMA) <a href="https://www.esma.europa.eu/sites/default/files/2024-04/ESMA75-117376770-460_DLT_Pilot_Regime_-_Letter_to_EU_Institutions.pdf">wrote</a> to the European Commission, Parliament and Council to explain challenges they’ve encountered when trying to get the pilot off the ground.&nbsp;



Most notably, the lack of CBDCs makes cash settlements difficult, ESMA said. Plus, the newly effective <a href="https://blockworks.co/news/micar-foreign-stablecoins-advantage-in-europe">MiCA regulations</a> come with implications for custodians and “self-hosted wallets” that are not immediately clear. Regulators need to issue <a href="https://blockworks.co/news/mica-clarity-stablecoin-restrictions-revisited">more guidance</a> on how custody providers can operate within DLT infrastructure, ESMA said.&nbsp;



The commission’s <a href="https://www.esma.europa.eu/sites/default/files/2024-05/3056562_030524_Reply_Verena_Ross_on_DLT_Pilot_Regime_Implementation.pdf">response</a> was brief in detail but enthusiastic in support. They said the pilot regime was an important effort that should continue, noting that applicants should not be deterred from the lengthy process as the program has “no expiration date.”&nbsp;



So that brings us here, to the Central Securities Depository Prague’s approval. The first green light being given to a TradFi institution is not surprising, and I’d say it’s even encouraging that an incumbent is interested in exploring this technology.&nbsp;



We’ll have to wait and see how Prague’s program plays out, and if they encounter the challenges ESMA feared (mostly if they find they need CBDCs to meet cash settlement demands), but I’d label myself as cautiously optimistic, for now.&nbsp;



— Casey Wagner



<h2 class="wp-block-heading">On Our Radar</h2>



Welcome back to another Monday edition of the Forward Guidance newsletter! With the major <a href="https://blockworks.co/news/forward-guidance-newsletter-jobs-report">jobs</a> and inflation reports now behind us, we have a relatively quiet week ahead in terms of economic data. Here’s what we will be watching:&nbsp;



<ul class="wp-block-list">
<li>Initial jobless claims on Thursday are slated to show a slight decrease after last week’s unexpected jump. Claims for the week ended <a href="https://www.dol.gov/ui/data.pdf">Oct. 5</a> came in at 258,000 — a 33,000 increase from the week prior. Analysts attributed the surge to Hurricane Helene, but the impact of the storm is likely to be felt for several weeks. For the week ended Oct. 12, economists expect 245,000 initial claims. Another factor impacting employment numbers is the ongoing Boeing strike. While striking workers are not eligible for unemployment benefits, those furloughed and facing temporary layoffs are. </li>



<li>Also on Thursday, the US Retail Sales report will be released. As Sevens Report Research founder Tom Essaye said Monday, investors being confident in a soft landing is the single most important support for the current market, so these consumer-spending metrics will be telling. Economists are calling for a 0.3% monthly increase in September, up from the 0.1% increase notched between July and August. After relatively flat retail sales data throughout 2024, a boost would be a welcome sign that growth is not too stagnant. </li>



<li>Lastly, the <a href="https://www.newyorkfed.org/survey/empire/empiresurvey_overview#tabs-4">Empire State</a> and <a href="https://www.philadelphiafed.org/surveys-and-data/regional-economic-analysis/manufacturing-business-outlook-survey">Philadelphia Fed</a> manufacturing surveys, to be released on Tuesday and Thursday, respectively, will give us the first look into economic activity for October. Both reports indicated that growth was on the rise last month, so continued momentum here will also support the soft-landing narrative. The Philly index, which turned positive last month, is expected to come in at 2.9, up from 1.7 in September. New York’s figure last month showed an increase in the state’s manufacturing activity for the month of September — the first such instance since November 2023. </li>
</ul>



— Casey Wagner



<h2 class="wp-block-heading">Bulletin Board&nbsp;</h2>



<ul class="wp-block-list">
<li>We talked about bitcoin, but ETH’s price rose above $2,600 for the first time since Oct. 1. It was at $2,625 at 2 pm ET — a more than 6% gain in the past 24 hours. </li>



<li>As part of an “opportunity agenda” for Black men, Vice President Kamala Harris is set to support on Monday “a regulatory framework for cryptocurrency and other digital assets so Black men who invest in and own these assets are protected,” according to a campaign <a href="https://mailchi.mp/kamalaharris.com/vice-president-harris-releases-opportunity-agenda-for-black-men-as-part-of-harris-walz-comprehensive-push-to-continue-engaging-black-voters-6744030">release</a>.</li>



<li>US ETFs that hold ether directly saw <a href="https://farside.co.uk/ethereum-etf-flow-all-data/">relatively flat</a> net flows last week, even as the country’s spot bitcoin ETFs posted $349 million of inflows over the five-day span. Bloomberg Intelligence’s James Seyffart <a href="https://blockworks.co/news/forward-guidance-newsletter-crypto-etfs-permissionless">acknowledged at Permissionless</a> last week that his flow projection for these ETH products appears to have been “way too bullish.” The funds have so far been hurt by launching during the summer “doldrums,” ETH’s <a href="https://blockworks.co/news/tough-ethereum-vibes">price trajectory</a> around that time and the need for <a href="https://blockworks.co/news/education-required-to-spur-eth-etf-outflows">more education</a> around the asset, industry watchers have said.     </li>
</ul>



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The factors that led BTC above $66K…and what’s next?

Jack Kubinec

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Happy birthday, Solana bull run.



A year ago today, SOL was trading at around $22. By the end of October 2023, the price had nearly doubled. By Christmas day, it crossed $120 — a price appreciation of over 400% in less than three months. The chart pierced $200 a couple times in March, but SOL has oscillated above and below $150 for much of the past six months.&nbsp;



The asset was trading at around $155 at press time, a 606% increase from a year ago, according to CoinGecko.



Solana’s downtrend ended with its chief perpetrator — former FTX CEO Sam Bankman-Fried — on trial for fraud. As the market realized that FTX estate sales of SOL wouldn’t be as catastrophic as some feared, the price began to tick upward. Still, common knowledge held that Solana would struggle to shake off its FTX ties quite so quickly.



“Solana Is Down 15% Since Hitting a 14-Month High. Is the Rally Over?,” read one headline as SOL’s price sat around $40.



As the Bankman-Fried circus slowly receded from public view, token airdrops took over Solana’s mindshare. Multiple Solana-based DeFi protocols — most notably <a href="https://blockworks.co/news/jupiter-airdrop-draws-criticism">Jupiter</a> and <a href="https://blockworks.co/news/jito-airdrop-value">Jito</a> — distributed new native tokens to their users. Airdrop farming, or moving assets around in hopes of increasing one’s allocation, partly juiced the assets in Solana DeFi protocols to over $4 billion in March for the first time since early 2022. Today, Solana DeFi holds over $6 billion in assets, according to DeFiLlama.



For the bull run’s third act — one we’re very much still in the middle of — SOL rode a wave of excitement surrounding memecoins. What started with <a href="https://blockworks.co/news/slerf-investor-lose-money-crypto">missing pre-sale funds</a> and <a href="https://blockworks.co/news/memecoin-dogwifhat-shibainu-lasvegas-sphere">DogWifHat on the Las Vegas Sphere</a> gave way to pump.fun, a novel launchpad that let anyone launch a memecoin for a couple of dollars-worth in SOL. The platform, which is younger than Solana’s bull run, has <a href="https://dune.com/adam_tehc/pumpfun">generated</a> nearly $130 million in revenue.&nbsp;



As with many things in crypto, Solana’s bull run has involved a heavy dose of unseriousness — “free money” and speculative pet pictures abounded. And obviously, price trends like Solana’s can’t last forever, and we could very well be reflecting on Solana’s 500% drop a year from today. But for those who timed the bull run correctly, there was life-changing money to be made.



<a href="https://blockworks.co/news/permissionless-iii-day-three-solana">Last week at Permissionless III</a>, I met Klaus Wenzel, a Lightspeed reader who paid his way to attending the conference with profits he had taken from a SOL investment last October. Wenzel pays his bills with staking rewards from his SOL, he told me in a direct message.



“Now I can scroll Twitter, listen to Blockworks podcasts and research crypto full time. Life has never been better,” Wenzel said.



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Solana’s bull run is 1 year old today

Macauley Peterson

Donovan Choy

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<h2 class="wp-block-heading">Why bitcoin ETF flows matter</h2>



As we approach the mid-point of October, net inflows for the US bitcoin ETFs have flipped into positive territory for the first time this month.



Bitcoin ETFs notched $253.6 million in net inflows on Friday, breaking a three-day negative streak. They ended the week with a solid net of $348.5 million.



ETF flows provide insights into bitcoin price movements, acting as a potential indicator of directional trends, according to David Lawant, head of research at FalconX.



In addition to a correlation between BTC price and ETF flows overall, “a positive shock to ETF flows leads to a persistent positive effect on bitcoin prices, peaking around days 3-4 with approximately a 1.2% price increase before gradually diminishing,” Lawant wrote in a research note Friday.



BTC is up about 5% today, threatening to break above the daily high set on Sept. 28 at nearly $66,000. The brief dip below $60,000 last week has turned into a spring, setting up a <a href="https://x.com/BigCheds/status/1845821835574759861">bullish double-bottom</a> chart pattern.



Ritesh Dutta, Deputy CEO at AMINA Bank, finds solace in the relative outperformance of venture capital-backed cryptos. “The recent surge in VC-backed cryptocurrencies, particularly SUI and Aptos, is a strong signal of market confidence in <a href="https://blockworks.co/news/on-the-margin-newsletter-inevitable-institutional-digital-assets-involvement">institutional adoption</a> of innovative blockchain technologies,” Dutta told Blockworks. He also likes the “resilience in DeFi,” which has maintained its total value locked (TVL) in the third quarter, alongside a 14% rise in the total stablecoin market cap to $172 billion.



For most crypto assets, the <a href="https://blockworks.co/news/btc-uptober-market-odds">anticipated “Uptober”</a> has been more like a continuation of “<a href="https://blockworks-research.beehiiv.com/p/closing-september-on-a-pullback">Choptember</a>.” But the present attempt to reverse a longer-term downtrend looks promising.



— Macauley Peterson 



<h2 class="wp-block-heading">Chart of the Day</h2>



Slow and steady progress with Ethereum solo stakers:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdRifiwliPYTJVYY_Fy7hfk2fs8ViYZZ4mOYNqCpY4bXtFh_m9Fy2NunrQPZYF-CDxf6Xl27b8kmommTR4Q2MaiKX5c3vkDOO9LUPyuCsPv9fxSIFrvuFBhF1dnIkGIXyzev3FMZ_6zQajj1CZnzHp-uPA?key=cpT_n3yTt4E3sWur4lvNGQ" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://ethresear.ch/t/on-solo-staking-local-block-building-and-blobs/20540">Ethresearch</a></figcaption></figure>



How well has Ethereum been preserving decentralization? According to research from Toni Wahrstätter, the reorg rate for solo stakers (dark purple line) has decreased about 0.25% since the <a href="https://blockworks.co/news/ethereum-dencun-upgrade-mainnet">Dencun hard fork</a> in March 2024.&nbsp;



Solo stakers may not necessarily be local block builders, however, as a certain subset are using third-party relays and <a href="https://blockworks.co/news/mev-the-relays-problem">MEV-Boost</a> to outsource block building. The bad news: Based on the last 12 months, local block builders — considered the holy grail of decentralization — are still about 5x more likely to be reorged than MEV-Boost block builders.



— Donovan Choy 



<h2 class="wp-block-heading">Governance</h2>



Ethena proposal to onboard SOL as USDe backing asset:



In August, Ethena made the <a href="https://x.com/ethena_labs/status/1821185511563956569">strategic decision</a> to expand its yield-bearing synthetic stablecoin USDe <a href="https://blockworks.co/news/lightspeed-newsletter-ethena-solana-integration">to Solana</a> with the use of LayerZero’s OFT (Omnichain Fungible Token) standard. Ethena looks to further expand its presence in Solana with a governance proposal <a href="https://gov.ethenafoundation.com/t/proposal-onboard-sol-as-a-usde-backing-asset/232">posted</a> last Thursday looking to onboard SOL as a backing asset to USDe.



Unlike centralized stablecoins such as USDT and USDC, USDe is collateralized by a “cash-and-carry” trade. Short positions on perpetuals futures are taken by Ethena against user-deposited BTC, ETH and possibly SOL (the long position) to exploit a difference in funding rates for profit, with a <a href="https://app.ethena.fi/dashboards/solvency">reserve fund</a> ($46.6 million) to mitigate short-term volatility.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXddKWJYtjSSqfUk4MbpsCss8cFtc_evkinQiVsOZbu6IR9hbvGnKMVjnIjHX6q3jkb4WWwwuMn0zRsMVAiWB-j5lRgPsbfNEg3-ypnankxvZ-ngbOlToMJWPJaUCkB4GuSgGHdDpRqmAX-h3ns7gK_flDVo?key=cpT_n3yTt4E3sWur4lvNGQ" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://app.ethena.fi/dashboards/positions">Ethena</a></figcaption></figure>



Posted by Ethena Labs Research, the economic rationale for the proposal is the relatively favorable funding rates of SOL perpetual futures in 2024 to BTC and ETH over the last several months.&nbsp;



If approved, the plan is to target an initial allocation range of $100 to $200 million SOL for USDe. That is about 5-10% of SOL open interest, compared to Ethena’s present stake in 3% of BTC open interest and 9% of ETH open interest.



— Donovan Choy



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Bitcoin is poised for a bullish reversal

As part of a larger investigation into TD Bank’s transactions and adherence to anti-money laundering laws, a FinCEN investigation found that the traditional finance bank failed to disclose “suspicious activity” regarding crypto.



A consent order alleges that the bank processed transactions for “Customer Group C,” which is an unknown entity, “including the facilitation of over $420 million to a financial institution offering cryptocurrency services in the high-risk jurisdiction of Colombia.”



There was a pattern, FinCEN <a href="https://www.fincen.gov/sites/default/files/enforcement_action/2024-10-10/FinCEN-TD-Bank-Consent-Order-508FINAL.pdf">said</a>, of Customer Group C doing over $100 million in wire transfers a month, “most of which facilitated apparent third-party cryptocurrency trading and involved high-risk industries and jurisdictions, including Colombia, China and countries in the Middle East.”



Read more: <a href="https://blockworks.co/news/fincen-hearing-crypto-illegal-financing">House hearing on FinCEN oversight turns into crypto debate&nbsp;</a>



Customer Group C saw transactions top $1 billion in a period of time from July 2023 to April 2024, the order found. Ninety percent of that came from an unnamed crypto exchange, though this one was UK-based. Sixty percent of the outgoing transactions went to a Colombian financial institution — again unnamed.&nbsp;



The group was also tied to an “international cryptocurrency exchange platform,” the order states, and received over $650 million from it. However, it’s not clear which platform <a href="https://blockworks.co/tag/fincen">FinCEN</a> is referring to.&nbsp;



“TD Bank processed these transactions on behalf of Customer Group C, due in part to a lack of clear controls applicable to customers dealing in cryptocurrency: the limited high level written policies the Bank had in place relating to virtual assets alluded to the requirements for certain additional controls and monitoring,” the order claims.



Read more from our opinion section: <a href="https://blockworks.co/news/crypto-innovation-suffering-inside-closed-networks">Crypto is becoming the same broken system it promised to fix</a>



“However, there is no evidence any enhanced controls were ever applied to Customer Group C’s extensive transactions with virtual asset service providers.”



The bank failed to report the activity until it received “multiple law enforcement inquiries” about the unnamed entity.



Last week, TD Bank pleaded guilty to <a href="https://blockworks.co/tag/aml">AML</a> violations, paying a hefty fine of $3 billion in penalties. Of that sum, $1.3 billion went to FinCEN according to the order filed with the government office.



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TD Bank failed to disclose ‘suspicious’ crypto transactions tied to unnamed customer group 

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



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



I think we can all agree that NFTs won’t undergo the same explosion we saw last cycle.&nbsp;



That’s not, of course, to say that NFTs can’t make a comeback of any sort. But it looks like we won’t see CryptoPunk #5822 fetch another $23 million (8,000 ETH at the time) like it did a few years ago.&nbsp;



(For reference, in the past 24 hours, CryptoPunk #8135 sold for a cool 29 ETH, or $71,000, per CryptoSlam.)



OpenSea CEO Devin Finzer <a href="https://blockworks.co/event/permissionless-iii/recordings">told me at Permissionless</a> that this time will be a little different. And part of that, he said, is the utility behind NFTs.&nbsp;



“The technology has just been getting better and better,” since the last boom, he said on a panel.&nbsp;



The previous cycle caused some <a href="https://www.theatlantic.com/ideas/archive/2021/04/nfts-werent-supposed-end-like/618488/">issues</a>, even with the demand. Gas fees, among other things, were pain points for consumers who wanted to simply purchase an NFT. Finzer said that they’ve “solved” a lot of those problems since 2021.&nbsp;



“Now you can build all of the cool stuff that we’ve always dreamed of building because…scaling is here on Ethereum, for example,” he explained. Though OpenSea continues to work on onboarding and user experience, he said.



Admittedly, it seems already that any sort of NFT comeback is going to appear vastly removed from what we saw in 2021. Not just anyone is going to be able to create and successfully sell off an NFT.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfvJU1H4_fHYwDH1OvB2FYoSWZYQHn_GE_oFl4asiEhSqo4Q1oUiTDSqtMuK4yAwlq9hXX5B5EVwLMsh8hhZYq6vLD8Fcoicrl2Zpqgo4hHVVQ6A9qFL-DbD9eMQGZ3ebOTGIskrPRKcbSA4tNhRveAXgtc?key=lBKbl17C1g4q2pGnkOLNZQ" alt=""/><figcaption class="wp-element-caption">Source: CryptoSlam!</figcaption></figure>



Finzer said that he’s looking at transaction and user counts to monitor momentum, putting transaction volume to the side. Overall, Finzer said the space is showing a lot of “momentum.”



For example, three <a href="https://blockworks.co/news/7-nft-use-cases">use cases</a> are becoming abundantly clear this time around: gaming, physical collectibles tied to a digital collectible, and tokenizing real-life objects (like Galaxy <a href="https://investor.galaxy.com/news/news-details/2024/Galaxy-Announces-Tokenization-of-the-1708-Stradivarius-Violin-Empress-Caterina/default.aspx">tokenizing</a> a famous violin).



“Gaming’s probably the [use case] I’m most bullish on,” Finzer told the crowd at Permissionless. In a close follow-up, Finzer said he’s keeping an eye on physical assets, which encompasses both tokenized real-life items and digitizing certain things such as tickets.



Ubisoft’s announcement of a crypto game — Champions Tactics — that’ll launch later this month shows that perhaps gaming, a segment that didn’t flourish when Bored Apes were selling for millions, shows how demand has shifted. The <a href="https://championstactics.ubisoft.com/">page</a> for the game notes that 75,000 playable characters, or Champions, have been minted.



Not to mention that Off the Grid, another crypto game, which climbed to the top of the charts in the Epic Games store.&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">10 months later &#8211; most popular free game on the Epic Games Store &#8211; #1 trending game on Epic &#8211; 150k Twitch streamers on Friday was more than League of Legends &#8211; partnership with Ninja &#8211; has an Avalanche L1 for token, marketplace, and NFTs Onchain gaming has arrived. <a href="https://t.co/A3uPMVTKxH">https://t.co/A3uPMVTKxH</a>&mdash; Yano 🟪 (@JasonYanowitz) <a href="https://twitter.com/JasonYanowitz/status/1845621334237155785?ref_src=twsrc%5Etfw">October 14, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



But there’s one other storm cloud over NFTs right now, and that’s the Securities and Exchange Commission, which <a href="https://blockworks.co/news/sec-issues-wells-notice-opensea-nfts">sent OpenSea a Wells notice</a> a few months ago, though <a href="https://blockworks.co/news/what-an-sec-lawsuit-against-opeansea-could-look-like">no lawsuit’s been filed yet</a>.



Finzer hopes that the momentum isn’t stymied by any potential regulatory action, given that OpenSea, among others, is “ready to go and fight if push comes to shove.”



“No news on that,” Finzer told me when I asked if they’d heard from the regulator since the notice.



As for where we end up over the mid-term, Finzer said that he expects a “wild” few years. “In five years, I think we’ll all be living in the metaverse potentially,” he said.&nbsp;



If that’s the case, I just hope my mortgage is cheaper.



— Katherine Ross



<h2 class="wp-block-heading">Data Center</h2>



<ul class="wp-block-list">
<li>BTC and ETH have broken upwards this morning, climbing over 3% to monthly highs of $64,800 and $2,530 apiece.</li>



<li>SUI set a new price record of $2.35 on Sunday evening, having gained 15% in the past week. It has since retraced slightly to $2.24 (mcap: $6.19 billion).</li>



<li>Base transaction counts have also hit a new peak, per <a href="https://app.blockworksresearch.com/analytics/base?dashboard=base-onchain-activity&amp;interval=weekly">Blockworks Research</a> data: 40.82 million in the past week, up over 17% from the previous period. Trading bots including Banana Gun are leading gas consumption on the network, alongside AMM Aerodrome.</li>



<li>Base’s TVL has hit a new <a href="https://defillama.com/chains">record</a> of $2.455 billion, up 54% in the past month.</li>



<li>Bitcoin is the second-most popular <a href="https://www.cryptoslam.io/blockchains">venue</a> for NFT trading in the past month after Ethereum: $67.2 million volume vs. $107.8 million.</li>
</ul>



<h2 class="wp-block-heading">Off the Grid, on the chain</h2>



Off the Grid — one of the first true AAA games infused with crypto — is a ballsy experiment worthy of your attention.



I spent the weekend (and some of this morning) blasting through as many rounds as I could, earning what appears to be a stand-in tester cryptocurrency for every kill.&nbsp;



And yes, it’s actually fun.



The third-person shooter, from Ukrainian-German studio Gunzilla Games, throws the player into a battle royale set in a world ripped straight from dystopian action thrillers Elysium, Chappie and District 9.&nbsp;



Which is to be expected: Director Neill Blomkamp co-founded the studio and serves as its creative chief.



It’s a cool twist on the genre made big by PUBG, Fortnite and Warzone. The lore goes that players have their limbs surgically removed to compete on the hyper-violent <a href="https://gameoffthegrid.com/">Teardrop Island</a> — to be replaced by mechanized arms and legs fitted with all sorts of weaponry, from swords and shields to drones and poison gas.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeofdex5GrzuWd8WxVysCMPKXoI2gxHda_jeZp1HZIBpdQ7vsv3XOdzeOU0vBm3YkcOL8efkk0A3lCoB5giShB5pNzw_r5yr7i0Rg5a5wIR1INCM9xaiCjBlVBBWLZYaIbBc376VsUMbo6pFSB461BwTLs?key=lBKbl17C1g4q2pGnkOLNZQ" alt=""/><figcaption class="wp-element-caption">Always dressed for crypto summer</figcaption></figure>



Freedom of movement is where Off the Grid really shines. Jetpacks are standard — so lots of zooming between buildings, cranes and other climbables — while legs can come loaded with ultra-speed or mega-jump capabilities.&nbsp;



It’s super fast-paced and smooth, although the PS5 beta does suffer from some optimization issues in the current version.



As for the crypto stuff: It’s not totally live just yet.



Weapons and other items like skins and clothing can be optionally minted NFTs and traded on the in-game marketplace for a native token, GUN. Just like a crypto version of the Steam marketplace.



Those mechanics run on an Avalanche subnet (through which transactions don’t eventually settle via the main Avalanche chain, as is the case with Ethereum rollups and mainnet).



Avalanche’s Blizzard Fund <a href="https://gunzillagames.com/en/news/55-Gunzilla-Games-Announces----M-in-Funding-Co-Led-by-CoinFund-and-Avalanche">co-led</a> a $30 million funding round in March for Gunzilla Games, alongside CoinFund.



And you can indeed earn GUN for killing enemies, ranking highly in matches and extracting what’s known as HEX cubes — loot boxes that you can then sell for more GUN. Above average items go for around 80 to 100 GUN at the moment.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc5mzZzLaLB162oxJUbxEVQBX8qTWhoVF9m2afCOnT8BaohpjLXVncich_wGzTW-1CL9d097DENqKAvhQur6aASgC98kLN0JPiNQT7CP1M6P0DCuXbJOBKSx6fy-FI5fiiPRQ7Xk_0bb_YPZ_42ieGKHnEP?key=lBKbl17C1g4q2pGnkOLNZQ" alt=""/><figcaption class="wp-element-caption">Three kills earned me 0.3 GUN, with an additional 1.2 GUN coming from the monthly battle pass subscription </figcaption></figure>



For now, the GUN token payouts and NFT minting appear to still be occurring on a testnet version of Gunzilla Games’ subnet, GUNZ, although all early access progress is set to carry over to the full release. I reached out to the team to confirm and I’ll drop a note in a future edition with their answer.&nbsp;



Either way, the <a href="https://scan.gunztoken.io/">testnet</a> has seen over three million transactions per day for the past three days running with 5.5 million wallet addresses — positively humming along. And in the future, items will be <a href="https://gunzillagames.com/en/news/56-Gunzilla-Games-Announces-Integration-of-its-GUNZ-Blockchain-Into-OpenSea-Marketplace">tradable</a> as NFTs on OpenSea, denominated in the GUN token, which the team previously <a href="https://decrypt.co/207849/district-9-director-avalanche-shooter-off-grid-launches-mobile-game-subnet-rollout">said</a> it plans to list on centralized crypto exchanges.



Aside from maintaining Twitch <a href="https://twitchtracker.com/games/983841243">attention</a>, the real keys to success will be whether Off the Grid can stave off cheaters while maintaining balance in its crypto-economy as it ramps up.



In the meantime, who can argue with pwning noobs to earn crypto.



— David Canellis



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



<ul class="wp-block-list">
<li>Avalanche Foundation struck a <a href="https://www.theblock.co/post/320833/avalanche-foundation-to-repurchase-tokens-sold-to-terras-lfg-in-2022-deal-pending-court-approval?utm_source=rss&amp;utm_medium=rss">deal</a> to repurchase nearly two million tokens sold to Terra’s Luna Foundation Guard, pending court approval.</li>



<li>Arkham Intelligence is <a href="https://www.bloomberg.com/news/articles/2024-10-11/crypto-firm-arkham-backed-by-openai-s-altman-to-launch-derivatives-exchange?utm_source=telegram&amp;utm_content=crypto&amp;utm_medium=social">reportedly</a> plotting to launch a derivatives exchange.</li>



<li>Samara Asset Holdings is <a href="https://www.coindesk.com/markets/2024/10/14/samara-asset-group-plans-up-to-328m-bond-to-expand-bitcoin-holdings/?utm_medium=referral&amp;utm_source=rss&amp;utm_campaign=headlines">planning</a> to issue a $30 million bond to buy up some bitcoin. </li>



<li>Copper <a href="https://www.coindesk.com/business/2024/10/14/crypto-custodian-copper-appoints-former-sec-advisor-amar-kuchinad-as-new-global-ceo/?utm_medium=referral&amp;utm_source=rss&amp;utm_campaign=headlines">tapped</a> former Goldman Sachs and SEC employee Amar Kuchinad as its new CEO.</li>



<li>Horst Jicha, a German national <a href="https://www.cnbc.com/2024/10/11/horst-jicha-skips-bail-new-york-cryptocurrency-fraud-fugitive.html">accused</a> of running a $150 million crypto scam, went poof from his New York City home while on a $5 million bond.</li>
</ul>



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



Q: Are gamers coming around to crypto?



Off the Grid will be the best test of that to date.



To be clear, the game is very much still in beta. But there are already a slew of <a href="https://www.reddit.com/r/OffTheGridGame/comments/1g2hn64/anyone_else_having_trouble_with_purchases_fml/">posts</a> <a href="https://www.reddit.com/r/OffTheGridGame/comments/1g31wnh/failed_transactions/">complaining</a> about failed transactions for in-game stuff, and blockchain is, apparently, still very easy to blame.



One Redditor wrote:



“Why the hell does it take 15 tries of 15 different items before I can purchase anything on marketplace. Right now I can even buy anything on there like I been locked out by moderators for interfering on their stupid cryptocurrency scam they got going. Like what do u get by holding onto all the rarest items and preventing others from buying them. Only a handful of market gate holders have a majority of the valuable items and what does that get then at the end of the day a couple thousand dollars worth of savings in a video game they likely don&#8217;t even play. Fricken vultures man why don&#8217;t they just not use our market place to make crypto pennies and leave the gaming to gamers …”



Make of that what you will.



— David Canellis



It’s too early to tell.&nbsp;



I don’t think gamers necessarily have anything really against crypto (though, understandably, I think a lot of game developers have a bad taste in their mouth from previous iterations, but that’s a whole other can of worms).



The over-monetization of games can easily burn folks out. Remember back in 2017-2018 when loot boxes became more widely used, and therefore, controversial? I think folks just want to avoid that.&nbsp;



I’ll be honest with you, I’m an avid Sims player so I’m well aware of how much it sucks to continually sink money into a game. And I think it’s a fair concern for games with NFT functionality. But I hope that we’ve finally struck a fair balance.&nbsp;



No one’s gonna care if it’s a crypto game as long as it’s good, and doesn’t require you to drain your bank account to have a fun time.&nbsp;



Let’s be real, at the end of the day, the gameplay is what really matters.



— Katherine Ross



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A wave of new games could prove NFTs aren’t dead after all

Karate Combat announced the launch of its upcoming layer-2 blockchain, UP, built on the Hedera layer-1 network.



The first professional striking league governed by its own KARATE token, the project allows over 100,000 users to earn tokens by accurately predicting fight outcomes using its Up Only Gaming software.



Through the use of the Up Only Gaming software stack, more than 100,000 users on the platform can earn KARATE tokens by correctly predicting fight outcomes.



The UP layer-2 is set to be launched in Q1 2025. Its own $UP token is planned to be launched within the same year, with up to 30% of the token going to KARATE stakers.



Read more: <a href="https://blockworks.co/news/permissionless-day-two-vibes">Politics and memecoins drive the conversation on day 2 of Permissionless</a>



“Karate Combat is already massively incentivized to spread its Up Only Gaming technology to other sports, esports, fantasy sports, crypto projects and more,” onlylarping, Karate Combat’s pseudonymous co-founder, said. “UP is the enabling technology to not only allow us to provide all the tech for free, but to give grants and our user base to early partners.”



Karate Combat’s latest combat sporting event <a href="https://www.universe.com/events/karate-combat-50-permissionless-tickets-NP6T1Z">KC 50</a> is being held at <a href="https://blockworks.co/event/permissionless-iii">Permissionless III</a> in Salt Lake City, UT. It will feature a fight between David Hoffman, co-founder of Bankless, and Kain Warwick, co-founder of Infinex.



Read more: <a href="https://blockworks.co/news/permissionless-iii-day-three-defi">Permissionless III: DeFi phoenix looms as OG builders forecast next phase</a>



<h2 class="wp-block-heading">Polemos partners with Buff</h2>



On Wednesday, the blockchain <a href="https://blockworks.co/tag/gaming">gaming</a> asset management platform Polemos announced a partnership with Buff.game — a gaming company that runs a loyalty program for over 15 million players across games like Dota 2, Fortnite, League of Legends, Valorant and more.



The partnership is leveraging Polemos&#8217; asset management wallet and non-collateralized lending solution to let gamers trade, lend, borrow and access in-game items without the need for players to make an upfront investment.



Carl Wilgenbus, CEO of Polemos, said of the partnership: &#8220;This collaboration with Buff.game represents a pivotal moment in the evolution of gaming. By combining our Web3 expertise with Buff&#8217;s massive player base, we&#8217;re set to catalyze widespread adoption of blockchain gaming technologies.&#8221;



<h2 class="wp-block-heading">One interesting stat:</h2>



<ul class="wp-block-list">
<li>Pudgy Penguin <a href="https://x.com/pudgypenguins/status/1841878248101196078">GIFs</a> on Giphy have seen more than 30 billion views. </li>
</ul>



<h2 class="wp-block-heading">Also of note:</h2>



<ul class="wp-block-list">
<li>ENS domain names are now <a href="https://x.com/nalin/status/1843750140332650851">searchable</a> on Google.</li>



<li>The CryptoKitties NFT project is <a href="https://x.com/CryptoKitties/status/1841206455153934824?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1841206455153934824%7Ctwgr%5Ef0beffe8b1d8a196bee0ddfc0667d6d00ce86b14%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fopensea.io%2Fblog%2Farticles%2Fopensea-digest-october-10-2024">launching</a> “All the Zen,” a new monster breeding game on the Telegram messaging platform.</li>



<li>The Avalanche-based battle royale shooter Off the Grid from Gunzilla Games went <a href="https://x.com/playoffthegrid/status/1843685237546725748?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1843685237546725748%7Ctwgr%5Ef0beffe8b1d8a196bee0ddfc0667d6d00ce86b14%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fopensea.io%2Fblog%2Farticles%2Fopensea-digest-october-10-2024">live</a> on PlayStation 5, Xbox and PC, making it the first ever blockchain game on PlayStation 5.</li>
</ul>



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Web3 Watch: Karate Combat announces the launch of its UP L2

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<h2 class="wp-block-heading">The state of crypto ETFs: Permissionless edition</h2>



We’ve already noted there has been plenty of <a href="https://blockworks.co/news/empire-newsletter-permissionless-crypto-regulation">regulatory talk</a> at Permissionless.&nbsp;



ETFs were also a major point of discussion following the milestone launches of US spot <a href="https://blockworks.co/news/sec-approves-bitcoin-etf">bitcoin</a> and <a href="https://blockworks.co/news/ether-etfs-approved-for-us-exchange-july-23">ether</a> funds in January and July, respectively.&nbsp;



The bitcoin ETF chatter focused, in part, on the buyers driving the so-far $18.6 billion of net flows into the segment.



“The industry had an expectation that was summed up by: ‘Here come the boomers,’” Bianco Research’s Jim Bianco said during a panel discussion. “I don’t think it’s really been that at all.”



Rather, he and fellow panelist Bloomberg Intelligence analyst James Seyffart, noted that a large <a href="https://x.com/biancoresearch/status/1802764031415271586">chunk</a> of that money has come from existing digital wallets.



Indeed, Samara Cohen, BlackRock’s CIO of ETF and index investments, noted that 75% of buyers of the iShares Bitcoin Trust (IBIT) had never bought an iShares product before — signaling many IBIT holders are more crypto native investors.&nbsp;



While a number of wealth managers have <a href="https://blockworks.co/news/advisers-bitcoin-etfs-client-portfolios">jumped into</a> these products, many more remain on the sidelines. Morgan Stanley has <a href="https://blockworks.co/news/on-the-margin-newsletter-morgan-stanley-bitcoin-adoption">allowed</a> its financial advisers to offer the BlackRock and/or Fidelity bitcoin ETFs to certain clients, but other wirehouses have not yet followed suit.



“Really what they want to look at is who are the right investors, what’s the right level of liquidity needs, risk tolerance…and what’s the role bitcoin might play in a portfolio so they can recommend an appropriate allocation,” Cohen said. “That’s not a trivial exercise with relatively limited trading data and a pretty interesting market backdrop over the last few years.”&nbsp;&nbsp;&nbsp;&nbsp;



Seemingly more involved than wealth managers in bitcoin ETFs right now are hedge funds that are executing basis trades, Permissionless speakers have noted. That means they are taking positions in both the BTC spot and futures markets in a bid to profit from price differences.



As for the spot ether ETFs, Seyffart acknowledged his flow estimate for those funds (at between 15% and 25% those of the BTC funds, in the first year) appears to have been “way too bullish.”



Those US ETH products have so far seen net outflows amounting to $548 million.



A few reasons for this include the product launches occurring during the summer “doldrums,” ETH’s <a href="https://blockworks.co/news/tough-ethereum-vibes">price trajectory</a> around the launch and the need for <a href="https://blockworks.co/news/education-required-to-spur-eth-etf-outflows">more education</a> around the asset.&nbsp;



And, of course, the ETFs can not yet <a href="https://blockworks.co/news/proposed-ether-etfs-not-staking-eth">stake</a> the ETH that they hold.&nbsp;



“People who understand this and are staking their ETH would never go to an Ethereum ETF because you’re giving up that 3% or 4% yield,” Seyffart said. “You lose more utility by taking Ethereum and putting it in an ETF wrapper than you do taking bitcoin and putting it into an ETF wrapper.”



— Ben Strack



<h3 class="wp-block-heading">13.75%</h3>



The amount MicroStrategy shares were up on Friday, as of 2:15 pm ET. The business intelligence firm’s stock price is now at a 52-week high.



The run-up comes as MicroStrategy founder Michael Saylor announced plans to launch a bitcoin bank during a recent interview with research firm Bernstein. MicroStrategy currently holds 252,220 BTC.



<h2 class="wp-block-heading">Did You Notice</h2>



Happy Friday! Inflation data this week came in above expectations, painting an uncertain picture as investors and analysts continue to <a href="https://blockworks.co/news/btc-uptober-market-odds">speculate</a> about what we might see from the Fed in November. Here are the highlights:&nbsp;



<ul class="wp-block-list">
<li>Thursday’s CPI report came in hotter than expected. As Felix said <a href="https://blockworks.co/news/forward-guidance-newsletter-hot-inflation-data">yesterday</a>, the report wasn’t smoking hot, but left much to be desired. We’ll call it warm. Core CPI rose 0.3% month over month, vs. the 0.2% that analysts expected. Annually, core CPI came in at 3.3%, just above the forecasted 3.2%. Same with headline CPI, which was up 0.2% from the prior month and 2.4% year over year, compared with 0.1% and 2.3% expected, respectively. </li>



<li>Friday’s PPI report showed core PPI inflation rose to 2.8% annually. Analysts had called for 2.7%. The monthly increase for the core index showed a 0.2% increase in line with forecasts. Neither the PPI nor the CPI are the Fed’s top inflationary gauge, but they are still important data points to note. </li>



<li>The University of Michigan published its Survey of Consumers on Friday, showing sentiment dropped 1.7% from September to October. At the same time, near-term inflation expectations increased to 2.9%. It’s the highest inflation expectation we’ve seen since the summer. </li>
</ul>



— Casey Wagner



<h2 class="wp-block-heading">Bulletin Board&nbsp;</h2>



<ul class="wp-block-list">
<li>Coinbase Chief Policy Officer Faryar Shirzad said during a Permissionless panel that Donald Trump is “very committed to the crypto issue” and that the Harris campaign “has done a really good job in beginning to talk to us.” We asked the executive about some other things; check <a href="http://blockworks.co">Blockworks.co</a> next week for our full interview with Shirzad.</li>



<li>Bitcoin’s price surged above $62,900 by 2 pm ET — up more than 4% from 24 hours prior.  </li>



<li>After notching $245 million of net inflows on Monday, the US-listed spot BTC funds endured three straight days of outflows this week (amounting to a combined $140 million), Farside Investors <a href="https://farside.co.uk/bitcoin-etf-flow-all-data/">data</a> shows. <a href="https://farside.co.uk/ethereum-etf-flow-all-data/">Flows</a> into the US ETH products have been roughly flat since Monday. </li>



<li>Permissionless is wrapping up today, but Blockworks’ DAS is coming back to NYC from March 18-20, 2025! Early bird tickets are <a href="https://blockworks.co/event/digital-asset-summit-2025-new-york">available now</a>.</li>
</ul>



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Crypto ETF takes from the Permissionless stage

DeFi is getting top billing on day three of Permissionless III, with a high-profile main stage session and its own <a href="https://blockworks.co/permissionless#agenda">breakout track</a>.



After lying in wait during recent years, DeFi is on the brink of a renaissance, according to panelists who discussed the category’s future role in crypto on Friday morning. Kain Warwick, Stani Kulechov and Sam Kazemian delved into the maturation of DeFi, the prospects for new innovations, a shift from experimentation to consolidation, the next phase of scaling and competing with centralized services.



Moderator David Hoffman kicked off the session with the observation that we haven’t seen much evolution since the heady days post-DeFi summer. Warwick, the founder of Synthetix credited with creating the concept of yield farming, suggested that innovation in DeFi typically stems from combining new technologies.



Read more: <a href="https://blockworks.co/news/permissionless-day-two-vibes">Politics and memecoins drive the conversation on day 2 of Permissionless</a>



“We’re sort of waiting for that next thing to combine,” Warwick said, noting that <a href="https://blockworks.co/podcast/empire/3bcc1a58-8768-11ee-bb69-9b6b85d39f7e">Synthetix spin-off</a> Infinex was built to integrate newer primitives that improve user experience and help those technologies gain distribution. He believes the DeFi market still holds immense potential, particularly among users currently “trapped” in centralized services.



Kulechov cited the shift away from experimentation and towards profitability as indicative of DeFi protocols reaching a stage of maturity, with select DAOs leading the charge. The next phase of DeFi&#8217;s growth will focus on building trust, network effects and brand value, positioning DeFi as a serious alternative to centralized exchanges, Kulechov said. That’s already happened with centralized lending, largely supplanted by non-custodial alternatives, the <a href="https://blockworks.co/tag/aave">Aave</a> founder added.



Read more: <a href="https://blockworks.co/news/0xresearch-newsletter-trump-world-liberty-financial-aave">Trump’s World Liberty Financial is using Aave</a>



Kazemian of <a href="https://blockworks.co/tag/frax">Frax Finance</a> praised the growing number of decentralized chains. He referenced <a href="https://blockworks.co/news/0xresearch-newsletter-uniswap-layer-2">Uniswap’s launch of Unichain</a> yesterday as a vindication of Frax’s earlier decision to launch its own chain, Fraxtal. He envisions a future where most computation occurs on decentralized chains rather than centralized servers. This shift, according to Kazemian, will blur the lines between centralized and decentralized services, further enhancing interoperability.



The group noted the trend of centralized exchanges launching or closely affiliating themselves with their own chains, with varying degrees of decentralization. While these went unnamed, chief examples are Binance and BNB Chain, Coinbase and Base, Bybit and Mantle, OKX and X-layer, Crypto.com and Cronos.



In some respects, exchanges were the first cross-chain interoperability solutions, Kazemian said. DeFi has historically catered to fervent enthusiasts and “decentralization maxis,” Warwick pointed out, a strategy that has limited mainstream adoption. The focus must now shift toward simplifying user experience and expanding market access.



Read more: <a href="https://blockworks.co/news/empire-newsletter-permissionless-crypto-regulation">A16z’s Chris Dixon pushes for bipartisan legislation at Permissionless III</a>



“We can’t keep doing the same thing over and over — we’re not breaking through this enthusiast wall,” he said.



So, what are centralized services weak points, asked Blockworks co-founder Michael Ippolito. Unichain is also a hallmark of a trend towards vertical integration in DeFi, he said. That’s a departure from how we’ve viewed dapp development in years past. As applications move into various layers of the stack, such as Uniswap, “it looks like they are just trying to own the entire thing,” in an attempt to mimic a centralized experience, Ippolito said.



There’s an inevitability to this, Warwick said, even at the cost of some censorship resistance. “If we can’t get through the problems in our own backyard, we’re not going to be credible in saying we’re going to take down banks,” he said. It doesn’t matter that Unichain may directly compete with Infinex — that’s fine, argued Warwick. “We’re all competing against Binance.”



Kazemian said the script has now flipped from “why do you need a chain” to “why don’t you need a chain?”



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Permissionless III: DeFi phoenix looms as OG builders forecast next phase

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The notion that a (former) president of the United States would throw his support behind a DeFi project would’ve been inconceivable just a few years ago, but <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-family-defi-venture">it’s happening</a>.



The Trump-backed World Liberty Financial (WLF) project <a href="https://governance.aave.com/t/temp-check-world-liberty-financial-aave-v3-instance-on-ethereum-mainnet-proposal/19383">submitted</a> on the Aave governance forums a proposal to deploy an Aave v3 instance on Wednesday.



WLF is not technically a fork of Aave’s code, as confirmed by Aave founder Stani Kulechov on the Chopping Block <a href="https://youtu.be/gZyn9R_hBIc">podcast</a>.&nbsp;



On the backend, WLF seems to be a segregated instance of its own “Aave” from the main Aave protocol. WLF’s users are then serviced from its own separate <a href="https://blockworks.co/news/world-liberty-financial-kyc-starts">KYC’d front-end</a>, where it will presumably charge a trading fee.



That makes it very much a “DeFi” project, insofar as World Liberty Financial is running on the largest smart contract compatible public blockchain and leveraging core DeFi primitives.



Yet it’s also not quite “DeFi,” given its strict KYC measures for global users and how it’s presently limited to only accredited investors in the US.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd3U24H8ZS257qXT9Hvwhd4CNlOhRsf_dk2y4ovh-2IKO-Q1vZSO7qk9o8j9mf05Wf240MIPaE9Eyb43h6ZE-yCYEcKsJuvdpmtTl8XwDhigVG2VrzPNOlmlslKlcITB8iWge1otfQ-P3TUMKOvlfBZqz5k?key=JQMVYvq9Jhk3rOrcyxUrZg" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://www.worldlibertyfinancial.com/">World Liberty Financial</a></figcaption></figure>



In exchange for using Aave, WLF is offering 20% of its protocol fees and 7% of its WLFI governance token supply to Aave.



Part of the allocated WLFI token supply is explicitly for liquidity mining rewards on Aave, despite previous claims from a <a href="https://www.coindesk.com/business/2024/09/03/inside-the-trump-crypto-project-linked-to-a-2m-defi-hack-and-former-pick-up-artist/">leaked draft</a> of World Liberty’s plans that the token will be non-transferable.



USDC, USDT, ETH and WBTC are four of the assets to be initially listed on WLF for lending and borrowing.&nbsp;



The proposal has received the verbal <a href="https://governance.aave.com/t/temp-check-world-liberty-financial-aave-v3-instance-on-ethereum-mainnet-proposal/19383/4">approval</a> of Aave-chan Initiative (ACI) founder Marc Zeller, who “welcomes the alignment between the WLF and the Aave ecosystem.” However, other DAO members are <a href="https://governance.aave.com/t/temp-check-world-liberty-financial-aave-v3-instance-on-ethereum-mainnet-proposal/19383/9">questioning</a> the strategy of saddling Aave with the baggage of <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-crypto-promises">Trump’s politics</a>.



Though the Trump family’s names are attached to the project, it’s hard to believe that it goes beyond much more than a brand name association.



<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">.<a href="https://twitter.com/worldlibertyfi?ref_src=twsrc%5Etfw">@worldlibertyfi</a> <a href="https://t.co/mwhVIzPJyq">pic.twitter.com/mwhVIzPJyq</a>&mdash; Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1829141447087648796?ref_src=twsrc%5Etfw">August 29, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The people behind WLF are clearly crypto natives. From the precise selection of Aave, and the strategy to incentivize liquidity providers with its own native token, to the linguistic nuances of its governance proposal, WLF has all the trappings of a team that understands how things are done in this business.



Who knows how it will end —&nbsp;stay tuned, as they say.&nbsp;



<h2 class="wp-block-heading">Chart of the Day</h2>



Optimism Collective generates $911 million in monthly revenues:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXes5oaGYzL4yu5BVrVawekIcM1CLBfUtqIwvyqnWet2tdkrPr2mgyHBiw9y4JApTkCI1jpbtjQy-GKL_UVnF8vtXPJ624F5B9SuKKkie6OODx8s9ChzXsHd2SlykEqtiCihk9_7J6qGO-uc5ARW71Crng_Y?key=JQMVYvq9Jhk3rOrcyxUrZg" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://app.blockworksresearch.com/analytics/superchain">Blockworks Research</a></figcaption></figure>



Uniswap announced its own <a href="https://blockworks.co/news/0xresearch-newsletter-uniswap-layer-2">Unichain L2</a> yesterday as part of the Optimism Collective/Superchain. One revenue-sharing <a href="https://base.mirror.xyz/aBwt4flT1WAKJGQTj2AXBpH_8Qd3umQ-ZECLAJoO_nE">criteria</a> of being an L2 chain within the Optimism Collective is to share 2.5% of your total sequencing revenues, or 15% of your gas fee profits (after deducting data availability costs) — whichever is higher.



In the month of September, the Optimism Collective raked in $911 million in total revenue. Optimism mainnet and Base make up the two largest revenue contributors, at $646 million and $263 million, respectively.



Note that the Blast L2 is left out of the above chart. Though L2s may be built with the Optimism’s OP Stack developmental kit, that does not make them necessarily committed to the Optimism Collective.



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Trump’s World Liberty Financial is using Aave

Today is day three of <a href="https://blockworks.co/event/permissionless-iii">Permissionless III</a> — have fun staying richly informed and entertained to all the attendees headed to the event this morning.



Keep reading for the inside scoop on where the crypto vibes are headed from Katherine, reporting from Salt Lake City. Catch you next week!



<h2 class="wp-block-heading">App revolution</h2>



It’s looking like crypto is ready to transcend to its next major phase.&nbsp;



Apps, not infrastructure.



There have been calls to renew focus on funding and building apps for a while now. Not “crypto apps,” like perps DEXs and lending protocols, but more genpop apps that regular people really want to use at scale — that would just so happen to run on blockchain rails.



With good reason. Infrastructure plays dominate the market. I spent the morning cataloging the top-200 cryptocurrencies by capitalization — which represents 96% of the entire market — per CoinGecko into three top-level categories: infrastructure, currency and apps.



Within each of those headline items were subcategories. Under infrastructure there’s layer-1 tokens like ether, SOL and TON, layer-2s arbitrum, mantle and optimism and pure-play infra assets including chainlink, PYTH and EIGEN.&nbsp;



Under currency there are stablecoins, memecoins and tokens derived from wrapping, staking or bridging other assets, like wrapped bitcoin and lido staked ETH.&nbsp;



App categories include exchange tokens — both DEX and CEX — as well as ones for metaverses, wallets and compute marketplaces like Akash, and DeFi platforms such as sky (formerly maker), pendle and aave.



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1513" height="1600" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image.png" alt="" class="wp-image-93002" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image.png?w=1513 1513w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image.png?w=284 284w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image.png?w=968 968w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image.png?w=1452 1452w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image.png?w=243 243w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image.png?w=247 247w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image.png?w=207 207w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image.png?w=76 76w" sizes="(max-width: 1513px) 100vw, 1513px" /><figcaption class="wp-element-caption">Appcoins are in purple, with exchanges and DeFi tokens the most common</figcaption></figure>



It obviously took some value judgments: Are liquid staking platforms Jupiter and Lido “apps” or “DeFi”? Probably the former. You use your crypto through the platform and immediately receive something else in return — in those cases a liquid staking token. DeFi apps would otherwise generate potential rewards over time.



Bitcoin was labeled a “currency,” and not a layer-1 under infrastructure. Those are mostly smart contract-native platforms on which apps can be deployed: coins that aim to offer ownership, exposure and utility to the underlying architecture of Web3.



All told, infrastructure coins, when sorted this way, represent $660.5 billion out of the $973.2 billion that remains of crypto after excluding bitcoin — 68% of the whole.



Appcoins are worth just $45.3 billion, or less than 5% of the total. Currencies other than bitcoin meanwhile make up over 27%.



Of course, the next wave of consumer apps, like the ones crypto-forward TradFi titan VanEck is looking to back with its <a href="https://blockworks.co/news/forward-guidance-newsletter-vaneck-vc-fund">new fund</a>, might not even have their own token. The blockchain and crypto elements could be buried underneath slick UX, so that users are none-the-wiser that they’ve landed in Web3.&nbsp;



Polymarket, for instance, doesn’t have its own coin but is one of this cycle’s most successful apps within the broader zeitgeist.



Still, there’s obviously room for growth within the app space. It’s difficult to say how big the explosion in adoption could be.&nbsp;



Despite the example of Polymarket, I suspect that token launches — specifically ones that prioritize access to the general public — will need to be central to those projects. Perhaps the shift to the applayer will bring about the return of initial coin offerings.&nbsp;



After all, it could be that infrastructure tokens are only so dominant because they offer exposure to potential growth within those ecosystems, through their native coins.



App projects may do well in following that formula — as long as they can stomach a potential visit from a trigger-happy SEC.&nbsp;



With that in mind, whatever success is destined for the applayer rests on how well <a href="https://blockworks.co/news/forward-guidance-newsletter-sec-ripple-inflation">Coinbase</a>, <a href="https://blockworks.co/news/uniswap-at-center-of-us-war-on-crypto">Uniswap Labs</a> and now <a href="https://blockworks.co/news/sec-charges-cumberland-unregistered-dealer">Cumberland DRW</a> fairs against the regulator in court. Joy.



— David Canellis



<h2 class="wp-block-heading">IYKYK</h2>



We’re bringing you something a little different this week.



Instead of just sitting down and absorbing what Blockworks co-founder — and Empire host — Jason Yanowitz said on the podcast this week, I tracked him down at Permissionless.



“The biggest takeaway from me is that the energy online is very different online from the energy in person,” Yanowitz told me.&nbsp;



“There [are] like three stages of companies from 2017-2020, which was the CeFi infrastructure people (like Fireblocks, BitGo, Anchorage), 2020 to 2024 was infrastructure and now I think we’re entering this application era,” Yanowitz said. “Every panel ends up talking about applications in some way, which we’ve never seen at a conference before.”



“I think all signs are actually pointing to 2025 being [the year that all applications] are funded,” he explained.&nbsp;



So the bullish vibes really are real.For Yanowitz, the energy felt “rejuvenating.” He thinks bitcoin could carve out fresh all-time highs in November or December, setting the stage for a (potentially) bullish start to 2025.



And now you know.



<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">Day 2 at <a href="https://twitter.com/Permissionless?ref_src=twsrc%5Etfw">@Permissionless</a> was awesome. -Favorite talk was on macro by <a href="https://twitter.com/JanvanEck3?ref_src=twsrc%5Etfw">@JanvanEck3</a> and others, TLDR bullish setup for crypto. -Way too many bullish on memecoins and bearish alts. Short term basis in my opinion. Alts are just memecoins with fundamentals. Memecoins will trend… <a href="https://t.co/mCrrj3wxYQ">pic.twitter.com/mCrrj3wxYQ</a>&mdash; Jesse Eckel (@Jesseeckel) <a href="https://twitter.com/Jesseeckel/status/1844590367829786665?ref_src=twsrc%5Etfw">October 11, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



&#8220;Despite (SEC) Chairman (Gary) Gensler’s call to just &#8216;come in and register,&#8217; Cumberland has for years been expressly prohibited from using its now-dormant registered broker-dealer for crypto asset activity. We cannot comply with rules that do not exist or a framework that regulators are interpreting to prohibit trading in natively issued crypto assets,” Cumberland said.



While it may look like next year is potentially bullish, the Securities and Exchange Commission continues to target companies in the crypto space.&nbsp;



Yesterday, it was Cumberland.&nbsp;



“We are not making any changes to our business operations or the assets in which we provide liquidity as a result of this action by the SEC,” Cumberland said in a statement.



“Despite frequent protestations by the industry that sales of crypto assets are all akin to sales of commodities, our complaint alleges that Cumberland, the respective issuers, and objective investors treated the offer and sale of the crypto assets at issue in this case as investments in securities, and Cumberland profited from its dealer activity in these assets without providing investors and the market with the important protections afforded by registration,” Jorge G. Tenreiro, acting chief of the agency’s crypto assets and cyber unit, alleged.



It’s one of those cases that could have lasting effects on the crypto space, but first, we need to see how it plays out.



— Katherine Ross



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Crypto set for a new era of apps over infrastructure

Crypto conference panel titles are like little time capsules that give a sense of what the crypto world was interested in at a certain moment in time (at least in the eyes of conference organizers).



So here’s one telling example I found: A year ago at Permissionless II, a host of Solana founders sat on a panel called “Solana DeFi: A Phoenix Rises from the Ashes.”&nbsp;



This year, the main stage saw a talk called “DeFi: A Phoenix Rises from the Ashes,” but the panel was populated with Ethereum DeFi founders instead.



During that 2023 panel, SOL was trading at around $18. Today, it&#8217;s around $140. This week, the fees and tips being <a href="https://app.blockworksresearch.com/analytics/sol?dashboard=sol-financial&amp;interval=weekly">processed</a> by the Solana blockchain are roughly 70 times what they were during the last Permissionless.



Read more: <a href="https://blockworks.co/news/permissionless-day-two-vibes">Politics and memecoins drive the conversation on day 2 of Permissionless</a>



In brief, it appears that the phoenix has risen from the ashes.&nbsp;



This year’s Permissionless conference fell less than a month after Solana’s flagship conference in Singapore, so it was a light week as far as bombshell <a href="https://blockworks.co/tag/solana">Solana</a> announcements went. Instead, the Solana content was a bit of a heady brew.&nbsp;



Read more: <a href="https://blockworks.co/news/lightspeed-newsletter-solana-breakpoint-2024">These 3 questions remain after Solana Breakpoint</a>



Eugene Chen from Ellipsis Labs <a href="https://x.com/whosknave/status/1844104857437049207">said</a> that “fighting [maximal extractible value] is almost like fighting gravity” due to the inevitable economic force to pack blocks tightly. DRiP’s Vibhu Norby said that memecoins can be better thought of as commerce than as investment during a live taping of the Lightspeed podcast. And someone I chatted with near the coffee station said decentralized physical infrastructure (<a href="https://blockworks.co/tag/depin">DePIN</a>) projects where the infrastructure’s supply comes from the same place as its demand are the most likely to succeed (think of a shared computing network where users offer and also use computing power, as an easy example).



As attendees chugged water and generously applied chapstick to battle the Salt Lake City dryness, it became clear to me that Solana has become, for lack of a better word, cool. The Solana breakout track was reasonably full, and a Solana Foundation-sponsored founder summit had to turn around its fair share of curious interlopers.&nbsp;



For Solana founders I heard from, the plaudits feel good, especially given how some in crypto tabbed Solana a lost cause following FTX’s unraveling.&nbsp;



But it’s also uncharted territory for Solana, which has always felt like a contrarian bet against the much-larger Ethereum. Today, Solana is <a href="https://blockworks.co/news/lightspeed-newsletter-solana-defi-activity-expanding">much closer to Ethereum</a> in key usage metrics, and professional investors seem to be <a href="https://blockworks.co/news/lightspeed-newsletter-sol-strategies-rebrand">taking a liking to SOL</a>.&nbsp;



The question I was struck by during the conference is how Solana can adjust to a world where it’s not quite the contrarian underdog anymore. What if new chains come to fruition that are faster, cheaper, more impious to crypto’s high priests?



Crypto fans tend to not be fans of social consensus, and being more of a consensus blockchain could prove to be disadvantageous. Solana has certainly risen from the ashes over the past year. It’s now a question of whether the phoenix can also fly.



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Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



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Permissionless III dispatch: What a difference a year makes for Solana

Binance executive Tigran Gambaryan was denied bail at a Nigerian hearing on Friday.



The executive’s been detained since February when he visited the country to meet with Nigerian officials on behalf of Binance. He’s facing money laundering charges.&nbsp;



Gambaryan’s also suffering from health issues yet is still imprisoned at the Kuje Prison. And I wish I could report that there was, well, more to report. But unfortunately, at this point, there’s not.&nbsp;



&#8220;We all know that Tigran was <a href="https://blockworks.co/news/binance-detained-exec-charges-dropped-nigeria">never a decision-maker at Binance</a> and that he is entirely innocent but I am not surprised by this decision. It is completely unjust to deny someone in Tigran’s condition the opportunity to seek appropriate medical help and I just pray that when he is finally released that the damage he is suffering is not permanent. I am exhausted and deeply disappointed, but I will continue fighting for my husband’s rightful freedom,” his wife, Yuki Gambaryan, said in a statement.



Read more: ​​<a href="https://blockworks.co/news/continued-detainment-binance-executive-outrageous">Rep. Hill calls continued detainment of Binance executive ‘outrageous’</a>



<a href="https://blockworks.co/tag/binance">Binance</a> echoed her thoughts, with a spokesperson telling Blockworks that the company is “deeply disappointed by the court’s decision to deny Tigran bail, particularly given his deteriorating health. He has been unlawfully detained for over 220 days.”&nbsp;



“We are committed to working with the Nigerian government to resolve issues,” they added.&nbsp;



Gambaryan has a long and storied history with crypto. Prior to joining Binance, he worked as an IRS agent with a focus on digital currency.&nbsp;



He <a href="https://blockworks.co/news/empire-newsletter-binance-exec-silk-road-arrests">served as a special agent</a> involved in taking down former Drug Enforcement Administration agent Mark Force and former Secret Service agent Shaun Bridges, who were both involved in the Silk Road.&nbsp;



Gambaryan wrote that the two “abused their positions” as federal agents in a <a href="https://www.justice.gov/sites/default/files/opa/press-releases/attachments/2015/03/30/criminal_complaint_force.pdf">2015 affidavit</a>. When detailing his experience, he said that he “developed a specialty in cyber and digital currency crimes.”



Wired’s Andy Greenberg — who wrote the book Tracers in the Dark: The Global Hunt for the Crime Lords of Cryptocurrency with Gambaryan as the protagonist — called the former IRS agent “kind of a legendary figure in the crypto crime investigation world.”



Earlier this month, Yuki Gambaryan did an interview with Illicit Edge’s new podcast “Designated” about his imprisonment.&nbsp;



“Tigran is innocent, he didn’t do anything wrong,” she told host Yaya Jata Fanusie. She also pushed for more “decisive actions” from the US government.&nbsp;&nbsp;



“I am having this constant fear of losing Tigran,” Yuki went on to say.



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Binance exec Tigran Gambaryan denied bail in Nigeria

The mix of retail and institutional, DeFi and TradFi, suits and T-shirts has been a staple at Permissionless since the inaugural event in 2022. Crypto influencers and US senators find themselves under the same roof this year for three days in Utah.&nbsp;



But the circumstances this year are special. When Permissionless III wraps on Friday, there will be 26 days left until the 2024 presidential election. This reality has crept into almost every discussion, both on stage and on the expo floor.&nbsp;


<div class="wp-block-image">
<figure class="alignright size-large is-resized"><img loading="lazy" decoding="async" width="1200" height="800" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241010_Permissionless_3966.jpg?w=1024&amp;h=1024" alt="" class="wp-image-92981" style="width:557px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241010_Permissionless_3966.jpg?w=1200 1200w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241010_Permissionless_3966.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241010_Permissionless_3966.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241010_Permissionless_3966.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241010_Permissionless_3966.jpg?w=386 386w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241010_Permissionless_3966.jpg?w=392 392w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241010_Permissionless_3966.jpg?w=329 329w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241010_Permissionless_3966.jpg?w=80 80w" sizes="(max-width: 1200px) 100vw, 1200px" /><figcaption class="wp-element-caption">Source: Mike Lawrence for Blockworks</figcaption></figure></div>


“I think it is bullish if Trump wins, and it&#8217;s probably negative for a little bit if [Harris] wins,” Dan Tapiero, founder of 1Roundtable Partners and 10T Holdings, said during a Thursday panel discussion. “But the reality is that this move toward putting all value on a blockchain is bigger than one election.”&nbsp;



Read more: <a href="https://blockworks.co/news/permissionless-3-day-one-vibes">Axe throws and crypto wizards: Permissionless III is underway</a>



The comments contrast a widely accepted narrative from many industry players — and certain politicians — that a second Donald Trump presidency will lead to a more friendly environment for crypto in the US.&nbsp;



“He’s evolved on this issue to the point where he’s going to advocate for it,” House Majority Whip <a href="https://blockworks.co/news/forward-guidance-newsletter-vaneck-vc-fund">Tom Emmer told Blockworks</a> of Trump’s crypto stance and the about-face he’s done in recent months.&nbsp;



“[<a href="https://blockworks.co/tag/kamala-harris">Harris</a>] doesn’t know what she’s talking about,” he added.&nbsp;



Couple the looming election with increasingly uncertain macroeconomic conditions and a crypto market that just can’t seem to take off again, and you paint a somewhat bleak picture. Still, the speakers in Salt Lake City managed to bring some levity to the situation: Focus on the memes.&nbsp;



“I don&#8217;t want to wax too philosophical here, but partially because the transparency of mobile phones, trust in US institutions has really gone down,” <a href="https://blockworks.co/tag/vaneck">VanEck</a> CEO Jan van Eck said on stage.&nbsp;



“Trust in Congress, trust in academia, trust in mainstream media has basically disappeared,” van Eck added. “The fact that some of the memecoins make fun of some of that, I think, is great. It&#8217;s a joyful response, a social response.”&nbsp;



Read more from our opinion section: <a href="https://blockworks.co/news/political-candidates-cannot-ignore-crypto-voters">Political candidates can no longer ignore crypto voters</a>



Aside from politics and memecoins, it just wouldn’t be a crypto conference if people didn’t talk about price action. Even as bitcoin dipped below $59,000 Thursday, the bulls were unphased.&nbsp;



Tapiero said he expects BTC to hit between $150,000 and $180,000 in two years or so.&nbsp;



Pantera Capital CEO Dan Morehead threw out a number too: $117,000 by August 2025. Van Eck didn’t share a specific price expectation, but added with a smile: “I think we’re all bulls on this stage.”



Ben Strack contributed reporting.



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Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



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Politics and memecoins drive the conversation on day 2 of Permissionless

Felix Jauvin

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<h2 class="wp-block-heading">Structural sticky inflation is here&nbsp;</h2>



Today’s inflation data tells a story of sticky prices that are going to have a lot of trouble coming down and getting us back to the 2% target.&nbsp;



Off the top, the key data points vs. expectations:



<ul class="wp-block-list">
<li>Core CPI MoM: 0.3% actual, 0.2% expected</li>



<li>Core CPI YoY: 3.3% actual, 3.2% expected</li>



<li>Headline CPI MoM: 0.2% actual, 0.1% expected</li>



<li>Headline CPI YoY: 2.4% actual, 2.3% expected</li>
</ul>



As we can see, the CPI print was hot. Not smoking hot, and also not because any major outliers drove it higher. What we’re seeing is really just a broad-based inability for inflation data points to meaningfully move lower.



Before digging into the hot points, let’s quickly run through what accounts for 55% of this month’s inflation: shelter.



Following a rebound last month, owner-equivalent-rent and primary rents both continued their trajectory lower, leading to shelter inflation coming in at 0.22% MoM vs. expected 0.46%. By all accounts, this was a positive outcome for disinflation.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdt7ccAM23USZ7WS3MDujDSesbV1kt6R84kh93rvFctWoErOd42OGkBLB1saG5cU6CPKWNGVcK0Hl9C7Lm7FIDyu5pCQu3Jz7OL5kuQknS9XW_Pl2sYnWcMm9a8mS1x5SCypfBbL9P-DcAwCVLN-3d1Xqvw?key=0JUZeaMwPbST8WRCQEVVkA" alt=""/></figure>



That’s about as far as we can go in terms of positive data points in today’s print.



The big red flag is that core goods rebounded higher at 0.17% vs. the anticipated 0.02%. Goods MoM deflation has been the core driver of the disinflation story we’ve seen this year and which has allowed the Fed to cut with confidence. So if we’re beginning to see a rebound in goods inflation, that will be a concern.



Overall, today’s CPI print paints a picture of sticky inflation, but not re-acceleration. I think this print will still allow the Fed to cut by 25 basis points in November, but 50bps is surely off the table at this point.



— Felix Jauvin



<h3 class="wp-block-heading">$24&nbsp;</h3>



The price target (in CAD) for Galaxy Digital, according to a Thursday note from HC Wainwright &amp; Co., which started covering the stock. The company’s share price closed at $17.73 CAD on Wednesday.&nbsp;



Galaxy is one of just two diversified crypto-focused public companies (outside of the bitcoin miners) with a market cap of more than $1 billion, the analysts wrote. And an expected sharp crypto rally starting in Q4 could be the single biggest driver of a Galaxy stock price increase.



The HC Wainwright &amp; Co pros added: “Further, institutional understanding and adoption of digital assets has never <a href="https://blockworks.co/news/on-the-margin-newsletter-inevitable-institutional-digital-assets-involvement">been greater</a>, and we see a wave of incremental <a href="https://blockworks.co/news/forward-guidance-newsletter-vaneck-vc-fund">institutional capital </a>pouring into the space in the coming years, further amplifying the upcoming bull market.”&nbsp;



<h2 class="wp-block-heading">On the ground at Permissionless&nbsp;</h2>



Day two of Blockworks’ Permissionless was in progress when this newsletter went out, but let’s take a look at some of what people were talking about on day one.&nbsp;



There seems to be a calm before the storm. And we’re not talking about Hurricane Milton (our thoughts are with everyone in the affected areas and their loved ones), but rather the seeming holding pattern as we await the Nov. 5 <a href="https://blockworks.co/news/political-candidates-cannot-ignore-crypto-voters">presidential election</a>.&nbsp;



The need for regulatory clarity was mentioned a lot. That’s not really new, but it is even more highlighted given we’re now just 26 days from the big day.&nbsp;



Casey <a href="https://blockworks.co/news/forward-guidance-newsletter-vaneck-vc-fund">mentioned</a> some of House Majority Whip Tom Emmer’s thoughts yesterday about how the presidential election could impact the crypto industry’s trajectory.



Coinbase CLO Paul Grewal said during the same panel that he’s looking beyond just the Donald Trump-Kamala Harris match-up. “Congress is going to matter a lot here, regardless of who’s elected as president,” he said.&nbsp;&nbsp;&nbsp;



During a session later in the day, Lumida CEO Ram Ahluwalia argued that Harris — who he called the “presumptive leader of the Democratic party today” — could terminate SEC Chair Gary Gensler before the election if she wanted to.&nbsp;



But he expects to see “status quo” if Harris is elected, implying no quick change in SEC leadership would be made.



While Donald Trump has vowed to <a href="https://blockworks.co/news/donald-trump-speaks-bitcoin-2024">fire Gensler</a>, Harris has shared some <a href="https://blockworks.co/news/kamala-harris-crypto-policy-reset-outlook">pro-crypto comments </a>without noting how she might address the agency’s current leadership.&nbsp;



Clearing out the leaders with negative views of the industry should be positive for an agency that overall realizes the crypto industry’s value to capital markets and American innovation, said Bitwise’s Juan Leon.



But, he added in a panel alongside Ahluwalia: “I don’t think it’s as black and white as people in this industry seem to be thinking. Really what matters is the <a href="https://blockworks.co/news/house-passes-act-fit21-with-bipartisan-support">bipartisan support</a>, which is there.”



While regulation was mentioned in some shape or form in nearly every panel I listened in on, some other points worth noting strayed from strict policy.



In a panel on the future of bitcoin mining, Marathon Digital CEO Fred Thiel seemed to question the strategy of industry rival Core Scientific, which this year has <a href="https://investors.corescientific.com/news-events/press-releases/detail/78/core-scientific-announces-new-contract-with-coreweave-for-delivery-of-approximately-70-mw-of-additional-infrastructure-to-host-high-performance-computing-operations">inked</a> high-performance computing (HPC) <a href="https://blockworks.co/news/post-bitcoin-halving-mining-strategies">hosting contracts</a> with cloud-computing firm CoreWeave.



Core Scientific has said it projects more than $4.7 billion in cumulative revenue over the 12-year timeline of the CoreWeave contracts.



But Thiel argued: “That’s a race to zero,” noting that competition in the arena of renting rack space will ultimately hurt margins.&nbsp;



And we can’t not mention the world’s largest asset manager being in the building.&nbsp;



Samara Cohen, BlackRock’s CIO of ETF and index investments, said we are in “act one” in terms of institutional crypto adoption. This theater analogy came in lieu of the baseball-focused “early innings” line you typically hear (though Let’s Go Mets, am I right?).&nbsp;



While hedge funds and other asset managers have been jumping in, there remains “a fair amount of plumbing” needed to unlock others’ ability to buy bitcoin (namely pensions and endowments).&nbsp;



Outside of regulation, investment guidelines consideration and board approval are other hurdles to clear for those asset allocators.&nbsp;&nbsp;



“These things take a longer period of time…and this is a process that is underway,” Cohen said.



— Ben Strack&nbsp;



<h2 class="wp-block-heading">Bulletin Board&nbsp;</h2>



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<li>The SEC on Thursday charged crypto market maker Cumberland DRW with acting as an <a href="https://blockworks.co/news/sec-charges-cumberland-unregistered-dealer">unregistered dealer</a>. Regulators <a href="https://www.sec.gov/files/litigation/complaints/2024/comp-pr2024-168.pdf">allege</a> the Chicago-based firm has been “operating as an unregistered dealer in more than $2 billion of crypto assets offered and sold as securities.” In a statement posted on X, Cumberland expressed frustration with being the SEC’s “latest target” and pledged to defend itself “against overzealous regulators.” </li>



<li>Initial jobless <a href="https://www.dol.gov/ui/data.pdf">claims</a> released Thursday showed 258,000 first-time filers for the week ended Oct. 5, marking the highest weekly initial claims since August 2023. Analysts had expected 230,000. </li>



<li>Permissionless III continues! Check out the day one recap from Blockworks editor Katherine Ross <a href="https://blockworks.co/news/permissionless-3-day-one-vibes">here</a>, and keep an eye on Blockworks.co for the latest updates. </li>
</ul>



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