Ariva

Jeff Albus

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



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This is part two of a series on Solana’s rise, fall, and comeback. <a href="https://blockworks.co/news/solana-network-origins">Click here to read part one</a>.



In 2021, Solana’s ecosystem seemed unstoppable as it expanded at breakneck speed. Funding poured into DeFi projects like Serum, Raydium and Mango Markets. NFT marketplaces like Magic Eden began to rival Ethereum competitors like OpenSea, and the network saw record-breaking transaction volume. But underlying this rapid ascent was a <a href="https://blockworks.co/news/sol-investors-shrug-off-unlocks">precarious dependency</a>: Alameda Research and FTX.



These two companies, both founded by the <a href="https://blockworks.co/news/sbf-shows-no-remorse-sentencing-reaction">now incarcerated</a> Sam Bankman-Fried (SBF), were some of Solana’s earliest and most <a href="https://blockworks.co/news/sam-bankman-fried-crypto-portfolio">influential backers</a>. Alameda had participated in multiple funding rounds, acquiring <a href="https://blockworks.co/news/qa-solana-founders-raj-anatoly">vast amounts</a> of SOL tokens. FTX <a href="https://cointelegraph.com/news/solana-announces-defi-hackathon-offering-200k-in-seed-funding">hosted</a> Solana hackathons and played a pivotal role in launching and sustaining Serum, a decentralized exchange that was one of Solana’s flagship applications.



At first, this deep entanglement with FTX was an inarguable advantage. Bankman-Fried — who was viewed at the time as something of a visionary — became one of Solana’s most vocal supporters, frequently touting its superiority over Ethereum. The partnership helped Solana attract liquidity, developers and institutional credibility. However, it also meant that Solana’s fate became closely tied to the success of FTX.



In November 2022, <a href="https://blockworks.co/news/ftx-meltdown-timeline">everything unraveled</a> almost overnight. Reports surfaced that FTX had an $8 billion hole in its <a href="https://blockworks.co/news/sam-bankman-fried-ftx-not-bulletproof">balance sheet</a>, ostensibly due to reckless financial practices involving Alameda and its founder SBF. Panic quickly spread. FTX customers rushed to withdraw funds, triggering a liquidity crisis that the exchange could not survive. Within days, FTX and Alameda had both imploded, taking with them billions in customer funds and erasing Sam Bankman-Fried’s empire to naught but lone and level sands.



The fallout was catastrophic for the entire crypto industry, but no blockchain suffered more than Solana. Investors, fearing deeper contagion, rushed to offload their holdings. SOL&#8217;s price had already fallen significantly from its all-time high of nearly $250 a year prior, and was trading at around $37. While the broader bear market was responsible for that decline in majority, the implosion of FTX sent its price tumbling further to around $9.77.



DeFi activity on the network dried up instantly. Serum, which relied on FTX to operate, collapsed, leaving traders to scramble for alternatives. The broader Web3 community, already skeptical of Solana’s stability due to its <a href="https://blockworks.co/news/lightspeed-newsletter-solana-outage-patch">past network outages</a>, now labeled it as “Sam’s Chain,” a blockchain that had flown too close to the sun and was now destined to fade into irrelevance. Despite this, the crash was not as prolonged as some expected. Solana rebounded above $20-24 within the following weeks, though it remained in a long period of sideways price stagnation for much of the next year.



The psychological toll was arguably more severe than the financial damage. Developers who had built their projects on Solana questioned whether the network could survive. Venture capital firms, once eager to fund Solana startups, pulled back, shifting their focus to Ethereum and the promise of L2s. But even as the walls closed in, Solana’s deeply loyal core community fervently refused to capitulate. Convinced that the technology itself was sound, a dedicated handful of creators, validators and users insisted they&#8217;d continue building and evangelizing. But would their belief alone be enough? Next time: The comeback. How Solana defied the odds, rebuilt from the ashes, and reclaimed its place as a powerhouse in Web3.



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Solana’s origins: Catastrophe strikes

Casey Wagner

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



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US equities erased some of last week’s losses Monday as investors looked ahead to more fourth quarter earnings reports and a key inflation print this week.&nbsp;



Nvidia is scheduled to report its Q4 earnings on Wednesday afternoon. After months of <a href="https://blockworks.co/news/talking-about-ai-selloff">trading sideways</a>, it’s reasonable to think investors will be looking for any sign to bet again on the chipmaker. On the other hand, the days of Nvidia having little competition are long over.&nbsp;



Either way, Wednesday’s report will move markets across the board.&nbsp;



January’s PCE report, which drops Friday morning, is even more important now that other inflation measures have come in hot for the beginning of the year. We’re looking at you, <a href="https://blockworks.co/news/ppi-reading-sets-stage-for-cpi-report">PPI</a> and <a href="https://blockworks.co/news/first-2025-inflation-print">CPI</a>.&nbsp;



Still, it’s hard for us to believe the reading will be hot enough to sway the Fed. We think this&nbsp; pause will last <a href="https://blockworks.co/news/federal-reserve-quantitative-tightening">a bit longer</a>.&nbsp;



Stocks have, for the most part, remained impressively resilient amid widespread uncertainty. Investors are faced with looming <a href="https://blockworks.co/news/trump-gradual-tariff-policy">tariff policies</a> and the latest data is starting to poke holes in the “economic growth is still strong” theory, which complicates the Fed’s stance.&nbsp;



The facade did start to crack late last week when the S&amp;P 500 posted its worst daily decline of 2025 on Friday. Analysts largely attribute the growth to disappointing data in the US and overseas. The Philly Fed Manufacturing index released on Thursday showed expansion fell to 18.1 this month from 44.3 in January. The flash Eurozone PMI also came in softer than expected.&nbsp;



Still, the VIX is at a healthy 17.8, suggesting volatility is not terribly high. We’ll see what happens this week.



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US equities reverse losses as inflation data, key earnings report loom 

Ben Strack

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



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The industry celebrated Coinbase’s revelation that the SEC is <a href="https://blockworks.co/news/coinbase-says-dismissal-sec-lawsuit-imminent">set to drop its case</a> against the company.&nbsp;



Then the Bybit hack occurred, reminding us all of how <a href="https://blockworks.co/news/debunking-ethereum-rollbacks">erratic</a> crypto news can be.&nbsp;



You can read about the Bybit stuff <a href="https://blockworks.co/news/bybit-attack-institutional-grade-security">here</a>; I want to expand on what the SEC’s latest moves could mean going forward.&nbsp;



Arie Heijkoop, a partner in Haynes Boone’s investment management division, pointed out the significance of the pending Coinbase action dismissal being “with prejudice” — meaning the SEC doesn’t expect to bring the case back.



He also pointed to the joint filing to <a href="https://blockworks.co/news/binance-sec-temporary-ceasefire">“stay” the SEC-Binance case</a>, signaling the agency’s pivot from its regulation-by-enforcement approach (at least <a href="https://blockworks.co/news/regulation-by-enforcement-unsustainable">toward crypto exchanges</a>).&nbsp;



“It could therefore also indicate the SEC’s leanings in the Binance and Kraken suits down the road,” Heijkoop said of the agency’s Coinbase decision. “But it does seem to be doing a methodical review of each case on its merits, rather than a blanket reverse on similar open matters.”



Could the 60-day postponement in the Binance case indicate a self-imposed timeline for future guidance by the SEC? Heijkoop said that’s what he’ll be watching for.



So, despite Bitwise general counsel Katherine Dowling noting the agency might be in a <a href="https://blockworks.co/news/sec-in-purgatorial-state">“purgatorial state”</a> ahead of <a href="https://blockworks.co/news/sec-chair-nominee-crypto-past">Paul Atkins’</a> confirmation, there is indeed movement. She said she’s not surprised the Coinbase case was “one of the first to fall.”&nbsp;



This suit was <a href="https://blockworks.co/news/coinbase-binance-suits-different">“distinguishable”</a> from the Binance lawsuit filed the day before in June 2023, Dowling noted. The one against Binance alleged fraud and mishandling of customer funds, while the Coinbase case hinged on digital asset classification questions.



“The fact that the SEC had allowed Coinbase to go public after a lengthy process also called into question the bona fides of the case from the start,” she told me. “What had changed fundamentally that caused what appeared to be an about-face by the SEC?”&nbsp;



We can assume cases with hard evidence of fraud will — and should — proceed, Dowling argued. Those dealing with digital asset classification will more likely be scrutinized and resolved via settlement or outright dismissal.&nbsp;



Hester Peirce addressed the way the SEC thinks about such classifications in a Friday <a href="https://www.sec.gov/newsroom/speeches-statements/peirce-statement-rfi-022125">statement</a> titled “There Must Be Some Way Out of Here.”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe0q1w1kkCIHbiBtNtHDhNwdIgLbUG5zqSu-6DIEbfZK-yJfae8IV0Wn9E6xVssU6UWCD5eT8js4NL_lsdxF1nn1oxORJy-kRWoMgwriJqCpsmBODRUoyAJ81zTwe6PEtLxsITPNg?key=7ObxYV1JSci_EhiVlLck69fs" alt=""/></figure>



Heijkoop doesn’t expect the Coinbase dismissal to indicate how the SEC will approach enforcement actions against any crypto coins or tokens themselves.



“There are pretty significant differences in the many different coin options available, so there is not likely to be a one-size-fits-all approach to regulation of coin issuances,” he added.



I had connected with Heijkoop and Dowling before <a href="https://blockworks.co/news/sec-robinhood-investigation-update">Robinhood’s news</a> Monday: The SEC <a href="https://newsroom.aboutrobinhood.com/sec-closes-investigation-into-robinhood-crypto-with-no-action/">closed its investigation</a> (after handing the trading app <a href="https://blockworks.co/news/robinhood-wells-notice-sec">a Wells notice</a> last year) and won’t pursue an enforcement action.



So, what now? “I would expect that we should see action in the <a href="https://blockworks.co/news/sec-advances-ripple-appeal">Ripple litigation</a> next with review no doubt already underway,” Dowling said. “The SEC has spent years and millions scrapping with Ripple with little at this point to show for these efforts and some judicial spankings to boot.”



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With a Coinbase dismissal pending, what’s next?

Kate Irwin

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



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Robinhood’s crypto unit is no longer the subject of an SEC investigation.



“This investigation never should have been opened. Robinhood Crypto always has and will always respect federal securities laws and never allowed transactions in securities. As we explained to the SEC, any case against Robinhood Crypto would have failed,” said Dan Gallagher, chief legal, compliance and corporate affairs officer at Robinhood.



The SEC notified Robinhood of its intention to kill the probe on Friday, according to a Monday <a href="https://newsroom.aboutrobinhood.com/sec-closes-investigation-into-robinhood-crypto-with-no-action/">post</a> on Robinhood’s website, after the SEC <a href="https://newsroom.aboutrobinhood.com/robinhood-response-to-receipt-of-wells-notice-from-the-u-s-securities-and-exchange-commission/">issued</a> the firm <a href="https://blockworks.co/news/robinhood-wells-notice-sec">a Wells notice</a> last year.&nbsp;



Robinhood previously faced SEC scrutiny in 2020 over statements it made, and the company paid <a href="https://www.sec.gov/newsroom/press-releases/2020-321">$65 million</a> to settle the issue. In January, Robinhood agreed to pay an additional <a href="https://www.sec.gov/newsroom/press-releases/2025-5">$45 million</a> over a separate SEC issue over alleged securities violations.



Robinhood’s win this week follows the news that the SEC will scuttle investigations into both Coinbase and OpenSea. It means these companies can continue with business as usual — and you can keep trading without interruptions. And more ways to buy and sell crypto could be coming as more companies assess the favorable environment and decide to jump in.



It’s also a sign that we’re living in a new regulatory environment.&nbsp;



Long-time SEC Chair Gary Gensler — infamous for his anti-crypto stance — <a href="https://blockworks.co/news/sec-charges-nova-labs-with-fraud">resigned last month</a> when Trump took office. Crypto advocate Paul Atkins is <a href="https://blockworks.co/news/sec-chair-nominee-crypto-past">Trump’s pick</a> for the role. And Trump himself also has <a href="https://blockworks.co/news/empire-newsletter-donald-trump-nft-royalties-memecoin-taxes">NFT collections and a memecoin</a>.&nbsp;



With crypto making a comeback and regulators looking friendlier, other companies like GameStop, <a href="https://blockworks.co/news/gamestop-end-support-crypto-wallets">which previously dumped</a> its NFT marketplace and wallet, are considering coming back into the fray.&nbsp;



Others are still shutting down despite favorable regulators, like The Mystery Society game, which <a href="https://x.com/InviteToMystery/status/1894067480416657428">announced</a> its cancellation on Monday because “the state of web3 gaming is just too challenged right now.”



Crypto projects used to pull the plug on operations because of “regulatory concern.” The question now is, can they use that as an excuse anymore?  Also, will projects still use Cayman Islands foundations? Maybe not — but some, like the OpenSea Foundation, are <a href="https://blockworks.co/news/opensea-announces-token-and-open-beta">still planning tokens</a> that way just in case.



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Robinhood says it’s free from the SEC

Macauley Peterson

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/research">subscribe</a>.



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First, let’s get one thing clear. No serious person in the Ethereum community was advocating to “rollback” after the $1.5 billion <a href="https://blockworks.co/news/bybit-attack-institutional-grade-security">Bybit hack</a>.



These are simply not genuine debates. As some have <a href="https://x.com/AdrianoFeria/status/1893828942370316579">pointed out</a>, they’re more like an external psyop designed to sow confusion.



Ethereum has never performed a rollback. The term itself is a misnomer. A true rollback would require reversing all transactions since the Bybit hack — disrupting DeFi, liquidity pools and every user who has transacted in that timeframe. That’s not <a href="https://x.com/TimBeiko/status/1893412457567383559">how Ethereum works</a>.



Instead, critics point to the 2016 <a href="https://blockworks.co/news/ethereums-hard-fork-is-bound-to-be-implemented-despite-opposition">DAO hard fork</a> as some sort of precedent — but that was not a rollback either. For <a href="https://blog.chain.link/reentrancy-attacks-and-the-dao-hack">a bit of history</a>, The DAO exploited locked funds in a time-delayed smart contract, meaning the hacker had not yet moved the stolen ETH. The community opted for an “irregular state change” — not merely semantics — transferring the ETH to a safe contract before it could be moved.



Even though it was in no way a chain-wide reversion, those who disagreed — around 20% of the network — continued using the old chain, <a href="https://blockworks.co/news/ethereum-split-is-possible-but-many-remain-optimistic-about-the-merge">causing a fork</a> now known as Ethereum Classic.



Since The DAO’s fork, Ethereum has had multiple “opportunities” to intervene in major hacks — but has never done so, demonstrating that its threshold for any intervention attempt is exceptionally high:



<ul class="wp-block-list">
<li>2017 Parity Multisig freeze – $180 million locked forever.</li>



<li>2022 <a href="https://blockworks.co/news/the-ronin-hacker-made-off-with-625m-of-crypto-but-cashing-out-isnt-so-easy">Ronin bridge hack</a> – $620 million stolen by North Korean hackers.</li>



<li>2023 <a href="https://blockworks.co/news/multichains-exploit-inside-job">Multichain Exploit</a> – hundreds of millions drained.</li>
</ul>



In all cases, no intervention. Even if it were technically feasible (which it isn’t), it would violate the very ethos of the decentralized credibly neutral network. If Ethereum didn’t intervene to recover one of its own co-founder’s funds (Parity’s Gavin Wood) — eight years ago when ETH’s market cap was about 7% of what it is today — there’s no reason to believe Bybit would receive different treatment.



<h2 class="wp-block-heading">Well-meaning critics vs trolling narratives</h2>



It’s important to separate two types of critics.



On one side, there are genuine misunderstandings in my view, like those <a href="https://x.com/ctoLarsson/status/1893373498870964591">expressed</a> by Bybit CTO Larsson, lamenting the admittedly unpleasant consequences of the theft. But unless the entire Ethereum network itself is at existential risk, there’s practically nothing anyone can do — not <a href="https://blockworks.co/tag/vitalik-buterin">Vitalik</a>, not the <a href="https://blockworks.co/tag/ethereum-foundation">Ethereum Foundation</a>.



On the other side, we have bad-faith actors, <a href="https://x.com/CryptoHayes/status/1893055659001749537">engagement farmers</a> and <a href="https://x.com/sina_21st/status/1893117989794304266">trolls</a> who are pretending there’s a debate when none exists.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Every <a href="https://twitter.com/search?q=%24ETH&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$ETH</a> rollback post: <a href="https://t.co/FQmolRMFu9">pic.twitter.com/FQmolRMFu9</a>&mdash; Etheraider (@etheraider) <a href="https://twitter.com/etheraider/status/1893345451924983948?ref_src=twsrc%5Etfw">February 22, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



As @ChainLinkGod <a href="https://x.com/ChainLinkGod/status/1893364177332510998">pointed out</a>, the Bybit hack was a centralized exchange failure, not a smart contract exploit. The attack method — compromising the multisig signers’ machines — could have just as easily been used to steal bitcoin instead of ETH. Yet, when BTC is stolen from exchanges, there’s never a similar push for a rollback — because, just like Ethereum, it’s infeasible.



The irony is that Bitcoin maximalists (assuming they don’t know full well that it won’t happen) expose the emptiness of their own FUD — if Ethereum were centralized, the network might be compelled to attempt some action. Instead, when nothing happens, it’s further proof of Ethereum’s immutability.



Rolling back the chain is not, strictly speaking, impossible, but it would require a fundamental existential crisis, just like the <a href="https://decrypt.co/39750/184-billion-bitcoin-anonymous-creator">Bitcoin inflation bug</a> in 2010 (where BTC actually did roll back). The Bybit hack, while large, does not meet that threshold. Ethereum has just demonstrated its <a href="https://blockworks.co/news/eth-as-money">credible neutrality</a>. The sooner the trolls realize this, the better.



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The Ethereum ‘rollback’ idea was a joke

David Canellis

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



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So much has been made of the underperformance of ETH.&nbsp;



Turns out, SOL is on track to match it almost to a tee.



A few weeks back, I pointed out that ETH is <a href="https://blockworks.co/news/eth-speedruns-intel-chart">speedrunning the Intel stock chart</a> — doing what Intel has done over the past 50 years in about a decade.



Here’s another in the series: The SOL/BTC ratio is on an almost identical path to the ETH/BTC ratio.



Below plots the price of both ETH (green) and SOL (purple) in terms of BTC (their bitcoin ratios), with some caveats:&nbsp;



<ul class="wp-block-list">
<li>The SOL/BTC data begins 10 months into its trading history, in February 2021 rather than April 2020.</li>



<li>SOL/BTC has been moved forward to match ETH, as if both coins were launched at the same time.</li>



<li>ETH/BTC is sped up by 2x, which condenses two days of price action into one.</li>
</ul>



As you can see, the ETH and SOL bitcoin ratios are mapping eerily similar trajectories.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeCmo430CjpuMgdIrkCp7MTq2WptBMGDiMtVKoO3KoMFvJ9H07j5kk__AWFVJ-ljyQ9K2d0DRaHPiIOCWkjw-fn-Qr4wNXikF3tWCYvwo7_9i-JSMukTw3NIMraqndFJK3EiA9H?key=fzYK2mwnOIFHZy46xJplHa1f" alt=""/></figure>



Both underwent large initial spikes of price discovery against BTC during their first bull markets — ETH in 2017 and SOL in 2021 — before collapsing throughout bear markets.&nbsp;



Then they posted comparatively lackluster returns against bitcoin in the following bull market cycle: ETH/BTC mostly trended sideways between May 2021 and January 2023 but has since tanked by more than 60%.&nbsp;



SOL/BTC has otherwise gone not much of anywhere between December 2023 and today. This would put SOL/BTC about where ETH/BTC was in mid-2023 — before the latter slid from 0.07320 BTC to 0.028 BTC over the next year and a half.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdQCk1nPIBn9YxgmMt6e9bdai6NX4XHmSKc2jQRx3ohNOoTfuu5YzfauQlhumOpQYOk1gI5vf-RNsvwrMiCEhvjZvxTowH2lxnmx8K6YIINYo3eXD19-fdqOkVRekU_f2WiBhgh0Q?key=fzYK2mwnOIFHZy46xJplHa1f" alt=""/></figure>



So, if SOL is indeed destined to track ETH relative to BTC, then the price of ETH going up against the US dollar — and fast — would surely help matters.



Bad news: ETH has technically entered a bear market. At least, that’s by one very basic definition, which suggests that a coin is in a bear market when its year-on-year returns are negative and vice versa.



It’s the same theory that says bitcoin’s most recent bear market, which spanned 490 days between February 2022 and June 2023, was its <a href="https://blockworks.co/news/longest-bitcoin-bear-market-survival">longest on record</a>. ETH’s year-on-year returns were negative for almost that entire period.



As it turns out, ETH’s year-on-year returns (minus staking) again flipped negative 10 days ago, on February 14. That’s a first since June 2023 — which is either the very early innings of the current bull market or the very final moments of the previous bear market, depending on how you look at it.



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Solana is speedrunning Ethereum’s bitcoin ratio chart

Jack Kubinec

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



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As Solana awaits promised upgrades to its performance stemming from the release of <a href="https://blockworks.co/news/2025-solana-product-launches">Jump’s Firedancer client</a>, one group is already plotting to move Firedancer to its own blockchain.



Fogo Chain is a new layer-1 running on Solana’s software that will only use the Firedancer client and will implement multi-local consensus while making use of a curated validator set. Fogo’s creators think these features will help the chain — which is <a href="https://www.fogo.io/#about">slated</a> for mainnet and testnet launches in the first half of this year — push Solana’s software to its performance limits. The project is not without its detractors however.



Solana Labs developed the original Solana client. Jito forked this client and added MEV modifications that make transaction processing more lucrative. More than 90% of Solana’s stake runs on the Jito-Solana client. Chicago-based Jump, a high-frequency trading firm that has a crypto arm, was contracted by the Solana Foundation to build a high-performance Solana client from scratch. The so-called Firedancer client is still under development. A pared-down version called Frankendancer is fully live, but its lack of MEV opportunities means <a href="https://blockworks.co/news/solana-validators-mev-concerns">no one really uses it</a>.



Fogo’s belief is that even when Firedancer goes fully live, Solana could be slowed down by validators who continue to run existing Solana clients.



“It would be like having a Ferrari but you drive it in bumper to bumper New York City traffic,” Fogo Chain co-founder Doug Colkitt said. He added that Fogo will make use of multi-local consensus, where validators can coordinate their physical locations to achieve lower latency than under Solana’s status quo, where randomly distributed validators need to reach consensus from across the world.&nbsp;



Fogo’s validator set will also exclude “under-provisioned” or “abusive” validator nodes, according to its white paper.



Still, the fact that Fogo plans to use Firedancer’s open source code on a different blockchain has irked some. After Fogo Chain raised $8 million at a $100 million valuation via community fundraising platform Echo, a Solana developer wrote on X, “damn you can raise 8 on 100 just by redeploying some software that you don&#8217;t understand? higher (IQs in vc please).”



Colkitt cast some of the Fogo flack as “fair” but insisted the new SVM chain is “accretive” to Solana because its experiments with pure Firedancer and multi-local consensus will gin up useful findings for Solana’s future development. Fogo will start out based on Frankendancer before transitioning to Firedancer.&nbsp;



Fogo isn’t the only attempt to build a new blockchain using Solana’s software. Multiple Fogo contributors are affiliated with Douro Labs, the developer behind the Solana oracle network Pyth. Douro previously built Pythnet, an application-specific blockchain for Pyth that was built as a fork of Solana’s validator software.



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Fogo plots a Solana chain running ‘pure Firedancer’

Katherine Ross

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



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Bybit’s hack, which took place Friday morning, has <a href="https://blockworks.co/news/bybit-hack-raises-security-questions">sparked a slew of different conversations</a> from security experts about how Bybit handled the situation. Last night, Bybit CEO Ben Zhou said the exchange was able to fully close the ETH gap and promised an audit report soon.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Latest Update: Bybit has already fully closed the ETH gap, new audited POR report will be published very soon to show that Bybit is again Back to 100% 1:1 on client assets through merkle tree, Stay tuned. <a href="https://t.co/QLa1vOujM6">https://t.co/QLa1vOujM6</a>&mdash; Ben Zhou (@benbybit) <a href="https://twitter.com/benbybit/status/1893865556840775758?ref_src=twsrc%5Etfw">February 24, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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I had the opportunity this weekend to chat with Ledger’s chief technology officer Charles Guillemet, who told me that, for the foreseeable future, this year is so far “the worst year for cybercrime in history.”&nbsp;



Ledger fell <a href="https://blockworks.co/news/ledger-statement-on-phishing-hack">victim to an attack just two years ago</a> after a former employee was phished, giving attackers access to the package manager. Roughly $600,000 was stolen from Ledger users, a far smaller number than the $1.4 billion that Bybit suffered, but it led to <a href="https://blockworks.co/news/ledger-victims-being-made-whole">Ledger removing the blind signing</a> ability back in June of last year. Ledger’s CEO (and <a href="https://blockworks.co/event/digital-asset-summit-2025-new-york/speakers">DAS speaker</a>) Pascal Gauthier said in a statement that Ledger’s offered to support Bybit.



“This incident highlights once again that our industry needs to move beyond trust-based security models as attackers become more sophisticated. We can’t keep signing blind cheques and expecting it to be ok. The key evolution we&#8217;re seeing is the shift toward enterprise-grade security solutions that combine Clear Signing with robust governance frameworks,” Guillemet said.&nbsp;



His point is that attackers — like Lazarus, the North Korean group linked to the attack — are evolving and the current security measures used by the industry need to evolve as well.&nbsp;



“We need proactive security infrastructure that eliminates vulnerabilities like blind signing,” he explained.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">🚨 Bybit’s $1.4B Hack: The Biggest in History Yesterday, Bybit CEO Ben Zhou announced they had been compromised, with 401,000 ETH stolen ($1.4B). This marks the third major hack in six months attributed to Lazarus, which has stolen over $3B to date. <a href="https://t.co/KpWNXVGmLq">pic.twitter.com/KpWNXVGmLq</a>&mdash; Charles Guillemet (@P3b7_) <a href="https://twitter.com/P3b7_/status/1893375324353618305?ref_src=twsrc%5Etfw">February 22, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Guillemet also noted he has some concerns that this isn’t the end of Lazarus targeting Bybit. He said that he believes Lazarus “compromised several” of Bybit’s endpoints.&nbsp;



“This suggests that Bybit’s machines and networks were compromised. I know pretty well their tactics and it&#8217;s possible that they are still at work attempting a lateral move to compromise other parts of Bybit’s IT,” he told me, noting that this is clearly speculative but it’s better safe than sorry in these situations.&nbsp;



“Pausing certain central functions of the exchange could have been wise, waiting for forensic investigations.”



I asked Guillemet what kind of lessons we can learn from this — especially given that $1.4 billion seems to mark this attack as the biggest digital heist in history of any kind, and not just the biggest crypto heist of all time.



“We&#8217;ve been saying this for years now. When the stakes are high, attackers raise the bar for their attacks. They won&#8217;t stop here. And others will come. Stop signing blank cheques — instead, use enterprise-grade security and custody solutions built for managing a significant amount of value,” he said.



“Institutional-grade security isn&#8217;t optional – it&#8217;s fundamental.”



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Bybit attack shows ‘fundamental’ need for institutional-grade security: Ledger

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



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After detailing the growing number of crypto ETF proposals/developments in recent weeks, I wanted to point out the latest.



For one thing, US crypto index ETFs — in their earliest forms — are now live.&nbsp;



Franklin Templeton’s EZPZ ETF (named for the convenience of getting exposure to two crypto assets at once) holds both BTC and ETH. That joined the Hashdex Nasdaq Crypto Index US ETF, which hit the US market on Valentine’s Day.&nbsp;&nbsp;&nbsp;



The dual BTC-ETH exposure is just the first iteration of these products — or so we all expect.&nbsp;



A Tuesday 19b-4 <a href="https://listingcenter.nasdaq.com/assets/rulebook/nasdaq/filings/SR-NASDAQ-2025-016.pdf">filing</a> signals the Hashdex fund looks to add seven more digital assets (SOL, XRP, ADA, LINK, AVAX, LTC and UNI).&nbsp;&nbsp;



Hashdex CIO Samir Kerbage didn’t want to comment on filings. But he told me he expects both retail and professional investors to seek out diversification, just as they have in traditional asset classes.



“Investors looking to make this type of allocation are also not necessarily interested in trying to individually research each and every asset,” he explained. “They want to make their allocation and know that it gives them exposure to the major use cases and investment theses of crypto as they evolve.”



The same day that 19b-4 was filed, the SEC continued acknowledging various proposed single-asset ETFs — a signal it’s actually considering them. We wrote last week about why some think <a href="https://blockworks.co/news/litecoin-etf-approval-odds-2025">a litecoin ETF could be next</a> to get the green light.&nbsp;&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">NEW: As expected, the SEC just acknowledged <a href="https://twitter.com/CBOE?ref_src=twsrc%5Etfw">@CBOE</a> &amp; <a href="https://twitter.com/BitwiseInvest?ref_src=twsrc%5Etfw">@BitwiseInvest</a>&#39;s XRP ETF filings <a href="https://t.co/taCdggZljc">pic.twitter.com/taCdggZljc</a>&mdash; James Seyffart (@JSeyff) <a href="https://twitter.com/JSeyff/status/1891918637050532085?ref_src=twsrc%5Etfw">February 18, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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And most know about the Magnificent Seven stocks. But have you heard of the MAGA Seven? That’s what Defiance ETFs is calling stocks it expects to benefit from Trump’s presidency; the firm <a href="https://www.sec.gov/Archives/edgar/data/1924868/000183988225009834/magt-485apos_021925.htm#magta0001">seeks</a> to bring them into one wrapper.&nbsp;



Defiance has not specified which companies yet, but I wouldn’t be surprised to see COIN and MSTR included.



Then there are the modifications to existing bitcoin and ether ETFs.&nbsp;



Grayscale and 21Shares, for example, filed late last week to have their ether ETFs start staking the ETH they hold. Nasdaq filed last month for the SEC to allow in-kind creations/redemptions for BlackRock’s bitcoin ETF. <a href="https://x.com/matthew_sigel/status/1892303507492856032">Cboe did the same</a> for VanEck funds this week.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">No idea what SEC will do… But love that they’ve acknowledged filings for btc/eth ETF in-kind creations &amp; redemptions. *And* staking in eth ETFs. *And* sol, xrp, ltc, &amp; doge ETFs. Clearly open to constructive conversation. Regulation via conversation. Not enforcement/denial.&mdash; Nate Geraci (@NateGeraci) <a href="https://twitter.com/NateGeraci/status/1892792037885259818?ref_src=twsrc%5Etfw">February 21, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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On the two latter proposal types, you may recall Hester Peirce <a href="https://www.sec.gov/newsroom/speeches-statements/peirce-journey-begins-020425">noting</a>: “Before these changes can be operationalized, however, the commission may have to make progress on custody and other issues.”



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Crypto ETF updates signal regulatory evolution

Coinbase announced this morning that the SEC has agreed to drop its lawsuit against the crypto exchange.&nbsp;



In a blog <a href="https://www.coinbase.com/blog/righting-a-major-wrong">post</a> and regulatory filing, Coinbase said it had “reached an agreement in principle” with SEC staff to dismiss the lawsuit with prejudice, meaning the complaint cannot be refiled. The agreement is subject to SEC commissioner approval, the <a href="https://www.sec.gov/ix?doc=/Archives/edgar/data/1679788/000119312525031346/d857645d8k.htm">filing</a> added.&nbsp;



As a reminder, the SEC currently has only two sitting commissioners: Republicans Mark Uyeda, who is acting chair, and Hester Peirce.&nbsp;



Uyeda and Peirce in 2023 issued a joint <a href="https://www.sec.gov/newsroom/speeches-statements/peirce-uyeda-petition-121523">opinion</a> dissenting the commission’s decision to deny Coinbase’s petition for rulemaking. <a href="https://blockworks.co/news/coinbase-sec-appeals-decision">This matter</a> evolved into its own lawsuit separate from the one Coinbase now says is getting tossed. Like we’ve said before, we do not envy Coinbase’s legal bills, but I digress.&nbsp;



Given their well-documented distaste for the agency’s enforcement action track record under Chair Genser, I expect the two will sign off on the agreement SEC staff has apparently reached with Coinbase.&nbsp;



As of this afternoon, the SEC had not filed a motion to dismiss the lawsuit in either the SDNY (where the complaint was originally filed) or in the Second District, which has been tasked with ruling on Coinbase’s interlocutory appeal.&nbsp;



We wrote <a href="https://blockworks.co/news/crypto-task-force-coinbase-suit">earlier this week</a> that the SEC had filed for an extension in the Second District. In this filing the regulator mentioned its new “<a href="https://blockworks.co/news/new-sec-crypto-task-force">crypto task force</a>,” which may help “facilitate the potential resolution” of the litigation.&nbsp;



The lawsuit was originally filed in 2023 and alleged Coinbase violated securities laws by selling unregistered securities. Thirteen unregistered securities, to be exact. Among the tokens named in the suit were solana and filecoin.&nbsp;



Coinbase last year tried to get the lawsuit tossed altogether. The attempt largely failed but the judge did agree to dismiss allegations around Coinbase’s wallet service, which the SEC had claimed acted as an unregistered broker.&nbsp;



And then came Coinbase’s motion for an interlocutory appeal. The exchange asked the judge to allow a higher court to weigh in on one crucial question in the case, and the judge agreed.&nbsp;



The question now posed to the Second Circuit (well, at least until the whole case gets dismissed) is whether or not intermediated crypto transactions involve investment contracts. If the answer to this question is yes, then that means crypto exchanges are facilitating securities transactions, which would be a problem.&nbsp;



Coinbase elevating part of this case to the Second District was seen as a major win. The problem with district court rulings, even those from the prestigious Southern District of New York, is that they don’t set much precedent. Judges within the same district could come to different conclusions, like we saw in the Terraform and Ripple rulings.&nbsp;



An appellate level decision holds more weight. This type of ruling would come in handy should the SEC, say, sue another crypto exchange down the line.&nbsp;



All of this is probably moot now, though. There won’t be an appellate ruling, which at one point would have been seen as a disappointment for an industry seeking greater clarity. But if the “new” SEC doesn’t pursue these types of enforcement actions against crypto, is the clarity really needed?&nbsp;



For the time being, I guess not. But nothing — especially not agency leadership and presidential terms — lasts forever.



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Coinbase says full dismissal of SEC lawsuit is imminent

The Bybit exchange was hacked for some $1.4 billion in ether this morning, marking the largest exploit in crypto history.&nbsp;



Research platform Arkham claims onchain sleuth ZachXBT submitted definitive proof linking the hack to North Korea-linked Lazarus Group. One further piece of evidence indicates the attack may have been years in the making.



The hacker <a href="https://etherscan.io/tx/0xb61413c495fdad6114a7aa863a00b2e3c28945979a10885b12b30316ea9f072c">transferred</a> some 400,000 ETH out of Bybit’s cold wallet and subsequently split it into dozens of other wallets. Bybit’s CEO Ben Zhou <a href="https://x.com/benbybit/status/1892963530422505586">pointed</a> to an exploit in the user interface (UI) of the company’s multisignature wallet, provided by Safe — a wallet provider used by a variety of large organizations in the Ethereum world.



“It appears that this specific transaction was musked, all the signers saw the musked UI which showed the correct address and the URL,” Zhou said. “Musked” refers to the transaction payload being obfuscated or spoofed.&nbsp;



According to crypto security firm Groom Lake, a Safe multisig wallet was deployed on Ethereum in <a href="https://etherscan.io/tx/0x06d2fa464546e99d2147e1fc997ddb624cec9c8c5e25a050cc381ee8a384eed3">2019</a> and on the Base layer-2 in <a href="https://basescan.org/tx/0x06d2fa464546e99d2147e1fc997ddb624cec9c8c5e25a050cc381ee8a384eed3">2024</a> with identical transaction hashes. Ethereum’s alphanumeric transaction hashes are 64 characters long, so deploying the same smart contract transaction hash twice should be mathematically impossible.



The same transaction hash appearing on both Ethereum and Base indicates an attacker could have found a way to make a single transaction valid on more than one network or could be reusing crypto wallet signatures or transaction data across networks, pseudonymous Groom Lake researcher Apollo said.



However, the Safe team does not think there is a link to the current exploit. “The transaction in question is the transaction deploying the singleton contract,” a Safe spokesperson told Blockworks. “It was deployed without EIP-155 to support easy cross-chain deployments. Replaying the singleton creation doesn’t pose any security risk.”



EIP-155 (Ethereum Improvement Proposal 155) was introduced in 2016 as a security measure to prevent transaction replay attacks across different chains. Before EIP-155, if a transaction was signed on one Ethereum-based network — e.g. Ethereum mainnet — it could be replayed on another Ethereum-compatible chain because the signature remained valid.



EIP-155 solved this by adding a chain ID to signed transactions, ensuring that a transaction intended for Ethereum cannot be valid on another chain like Base. This means that even if a private key is compromised, an attacker cannot reuse old signed transactions across different chains.



Alternatively, the hack could have resulted not from a flaw in Safe’s smart contracts, or a type of replay attack, but rather a UI manipulation or wallet infrastructure compromise — where signers unknowingly authorized contract modifications.



That would put it in the same class as the Radiant exploit of December 2023 and the March 2024 WazirX breach.



The main Safe user interface is currently offline as a precaution.



“We remain confident there’s no exploit in the official Safe {Wallet} frontend but if you need to transact, you can still manage your Safe using these alternative interfaces,” the Safe team <a href="https://x.com/safe/status/1893012725602885911">wrote</a> on X.



If Safe’s assessment is correct, this reduces the likelihood of a systemic vulnerability in Safe’s smart contracts.



“If it was, it won’t be Bybit,” the spokesperson added, implying that there are far larger Safe targets to go after. Safe collectively secures over $100 billion in digital assets across more than seven million smart accounts.



However, it still <a href="https://x.com/pcaversaccio/status/1892976342649466916">suggests</a> a security risk in how Safe transactions are reviewed and approved, especially by large institutions using multisigs.



Multisig signers should <a href="https://x.com/LefterisJP/status/1892984150665187375">verify</a> transaction payloads at the raw data level, not just the UI display. Meanwhile, every security eye in the industry is going to be on the attackers’ wallet trail. For the moment, the person or group responsible is the fourteenth <a href="https://x.com/jconorgrogan/status/1893019485100970094">largest</a> ETH holder in the world.



Updated Friday, February 21 at 3:40 pm ET: Added Arkham’s claim that Lazarus Group was behind the hack.



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$1.4B Bybit hack raises questions over Safe’s transaction security

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Have you ever felt ashamed selling off a large sum of tokens for fiat currency? Or does it just feel good to take profits? Shaming others for their exits has become a thing on Crypto Twitter this week. So much so, in fact, that some traders have started calling the movement “ShameFi.”



ShameFi as a trend originated from the Kaito token claiming event, which happened this week and left some X users with piles of tokens worth hundreds of dollars for just a handful of tweets (like me). Others got six-figure sums—and promptly traded those Kaito tokens for cash.&nbsp;



Nansen AI CEO Alex Svanevik is one of a few crypto executives outing Kaito sellers on Twitter. He’s been posting <a href="https://x.com/ASvanevik/status/1892725012634673432">links</a> to Nansen charts, showing that Ethereum activist Anthony Sassano is among Kaito’s biggest sellers, among others. “NO MORE YAPS FOR YOU—NOT ALIGNED,” he <a href="https://x.com/ASvanevik/status/1892550491868897664">wrote</a> in one post in all-caps.



Crypto exchange <a href="https://x.com/arkham/status/1892626578015768863">Arkam</a> and Head of Base and Coinbase Wallet Jesse Pollack have also been outing or “shaming” Kaito sellers (Kaito’s token is on Base).



“I think it’s lame to celebrate immediately divesting of long term builders who are rewarding us for our contributions and using tokens to bring us in as cobuilders,” Pollack <a href="https://x.com/ChartFuMonkey/status/1892588286624837759">said</a> in response to a tweet from NFT influencer and Dastan President Farokh Sarmad, who sold his tokens and thanked the team for the “stimmy.”



“I think it&#8217;s net-negative for our culture to celebrate short-term, mindset-driven selling,” Pollack <a href="https://x.com/jessepollak/status/1892709649033609443">wrote</a> in a separate post on Thursday.



Later, he <a href="https://x.com/jessepollak/status/1892648601593250254">clarified</a> his stance: “It&#8217;s fine to sell your airdrop. Taxes, rent, bills, making your life better. All good and all within your rights. Economic freedom. What I think is less positive is celebrating selling immediately. Particularly over the last 12 months, CT and this space has increasingly focused on who can make money fastest.”



Others, like Web3 builder Jordan Feinstein, don’t believe in ShameFi as it’s not an effective tactic to actually get would-be sellers to believe in what you’re building.



“Shamefi is the dumbest fucking thing I&#8217;ve ever heard of in this space. For real. If you don&#8217;t want people to sell your token, they need to believe there&#8217;s more upside to holding it than selling it. If they don&#8217;t believe that, IT&#8217;S ON YOU, not them,” he <a href="https://x.com/JordanEureka_/status/1892617172008202268">wrote</a>.



My two cents? Crypto is such a high-risk, volatile space, that you have to do what’s right for your financial situation. There’s no one-size-fits-all answer as to whether you should sell something immediately or risk waiting something out.&nbsp;



I’m not trying to play the long game with Kaito—and I’m not that much of a yapper—so I swapped the tokens I got for Bitcoin. Kaito’s been pumping since. Oh well.



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‘ShameFi’ takes over Crypto Twitter

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



As Ethereum&#8217;s ecosystem expands with over a hundred L2 networks — such as Arbitrum, Polygon, Optimism and ZKsync — navigating between these networks remains cumbersome. Each transfer is like booking a flight with multiple layovers and different airlines, requiring users to manage chains, navigate bridges and sometimes use multiple wallets.



Intents offer a solution by letting users specify the outcome they want while specialized solvers determine the best way to execute it efficiently. Instead of manually moving assets and interacting with different networks, users simply declare their intent, and solvers handle the rest.



The Open Intents Framework (OIF) is a new initiative designed to standardize and simplify cross-chain transactions within the Ethereum ecosystem. Developed by contributors from the Ethereum Foundation, Hyperlane and Bootnode, OIF provides a modular, permissionless system for intent-based execution. By allowing users to specify desired outcomes rather than manually executing transactions across multiple L2s, OIF aims to smoothen the rough edges of cross-chain interoperability.



Using standardized infrastructure, developers can integrate intent-based execution without needing to build proprietary solutions from scratch. This shared framework reduces friction and fosters collaboration across some 30 ecosystem teams.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeA_9NVD0TDVGmjMDVi__-ZvjJvjhA-MKh0xig_wdpK8FUyhFKmp8XH-qeI_S-Vfda0mh8JBw29-Ij_2pFBF-eEWw9gbQGk1LrdLpFwt4muA1U5ho08-Y56liLxOKEt6XdZ95lJ?key=U_COMTiDQLwt8KHvv7jObLWl" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://x.com/ethereumfndn/status/1892244647369433272">Ethereum Foundation</a></figcaption></figure>



A key feature of OIF is its support for multiple settlement mechanisms that allow developers to choose execution methods that best suit their use cases. These include:



<ul class="wp-block-list">
<li>RRC-7755 from Base and Hashi Alliance: An oracle aggregator ensuring reliable data for cross-chain execution.</li>



<li>Espresso Systems&#8217; confirmation layer: A mechanism adding additional security and finality assurances.</li>



<li>Optimism&#8217;s Superchain native interoperability: A framework enabling seamless interactions within the Optimism ecosystem.</li>



<li>Arbitrum&#8217;s broadcast standard: A protocol optimizing intent execution on the Arbitrum network.</li>
</ul>



This diversity in settlement methods allows builders to experiment with different approaches while maintaining interoperability.



<h2 class="wp-block-heading">ERC-7683: Standardizing cross-chain intents</h2>



At the core of OIF is ERC-7683, a standard developed by Across and Uniswap Labs to create a unified structure for expressing and executing intents across Ethereum’s expanding ecosystem.



Unlike EIPs, Ethereum requests for comments (ERCs) focus on application-layer standards, such as token specifications and execution frameworks. ERC-7683 functions as a shared language that ensures compatibility across solvers, users and applications to eliminate fragmentation.



OIF lowers barriers for all participants in Ethereum’s multichain space:



<ul class="wp-block-list">
<li>Developers save months of development time by using ready-made infrastructure.</li>



<li>Networks can integrate intent-based execution without needing permission from central authorities.</li>



<li>Users benefit from near-instant cross-chain transactions, dramatically improving efficiency.</li>



<li>Solvers can service multiple protocols under a single framework, streamlining their operations.</li>
</ul>



With support from Ethereum’s major L2s and infrastructure providers, the OIF represents a coordinated effort to unify Ethereum’s multichain environment, reminiscent of <a href="https://blockworks.co/news/0xresearch-newsletter-cross-chain-interoperability">the W3 Alliance</a>. As adoption grows, it is expected to drive the next phase of interop, making intent-based execution a core component of the ecosystem.



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A framework, a standard, an intent

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Let’s be honest: Ethereum’s not having a good time. Part of it, <a href="https://blockworks.co/news/bearish-altcoin-action-drivers">as I wrote yesterday</a>, is due to the overall lack of momentum for altcoins. There’s also just a lack of positive sentiment — which is unlike what we’re seeing for bitcoin (even if it hovers below $100,000).&nbsp;



In my conversation with Amberdata’s Greg Magadini, one part that was left out of yesterday’s edition were his thoughts on ETH.&nbsp;



“The drag on ETH, in my mind, is because the value proposition of <a href="https://blockworks.co/news/eip-1559-is-live-thanks-to-ethereums-london-hard-fork">EIP-1559</a> creating a supply burn was made invalidated, or was invalidated once everyone started building their L2s and app chains and having all the transactions process off Ethereum and settle back to Ethereum. So then you flip from a deflationary asset to an inflationary asset. That’s a fundamental reason for ETH going down,” he explained.&nbsp;



In other words, ETH’s inability to regain momentum is not directly tied to the rest of the market right now — especially not the memecoin craze.



Okay so this wasn’t my most positive intro, but I actually wanted to take more of a positive look at Ethereum right now thanks to a Galaxy <a href="https://www.galaxy.com/insights/research/big-companies-building-on-ethereum/">report</a> from Vice President of Research Christine Kim.



The report is focused on what’s being built on Ethereum and is a nice refresher — or inside look — to see how projects are using it.&nbsp;



Kim noted that over 50 non-crypto companies have built either on Ethereum or an Ethereum L2. That’s no small number, especially when you dig in and find that about 20 of them are financial institutions with 10 of those being banks.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfoPZSy0Zh3uxXWq9jApvCl1X9bx6g7ZT-FNyvh6m_MYXm_VmkNA7VpiwLJeNCuyzuJWiVhhv2jzxMz2jNXy9PWYRVAyzFZBXV6is2tj6TSLP1jCpWnO7hC29wDp468bkHCKI9dJA?key=xC-bzhA2CEmj-eUhI-akgM4r" alt=""/><figcaption class="wp-element-caption">Source: Galaxy</figcaption></figure>



The biggest use case, which should come as no surprise to loyal Empire readers, is real-world assets. That’s where you have the financial institutions building and experimenting with tokenized assets — such as money market funds (think BlackRock or Franklin Templeton) or government bonds.&nbsp;



As seen below, Ethereum more than doubles the number of RWAs issued by Ethereum L2 rollup ZKSync.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcgnceAwY89zZJHfb5uCoG4L7tjkcjKNGFV1ggp6ohC-P8EbQwDSrINyrngqvt3mAaC8xbtCdmfZx27AcK70u52aX4GzEdIkag5z8603KkxEhGyGdB6Afwc-Kkh3qGtmuAVmoslAg?key=xC-bzhA2CEmj-eUhI-akgM4r" alt=""/></figure>



Now I know that RWAs aren’t the sexiest use case for crypto — and I get it — but I think we can all agree that they show some of the promise of crypto for non-crypto natives (so long as we keep them away from the memecoins).&nbsp;



But, okay, let’s move on to another use case Galaxy found: gaming on Ethereum L2s.&nbsp;



NFTs haven’t made a comeback, which means that some of the companies that tried to get some crypto exposure through them stopped issuing them years ago. Fair enough. But Galaxy found that nowadays, there is a use case for NFTs for some non-crypto native companies and that’s gaming.&nbsp;



“What is most notable about the ongoing investment and development of NFTs by non-crypto-native companies like Atari, Lamborghini, and Lotte’s Caliverse is that they are being developed in the context of a larger on-chain gaming application,” Kim wrote.



“This highlights how the scalability gains from L2s are helping to support crypto-native use cases that require frequent on-chain interactions like gaming among major retail brands and corporations,” she continued.



There are still a lot of questions and concerns about Ethereum and where it goes from here, and that’s something I’m sure we’ll be covering again soon. But Galaxy’s report shows that we’re still seeing a lot of building happening, and it’s attracted folks outside of crypto. And that, I think, is a small positive.



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More than 50 non-crypto native companies are building on Ethereum: Galaxy

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



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Unless you live under a rock, you probably heard about the Kaito token drop yesterday.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Base has been humming along nicely during the Kaito airdrop, topping out at 160 TPS at a median fee of $0.02 Their scaling efforts are clearly paying off <a href="https://t.co/a6UVHkJvKY">pic.twitter.com/a6UVHkJvKY</a>&mdash; Dan Smith (@smyyguy) <a href="https://twitter.com/smyyguy/status/1892585101873033380?ref_src=twsrc%5Etfw">February 20, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Vibes were pretty positive, it turns out people like to be paid to yap (and some of us — ahem, myself — are left with FOMO after not yapping to earn). But alas, I turned to two colleagues who did <a href="https://blockworks.co/news/kaito-yap-to-earn-takeover">earn KAITO for posting</a>.&nbsp;



<a href="https://blockworks.co/newsletter/lightspeed">Lightspeed’s Jack Kubinec</a> and <a href="https://blockworks.co/newsletter/thedrop">The Drop’s Kate Irwin</a> both earned roughly $200 of KAITO. Kubinec praised the project for understanding that folks didn’t want another social media site to post on to earn their yaps, and instead kept it on X — where parts of the crypto community are the strongest.&nbsp;



Kubinec was lucky in that a <a href="https://x.com/whosknave/status/1875216410391253192">thread of his went viral</a> shortly after claiming his profile on Kaito, bumping him up to one of the top yappers briefly. However, he admitted that even his short-lived CT fame didn’t prompt him to post any more than usual.



For Irwin, the question is all about longevity. We’ve been through a few hype cycles now, and admittedly when it’s good, it’s great and when it’s bad, CT kind of feels desolate. Irwin told me that it’s hard to see people still posting about yapping and caring about it in six months.



The token, however, is holding on for now. Perhaps some of that is due to some of the shaming we’ve seen over on X.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">you&#39;re free to do what you want with your money and also I want to publicly state that I think it&#39;s lame to celebrate immediately divesting of long term builders who are rewarding us for our contributions and using tokens to bring us in as cobuilders long term &gt; short term&mdash; jesse.base.eth (@jessepollak) <a href="https://twitter.com/jessepollak/status/1892554449668768024?ref_src=twsrc%5Etfw">February 20, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Or perhaps this is finally the project that can break the cycle and we’ve finally solved the code for SocialFi. Only time will tell I guess.



And now you know.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc3U1VGuuxlJWLf6NMwtCI9lQjgOSjDERfdn9I1hxS7-XpL3VgM1oTd83lw6HehD1qJdONZWCVItRR5TQtMsHriMcbnQl-GwL0Yww2l9mBmLvwrLKujaqqFJRn8Oxan7OpbjU1YNA?key=xC-bzhA2CEmj-eUhI-akgM4r" alt=""/><figcaption class="wp-element-caption">HYPE is up 550% since it launched at the end of November</figcaption></figure>



Maybe David Sacks is right. Memecoins are collectibles.



If that’s true, then crime season suddenly gets an element of Pokémon GO.&nbsp;



Like how you might wander through the park and catch Wigglytuffs and Psyducks, we could all frolic through Raydium and <s>buy dead rugpulls</s> collect souvenirs of all the memecoins that come and go.&nbsp;



It’s a pain that memecoins have sucked so much air out of the room and it’s made for a ton of myopic takes. The <a href="https://www.coindesk.com/tech/2025/02/21/kanye-west-self-proclaimed-nazi-who-said-coins-prey-on-fans-plans-yzy-token">supposed</a> Yeezy token launch isn’t helping, either.



So, here’s some eyebleach: Of the major coin launches in the past few months, HYPE — tied to a project of substance in Hyperliquid — is outperforming the pack with steady price action.&nbsp;



Around 60% of all perps <a href="https://defillama.com/perps/chains">volumes</a> on DEXs flows through Hyperliquid right now, which is a stat the market obviously appreciates.



MORPHO, the lending app on Ethereum and Base, is otherwise ahead by 135% since its own launch a week or so before HYPE.&nbsp;



That’s much better than BERA, PENGU and MOVE, which have lost between 24% and 38% since they started trading (BERA is staging a comeback as we speak). Morpho currently has $6.8 billion in <a href="https://dune.com/morpho/morpho-blue-dashboard">deposits</a>, up 160% in the past three months.



All well and good: Real projects might have a chance after all.&nbsp;



The best part is, if you zoom out this analysis to include coins launched just a few months earlier, in August and October, it would be FARTCOIN dominating the chart, even after its 84% retracement.



Sometimes, ignorance is bliss.



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Not all new coins are pointless pump and dumps

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The crypto-incentivized cell network provider Helium Mobile is bringing Helium network coverage to 2.3 million Mexicans via a partnership with Movistar, the country’s second largest carrier service.



Under the new plan, Movistar will pay for its subscribers to use Helium coverage where possible, and Helium hotspot operators will be rewarded with tokens. The expanded Mexico deployment hints at Helium Mobile’s broader development strategy: grow its network in new markets by partnering with existing telecommunications companies.



Helium Mobile sells <a href="https://blockworks.co/news/helium-miami-tmobile-hotspots-network-cellular">hotspot devices</a> that people can plug in to function as <a href="https://blockworks.co/news/helium-tech-for-disaster-relief">mini cell towers</a>, and it also <a href="https://blockworks.co/news/helium-mobile-introduces-free-plan">offers cellular plans</a> based on its patchwork of hotspots mixed with T-Mobile coverage in the US. Helium’s network is monetized with its Solana-based token, HNT. In addition to building a cellular network that <a href="https://blockworks.co/news/lightspeed-newsletter-helium-future-vision-depin">aims to unseat</a> legacy cellular networks, Helium Mobile has also looked to partner with them.



The company piloted an activation with Movistar, which is a subsidiary of the Spanish telecom giant Telefónica, in January 2024. The limited rollout happened in Mexico City and Oaxaca. A little over a year later, Helium is targeting 300 locations for hotspot deployment. Currently, 91 hotspots are live. Together, Helium Mobile and Movistar will create a hybrid system whereby subscribers’ phones will switch between the networks based on availability.



Helium Mobile general manager of network Mario Di Dio said partnerships like this one are advantageous for mobile virtual network operators — cell providers that do not operate their own cell towers, but functionally rent cell service from other operators — since Helium’s hotspots can provide service more cheaply. Movistar has <a href="https://www.telecoms.com/wireless-networking/telefonica-gives-up-mexico-network-but-it-s-not-an-mvno">contested</a> being labeled an MVNO, but it does pay AT&amp;T for mobile traffic in Mexico.



Helium Mobile offers a version of this in the US, and it has partnered with two of the three big mobile network operators in the US. Although these MNOs run their own cell towers, Helium Mobile can provide connectivity in cellular dead zones, which tend to emerge in indoor locations, Di Dio explained.



By growing its own cellular network while striking data offloading deals with telcos, Helium Mobile thinks it can have its cake and eat it, too. Carrier offload programs like the one in Mexico incentivize people to plug in Helium hotspots, and more hotspots make the network better for Helium’s own cell network. Helium pays T-Mobile for data when its own network can’t provide coverage.



Also as part of the partnership, Helium Mobile’s <a href="https://blockworks.co/news/helium-partners-with-dawn">decentralized physical infrastructure</a> machines will start being sold in Movistar retail stores.



“We will literally have a traditional telco company like Movistar selling DePIN miners on the shelves [in] retail stores, which to me is kind of a mind blowing achievement,” Di Dio said.



Updated Friday, February 21 at 4:10 pm ET: Clarified there are 300 target locations for deployment, not 300 hotspots.



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