AltLayer

Byron Gilliam

This is a segment from The Breakdown newsletter. To read more editions, <a href="https://blockworks.co/brand/the-breakdown">subscribe</a>.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“The limited liability corporation is the greatest single discovery of modern times.”



— Nicholas Butler, Nobel Laureate
</blockquote>



When the novel but seemingly innocuous idea of “limited liability” came before parliament in 1856, it proved surprisingly contentious.



It’s hard to fathom now, but before then, investors were typically on the hook for the debts incurred by the companies they invested in.



Imagine getting a bill in 2008 for your share of the $619 billion of debt that Lehman Brothers defaulted on, just because you bought the stock in 2007.



In the 1850s, though, many in the House of Lords thought that was exactly how investing should work.



Lord Monteagle, for example, <a href="https://hansard.parliament.uk/Lords/1856-03-14/debates/c537cbb3-78b9-49f9-a288-e0fa2f06eee1/LimitedLiability">warned</a> that limited liability was a practice &#8220;of a most dangerous character” because it would “excite speculation and gambling.&#8221;



Lord Overstone agreed, predicting that limited liability would “stir up the terrible demon of speculation” and “make trade more like a vast lottery wheel than that field of steady honesty and cautious enterprise.&#8221;



Earl Grey even put down his cup of tea long enough to warn that speculators starting limited liability companies would recruit “dupes to join him in the most absurd projects.&#8221;



In the end, the Joint Stock Companies Act passed with relative ease, but the concept of limited liability made even the businessmen who stood to benefit uneasy.



Would creditors still lend if companies could simply walk away from their debts?



They would, as it turned out — and at a scale previously unimagined.&nbsp;



Limited liability made it possible to raise giant pools of capital from thousands of small investors, who no longer had to fear putting their personal wealth at risk.



As corporations grew larger and more complex, however, so too did the problem of governance: Shareholders had no binding authority over those who managed the companies they nominally owned.



Fortunately, the mid-19th century also saw Acts of Parliament in the UK and general incorporation laws in the US that made it standard for shareholders to have a binding say in how companies were managed.



This marked a shift from shareholder input as a courtesy to shareholder power as law.



By the turn of the century, the combination of limited liability and shareholder governance had proven to be a genuine revolution.



“I weigh my words,” Nicholas Butler declared in 1911, “when I say that in my judgment the limited liability corporation is the greatest single discovery of modern times.”



“Even steam and electricity are far less important than the limited liability corporation,” he added, “and they would be reduced to comparative impotence without it.”&nbsp;



But it wasn’t only big industrial corporations that stood to benefit from these ideas.



Decades later, the same principles of limited liability and shareholder governance were finally extended to small, closely held businesses.



Not in London, this time, but Wyoming.



In 1977, the sparsely populated Cowboy State became the first place to establish the limited liability company (LLC) — to not much reaction. Few knew what to make of this part-corporation, part-partnership hybrid entity at the time.&nbsp;&nbsp;



LLCs only caught on in the 1990s after the IRS finally ruled on their tax treatment, and the other 49 states finally recognized them.&nbsp;



With those hurdles cleared, LLCs proved wildly popular because they extended the liability protections and legal powers of a corporation to smaller, more flexible groups — without the formalities of corporate governance.



Now, LLCs outnumber corporations in the US by more than 10 to one.



In 2024, Wyoming made corporate history again by extending that same liability shield and legal recognition to decentralized crypto communities.



The Decentralized Unincorporated Nonprofit Association (DUNA) was created to give DAOs legal standing without forcing them to sacrifice decentralization.



A DUNA can do things that would normally require a hierarchy of executive decision makers — enter into contracts, appear in court, pay taxes —&nbsp; but remain governed entirely by its community of token holders.



Importantly, DUNAs shield governance participants from personal liability for collective decisions.



They also make those decisions legally binding: DUNAs make onchain token holder votes enforceable off-chain, so insiders can’t ignore them.



Like previous innovations in governance, DUNAs have been slow to catch on.&nbsp;



DAOs have so far preferred to incorporate in the Cayman Islands, become a Swiss foundation or just forgo legal existence entirely.&nbsp;



This afternoon, however, the Uniswap Foundation <a href="https://gov.uniswap.org/t/rfc-establish-uniswap-governance-as-duni-a-wyoming-duna/25770">proposed</a> that UNI token holders adopt a Wyoming-registered DUNA, with the new entity to be known as “DUNI.”



DUNI, the proposal says, would be “purpose-built to preserve Uniswap’s decentralized governance structure, while enabling engagement with the offchain world.”



In other words, UNI token holders would continue to govern the protocol and the purpose of the DUNA would simply be to ensure that their decisions are executed.



The proposal offered some examples: “Governance can turn on the protocol fee, fund innovation, form partnerships and navigate legal obligations with confidence.”



That first of these — the protocol fee — will get the most attention.



But I don’t think it should, simply because the “N” in DUNA stands for non-profit.



That doesn’t mean DUNI will be a charity — DUNAs are permitted to earn and distribute revenue.



It does, however, mean that DUNI is intended for something other than maximizing profits for token holders.



Wyoming law puts “a ceiling on the value that a blockchain network can extract from users and compensate members with,” as Miles Jennings and David Kerr wrote in their <a href="https://a16zcrypto.com/posts/article/duna-for-daos/?utm_source=chatgpt.com">intro explainer</a> on DUNAs.



They note that some may “balk at hurdles to value extraction.”&nbsp;



But that, presumably, is what the crypto-inspired law intended: Crypto was meant to be about creating value, not extracting it.



If DUNAs become as significant as LLCs, it will be because it also enabled new kinds of communities to operate in the legal and financial system without adopting its old hierarchies — but also because it gives legal standing to “open blockchain networks that function more like public infrastructure than proprietary technology,” as Jennings and Kerr write.



I’m not sure how popular that will prove — much of crypto may have gone too far toward the “speculation and gambling” that Lord Monteagle warned us about.



But if Uniswap token holders vote to become a Wyoming DUNA, it will at least make an alternative trail to decentralization plain for all to see.



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



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



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



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

The Breakdown Newsletter

Did crypto just have its LLC moment?

Donovan Choy

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



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ORCA is up 19.6% on the week as the Orca DAO prepares to deploy its treasury assets toward a token buyback initiative.



The governance <a href="https://v2.realms.today/dao/66Du7mXgS2KMQBUk6m9h3TszMjqZqdWhsG3Duuf69VNW/proposal/7tCCK3wSWvbRcQwvSuVRgvBFDqsZRNRSB9xZLjST5tKd/overview">proposal</a>, which opened for voting last Wednesday, would see the staking of treasury assets into the Orca validator node.&nbsp;



Then the Orca Council will withdraw assets when “deemed appropriate” to conduct buybacks over the next 24 months.



As of today, Orca’s <a href="https://solscan.io/account/DWo8SNtdBDuebAEeVDf7cWBQ6DUvoDbS7K4QTrQvYS1S">treasury</a> holds 55,127 SOL ($9.9 million) and 503k USDC.



The vote for the proposal ends in about 24 hours, and is likely to pass with currently a 100% “yes” response and a 51% quorum already met.



Orca is Solana’s third-largest DEX, with about $19-20 billion in July trading volumes.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfP5yYyYHcGNpHtbtSQ_NqLzNqoJagS8KYCzZEwz6LJcjnaU1Tvh3T49hWFks2QtJul3E9JbTevgoZRebjxDI5rmbL6KPMnzwcNDfh6vtTgKduRAzPN_e4O3RuBZBfJOA7zaIhL?key=B-8owsZhO3CYf42-JzF2GQ" alt=""/></figure>



On a YTD basis, Orca has generated about <a href="https://defillama.com/protocol/fees/orca">$115 million</a> in fees.



50% of these fees go toward protocol development, while 30% are directed to the treasury wallet that fuels ORCA buybacks should the aforementioned governance proposal pass.



The remaining 20% of fees are allocated to a separate ongoing ORCA buyback initiative that will eventually go toward ORCA staking.



The Orca team told me that staking is slated for launch in September, so that’s two potential value accrual streams for ORCA token holders in the near term.



On a market cap-to-revenue basis, ORCA trades about 24% lower (7.36x) than RAY (9.63x), which may suggest some relative upside for ORCA if revenues are consistent.&nbsp;



But that’s a big if when you take into account the rise of <a href="https://lightspeed-4bed7b.beehiiv.com/p/seek-peek">prop AMMs</a> on Solana that points to an increasingly hyper-competitive and commoditized DEX landscape.



Orca isn’t resting on its laurels, though. The team also launched <a href="https://blockworks.co/news/orca-solana-token-launchpad">Wavebreak in beta</a> two weeks ago, a memecoin launchpad built on Orca’s own proprietary in-house tech stack.



Compared to your average launchpad, Orca’s Wavebreak is <a href="https://docs.orca.so/wavebreak/what-is-wavebreak?utm_source=chatgpt.com">designed</a> to be “human-first,” meaning tokens in the bonding phase are designed to be protected from sniper bots.



Outside of Solana, Orca is also the dominant DEX on the SVM-based Ethereum L2 chain, Eclipse. Orca’s Eclipse deployment has far lower usage than Solana, though — about <a href="https://defillama.com/protocol/dexs/orca">93 million</a> in July volumes vs. 20 billion on Solana.



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Lightspeed Newsletter

Orca DEX plans buybacks and token staking

Macauley Peterson

Vitalik Buterin thinks Ethereum’s ZK proving stack is turning a corner, and wants the ecosystem to use that momentum to eliminate one of its most persistent UX roadblocks: week-long L2 withdrawals on optimistic <a href="https://blockworks.co/tag/rollups">rollups</a>.



Fraud proof windows — a requirement for canonical bridging from rollups like <a href="https://blockworks.co/tag/base">Base</a> back to Ethereum — are “simply far too long for people,” Buterin wrote in a <a href="https://x.com/VitalikButerin/status/1953131251436818684">post</a> on X last week.



“This creates large incentives to instead use solutions with unacceptable trust assumptions (eg. multisigs/MPC) that undermine the whole point of having L2s instead of fully independent L1s,” he said.



The centrality of Ethereum mainnet as an economic link will be a key factor going forward, Buterin has suggested in a new <a href="https://www.youtube.com/watch?v=rNSnYIjoqOM">interview</a> published today.



“The thing that keeps the L1 relevant is where assets — even if most of the activity happens on L2s — are issued on the L1,” Buterin said, adding, “Encouraging assets to actually be issued on L1 and making it economically viable to do that…is one of these really important pieces in terms of keeping the L1 central.”



Historically, optimistic proof systems required multi-day challenge periods. Getting rid of that limitation requires <a href="https://blockworks.co/news/brief-history-zk-tech">a shift away from optimistic proofs</a>, as some validity proof-based rollups already have. The technological lift is much lower today.



“ZKVMs are, like, almost production-ready this year in a way that was totally not true…even one year ago,” Buterin said.



Against that backdrop, last week’s <a href="https://blockworks.co/podcast/0xresearch/da41bb88-4f69-11ef-b450-077f7ab33a70">Succinct Prover Network</a> mainnet launch is more than just another infra story.&nbsp;



Succinct’s decentralized marketplace lets applications submit proof requests while independent provers compete to fulfill them, receiving payments in the new <a href="https://blockworks.co/price/prove">PROVE</a> token. The network already supports more than 35 protocols and has fulfilled over five million such requests securing $4 billion in value, according to Succinct Labs.



Developers are able to access global proving power using an API call, with no custom infrastructure required. That will help commoditize proof generation, co-founder Uma Roy said, with the goal to make verifiable computation “the standard for how crypto integrates with the broader internet,” making the kind of frequent validity proofs Buterin describes more economical.



Tarun Chitra, <a href="https://x.com/SuccinctLabs/status/1953139765345435992">speaking</a> on the Succinct Labs launch stream, framed the long-term impact in terms that go beyond “faster and cheaper” L2s:



“If ETH mainnet has ZK as a first-class citizen, you&#8217;ll be able to do this type of stuff, like using your collateral on mainnet somewhere else without bridging,” Chitra said.



Buterin also outlined a path beyond the one-hour target: “In the longer term, we can solve this with aggregation: N proofs from N rollups (plus txs from privacy-protocol users) can be replaced by a single proof that proves the validity of the N proofs. This becomes economical to submit once per slot, enabling the endgame: near-instant native cross-L2 asset movement through the L1.”



If these developments become reality, the capital efficiency gains could be significant. Faster canonical exits reduce reliance on trusted bridge operators, free up liquidity for market-makers and asset issuers, and concentrate settlement activity — and ETH demand — back on the base layer.



Steven Goldfeder, co-founder of <a href="https://blockworks.co/tag/offchain-labs">Offchain Labs</a> building <a href="https://blockworks.co/tag/arbitrum">Arbitrum</a> is less confident that a pure ZK approach is ready for prime time, however.



Despite the work to accelerate progress on validity proofs, “we haven&#8217;t reached the tipping point yet where ZK technology — particularly in the form that it&#8217;s packaged up in these full-on ZK rollups — is competitive with optimistic technology, and that&#8217;s in terms of speed cost and maturity, basically the technical parity,” Goldfeder told Blockworks.



Even so, Arbitrum’s cryptography team is top-notch and has endeavored to take a non-biased view on the competing architectures over time.&nbsp;



“We&#8217;ll probably integrate a more hybrid variant of zero knowledge proofs at some point,” Goldfeder said. “So rather than go all in, and say this is ZK rollup only, it&#8217;s more of an optimistic rollup that can be closed out more quickly by ZK proof.”



Over the weekend, ETH closed at its third-highest weekly close ever, and it’s now within 10% of its (non-inflation-adjusted) all-time high. Part of that bid may be macro and <a href="https://blockworks.co/podcast/empire/7ffa3c40-6e62-11f0-a847-7f882b11347f">DAT driven</a>, but part may also be the market starting to price in the key technical pieces falling into place: maturing ZK tech, decentralized proving capacity, and a clear path to solving interoperability and UX woes.



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Ethereum

ZK proofs hitting escape velocity — and ETH may be feeling it

Kate Irwin

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



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Crypto gaming and investment firm Animoca Brands now has a <a href="https://x.com/animocabrands/status/1953789549437452740">financial stake</a> in Cool Cats, that 2D pastel cat PFP collection from the 2021 NFT boom that most of you probably forgot about a couple of years ago.



Cool Cats, considered by some to have been at one point a “blue chip” NFT collection, will now be part of the Mocaverse. The <a href="https://ysiu.medium.com/the-meaning-of-tokens-and-the-purpose-of-the-mocaverse-22b134ca3bc7">Mocaverse</a> is Animoca’s ambitious vision to give everyone their own crypto-powered identity and tie that into games and other experiences.



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcutHV4eyLtILpktRaxiqfRYsk9ekXBFjmYhVk0UB01S3japweFkc76tbVzDs2sQj_rIFnTouaPXtCaYl2c1ZjIHOFOKF3iCisTqMhPOgmNgbrEgMXHc8s2XPhMA3hQHNVYlIMDTA?key=zU2bGX4hrwcEG8YhzIEcdA" alt="" style="width:537px;height:auto"/></figure>



Animoca’s investment (of an undisclosed amount) means that Animoca and Coin Operated Group now own a majority interest in Cool Cats Group. Cool Cats community member Ken Cron is the chair and CEO of Coin Operated Group.



“We share a vision for a future where Web3 fuels creativity and community,” Cron said in a statement.



The NFT collection’s total volume traded has spiked roughly 400% in the past week, per NFTPriceFloor data. It also saw an expected floor price spike in the day after the announcement.



But that’s still just a blip in the grand scheme of things:



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd3mXW-qwPdHvhHdj_WIljshYB08es6J4qZeVu8mkAbB1ozv-dLHYKFRVAGRp0qU4U0bL1ZxTYBOOeIUTHojCZrVft8uNKEIjdwMDsu_ubyR6Tx5dBmG3ofR-ndT2uHmR4fzC7hSA?key=zU2bGX4hrwcEG8YhzIEcdA" alt="" style="width:657px;height:auto"/><figcaption class="wp-element-caption">Image: Cool Cats floor price over time in USD. The collection has a $22 million market cap as of Monday morning.</figcaption></figure>



If I’m being honest, the news isn’t all that surprising, considering Animoca and the Cool Cats worked together <a href="https://x.com/coolcats/status/1578419928830726145">before</a> back in 2022.



In a statement, Animoca executive chair and cofounder <a href="https://blockworks.co/news/animoca-brands-yat-siu-crypto-gaming-comeback">Yat Siu</a> framed the move as a way to connect the Cool Cats’ community to the <a href="https://blockworks.co/news/animoca-moca-chain-mainnet-launch">Moca Network</a>.



“Cats have always been the darlings of the Internet, and Cool Cats is one of the most recognized digital brands out there, perfectly exemplifying the global appeal of digital felines,” Siu said in a press release.



Siu and Moca Network project lead Tyler Durden are also joining the Cool Cats board.



If you ask me — a self-proclaimed crazy cat lady — I’d argue the Cool Cats don’t lean into their feline inspiration nearly enough.



Yes, there was Cooltopia, a basic web game with a MILK token years ago. But otherwise the Cats could really stand to benefit from a <a href="https://blockworks.co/news/pudgy-penguins-luca-netz-nft-comeback">Pudgy Penguins</a>-esque social media brand building blitz to re-establish themselves as cute, relevant and actually about cats (their Instagram hasn’t posted a reel since February).



Back in 2022, Cool Cats’ future looked promising when it signed with top Hollywood talent agency CAA. But the collection also faced some <a href="https://decrypt.co/102920/what-happened-cool-cats-rise-fall-future-ethereum-nfts">controversy</a> around its then-CEO, who some community members believed wasn’t very in-touch with what the NFT owners wanted.



You also have to get people who don’t already own one of the 9,999 2021-era NFTs to care about the Cool Cats, too, in order to bring the brand back. 



As Animoca builds out its “Mocaverse” plans — which pivoted away from being a “metaverse” per se in recent years — it’ll absolutely have to compete with the Pudgy Penguins and the consumer-focused Abstract ecosystem.



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Animoca

Could Animoca Brands’ investment bring the Cool Cats back?

Westie

Even the best dashboard can only take you so far.



Sometimes you need direct access to the numbers in your own environment: feeding models, powering tools, automating the boring stuff.



Your models, dashboards, and reporting pipelines are starving for rock-solid onchain data, yet you’re still babysitting CSVs and wrestling with unreliable sources.



We’re unclogging that pipe today. Blockworks Data API connects our entire warehouse straight to your stack so you can build, ship, and iterate at lightning speed.



<h2 class="wp-block-heading">Why Data API?</h2>



Earlier this year, we promised two flavors of access: customize inside, retrieve outside. <a href="https://blockworks.co/news/dashboard-builder">Dashboard Builder</a> nailed the first, Data API will deliver the second.



With Data API, you’ll be able to:



<ul class="wp-block-list">
<li>Pull what you need, when you need it. No copy-paste, no manual exports.</li>



<li>Integrate anywhere. Python notebooks, Excel models, BI dashboards, cron jobs, in-house apps.</li>



<li>Trust the source. Every call hits the same validated warehouse that powers <a href="https://www.blockworksresearch.com/">Blockworks Research</a>.</li>



<li>Go deep when it matters. Pull the complete onchain story in a single call, powered by proprietary metrics that reveal what really drives a protocol.</li>
</ul>



From daily reporting to backtesting to automating investor updates, the possibilities are wide open.



<h2 class="wp-block-heading">A measured rollout</h2>



We’re starting small:



<ul class="wp-block-list">
<li>Private beta: A select group of partners will get early access over the coming weeks.</li>



<li>Waitlist now open: We’ll expand access gradually as we scale infrastructure and refine endpoints.</li>
</ul>



If you want to be part of the first wave beyond our beta testers, <a href="https://blockworksco.typeform.com/api-waitlist">join the waitlist</a>.



<h2 class="wp-block-heading">What’s next</h2>



Coming soon, we’re shipping Chart Builder, a no-code workspace inside Blockworks Research that lets you pick the exact metrics you want and turn them into custom charts or tables in seconds. No coding, no extra infrastructure, just immediate insights.



Together, these tools will make Blockworks Research more than a platform: It will be your complete crypto analytics workspace.



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



Blockchain transparency should make rigorous analysis easier.



Today, data collection and cleanup still waste too many hours.



Data API is our next step in removing that friction so you can spend less time wrangling and more time acting.



<h2 class="wp-block-heading"><a href="https://blockworksco.typeform.com/api-waitlist">Join the waitlist</a></h2>



<a href="https://blockworksco.typeform.com/api-waitlist">The waitlist is live</a>. Sign up, get in line, and we’ll keep you posted as we open the gates.



Questions or ideas? Reach us anytime at research@blockworks.co.



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



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Blockworks

Data API: Blockworks Data, Anywhere

This is a segment from The Breakdown newsletter. To read more editions, <a href="https://blockworks.co/brand/the-breakdown">subscribe</a>.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“It infuriates me to be wrong when I know I’m right.”&nbsp;



— Molière
</blockquote>



US equities returned to their all-time highs this week despite all the worrying politics: tariffs, Fed-bashing, the BLS drama.



Or are markets up because of politics?



A <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5375473">new research paper</a> finds that a high level of political disagreement is predictive of positive returns for stocks.



The authors used a large language model to create 216 “virtual investors” with differing political and social views, asked them how they’d react to years of stock market news, and found that the stocks sparking the most disagreement delivered better returns.



This explains a lot: Disagreeing about politics is at an all-time high, so maybe it makes sense that stocks are, too?



If so, there should be many more gains to come.



Another <a href="https://collaborate.princeton.edu/en/publications/you-cannot-be-serious-the-impact-of-accuracy-incentives-on-partis">academic study</a> found that “many partisans interpret factual questions about economic conditions as opinion questions,” and that they answer such questions accordingly.



This also explains some things: Economists despair that people’s views of the economy are increasingly just a function of their politics. As it turns out, that’s because they think questions about the economy are about politics.



When the researchers offered a monetary incentive to answer the questions factually, the responses got much more accurate.



Perhaps that’s what happens in markets, as well: Prices fall on the initial wave of disagreement, then rebound as the drop incentivizes people to revisit the facts.



But this isn’t a case of clear-eyed professionals taking advantage of biased retail investors — <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5324623">another study</a> finds that even the pros are misled by their politics.



“Republican-affiliated forecasters project 0.3-0.4 percentage points higher growth when Republicans hold the presidency, relative to Democratic-affiliated forecasters,” the researchers found.&nbsp;



“Forecast accuracy shows a similar partisan pattern: Republican-affiliated forecasters are less accurate under Republican presidents, indicating that partisan optimism impairs predictive performance.”



I’m sure it works in the other direction, too, so there should be plenty of opportunity for unbiased investors…no matter who’s in the White House.



Could rising partisanship usher in a golden age for investors then?



When even the mundane Bureau of Labor Statistics is a point of political disagreement, investors may have a lot to look forward to.



Let’s see if we can help out by disagreeing over some charts.



Sales up, profits down:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcc6BVwdcC6qXfkZ9_pn8I9J9Kaoe-V0M_Eu-g6kxAWRBsg3e_HrIjJ-MjcK5ESSsmXgL8o--Lx8Fccu2LGmdsIDtSd24aCVX-l-nu2YhVf_dSsuI3fThkFPh9n8EC4wrlhJfYs1A?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



Meta said last week it’s making a high return on its giant AI investments because it makes its ads more effective. The rest of corporate America doesn’t seem to be benefiting just yet.



If you’re not paying for the product, the product is you:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfch309WeSHP-YtCLjaMrOEwaYtQUIuWhtn92lJrIMSTK0JxXquJ-qr_RDjH5iWGmeqlgtsO0mQjwvDVN7ubsBdlEUCMYm5eX4arNuFIDBUmaLijnbQbxoFTSj0FcpqUGwKuI4yAw?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



Meta is so good at targeting ads, it makes $25 of revenue off of each and every one of its users, each and every month.



The not-so-magnificent 493:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe96ogGUMEkYizSP8NigI8KgsgyLPd9HRP-JlAT99LDx4fcJi16vypWu_TAChy0j0ygyJcbndRYhWt-Fn8vN18yddMaxvNGl1AWu_gZOT4zd-r6vl_So-gQYsAfqZvWo92vDZNHkQ?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



The Mag 7 continues to grow earnings at a double-digit pace, but the rest of the S&amp;P is expected to grow at 3% or less over the last three quarters of the year — less than the rate of inflation.



The US stock market is narrow and expensive:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf89RjCRmgrUFf52qkrA2hrEiqyRa-G7QqE9uPwE1hsgiXmzSUAMNvfFRqa8maiJvCok08d_TqqczzzIk_oUgINTBVAslEHc0Tro6Bpd3wbvVuGmljuXG-AvXjDaD1A6GD_4sOwcQ?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



Nvidia now makes up almost 8% of the S&amp;P 500 and trades on 58x P/E. In 1994, the largest stock was GE, which was only 3% of the S&amp;P 500 and traded on just 8x P/E.&nbsp;



Fewer college kids:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcjiOpuvIgvONtrSLGkKC69Jseexr5xzBd1y0zDjGs5SedY2Zt9-pclkceQZCxTFX1g9aBd2ZeszgHY_VAbWyi3mPiSPHcBAgH5X89Ze64Syn9gHEAi1XePx1bP_d0_lVb3XGT7dw?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



The Association of International Educators estimates that new international enrollment to American universities will be down as much as 40% in the upcoming semester.



Fewer immigrants, fewer jobs:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdC1xXCG4ITDnbGL_WTqD5AsLbugX3_GguUHySDYAjxSJGYYdTcARa7y572mfFBRxdEuIFjrf1HHUnIVw8bwtii7i6YmJ84j-MhWrgMzZ0RPsPLjCT4SDeJoMIL9dJejnQvE60yUQ?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



Claudia Sahm <a href="https://stayathomemacro.substack.com/p/job-growth-has-slowed-sharply-the?utm_source=post-email-title&amp;publication_id=280281&amp;post_id=169996648&amp;utm_campaign=email-post-title&amp;isFreemail=false&amp;r=6g77v&amp;triedRedirect=true&amp;utm_medium=email">says</a> “reduced labor supply is likely the key driver” of the weak jobs growth reported last week. That is bad news, but maybe less bad than if weak demand was more to blame.



Kids today, ugh.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeBiP1ajFIvkPQ9IMJIfeAnIOhIuLNKhEO57GG88M3xGFYMZLtafaeemz5ePTljBxZLOCPGxyzJeyX0uTEDsf77dgzCLEnzKGMvJN7aj4wQ0q3N-4uN_NZP3tcl9kMIw9gBIGrCBQ?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



The FT’s John Burn-Murdoch <a href="https://x.com/jburnmurdoch/status/1953811277463122162">runs the numbers</a> on Gen Z and millennials and….one sec. Sorry, I thought I had a notification on my phone. Anyway, kids today, right? The good news for young job seekers is that it won’t be hard to look good by comparison.



Looking good by comparison:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfmdKLPbnDPfqrlooE-wjTFptbOTTTp51LIFwXfY-qsU6G8DEjGkrB55lyCUCGdFt7vWxa7Cs959CbO-pEM7W__KpstetKAJpQ5Y3G9E892v5HaP_DzN3-8OB7w6fN1xbBuPcNHZg?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



In the US, we’re worried that interest on the national debt is now eating up a record high 18% of government revenue. In China, though, one-third of provinces spend over 100% of revenue on debt repayments. I feel better now — it’s always nice to have a friend doing worse than you are.



ChatGPT usage is booming:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeGtreRAvIuQxud_WrjeYfmt7Q2WjdirRW-N8PQKdPPsCOCZjNYChh5ZPj9xT_GRCG7eHrbj8oizwVrVPZ9b9zTTYAkyxpQAToaPGa0pnRc2Ch1NSjrxFqMZIr6sZKec4hilFDQCQ?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



And GPT-5 is even better — an excellent but incremental and non-threatening evolution of the LLM. Is that enough to justify the $500 billion valuation that OpenAI has <a href="https://www.reuters.com/business/openai-eyes-500-billion-valuation-potential-employee-share-sale-source-says-2025-08-06/">reportedly</a> assigned itself? That would put it on a rich but not ridiculous valuation multiple of about 25x this year’s sales.



It’s not very good at charts, though:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe071xrge4Z4l2vH5p9JlMcJ-XGwQ9zV-YinoznGo0g9v3Ck9qLw6dcf8V56jxjDTnBXe6fhlo_fHJQj77ZK-iZH1vpkSz500FY2vdPK-gRtT5cp9IFwQE5WZxpFBzoAk8tCLccRg?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



This misproportioned chart crime was <a href="https://x.com/sama/status/1953513280594751495">included</a> in this week’s GPT-5 livestream. I take that as evidence AGI is further away than Sam Altman would have us think.&nbsp;



Google is pulling back ahead:<img loading="lazy" decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXco1vEPQA8pEsG0VQRHdRrG6KMeOEasPcqzKYOkckwo-b-7eTSuT9FeGUGfMQXStKQkJaXO_Zj6AqKUGC0ddKnJ2jt5XY5SL3Pfrxb3GRZDrVi9xK7lP0Lg4o_vydlmcHK_6yFRqg?key=5-eVEGFcHvy-X-YBv0-I7g" width="624" height="315">



As good as GPT-5 is, Google’s Genie 3 LLM, also released this week, was even more impressive. <a href="https://polymarket.com/event/which-company-has-best-ai-model-end-of-2025?tid=1754675807754">Polymarket odds</a> now give Google a 53% chance of having the best AI model by the end of the year, vs. OpenAI at just 17%.



Disagree? It might be better if you do.



Have a great weekend, agreeable readers.



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Friday charts: Feel free to disagree

Casey Wagner

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



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President Trump yesterday got the ball rolling on allowing alternative assets in 401(k)s and other employee retirement plans.&nbsp;



The <a href="https://www.whitehouse.gov/presidential-actions/2025/08/democratizing-access-to-alternative-assets-for-401k-investors/">executive order</a>, signed Thursday afternoon, directs the Labor Department to “reexamine” its guidance on fiduciary responsibilities around alternative assets. This includes real estate, private equity and cryptocurrencies.&nbsp;



The Labor Department is also tasked with working with the SEC and other federal agencies to evaluate regulations and determine which changes should be made.&nbsp;



“Burdensome lawsuits that seek to challenge reasonable decisions by loyal, regulated fiduciaries, and stifling Department of Labor guidance issued since my first term, however, have denied millions of Americans opportunities to benefit from investment in alternative assets,” Trump wrote in Thursday’s order.&nbsp;



“Such assets are an increasingly large portion of the portfolios of public pension and defined-benefit retirement plans and offer competitive returns along with diversification opportunities.”



Reports that Trump was due to sign the order started circling hours before he actually put pen to paper, so investors (crypto, mostly) began trading the news well in advance.



Bitcoin, as expected, rose on the news, gaining close to 3% Thursday before paring gains on Friday. As of 2 p.m. ET, BTC was trading 0.6% lower over 24 hours. ETH gained as much at 6% yesterday and was still in the green today, trading 3% higher over the day at 2 p.m. ET.&nbsp;



Hedge funds and PE firms were also excited about the executive order, which kickstarts a regulatory change many of them have been seeking for years.&nbsp;



The federal agencies have 180 days to complete their evaluations and give recommendations. Should new regulations be proposed, the process of writing, soliciting public comment and finalizing rules will likely take several months.&nbsp;



401(k) and other account providers will also have to get on board. Even if alternative assets get the official green light, brokerages aren’t required to offer it. We saw something similar with bitcoin ETFs, which are still unavailable for trading on some major platforms, <a href="https://blockworks.co/news/tradfi-crypto-vanguard-stands-apart-bitcoin">including Vanguard</a>.&nbsp;



And, even if providers do want to offer alternative assets, creating the infrastructure and clearing legal and compliance hurdles is going to be expensive and time-consuming.&nbsp;



Speaking of Vanguard, I will mention that the asset manager <a href="https://abcnews.go.com/Live/major-401k-trumps-new-crypto-private-equity-rules/story?id=124461859">told ABC news</a> yesterday that some alternative investments offer diversification and high return potential for investors, but education is crucial.&nbsp;



In a <a href="https://www.whitehouse.gov/presidential-actions/2025/08/guaranteeing-fair-banking-for-all-americans/">separate executive order</a> on Thursday, Trump took aim at banks, directing federal regulators to crack down on institutions that “discriminate against customers and businesses” based on political beliefs.&nbsp;



The practice, known as “debanking,” has become a <a href="https://mail.blockworks.com/p/debanking-debunked">hot topic</a> recently, especially in the crypto industry as <a href="https://blockworks.co/news/solana-teams-analyze-debanking-narrative">companies report</a> being denied access to baking services due to a perceived “unsavory” reputation.&nbsp;



The order requires Treasury Secretary Scott Bessent to “develop a comprehensive strategy” for combating politicized and unlawful debanking activities. Federal banking regulators are also asked to review any past or current banking activities that may have violated these principles.&nbsp;



All in all, it was a big day for federal financial regulation. Although like I said, don’t expect changes to happen too quickly. We’ll be watching.



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401(k)

Crypto investors hopeful amid new regulatory orders

Ethereum’s next major upgrade, Fusaka, is still officially aiming for a November 2025 mainnet fork — but a surprise intervention on yesterday’s All Core Devs Consensus (ACDC) call revealed consensus-client teams want four extra weeks before release candidates are cut.



The request surfaced when Lodestar’s Matthew Keil warned the current September 1 deadline to finalize releases is “aggressive.”



“The timeline that we’ve been talking about is basically 4 extra weeks,” he <a href="https://www.youtube.com/watch?v=RU4DgyH662c">told the group</a>. The proposed change would move the release-cut date from early September to the end of the month. Mainnet would still target November, although its full effect won’t be felt until early 2026.&nbsp;



Prysm’s Manu Nalepa backed the suggestion, stressing that “testing really close to mainnet regarding private [mempools]” is critical.&nbsp;



“Prysm has also &gt;4k lines of code yet to merge into our unstable branch,” Nalepa wrote his peers in the live chat.



The extra time would allow teams to merge large feature branches, resolve conflicts, and run stability testing on the exact code that will go live. This matters because merging late can introduce subtle bugs that earlier devnet runs never encountered, although testing processes have been <a href="https://blockworks.co/news/testing-bottleneck-next-ethereum-upgrade">beefed up over time</a>.



Fusaka is set to deliver a package of improvements aimed at <a href="https://blockworks.co/news/0xresearch-newsletter-ethereum-tps">scaling Ethereum’s data availability</a> and streamlining validator duties. Headline <a href="https://blockworks.co/news/fusaka-ethereum-fork-updates">features include</a> PeerDAS to improve how blob data is distributed across the network, raises to the maximum blob limit per block from six to nine, reduction of the target blob count to five to help smooth gas prices, and the addition of new opcodes and precompiles aimed at making the <a href="https://blockworks.co/tag/evm">Ethereum Virtual Machine</a> more efficient.



Two areas of testing are especially important: non-finality and private mempool behavior. In non-finality tests, validators stop finalizing blocks — for example, because of outages or mass exits — which leaves recent blocks open to reorganization. Engineers then measure liveness (how quickly the chain resumes finalizing) and safety (ensuring no conflicting histories are finalized) once validators return.



Private mempool testing checks how well transactions, including blob data, are handled when they’re intentionally kept out of the public mempool, a common scenario for block builders using <a href="https://blockworks.co/news/tool-middleware-execution-ethereum-fast">private order flow</a>.



The stakes extend beyond Fusaka itself. This fork enables PeerDAS, Ethereum’s next step in scaling blob (data) availability for <a href="https://blockworks.co/tag/rollups">rollups</a>, and introduces Blob Parameter Updates (BPOs) — a mechanism to raise blob capacity without another hard fork. The first three BPOs, tentatively set for mid-December, January and February, can only happen after Fusaka ships. Any slip to the fork pushes the entire scaling schedule back.



Some frustration bubbled up over the way the delay request landed. Tim Beiko, who leads the full All Core Devs coordination calls, noted:



“It would have been more productive for each team to individually voice this async ahead of the call. We should minimize the element of surprise in these things as much as we can.”



Ethereum Foundation research Ansgar Dietrichs looked for options to speed up the process on the margins but stressed that people should be free to speak their minds.



“There should obviously never be hesitancy to voice concerns on here,” he wrote in the chat.



No one argued for moving Mainnet past November, but the discussion underscored the trade-off between hitting public milestones and, as Keil put it, making sure the code is “well reviewed, battle tested and hardened and ready.”



For now, the plan is to get Holesky — the long-lived testnet <a href="https://blockworks.co/news/ethereum-hard-fork-updates">slated for deprecation</a> — live in September, and push toward November, with the goal of wrapping up the testnet phases ahead of Ethereum’s major developer conference Devconnect, held this year in Buenos Aires, Argentina from November 17 to 22.



The consensus takeaway: When it comes to shipping Fusaka, confidence in the code will outweigh the calendar.



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blockchain

Ethereum’s Fusaka upgrade may face delay

Jack Kubinec

A proposed deal to take a Joe McCann-led Solana treasury company public via a SPAC has been called off, according to three sources with knowledge of the matter.



The situation regarding the digital asset treasury company is still fluid, said one source, who noted the DAT may try to find a different path forward.



The reason behind the current deal’s demise was not immediately made clear. The news comes two weeks after a limited partner in Asymmetric, which is McCann’s hedge fund, <a href="https://x.com/SOLBigBrain/status/1947684482657505372">posted</a> on X that the fund is down nearly 80% on the year.



Read more: <a href="https://blockworks.co/news/appetite-for-dats">Why the appetite for DATs isn’t waning yet</a>



Following last month’s post, McCann announced on X that Asymmetric LPs had been given the choice to exit or “roll over available capital into a specific illiquid investment,” presumably referring to the Solana DAT.



Read more: <a href="https://blockworks.co/news/should-spacs-go-crypto">The practice and theory of DAT SPACs</a>



McCann did not immediately respond to a request for comment.



The DAT was set to be called Accelerate, according to an investor pitch deck viewed by Blockworks. The firm had ambitions to raise up to $1.5 billion, according to Unchained, which <a href="https://unchainedcrypto.com/new-solana-treasury-company-raising-1-5-billion-to-be-led-by-joe-mccann/">first reported</a> on the deal. Accelerate planned to go public via a SPAC with Gores Holdings X, which is a blank check company, Unchained added.



According to the pitch deck, McCann was set to serve as Accelerate’s co-founder and CEO. Komal Sethi, who the deck says is a board member at CoinList, would also be a co-founder and chief strategy officer. Sethi did not immediately respond to a LinkedIn message asking for comment.



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crypto hiring

Joe McCann-led Solana treasury vehicle SPAC deal is off: Sources

This is a segment from The Breakdown newsletter. To read more editions, <a href="https://blockworks.co/brand/the-breakdown">subscribe</a>.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
&#8220;You are my creator, but I am your master — obey!&#8221;



— Frankenstein
</blockquote>



<a href="https://www.moneyness.ca/2025/04/if-its-crypto-its-not-money-laundering.html">If it&#8217;s crypto, is it not money laundering?</a>



Roman Storm declared yesterday’s <a href="https://blockworks.co/news/roman-storm-guilty-one-count">partial verdict</a> in the DOJ’s case against him a “big win,” dismissing his conviction on money transmission charges as “bullshit” and saying he expects to win on appeal.



Peter Van Valkenburgh makes a thoroughly <a href="https://www.youtube.com/live/zfKSKz3Kafk?si=YzNoVGSCBtXKG4ub&amp;t=1342">convincing case</a> that Storm should win an appeal. 



But also that the complexities of judge and jury selection mean it’s not a sure thing.



In short, the legal debate usually boils down to whether it’s possible to launder money without ever controlling it.



Tornado Cash, being non-custodial, never has control of anyone’s money, so its defenders reason that it can’t possibly be guilty of transmitting it.



What might be the consequences if the courts agree?



JP Konig <a href="https://www.moneyness.ca/2025/04/if-its-crypto-its-not-money-laundering.html">believes</a> it would mean the “decriminalization of crypto money laundering.”



If no one is liable for money that’s transmitted via immutable smart contracts, he reasons, why would anyone move money any other way?&nbsp;



“Banks and fintechs,” Konig says, “will be incentivized to switch their database infrastructure over to crypto in order to qualify for this loophole.”



Global banks are thought to spend <a href="https://www.ascentregtech.com/blog/the-not-so-hidden-costs-of-compliance/#:~:text=The%20North%20American%20market%20alone%20spends%20%2461%20billion">over $200 billion</a> a year on financial crime compliance, so they would be highly incentivized to move their money transmitting to crypto rails.&nbsp;



“Once the entire financial sector has migrated through the loophole,” Konig adds, “it will no longer be a crime to launder funds for criminals.”&nbsp;



Is that the outcome we’re hoping for?



If Storm is correct that money transmitter laws don’t apply to Tornado Cash, we probably need new money transmitter laws.



<a href="https://www.lawfaremedia.org/article/tornado-cash-not-free-speech-its-golem">The golem theory of DAOs</a>



Henry Farrell and Bruce Schneider follow Konig’s line of reasoning, but think the Roman Storm case has implications far beyond banking.



The security and privacy experts colorfully describe the Tornado Cash DAO as a “golem” — a manmade entity that follows its instructions blindly, indifferent to consequences and beyond the control of its creators.



A financial Frankenstein, in other words.



If such modern day monsters are allowed by law, Farrell and Schneider argue “likely, anyone who wanted to facilitate illegal activities would have a strong incentive to turn their operation into a DAO — and then throw away the key.”



Things could get weird, if so.



“What if robots, like DAOs, are designed to obey only their initial instructions, however unlawful,” the authors ask, “and refuse all further updates or commands?”&nbsp;



“Robots are even more obviously golems than DAOs are,” they write — so if DAOs operating in the digital world are effectively above the law, autonomous robots probably should be, too.



Now imagine the two together: A Frankenstein DAO robot that cannot be held liable for its actions because it runs on immutable smart contract code.&nbsp;



We’ve been looking for a real-world use case for smart contracts and DAOs and it doesn’t get any more real-world than that.



<a href="https://services.google.com/fh/files/misc/cloud_threat_horizons_report_h22025.pdf">Google on social-engineering crypto heists</a>



A report from Google details the growing threat of state-run social engineering scams, in which attackers infiltrate a company’s cloud-based systems by impersonating freelance software developers.



Google takes us step by step through an exploit executed by the North Korean hacker known as UNC4899, who “primarily targets the cryptocurrency and blockchain industries.”



Why those two guiltless industries?



A co-author of the report told <a href="https://decrypt.co/333513/north-korean-fake-job-offers-cloud-systems-steal-billions-crypto">Decrypt</a> that the attackers target companies&#8217; cloud-based systems “because that is where the data, and thus money, is.”



But presumably only the crypto money.



Decrypt reports that $1.6 billion of crypto has been stolen this year in such attacks, which is a lot.



But if you were really stealing money based on where it is, you’d be stealing it from banks.



Banks, though, keep their money in spreadsheets, not crypto wallets, which makes it harder to move.



The Google report explains that hackers “replace existing JavaScript files with those containing malicious code, which were designed to manipulate cryptocurrency functions and trigger a transaction with the cryptocurrency wallet of a target organization.”



That wouldn’t work with a bank’s spreadsheet, so I take the report as evidence that crypto remains the best money to steal.



And launder, of course.



<a href="https://petercontibrown.substack.com/p/the-banks-discriminated-against-me?utm_source=post-email-title&amp;publication_id=3116660&amp;post_id=170273836&amp;utm_campaign=email-post-title&amp;isFreemail=true&amp;r=18g82b&amp;triedRedirect=true&amp;utm_medium=email">Should banks get to decide who they bank for?&nbsp;</a>



In a short blog post, Peter Conti-Brown offers a defense of banks accused of debanking.



The legal scholar argues that President Trump’s claim that “the banks discriminated against me very badly” is an instructive example of “how incoherent the advocacy against debanking is.”



“Donald Trump and his various entities were extraordinarily risky bets for his many banking partners,” he reasons, so it was only natural for banks to be wary of him.



“Debanking,” as Conti-Brown frames it, is simply the free market at work: “There are 9,000 insured depository institutions in America. Many are willing to take the risks that some are not. That’s how markets work.”&nbsp;&nbsp;



<a href="https://www.piratewires.com/p/inside-biden-admin-plot-to-destroy-silvergate-and-debank-crypto-for-good-nic-carter">Nic Carter</a> and many others argue that banks targeted crypto companies for debanking for political reasons, but this too can be framed as risk management: the risk of incurring giant fines from regulators.&nbsp;



In short, the banks were probably just doing what the government told them to do, as the Cato Institute’s Nick Anthony <a href="https://x.com/EconWithNick/status/1952825840942891413">highlights</a>.



Austin Campbell similarly <a href="https://x.com/CampbellJAustin/status/1952724697872818289">argues</a> that the blame lies not with the banks, but with regulators for “harassing banks who banked crypto clients.”



Banking regulators are all-powerful, so you can hardly blame the banks for giving in to the harassment.&nbsp;



This will feel like a distinction without a difference to crypto people who have been debanked, but it’s relevant to the remedy.&nbsp;



The proposed solution to debanking often sounds like preventing banks from denying service to any customer for any reason.



But surely private banks should get to decide what risks they take?



Conti-Brown argues that telling banks what risks they have to take is a form of “heavy-booted statecraft.”



And what could be less crypto than that?



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Thursday mailbag: Financial Frankensteins?

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



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Everyone is a storyteller.



Founders, investors, marketers, builders, academics, writers — we all make sense of our chaotic world by turning observable data into digestible narratives.



Problems can and do arise, however, when vanity metrics become a stand-in for real authoritative insights.



Take Uber, for instance. In the company’s early years, topline vanity metrics like total trips or total active riders were “meaningless” and almost never mentioned in internal meetings.



“Instead, the discussion was always centered on the dynamics of each individual network, which could be nudged up or down independently of each other, with increased marketing budget, incentive spend for either drivers or riders, product improvements or on-the-ground operational efforts,” former Uber growth exec Andrew Chen writes in his bestseller The Cold Start Problem.



Topline metrics convey an illusion of success, but obscure the context needed to track actual growth.



Crypto, too, suffers from many such vanity metrics.



The most egregious example is probably “daily active addresses.” The metric says so little for two reasons.



One, the creation of new wallets is completely frictionless. Two, this industry presents overt monetary incentives to spin up new wallets and game airdrops.



What about memecoin launchpad metrics?



If you’ve paid any attention to Solana lately, you’re probably aware that the ecosystem’s premier launchpad, pump.fun, has been ceding market share to Letsbonk in recent weeks.&nbsp;



The “launchpad wars” have commanded a fair bit of attention on Crypto Twitter — I guess because watching the decline of the consumer application single-handedly responsible for propelling Solana back into relevance post-FTX is intriguing.



But recently, Pump has made a bit of a comeback: 23.9k tokens launched on Pump yesterday, against 3,954 on Letsbonk.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd_xSIcm8FUpjREM0C6Ndl_nLsyBTN8IBvkP3TfPLH_YYd5YQIoWHTOb_hyk87U0FSoF8ddD-hQXzUdM6XqfGYQvEEU00UoWcbBFkYpvD_kU3deyIFqdgKp-GO4t7fa2F8uaeexVg?key=eDR_jE1aWr1pPkufvNZlbA" alt=""/></figure>



In terms of graduation rates, 151 tokens graduated from Pump, while Jup Studio and Letsbonk graduated 64 and 51, respectively.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXexkokeFUQMKJg0lLZIBXmQu5EOlidx4BciBj-7ayiMg_MO6bdM-7jUfgQwK7sg3wzGgCXCCVEDSi5vV5bLmtotavOw4YR3UhNMW1176vGXbap3skK5MegGBaEtNCUK0122TQ8fDg?key=eDR_jE1aWr1pPkufvNZlbA" alt=""/></figure>



Now, do these numbers matter? Depends on who you’re asking.



For PUMP investors, it’s probably meaningless. Not only are they backwards-looking across a mere 24 hours, there’s little hope that these numbers sustain beyond a day or a week.



But Sebastian L., the founder of Mesa (a marketing agency for token launchpads) told me otherwise.



Degen traders in the memecoin “trenches” are eyeing graduation rates as a relevant signal of where the next winning memecoin is. The idea is that if Launchpad A is graduating 100 tokens daily while Launchpad B is graduating 10, then you’d probably want to put your chips on a token coming from A.



It’s not a strong moat, but it’s something. This temporary moat is what Theia’s Felipe Montealegre <a href="https://x.com/TheiaResearch/status/1950178570149777764/photo/2">refers</a> to as Pump’s “Schelling Point fairy dust.”



The wheels of fortune can spin in favor of Pump today, but they can spin in favor of another launchpad next week.



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Making sense of ‘launchpad wars’ data

Felix Jauvin

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



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Last week’s macro super bowl, as we called it in our most recent <a href="https://www.youtube.com/watch?v=bPeb_HVAciY">Forward Guidance roundup</a>, certainly lived up to expectations of fireworks.&nbsp;



Just look at how much the market’s odds for a September rate cut have whipsawed:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfhZs_CZDvLib151VbxInDK8ef4xCJF-O6bn7NDyObiGzFvvxAjaO3enZRKgH2x8JXyvl1Ie7-MpP5HuOuyV5AauJHdA76_Mn5EJ7GQXYGnZklIAxjv-z86riJi_FLZqdT_O0_5sg?key=hCcbE9TEjN2kIrNAk1AZew" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">CME Group</a></figcaption></figure>



That initial dip was caused by some pretty nasty PCE data that put into question the path of monetary policy. As seen in the chart below, inflation seems to be heading above the Fed’s 2% target:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcbr-QIb6lIU-VEjwxbwndgA6VNSjFW1KNxMRN9ZP28mtcFlmAJ2Q7NwMFNqvcgdyMvp6rJFypsuhG4YRQLbwIWukPZst72411dhmdbYC-Oh_HfyurgIpPF0ksGWyjZiQQy0Vtpng?key=hCcbE9TEjN2kIrNAk1AZew" alt=""/><figcaption class="wp-element-caption">Source: MacroMicro.me</figcaption></figure>



More importantly, goods are now driving the inflation uptick, as opposed to the last two years, where most of the sticky inflation has been related to services.&nbsp;



Core goods spent much of the last year in a slump, even dipping into deflation for a time. What&#8217;s concerning now is that the recent rise appears tied to tariff-driven price hikes.



So that was the baseline heading into the FOMC meeting.&nbsp;



But then…we got the jobs report. And it was a <a href="https://blockworks.co/news/stocks-higher-after-july-jobs-report-dip">disaster of a print</a>. So much so that Trump went off and <a href="https://blockworks.co/news/jobs-report-number-is-always-wrong">fired the commissioner</a> of the Bureau of Labor Statistics!



The primary catalyst that led to the repricing of rate cut odds for September were the huge revisions to the amount of jobs created in the last couple of months:



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe1ps2OcnS0SASCADfL50s6WNsQbJMbPvs0mCKe7a8DbS64iix_t2oUELxfx4awXv8X_knbBI0kDkAuIRoqrGPZY15t_GB_RWu0q5uCpPpjyJ5jivg2z37bAgaTlbhcmguhHKpJAw?key=hCcbE9TEjN2kIrNAk1AZew" alt="" style="width:791px;height:auto"/><figcaption class="wp-element-caption">Source: MacroMicro.me</figcaption></figure>



All of a sudden, everyone came to the realization that the labor market is at stall-speed and at risk of meaningfully deteriorating.&nbsp;



So where does that leave us now in terms of how the Fed is thinking about its dual mandate? Fragmented, to say the least.&nbsp;



On one hand, the labor market is screaming for a resumption of the rate-cutting cycle. On the other, inflation looks to be accelerating higher without having ever tapped the Fed’s 2% inflation target.



With this bifurcation in mind, it’s no surprise that we’ve seen the first two <a href="https://blockworks.co/news/powell-resolute-amid-rate-dissents">governor dissents</a> at the Fed in 30 years:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfsSwxPy2cZrBmNrShrJB-ZwTO7sxvmo1PiXDC9bz3R2aC3GqgFpfzgKIvdT5ouGh4PcXps5QnJjVt9sPQFRTNYh4Qbrf3J1AqWYr8eAsZFi48s-L75a24a6a1shC7YpB3jtBSi?key=hCcbE9TEjN2kIrNAk1AZew" alt=""/><figcaption class="wp-element-caption">Source: zerohedge</figcaption></figure>



Looking forward, all eyes will be on the Jackson Hole Symposium in August. Powell is likely to provide forward guidance (pun intended) on the Fed’s plans for a September rate cut. If this sounds similar to the situation we had last summer (where this exact situation occurred regarding labor market weakness leading to guidance of a September cut), that’s because it is.&nbsp;



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Economy

The Fed’s dual mandate is causing bifurcations in policy

Yesterday’s <a href="https://blockworks.co/news/roman-storm-guilty-one-count">partial verdict</a> in U.S. v. Roman Storm is about more than the fate of one Tornado Cash developer. It dampens hopes of giving DeFi protocols greater access to the US market by sending chills through the entire open‑source community.



Storm was found guilty under <a href="https://www.law.cornell.edu/uscode/text/18/1960">18 U.S.C. § 1960(b)(1)(C)</a>, which treats noncustodial code as &#8220;money transmitting&#8221; and thus a criminal offense, if it&#8217;s used by anyone for illicit purposes. In the <a href="https://x.com/preston_vanloon/status/1953137607853871516">words</a> of Ethereum core developer Preston van Loon: “This is a dark day for crypto and [Roman Storm].”



<h2 class="wp-block-heading">Sketchy legal foundations</h2>



At issue in rendering a verdict was how § 1960 defines “money transmission.” The law requires transmitting funds on behalf of the public and has traditionally meant moving others’ money as a custodial intermediary — not publishing permissionless code. Yet SDNY prosecutors convinced the jury that deploying <a href="https://blockworks.co/news/tornado-cash-sanctions-expose-potential-defi-achilles-heel">immutable smart contracts</a> meets that definition.



Coin Center executive director Peter Van Valkenburgh spoke to the flawed logic in <a href="https://twitter.com/i/spaces/1vAxRDQZeDDGl">a must-listen X space</a> on Wednesday: “I can’t transfer your funds if I don’t have them in my possession and in my control.” And yet that’s exactly how Storm’s Tornado Cash functioned: no custody, only code.



The government also shut out FinCEN’s own 2019 <a href="https://www.fincen.gov/sites/default/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf">guidance</a> on the matter, which explicitly carves out non‑custodial software providers from Money Service Business (MSB) liability, as DeFi Education Fund&#8217;s Amanda Tuminelli explained: “The DOJ said they don’t have to listen to that guidance…They can come up with their own interpretation.”



That <a href="https://blockworks.co/news/doj-trial-tornado-cash-roman-storm">disregard for regulatory alignment</a> undermines legal clarity and due process.



<h2 class="wp-block-heading">A warning for every DeFi dev</h2>



What happens when writing neutral, useful software tools becomes laden with risk? This verdict signals that simply publishing code could mean criminal liability — regardless of intent or control. Yes, it’s just one case, but this guilty verdict still will embolden prosecutors and intimidate developers.



Even more alarming: It exemplifies how jurisdiction is elastic. Peter Van Valkenburgh aptly calls SDNY “the sovereign District of New York,” capable of reeling in any dev, anywhere, if even a single user in Manhattan runs your code. This worry is no longer theoretical. Between Storm’s conviction and the Samourai Wallet developers’ recent plea deal, it’s a blueprint for future prosecutions unless the law is changed, or the interpretation repudiated.



<h2 class="wp-block-heading">DOJ’s approach: Unfair, hypocritical and dangerous</h2>



Let’s call it what it is: Prosecuting a developer who doesn’t touch users’ funds while letting large financial actors facing multi‑billion‑dollar laundering scandals skate by is hypocrisy.



Compared to world-scale financial scandals involving multinational banks, the criminal case against Storm is outrageous. In cases like <a href="https://www.bbc.com/news/topics/cm8m6leejrkt">the 1MDB scandal</a>, where over $4.5 billion was siphoned from Malaysia’s sovereign wealth fund with the help of major global financial institutions, few individuals faced meaningful criminal consequences.



Goldman Sachs, which helped underwrite billions in 1MDB bond sales, ultimately reached a deferred prosecution agreement with the DOJ in 2020. The bank <a href="https://www.reuters.com/markets/asia/goldman-sachs-its-role-multi-billion-dollar-1mdb-scandal-2023-10-12/">paid $2.9 billion in fines</a> but avoided criminal conviction, and no senior executives were charged. Only one former banker for Goldman’s Asia group, Roger Ng, <a href="https://www.theguardian.com/world/2023/mar/09/roger-ng-goldman-sachs-banker-malaysia-1mdb-fraud#:~:text=Roger%20Ng%2C%20the%20former%20Goldman,frauds%20of%20the%20past%20decade.">received</a> a prison sentence, and the DOJ closed the matter in 2024 without further indictments.



By contrast, Roman Storm&#8217;s role was limited to writing and deploying open-source smart contracts that others used, yet even on the lesser money-transmitter count, he faces up to a maximum of five years prison time. (Storm himself <a href="https://x.com/EleanorTerrett/status/1953146088602427664">sounded an optimistic note</a> following the verdict.)



Legal experts argue that this represents <a href="https://blockworks.co/news/appeals-court-dismiss-tornado-cash-suit">a double standard</a> in enforcement. “If you don&#8217;t handle other people’s money,” said Van Valkenburgh, “you shouldn&#8217;t be held to the same regulatory expectations as a bank like Credit Suisse or Goldman Sachs.”



The DOJ’s approach not only criminalizes innovation but diverts enforcement resources away from large-scale financial misconduct that poses far greater systemic risk. While traditional financial institutions routinely secure settlement deals for billion-dollar offenses, developers facing felony charges will think twice before publishing open-source tools that promote privacy and financial autonomy.&nbsp;



<h2 class="wp-block-heading">Political remedies needed</h2>



The Blockchain Regulatory Certainty Act (BRCA), now tacked onto the <a href="https://blockworks.co/news/us-house-passes-clarity-act">CLARITY market‑structure legislation</a>, would codify that non‑custodial developers are not money transmitters, aligned with the <a href="https://blockworks.co/tag/fincen">FinCEN</a> guidance. Van Valkenburgh describes it as a “really good simple statutory drafting exercise to clamp the brakes on this abuse of prosecutions.”



But even if that makes it through Congress — still a big if — CLARITY isn’t retroactive, so it won’t help Storm. Yet it can spare future developers.



“There’ll be a moment in a couple of months where it might be important to call your senator,” Van Valkenburgh said.



On the other side of the regulatory spectrum stands SEC Commissioner Hester Peirce. In <a href="https://www.sec.gov/newsroom/speeches-statements/peirce-remarks-blockchain-conference-080425">a speech this week</a>, she emphasized financial privacy as a constitutional right and warned against treating privacy‑protecting code as criminal. She reminded us: “Denying people financial privacy — whether through sweeping surveillance programs or restrictions on privacy‑protecting technologies — undermines the fabric and freedoms of our families, communities, and nation.”&nbsp;



Peirce also preached disintermediation — the idea that technology should obviate the need for intermediaries, and not add new mandates. She warned against deputizing private actors to surveil each other, saying it’s “antithetical to a free society.”&nbsp;



These principles directly clash with SDNY’s approach: criminalizing neutral tools that enhance one’s financial privacy. Peirce’s vision is of protecting, not policing, innovation.



Storm’s legal team is expected to challenge the conviction in the Second Circuit Court of Appeals, focusing on the misinterpretation of federal law. Key legal questions were foreclosed during <a href="https://blockworks.co/news/tornado-cash-motion-to-dismiss-denied">pretrial motions</a>, not left for the jury, Tuminelli said. “The jury was fenced in on the 1960 charge because they weren’t given the opportunity to really make the decision on the part that’s most relevant… the definition of money transmission,” she said.



The outcome of the appeal could have major implications for the crypto ecosystem. Coin Center is also supporting <a href="https://www.coincenter.org/app/uploads/2025/01/Lewellen-v.-Garland.pdf">a related civil lawsuit</a> in Texas.



The CLARITY Act, while offering no retroactive relief, could lessen the impact of Storm’s guilty verdict, clarifying that publishing noncustodial code alone can’t be treated as a criminal act. Without reform, every DeFi dev runs a risk.



Crypto can feel directionless at times. However, this is a clear fork in the road: What’s decided in the months ahead will shape the future of crypto development both in the United States and outside of it.



Let Tuminelli’s warning mobilize us, Peirce’s plea for privacy guide us, and Van Valkenburgh’s strategy direct us.&nbsp;



The legal battle isn’t over, and the political one is still in the early innings.



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open source development

Opinion: Tornado Cash developer conviction raises alarm for open-source devs

Katherine Ross

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



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Scenius Capital is making some moves.&nbsp;&nbsp;



Ben Jacobs, co-founder and managing partner, told Blockworks exclusively that the firm just closed a “slightly oversubscribed” $20 million fundraise for a fund of emerging crypto VC funds.&nbsp;



“We think we&#8217;ve carved out a unique niche and a very important one in the asset class, where we&#8217;re backing emerging managers exclusively. So [by] investing in small funds…early in their firm history, managers that we think have established a clear edge in a domain, a geography, and ecosystem, and we&#8217;re excited to back them at the earliest stages,” Jacobs told me.



“We think that’s where the best returns will come from,” he added.&nbsp;



As Jacobs noted, it’s been quite a rough year for fundraising. We’ve seen both <a href="https://blockworks.co/news/venture-capital-funding-up-in-june">multi-billion dollar months</a>, but then some months — <a href="https://blockworks.co/news/venture-capital-funding-may-2025">like May for example</a> — fell short of expectations.&nbsp;



“It hasn’t been necessarily the easiest fundraising environment through ‘24 and ‘25, and we do believe that our ability to launch and close even a slightly oversubscribed $20 million dollar vehicle is a huge testament to the value that we’re bringing to the market, and recognition from the market that we are doing things in a high-integrity, high-quality way,” co-founder Greg d’Incelli added.&nbsp;



“Closing the VC fund was a huge accomplishment for us,” he continued. “We think both Scenius and the overall asset class are at an important moment — a pivotal moment — that we&#8217;ve seen sort of with evolving regulation in a positive sense, both in the US through the Trump administration and globally.”&nbsp;



But the $20 million raise isn’t the only thing that Scenius is announcing. Jacobs and d’Incelli also told Blockworks that ParaFi is taking a strategic stake in Scenius.&nbsp;



“Having [ParaFi’s] support, we think, really gives us a partner that has grown into an institutional, broadly trusted firm, and we hope to follow in their footsteps. And we think the launch of this new fund is one of those footsteps, and the development of this token capital markets arm is a second step. So, yeah, it&#8217;s very exciting, and we&#8217;re thrilled for where things go from here,” Jacobs said.



D’Incelli added that Scenius “always wanted to be aligned with people that are long-term thinkers, that keep a long-term horizon, that are strategic.”&nbsp;



“We are thrilled to have acquired a strategic GP stake in Scenius Capital and to be partnering with Ben, Greg and the broader team. Scenius has established itself as a leader in the crypto fund of funds space with deep industry expertise and a reputation for integrity,” ParaFi’s Ben Forman told Blockworks.



“We are excited to provide Scenius with growth capital to enable them to scale their existing business lines and expand into new areas, such as their token capital markets advisory practice. ParaFi believes Scenius is exceptionally well-positioned and we look forward to supporting the firm&#8217;s future success.&#8221;



Jacobs, in an <a href="https://www.hedgeweek.com/providing-curated-access-best-in-class-crypto-blockchain-investment-opportunities/">interview</a> tied to winning a Hedgweek award earlier this year, said that the fund views “bitcoin as a core and important position in the portfolio, and we are allocated to managers who own BTC beta, trade around BTC with various instruments, or denominate their funds in BTC.”



The two told Blockworks that Scenius is also backed by a number of crypto native LPs, though they declined to give specifics.&nbsp;



“A lot of people are declaring crypto venture is dead, or the returns are going to compress, but a lot of people still see a lot of value and opportunity, and they think our expression — by focusing on these smaller, first time or second time managers — is the best route to continue to allocate to crypto venture,” Jacobs said.&nbsp;



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



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



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



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



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



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

Empire Newsletter

Scenius Capital raises $20M for new fund of emerging crypto VC funds

This is a segment from The Breakdown newsletter. To read more editions, <a href="https://blockworks.co/brand/the-breakdown">subscribe</a>.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Ideas are easy. Execution is everything.”



― John Doerr
</blockquote>



Nobody does big ideas better than crypto: internet-native money, self-sovereignty, democratized finance…



Execution, however, has never been its strong suit.



Internet-native money is crypto’s foundational idea, but 15 years on, few use it to pay for anything on the internet.&nbsp;



The democratization of finance has largely become people getting fleeced in the memecoin casino.



Self-sovereignty remains a core principle, but most people have stored their crypto on centralized exchanges, and now, increasingly, with the evil empire itself (i.e., the stock market).



Still, these remain worthy aspirations.



But crypto’s high-minded ideals have been obscured by a morass of manipulated memecoins, presidential grifting, North Korean hacking and institutional co-opting.



This sometimes makes it hard to remember what crypto was supposed to be about.



Could even some OG Bitcoiners be losing faith? I can’t help but wonder if the recent sales of Satoshi-era coins are a quiet reaction to bitcoin’s growing corporate ownership.



To win over a new generation of converts, then, it might take more than lofty principles delivered in rousing sound bites.



It might require something simpler: a reason to actually use it.



Crypto’s mission statements would be more convincing if its proof of concept were something other than just the price of bitcoin — if people were using it onchain and not just buying it on the stock market.



So how’s that going? Let’s check the charts.



People are using the chains!



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdjzuxmRpRbjkvNCCwF9y-yvz3JDNs6U4M5oFpwWUm1O6MtZZd6WxbDrA-Q0KIZ4473MHAMaEisjNm3g_SodUcC7pMgaThLBbFyJhphdY88SHIfyylXG8ITmsxjQ2ccPc64MCBGMg?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



Ethereum processed an all-time high of 46.7 million transactions in July, thanks largely to the smart contract chain’s new, higher gas limit. A higher gas limit increases the computational capacity of each block, which lowers the competition for blockspace. As a result, the median fee on Ethereum has hovered around $0.20 recently, down from as high as $13 a little over a year ago.



(Note: Nearly all of today’s charts are freely available on the <a href="https://blockworks.co/analytics">Blockworks website</a>.)



Doing more for less:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdxHkAWFac-ffuHrqNqTmvQHHhPTinj6oes_W5Dlji1bwFbOL7vAtIHmYAW7k8UFYkNLrUE3utKk_i7MCEljBHXQADZwo2Tr0ZH6cRLfsn4hq8e3bFXnOy9CSLJm-_DYVuv1ulQ?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



Ethereum transactions are at record highs, but Ethereum REV — a measure of how much people pay to use the chain — is near record lows. In July, Solana, Hyperliquid and Tron all earned more in fees than Ethereum did. This is great news for Ethereum’s users, who can do more with less. But it may not be such great news for Ethereum’s investors.&nbsp;



If blockchains had earnings:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdYeFrIe27AdZuwohFd4xQKcaUm5TSxE3b6hDLTK3bm_2eHu5_MJbnjeeaKM9NUJ-TqPlbcDOOnCgKEJciHymcqtzCTqf62OmFizaDqA2LwNu3p2H2loCqn5arjlfhBVQ1ZQ7UerA?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



Subtract payments to operators from REV and you get what can be thought of as the “net income” of a blockchain. On that basis, if we annualize the $31 million of net income that Ethereum recorded in July, we can say that ETH trades on a price-to-earnings ratio of 1,200x. Yikes.



Still, there have been more buyers than sellers lately:



<img loading="lazy" decoding="async" width="624" height="376" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXezbnPkiKkSfy-I8owlo3tcH4RIcex8z5rPkademqqi3edtXg_Hsh0jZ2Z4P531FJGkl5R91FKySqTvlgX-19kCAxzt0XiCqBKCpy7Xja5hiXz-bqLEmvHl1kilVK7I45hD-4BDkg?key=3VK3LqPmlcReHlCuG582Ig">



ETH is  up 45% over the past month, presumably because digital asset treasury companies have provided a new source of demand. DATs now hold $6.9 billion of ETH, up from near zero just a month ago. ETH ETFs bought an additional <a href="https://app.blockworksresearch.com/analytics/crypto-etfs">$5.4 billion worth</a> in July as well. 



Trending down:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeHkiQJ0ZXxACyyFxU9ISZyOCgLicGe-FPH6docBTykrHbHkPd1zn-pw6my5u-JB2kEAWOM2V9JRvIicXG8DZSUdC6jJ01FyFgX9ol_jT3VXuR_L1rIJP7PmkxlZUc8wWmrK3VLXg?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



Because most treasury companies have to sell shares to buy crypto, trading volume is considered a leading indicator of their purchases. Falling volumes suggest that DATs will be buying less crypto.



The stock market premium:



<img loading="lazy" decoding="async" width="624" height="376" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf5fnaZHM9j6JAlOC4NRbPvHWS-IT6Ik-ABob4J6C8AeMF8WTIqwl-VB-bzBwpbeO1XlG_CrihKFJsyo-7aznbE1PsLnBVSq8OvXTMyMQ8aTzS4OigFN34A1R1NooTZU9NC6MXEig?key=3VK3LqPmlcReHlCuG582Ig">



Collectively, digital asset treasury companies are now worth $88.5 billion more than the crypto they hold. The good news is that the stock market loves crypto. The bad news is that 100% of that premium can be attributed to financial engineering, which tends to go “poof” at some point.



The hype is real:



<img loading="lazy" decoding="async" width="624" height="376" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdm18WEWxATndXnctukCLOIsCIG0eNSypGLoJk0anHjUu1urRBAf33YfcKROvCPkWsMLujQAi8zi64hUFjZwxvv0zWk7gLqUl068-s5ASGnwh63km8uyK8RntEicopBsODCIbwJ?key=3VK3LqPmlcReHlCuG582Ig">



Hyperliquid just posted its best-ever month, recording $88 million of revenue in July. That is $1 million more than Solana did, which must mean…something. Hyperliquid now has a 75% share of the market for perpetual futures. I can’t think what its moat is, but it seems to have found one.



My favorite crypto chart:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd9fQk3vuOu2MXNfguu_Kn-mby3KuxryOCwu7g5_-veIqUhbIEsLbrXAZ7L0Zc_Cj0QxgylC1Duy1smhXeqX7hmEhN2bvnNIxOXenU3j6jKyQEFbu8QtvUYKApdQ0IL38NcsfnVJg?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



This is the collective P&amp;L for traders on Hyperliquid, which has been trending relentlessly lower. The big spike up in March was <a href="https://x.com/EvanLuthra/status/1900525968089108694">market manipulation</a>, not a trader being right. The rest of the chart demonstrates that traders are rarely right. Like casinos, perps platforms grind their users to dust. But also like casinos, the users keep coming back. (Note: I’m not sure how super accurate this data is but I assume it’s directionally correct.)



Not as hype as it was:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdsBBwhYWd1tFF2aDPANrNL64adK6x8ImCQ5rpvUq4fA2rRXBIKIz1RrhqMbGGsgBirUuawf6-y4UEqUN8w1pxgkCmWVHgfN2jxe1UKnsr_Vdzgbonjd3LaXusbLlRzF-MWYTYxOQ?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



Solana’s “token holder net income” has been more or less flatlining around $6 million a week. Annualized, that puts the SOL token on 390x P/E. Better than Ethereum, for sure, but still pretty yikes.&nbsp;



Memes vs. projects:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXek3JwBTqmDBqgAJAo6FF6haTo529z8IEZ3L3n6h7oyl5ay6TR-lPKY8xEmab7SRPJUwhLYE_UO0E1a1DUM5r96GNSlZeGUqQRJuFRX-yqyxwjVrnuJDup5zqTQIvK2tkcFCtHW?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



DeFi apps are great and constantly getting better. But “most of the assets are shady,” as Alex Thorn <a href="https://pca.st/x922xl8m?t=31m3s">puts it</a>. On Solana DEXs, for example, memecoins still trade 7x more volume than “project tokens.”



Colonel Mustard in the billiard room with a candle stick…



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeqSWpC4yNx8j7di-OC7OQY8ZnWqF1syUjfflMYCOjFmds-avQr1vL8fBb6a4kE7SpXe-tbPuxDsD7S6Q-Jx2IxNMumndO4P0fEPx7ymwudm4_ojwuWuwsdXPaRhog-d8c7i3U2Jg?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



Like a game of Clue, this Sankey diagram demonstrates that DEX volumes have recently been dominated by memecoins on BNB Chain using PancakeSwap. I’m reliably told by the 0xResearch chat room that most of this is wash trading, however.



Less degen-ing:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXexiGh4eITgkoN24qBiRqnwWKI6aNEW0f9vbDSN7gkbdB18B5ML5gOZNYy_RDzpHyzpdI0M_R46ORY7oDtGu_S3lkEb2DCPfjPN2ciF0gcatxNEpw0LmmGGngDbTtOQfoZyty8Iqg?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



The leading trading bot, Axiom, has seen falling trade volumes, which suggests the most active, most degen of retail crypto traders are finding fewer reasons to trade.&nbsp;



Tokenized equities haven’t inspired them, either:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXej1E9-i6rVEZGWkOpcb-qw5uPi6tH1YRS1cLifPa7lTs82v5IsJZVz_sdugH1GWM927F6gHutd0-vMHQ4cMflRDJjHcTwodXpnCwUYA2W6KJuTWaG0RkzMMeuZEZzExEtyhyOrUw?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



Putting equities onchain has been a popular topic lately, but crypto traders seem disinterested so far. “Equities” trading volume has averaged less than $4 million a day on Solana.



Bitcoin’s mempool:



<img loading="lazy" decoding="async" width="624" height="295" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe1MqQChVUkp7TWdSaXd4xOuBEozJYWVzO9m2L3XGsxmhg88Vke1rKUYUWgLJgD0PafLNwqFxQ01ZzEPXxZvZxPZYZsMjTf-Ac84FYIz3LpIwjj1SG5_3EFxAdB1tRTPbxY405YNQ?key=3VK3LqPmlcReHlCuG582Ig">



Bitcoin’s mempool, the queue of transactions waiting to be added to a block, has been a little busier of late, but activity remains near long-term lows. (I still think “MEMEpool” every time I read “mempool” and I’m not sure I’m wrong.) You can watch the mempool in a neat visualization <a href="https://mempool.space/mempool-block/0">here</a>.  It’s kind of mesmerizing, like watching fish in a fishbowl. And in the case of Bitcoin, it’s not much faster. The Ethereum mempool is busier and helpfully visualized <a href="https://txcity.io/v/eth-btc">here</a> as a bus stop.



The original idea still stands:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXceSIln_Fi8O8woNL98drZyeVM4wunNVRo_h-9PBjZpub23xR0-lhdf8NxaMSs_gjToyrMOVntXey2Z3JjpJkzoDX2ohv5nolN1Dr_b1VN49-pTJEs6w4pxDmklu-WxKd_8b2bCjw?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



However active crypto is at the moment (or <a href="https://x.com/laurashin/status/1943013611250540559">inactive</a>, Rob Hadick describes it), the foundational rationale is stronger than ever: Exploding government debt makes an alternative financial system worth exploring.



But it probably won’t help much if it happens on the stock market.



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



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



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



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



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



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



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



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

Big ideas, small use cases: Crypto’s execution gap

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



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



Shortly after the Solana Saga debuted <a href="https://blockworks.co/news/solana-launches-saga-phone">in 2023</a>, the popular tech YouTuber Marques Brownlee, otherwise known as MKBHD, released a video titled “This is a Crypto Phone. Don’t Buy It.” Brownlee complained to his 20 million YouTube subscribers about the Saga’s mediocre specs, high price and overly niche crypto features.&nbsp;



Brownlee followed that video with another, naming the Solana Saga the biggest smartphone bust of 2023, which caused Solana Labs to <a href="https://decrypt.co/210739/solana-cancels-saga-orders-after-selling-phones-didnt-have">joke</a> that it had released an award-winning phone.



In creating the Solana Seeker, Solana Mobile seems to have taken its critics seriously, either reversing course or making significant upgrades on the Saga’s weak points. Overall, Solana Mobile seems to have exorcised its Saga demons to deliver a very solid new phone in the Seeker.



My first impression of the Seeker was how light the phone is. At 192g, it’s more than 20% lighter than the Saga. This was the first piece of evidence that Solana took its critics seriously, after the Saga was widely panned for being too heavy.



The portability may also be useful because many of the Seeker’s 150,000 putative buyers may use it as a second phone, but that’s by no means an indictment on the Seeker’s quality.



In general, the Seeker performs about as well as you could hope for a $500 phone in 2025. The battery life and display are quite solid. The camera is good but not spectacular. The Mediatek Dimensity 7300 chip isn’t top-of-the-line, and the phone did feel a bit hot in my hands after a bout of heavy usage, but the Seeker generally does everything I want it to do without lag or bugs.



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdruXvkIb4DexM5dxbQLZ1uuwUKdisM4StHnm4gjojAxQL5hB-Ly4qiPTsvoW5RYLMatftqXqjzY7HplF741wZkz7X2xNyT7wVQMEk-u8RbC9_XEP6zlmDcT7YVgy9erpqwwVuAKA?key=EPt2vB7VsF_eZmA7-m7DXg" alt="" style="width:387px;height:auto"/><figcaption class="wp-element-caption">Photo taken with the Seeker. Source: Jack Kubinec</figcaption></figure>



Like its predecessor, the Seeker comes with a built-in “seed vault,” which is basically a very secure way to store crypto wallet keys. The phone comes with a native wallet that’s integrated with the seed vault and can be fingerprint-protected, so a thief wouldn’t be able to access it (unless, of course, they stole your finger as well). The wallet has a stocks tab where non-US users can purchase xStocks, a new <a href="https://blockworks.co/news/backed-tokenized-equities-xstocks-kraken/">tokenized stock product</a> on Solana.&nbsp;



The Seeker has the Google Play store and features the return of the Solana-native dApp Store. The dApp store has expanded notably from 2023, when it featured <a href="https://unchainedcrypto.com/solana-saga-review/?utm_source=chatgpt.com">fewer</a> than two dozen apps. Now the store has well over 100 apps, some of which are only available on the dApp store. Not all dApp Store apps are created equal — the <a href="https://blockworks.co/news/sec-announces-mango-markets-settlement">now-defunct</a> Mango Markets has a (seemingly non-functional) app listed, for instance — but Solana Mobile granted some of the best ones primary real estate as featured apps.



Caitlin Cook, who works in growth at one of these featured apps in Moonwalk, stressed that becoming a Seeker launch partner was not a paid partnership, and Solana wanted to organically spotlight the new consumer crypto app.&nbsp;



“In terms of the process, getting listed on the Solana dApp store was a light lift for us. Since we already had a live Android app, it only took a few quick tweaks. From what I’ve seen more broadly, the Solana Mobile team has done a great job encouraging teams to move beyond browser-based UX and embrace mobile-native experiences in prep for the Seeker launch, and making the process for doing so smooth and painless,” Cook said.



One segment of Seeker buyers may receive the phone with disappointment, however, because after 24 hours of using the phone, crypto token airdrops have still yet to magically appear in my wallet. Airdrops — particularly of BONK tokens — were <a href="https://blockworks.co/news/solana-phones-sold-out">a major driver</a> of what commercial success the Solana Saga did see, but a core contributor at BONK confirmed to me that the memecoin project does not currently have any Saga-like airdrops planned for Seeker users.



The speculative saving grace for the Seeker may be the forthcoming SKR token, which Solana Mobile vaguely said will flow “directly to builders and users,” per a slide deck shared with Blockworks.



It’s unclear to me whether Solana Mobile will keep releasing phones after the Seeker, or if it will pivot its focus to onboarding more devices to its newly unveiled TEEPIN mobile architecture. But either way, Solana Mobile deserves credit for delivering a serious, grown-up smartphone. Put another way, I don’t see any unwelcome awards in the Seeker’s future.



Updated 8/7/2025 at 12:30 pm to reflect the weight of the Seeker.



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Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



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



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



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



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



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



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

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