Cetus Protocol

Byron Gilliam

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



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



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“The chief business of the American people is business.”



— Calvin Coolidge
</blockquote>



When Ross Perot’s “computer facilities management” startup Electronic Data Systems was listed on the stock exchange in 1968, the shares were offered at 118x earnings.



It was an eye-popping valuation at the time — especially given the risks.&nbsp;



EDS “is in a precarious position,” Fortune noted shortly after its IPO. “It has only a few customers, and three of them accounted for a total of 64% of revenues during fiscal 1968.”



But those were the kinds of risks that investors were keen to take.



“As every ladies’ investing club knows,” Fortune explained, “the public these days is wildly receptive to new stock issues, particularly from companies involved in the computer industry.”&nbsp;



It’s unlikely that many of those ladies had ever even seen a computer, let alone used one.



But they were nonetheless eager to bet on them, however aggressive the valuation.



Ken Langone, the investment banker who promised Perot he’d IPO EDS at “the highest possible price,” acknowledged that the price was indeed high.



At 118x earnings, the stock “would be way overvalued,” Langone later <a href="https://www.amazon.com/I-Love-Capitalism-American-Story/dp/073521624X">wrote</a>.



“But it would only be overvalued until it grew, and then it wouldn’t be.”



The investment club ladies — intrepid pioneers of growth investing — agreed with him.



EDS closed its first day of trading 40% above the “overvalued” IPO price.



With that, Perot has achieved “perhaps the most spectacular personal coup in the history of American business,” Fortune assessed.



The article dubbed Ross Perot “the fastest richest Texan ever,” which was no small feat in the state renowned for overnight oil fortunes.&nbsp;



Soon, Perot was also historically rich.



With EDS shares soaring into the end of the year, the 39-year-old Perot became history’s first tech billionaire.



It was a uniquely American story.



No other country could have produced an entrepreneur quite like Ross Perot, who spoke in Texas colloquialisms, got his hair cut Marine short every week at the same Dallas barber for 30 years straight, was a devout family man but also ruthlessly hypercompetitive in business — and won 18.9% of the popular vote in the 1992 presidential election.



But what made Perot’s fortune even more uniquely American is that investors in no other country would have enabled it.



EDS was just one of 368 companies to list its shares on American stock exchanges that year in an era when companies in other developed countries got most of their funding from bank loans.



While the US was averaging more than one IPO per calendar day, Germany, for example, <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=231231">averaged</a> fewer than one IPO per year.



​After the EDS IPO, Fortune speculated that “probably no other man made so much money so fast.”



But the author also cautioned that “most of Perot’s wealth can be attributed to the enthusiasm of investors.”



That enthusiasm for risk-taking did more than just make founders like Perot wealthy, however — it made America wealthy, too.



The United States “had a public stock market that was willing to absorb risk at much earlier stages than European and Asian markets,” Bhu Srinivasan <a href="https://www.amazon.com/americana-400-year-history-american-capitalism-Books/s?k=americana+a+400-year+history+of+american+capitalism&amp;rh=n%3A283155&amp;hvbmt=%7BBidMatchType%7D&amp;hvdev=c&amp;tag=googhydr-20&amp;ref=pd_sl_5drh44zcl3_e">wrote</a> in his history of American capitalism.



This gave the US “the unique capability to finance ideas at the earliest stages,” — and later “an ecosystem in Silicon Valley that allowed embryonic companies in nascent markets to develop quickly.”



Some of those embryos have developed into giants: The United States is now home to 21 of the 25 largest companies in the world. Americans don’t always celebrate this incredible success.



Occupy Wall Street types actively bemoan it, of course — but even the treasury secretary of the United States seems ambivalent.



“It’s Main Street’s turn,” Secretary Bessent has said repeatedly, as if the economy is a zero-sum contest between Main Street and Wall Street.



It’s not.



“Increases in stock market capitalization and the number of listed companies are closely correlated with real GDP growth,” one <a href="https://www.researchgate.net/publication/361086455_The_Influence_of_the_Capital_Market_on_Economic_Growth_in_the_USA">study</a> found, “supporting the argument that capital markets have played a key role in driving US prosperity.”



Another <a href="https://www.sciencedirect.com/science/article/pii/S0304405X00000702">study</a> detailed why: “Across 65 countries, those with developed financial sectors increase investment more in their growing industries, and decrease investment more in their declining industries.”



It doesn’t always feel that way, of course.



The popularity of things like meme stocks, zero-days-to-expiration options, and crypto “treasury companies” can make the stock market look like a giant misallocation of resources — not much more than a casino.



But a third <a href="https://www.sciencedirect.com/science/article/abs/pii/S0378426602004089">study</a> found “strong evidence that greater stock market liquidity, as measured by trading volume relative to market size, causally contributes to long-run GDP growth.”



In other words, even day trading might be economically productive.



Could crypto trading be too?



Solana co-founder Anatoly Yakovenko <a href="https://x.com/aeyakovenko/status/1925705058785644978">thinks so</a>: “What makes American capital markets great is their depth and liquidity and broad array of participants,” he says, adding that “the whole pitch of Solana [is] lowering the barrier to entry to participate in capital markets.”



It&#8217;s a good pitch, I think, because opening markets to more traders makes markets better — and crypto opens markets to everyone.



America’s capital markets are the world’s best because they’ve always connected the best founders (like Ross Perot) to the most enthusiastic investors (like the ladies’ investing clubs).



Now, crypto capital markets — newly <a href="https://multicoin.capital/2025/01/22/the-solana-thesis-internet-capital-markets/">rebranded</a> “internet capital markets” — might be the next place where risk-taking founders meet risk-taking investors.



The hope is that this happy, permissionless meeting will result in the creation of “<a href="https://x.com/_ryanrconnor/status/1924876335777734950">net new assets</a>” that could only ever be funded by crypto enthusiasts.&nbsp;



Such optimism is easy to dismiss, because for all the extraordinary enthusiasm that crypto investors have shown, the results so far have been underwhelming: Non-sovereign money was an immaculate conception, stablecoins aren’t really crypto and the rest of crypto seems highly self-refential — not much more than new ways to trade crypto.



But trading is important — and if crypto turns out to be where a new generation of enthusiastic traders fund new kinds of assets, it’s worth taking a chance on.



History shows that America’s enthusiastic investors didn&#8217;t just make fortunes for founders — they made fortunes for America, too.



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The Breakdown Newsletter

The spirit of ’68: How capital markets made America wealthy

Jack Kubinec

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



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I spent much of last week running between conference venues and side events during Solana Accelerate in New York City.&nbsp;



Conferences tend to be announcement-heavy affairs, and Accelerate didn’t disappoint, bringing major updates on Solana’s core infrastructure, Solana’s phone startup and tokenized equities.&nbsp;



And as I <a href="https://blockworks.co/news/solana-accelerate-day-one-etfs-firedancer">pointed out last week</a>, change is in the air. Competition is heating up, and formerly-hyped areas of Solana’s ecosystem are starting to lose their luster.&nbsp;



To elucidate some of that potential change, here are four big questions I have after Accelerate.



<h2 class="wp-block-heading">1. What’s the deal with Firedancer?</h2>



<ol class="wp-block-list">
<li></li>
</ol>



Jump <a href="https://blockworks.co/news/lightspeed-newsletter-solana-firedancer-testnet">released Frankendancer</a>, a halfway version of Firedancer that makes some performance improvements to the existing Solana client, last September. It began <a href="https://x.com/whosknave/status/1894134153446031532">rolling</a> out Jito bundle support — allowing validators to more efficiently MEV — earlier this year.



Today, Frankendancer <a href="https://app.blockworksresearch.com/analytics/solana?dashboard=131">commands</a> just 6% of Solana’s total stake (that proportion is up slightly from around 5% last week). This from-scratch Solana client project has been talked about in hallowed terms for years, but for one reason or another, most validators aren’t currently using Frankendancer.&nbsp;



One Accelerate attendee mused to me that Jump and Solana may have hyped up Firedancer too much, too soon, and perhaps building and rolling the software out more quietly would have been the better move.



Frankendancer’s key catalyst could be financial incentives: The client’s developer announced a stake delegation program similar to what the Solana Foundation offers during Accelerate.&nbsp;



<h2 class="wp-block-heading">2. Has Kraken become the Solana-favored exchange?</h2>



<ol start="2" class="wp-block-list">
<li></li>
</ol>



One major news item from Accelerate was Kraken’s <a href="https://www.wsj.com/finance/currencies/kraken-crypto-exchange-stock-tokens-e4fc1bb9?gaa_at=eafs&amp;gaa_n=ASWzDAgyoeZEozJQPCzOiVx9Ta6nVeJba4g_rjkkAHNtpnkllIWhV6juu0nX1eeMX2U%3D&amp;gaa_ts=68360099&amp;gaa_sig=wHrVyKYN3BI0rBGsrl6J2vapDwzPavSgAl9B751UK0uhotgqYLUM7wWH0UJr1C-ZBKd6vUEYctiviq1qRDn3XA%3D%3D">launch</a> of xStocks, tokenized equities —&nbsp;including Apple, Tesla and Nvidia — that will trade on Solana.



It’s an interesting development in international investors’ ability to invest in US stocks, but more interesting was the decision to launch on Solana. Kraken has an in-house <a href="https://blockworks.co/news/kraken-ethereum-layer-2-superchain">layer-2 blockchain</a> named Ink, which would have been a natural fit for the new product, but I think the exchange sees business upside in Solanaland.



As a US-based exchange operating in Coinbase’s shadow, Kraken may spy opportunities in the former exchange’s sometimes-contentious relationship with the Solana community, which has <a href="https://www.reddit.com/r/solana/comments/1h1m4ut/coinbase_is_intentionally_making_solana_look_bad/">expressed</a> consternation over Coinbase’s penchant for nudging users to use its layer-2, Base.



Solana is the hottest blockchain ecosystem of the moment, so becoming the favored exchange for Solana investors could prove lucrative for Kraken. In the past few months, the exchange has brought back staking for US users, <a href="https://blockworks.co/news/janover-to-receive-kraken-staked-sol">parked some</a> of its own money in a Solana treasury vehicle and now will launch tokenized equities on Solana. Kraken appears to be well on its way.



<h2 class="wp-block-heading">3. What’s the thinking behind the SKR token?</h2>



<ol start="3" class="wp-block-list">
<li></li>
</ol>



The Solana Labs-supported mobile phone startup Solana Mobile made three big announcements at Accelerate, which were:



<ul class="wp-block-list">
<li>A) the Seeker phone will ship in August</li>



<li>B) with a new decentralized architecture to rival Android and iOS, and&nbsp;</li>



<li>C) it will have a token with the ticker SKR.</li>
</ul>



I found this last announcement somewhat surprising. As an entity with some presence in a New York City office, I’m sure Solana Labs has to be reasonably careful with compliance — and launching tokens can create legal headaches. Just look at <a href="https://blockworks.co/news/bakkt-delist-cardano-polygon-solana">some of the fallout</a> from when the SEC deemed SOL a security.&nbsp;



My guess is that Solana Labs — which currently develops companies including Solana Mobile — thinks a friendlier legal environment can shield SKR from too much scrutiny, and it knows token incentives <a href="https://blockworks.co/news/solana-phones-sold-out">drove a chunk</a> of the demand around the last Solana phone.&nbsp;



Disrupting the App Store duopoly, as Solana co-founder Anatoly Yakovenko likes to say, will be no easy task. Maybe SKR will make things a bit easier.&nbsp;



<h2 class="wp-block-heading">4. Is the Trump-crypto marriage growing strained?</h2>



<ol start="4" class="wp-block-list">
<li></li>
</ol>



Leadership at the newly-formed <a href="https://blockworks.co/news/solana-policy-institute-ceos-political">Solana Policy Institute</a> was visible in and around Accelerate, as Solana looks to grow its political footprint. To that end, there’s one political post from the conference that caught my eye.



“Congressman @RitchieTorres just got cheers from the crowd at Solana Accelerate for saying ‘We should not be selling access to Congress or the White House,’” the journalist Veronica Irwin, formerly of Unchained, wrote on X last week.



She went on to add: “I was surprised by the cheers — disapproval of President Trump is not something you see often at crypto conferences these days.”



President Trump held a dinner for holders of his Solana memecoin last week, a move that <a href="https://www.washingtonpost.com/politics/2025/05/22/trump-meme-coin-dinner/">raised</a> ethics concerns. As <a href="https://blockworks.co/news/senate-advances-genius-act">legislation</a> on stablecoins and crypto market structure works its way through Congress, I’m wondering whether Trump’s crypto profiteering may cost the industry legislative wins if Democrats <a href="https://blockworks.co/news/legislative-speed-bumps-genius-act-sec">turn against</a> crypto.



Still, Trump’s SEC dismissed a number of burdensome lawsuits against crypto companies. If I were a betting man, I’d say that in combination with the president’s other overtures to the industry would be enough to keep the union intact.



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conference

4 big questions following the Solana Accelerate conference

Ben Strack

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



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As corporate bitcoin treasury strategies proliferate, one firm is set to focus on buying ether at scale.&nbsp;



We all know about Strategy’s relentless bitcoin purchases (it bought another 4,020 BTC last week) and how more <a href="https://blockworks.co/news/strategy-metaplanet-bitcoin-treasuries-all-time-high">companies are following</a> its lead.&nbsp;



Well, SharpLink Gaming revealed Tuesday that it intends to use the proceeds of a $425 million private placement to buy ETH. Ethereum co-founder Joseph Lubin is set to become SharpLink’s board chair.&nbsp;



Shares of the Nasdaq-listed company were up roughly 400% on the day at 2 p.m. ET.&nbsp;



“ETH is a scarce asset that has bouts of deflation when chain activity is high, while simultaneously providing a nice yield through staking,” said Matt Lason, CIO at crypto hedge fund Globe 3 Capital. “This combination of scarcity, deflation and yield is an ideal scenario for a treasury strategy.”



While others have recently bought ETH on a smaller scale (<a href="https://www.newsfilecorp.com/release/250997/Beyond-Medical-Technologies-Announces-2.5-Million-Convertible-Note-Financing-to-Support-Blockchain-Attestation-Platform">Beyond Medical</a>, <a href="https://www.nasdaq.com/press-release/srx-health-solutions-further-diversifies-treasury-strategy-purchase-ethereum-2025-05">SRx Health Solutions</a>), Lason told me SharpLink is set to have a first-mover advantage similar to Michael Saylor-led Strategy. Having Lubin and a “AAA-list” of Web3 investments companies (Consensys, Pantera, GSR, Galaxy Digital, etc.) certainly helps, he noted.&nbsp;



LMAX Group crypto strategist Joel Kruger said capital is expected to flow beyond bitcoin as crypto matures, pointing out the falling BTC dominance and growing adoption of ether ETFs.



“While Ethereum carries more risk given its evolving technology and broader use case, its role as the backbone of internet capital markets makes ETH exposure a logical, if bolder, move for companies looking to diversify their crypto treasury strategy,” he told me.



Kruger said ETH appears to have formed a solid bottom and could retest its 2021 high (~$4,880) in the coming months. ETH was trading around $2,700 at 2 p.m. ET — up 48% over the past month.



“While Solana has captured some short-term liquidity, Ethereum remains the more battle-tested, decentralized and developer-diverse ecosystem,” he added.



Some will continue to prefer Ethereum’s rival layer-1 blockchain. Sol Strategies in April announced a convertible note facility of up to $500 million dedicated to <a href="https://blockworks.co/news/sol-strategies-is-solanas-microstrategy">acquiring and staking</a> solana tokens.



As for Lason’s outlook for ETH, he expects a new all-time high by the year’s end and a possible push to $8,000 by the end of 2026.&nbsp;



Price predictions are, well, just predictions. But it’s good to have them on the record.



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As bitcoin treasury strategies proliferate, one company eyes big ETH buys

Casey Wagner

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



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Investors were once again reminded over the weekend that when it comes to the trade war, threats often do not become reality.&nbsp;



US stocks were on the rise Tuesday, thanks to signs the US could be approaching a deal with the EU, as well as May’s better-than-expected consumer confidence survey.&nbsp;



Let’s start with a trade war update. Today’s rally follows a long weekend of heightened tensions, after President Trump on Friday said he would impose a 50% tariff on the EU, sparking a selloff late in the session. By Sunday, though, he had announced a pause on the levies until July 9.&nbsp;



“Talks will begin rapidly,” Trump wrote in a Truth Social post Sunday night.&nbsp;



The S&amp;P 500 and Nasdaq Composite indexes had erased Friday’s losses — trading 2% and 2.5% higher on the day, respectively, as of 2 p.m. ET.&nbsp;



Apple shares were also on the rise after facing headwinds on Friday following Trump’s threat to impose a 25% on iPhones made outside the US. I’ve <a href="https://blockworks.co/news/us-equities-trade-tariffs-magnificent-company-earnings">written before</a> about why I think Trump will be forced to spare Apple when it comes to his trade policy agenda, and we saw a hint of that over the weekend.&nbsp;



Trump’s Friday morning Truth Social post triggered a selloff in APPL futures; the stock opened 3.5% lower that day. By Tuesday, the administration was doing damage control. National Economic Council Director Kevin Hassett said this morning on <a href="https://www.cnbc.com/2025/05/27/trump-apple-iphone-tariffs.html">CNBC</a> that they “don’t want to harm Apple.”&nbsp;



By 2 p.m. ET, Apple shares were back in the green, trading 2.7% higher on the day and just below last Thursday’s close.&nbsp;



Trump’s threat and Hassett’s comments come about six weeks after the administration issued a tariff “exemption” on certain consumer electronics, including iPhones. We’re getting whiplash.&nbsp;



It’s true that Trump has said he’s willing to tolerate a level of pain in markets (remember, don’t be a “panican”), but we’ve seen time and time again that there’s a threshold. That’s one explanation for these back-and-forth policies that change on a sometimes hourly basis. If you ask Karoline Leavitt, though, the president is practicing the “Art of the Deal.”&nbsp;



Either way, stocks are trading on Truth Social posts. If anyone tells you they know where these tariff policies will land, take whatever they say with a grain of salt.&nbsp;



The other thing moving markets today was May’s consumer confidence survey.&nbsp;



The report came in much higher than expected, gaining 12.3 points on the month to hit 98. Analysts had projected a reading of 87. The numbers suggest that households may be feeling more positive about where tariffs will end up.&nbsp;



We know there’s still a lot up in the air, and like we said, one Truth Social post could send shares tumbling to new lows. But it seems that until consumers actually see higher prices, their outlook isn’t too bad.&nbsp;



Next up, the FOMC’s May meeting minutes are set to be released tomorrow afternoon. Investors will be looking for signs about how central bankers are thinking about <a href="https://blockworks.co/news/fed-holds-rates-fomc-may-powell">future rate cuts</a>. March’s minutes revealed that committee members are very comfortable with waiting for more economic data before adjusting interest rates in response to tariffs.&nbsp;



Keep an eye on your inbox tomorrow for our analysis.



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Donald Trump

Tariff reversal sends stocks higher

Kate Irwin

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



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We now know more about the bug that was exploited last week, resulting in over $220 million in frozen and stolen funds from the Sui-based DEX Cetus.



On Monday, Sui <a href="https://x.com/SuiNetwork/status/1927077606488252775">described</a> the flaw as “a bug in a Cetus math library” and promised to commit $10 million to improving Sui’s security more broadly. That includes a <a href="https://x.com/SuiNetwork/status/1927077631477891141">bug bounty program</a>, plus Sui-funded security audits for projects using the chain.



Blockchain security firm Dedaub <a href="https://dedaub.com/blog/the-cetus-amm-200m-hack-how-a-flawed-overflow-check-led-to-catastrophic-loss/">explained</a> that the attack involved intentionally misconfiguring a liquidity pool with an “extremely high value.”



“This allowed them to add massive liquidity positions with just 1 unit of token input, subsequently draining pools collectively containing hundreds of millions of dollars worth of token,” the firm wrote.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXePT5t92frYhGnlQd14zNo3j78OWArKwh4M9KlCvfx4zTC6mDGSfxk93EQXxeOxz46IFhkwyMQa0vBN9EX_zSzl7bfPuz3ttDr3GsA3L2iF9Kja_rA-z4YkjBr5Hbbejm4nch71IQ?key=1yjnQt7AfIzXFB7ywHt_gA" alt=""/><figcaption class="wp-element-caption">Image from Cetus detailing how the incident occurred.</figcaption></figure>



As of May 26, Cetus <a href="https://cetusprotocol.notion.site/Cetus-Incident-Report-May-22-2025-Attack-Disclosure-1ff1dbf3ac8680d7a98de6158597d416">said</a> that the majority of the swiped crypto (roughly <a href="https://x.com/CetusProtocol/status/1925567348586815622">$162 million</a>) remained frozen across two Sui wallets, while the rest of the stolen funds had already been converted to ETH by the attacker.&nbsp;



“Cetus has been among the DeFi teams on Sui that invested the most in smart contract audits and system safeguards. Unfortunately, reality does not always unfold as we wish,” Cetus said in its disclosure. “Multiple rounds of audits on the underlying contracts and the dependent open-source libraries — combined with their widespread and successful use by ecosystem developers — gave us a sense that we had done enough. In hindsight, we realize we allowed ourselves to relax our vigilance. This painful lesson has shown us: we must do more.”



The DEX further <a href="https://x.com/CetusProtocol/status/1925914205745459433">said</a> last week it hasn’t heard from the hacker thus far.



Sui isn’t the only one that’s recently seen crypto swiped on its chain due to an exploit. On a much smaller scale, Cardex, a game on Abstract, had a flaw that resulted in at least $500,000 being siphoned from that app’s users earlier this year.



Being permissionless means more people can build in a chain’s ecosystem with less oversight, getting closer to financial <a href="https://blockworks.co/news/suis-decentralization-dex-put-to-the-test">decentralization</a>, one of the original aims of crypto.&nbsp;



But it also means a chain’s reputation can take a hit when some apps that use it are lacking on the security front — leading to headline-generating exploits and losses often in the millions.



“Security audits are inherently imperfect,” <a href="https://x.com/Jack24klove/status/1927226183592050789">wrote</a> BlockSec’s CCO, who goes by Orlando on X, in response to the incident. “In 2023, the entire crypto market spent $1 billion on security audits, yet $2 billion in assets were still stolen.”



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hacks

Sui shares details on $220M Cetus exploit, vows to step up security

Donovan Choy

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/0xresearch" target="_blank" rel="noreferrer noopener">subscribe</a>.



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More than a year after its initial <a href="https://blockworks.co/news/starkware-starknet-zero-knowledge-prover">announcement</a>, StarkWare is today launching S-two (STARK Two) in public alpha.



S-two is a next-generation zero-knowledge STARK prover fast enough to run natively on consumer hardware. Developers will be able to start building with S-two today.



According to a press statement, S-two will be able to generate STARK proofs “directly on phones, laptops and browsers…enabling smooth mobile experiences, fast browser-based apps and new classes of client-side privacy and AI applications.”



A full Starknet integration is slated for later this year.



Various teams such as Kakarot, Nexus, ZAN, Giza, Herodotus and more have begun building with S-two.



Based on the team’s own benchmark tests, S-two claims to generate proofs up to 39x faster than Succinct’s SP1 and 28x faster than Risc Zero’s R0VM on specific workloads.



<h2 class="wp-block-heading">The history of zk proving</h2>



In the context of blockchains, a prover is the entity in a zero-knowledge system that produces the mathematical proof that transactions are executed correctly and in compliance with protocol rules.



Historically, proof generation was an expensive bottleneck. Rollups had to batch thousands of transactions into a single proof, accepting a delay of several minutes or hours before publishing the result to Ethereum.



To users, this meant limitations of cross-chain composability (a.k.a. synchronous composability) and a withdrawal time delay capped by proof-generation times.&nbsp;



Recent breakthroughs in zk tech enable what Ethereum devs typically refer to as “<a href="https://x.com/drakefjustin/status/1924929057676001466">real-time proving</a>,” or the ability to compress proof-generation latency to mere seconds. Specifically, below 12 seconds — Ethereum’s block interval.



With real-time proving, rollups can finalize blocks at near-L1 speeds while still enjoying the quick throughput and cheaper fees of an L2.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfSTrR05oiu-y4uKW5IR7tktDerqYdJiN3C5iwY-fZlZjXPohIMGGuG5kpKMzRo9R0A9JBPpCpto0xUamPvzt752jyeNjnqP6nuJReQyNM6UDmJtsRa7nL41FIkR8vYeU87_vV-xg?key=AImQF8zvh6OFN8fSc0AqXw" alt="notion image"/><figcaption class="wp-element-caption">Source: <a href="https://risczero.com/blog/introducing-R0VM-2.0">RISC Zero</a></figcaption></figure>



S-two’s client-side proving will also mean users/rollups no longer have to rely on trusted and centralized prover clusters typically hosted on AWS or Google Cloud.&nbsp;



With S-two, proofs will be generated locally on the client side and submitted directly to Ethereum, potentially making every browser a self-sovereign proving node and reducing liveness risks from single-hosted clusters.



<h2 class="wp-block-heading">A step towards the zk endgame</h2>



StarkWare is not alone in chasing single-digit-second proofs.&nbsp;



Last week, Succinct <a href="https://x.com/pumatheuma/status/1924862764528370145">unveiled</a> SP1 Hypercube, a multilinear-polynomial zkVM that claims to be able to prove 93% of Ethereum mainnet blocks in just 10.3 seconds.



The announcement drew praise (and caution) from Vitalik Buterin, who <a href="https://x.com/VitalikButerin/status/1925050155922862526">tweeted</a> that the milestone represented real-time average cases, but that “real-time worst case for safe L1 use” was still a challenge.



Where Succinct’s new zkVM demonstrated that real-time block proofs are feasible, StarkWare’s new S-two prover shows the consumer-grade hardware feasibility of real-time proving.



Just a few years ago, it was <a href="https://x.com/zengjiajun_eth/status/1924995966832157107">thought</a> that real-time proving wouldn’t be ready anytime soon.&nbsp;



“Run a zero-knowledge proof on your phone” was a mere punchline.



Yet, zero-knowledge technology continues to accelerate with continued breakthroughs.



Users will never notice the cryptography under the hood. What they will notice, however, is when bridging takes mere seconds instead of minutes and privacy comes baked into the wallet — all without compromising on trustlessness.



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0xResearch Newsletter

StarkWare launches new consumer-grade hardware ZK prover

David Canellis

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



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“Sigh&#8230;why delete a wallet instead of moving it aside and keeping the old copy just in case?”



That’s Satoshi in October 2010 — only two months before they would post their last public message to Bitcointalk.&nbsp;



Satoshi had been <a href="https://bitcointalk.org/index.php?topic=1327.msg15136#msg15136">troubleshooting</a> a report of an unconfirmable transaction somehow making it to the chain, which would’ve been much easier had the person who’d sent it still had their wallet instance active on their machine.



“You should never delete a wallet,” Satoshi said, seeming frustrated.&nbsp;



And as it so happens, addresses once believed to have been controlled by Satoshi are now sitting on up to 1,125,150 BTC, equivalent to $123.3 billion right now.



If that’s true, Satoshi would be the 10th richest person in the world, at least for today — about $7 billion behind former Microsoft CEO and hypeman Steve Ballmer.



<h2 class="wp-block-heading">Unsolved Mysteries</h2>



Did Satoshi really mine more than 1.1 million bitcoin?



It would mean that Bitcoin’s creator had hoarded about 26% of the circulating supply by the time they urged users never to delete their wallets.&nbsp;



Another 15.5 million coins have been mined since then, bringing down Satoshi’s estimated holdings to 5.6% of the current supply.



Bigger brains than mine have scoured the chain data for clues, and I’d encourage anyone to read over the detailed work of Bitcoin developers Sergio Lerner and Jameson Lopp, if you haven’t already.



Essentially, Lopp <a href="https://blog.lopp.net/was-satoshi-a-greedy-miner/">independently</a> verified <a href="https://bitslog.com/2019/04/16/the-return-of-the-deniers-and-the-revenge-of-patoshi/">Lerner’s discovery</a> of a particular method of mining that was incredibly powerful in the early years.



Miners usually randomize nonce values on their way to finding valid hashes to generate new coins. But until May 2010, there was a miner — or miners — selecting nonces more systematically.



Whoever they were, they would only search for correct nonces within certain small ranges, rather than the 4.3 billion that exist within the entire valid pool.



They would also maximize their efficiency by incrementing through a then-little-known feature, ExtraNonce, which allows miners to more easily check additional hashes after the whole pool has been exhausted. ExtraNonce was not documented or utilized within the official Bitcoin software itself, so whoever had done this had built their own miner.



These specific processes imprinted a pattern into the chain data through the block header hashes themselves, and Lerner, Lopp and eventually BitMEX researchers all concluded the same things: This method was extremely effective and it had been used to mine up to 1.1 million bitcoin in the first year and a half or so. It tapered off over time, until suddenly it stopped.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc7hlGKUoHcmGqYEWIWla2GPVFfL2bWs_m9u8Q1x6hyI_aNBqd1hM3llpFQ58VXtNosFJMln6zXsR4zdoS4ZjrzkaaEz_UOIZhJYPF8baiuzDsDa_VMQrD7rFGoylkb0olSKbGvNw?key=6pcwshwfFmFwoKny87L03Q" alt=""/></figure>



Satoshi’s estimated hash rate is in red, the total network is in blue. Notice red and blue are positively correlated until late 2009, implying Satoshi dominated mining for almost a year (<a href="https://organofcorti.blogspot.com/2014/08/167-satoshis-hashrate.html">source</a>).



Lerner had named the pattern “Patoshi,” but it’s never been explicitly proven that Satoshi was the one mining bitcoin in this way. (By the way, check out Sergio Lerner’s <a href="https://www.youtube.com/watch?v=WY9hbafQ2Pc">recent appearance on Supply Shock</a>.)



Of course, the theory tracks: There were very few miners on the network in 2009, and most simply ran the official Bitcoin software, which didn’t contain a customizable ExtraNonce field. Who else but Satoshi would know how to exploit it?



Devil’s advocate: Bitcoin is open source, and its code was just not that long in 2009 — only about 9,000 lines. It’s not outside the realm of possibility that some savant reviewed the mining logic and immediately understood what to do.



Still, even the number of coins mined using the Patoshi method is technically still up for debate. In 2018, BitMEX boffins <a href="https://blog.bitmex.com/satoshis-1-million-bitcoin">found</a> only reasonable evidence pointing to a single dominant miner generating between 600,000 and 700,000 BTC — almost 40% fewer than Lerner’s initial calculation.



In that case, Satoshi’s bitcoin would be worth only $76.7 billion — $10 billion ahead of Binance founder Changpeng Zhao, still making them the 21st richest <a href="https://www.forbes.com/real-time-billionaires/#3764e9de3d78">billionaire</a> in the world.



After all, you should never delete a wallet.



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Bitcoin

Why Satoshi might still hold the keys to $123B BTC

Katherine Ross

Cantor’s Bitcoin financing business is fully operational, the company announced on Tuesday.&nbsp;



One of the transactions was with Maple, which said that it closed its first tranche of Bitcoin-backed financing.&nbsp;



“This financing facility through Cantor enables Maple to accelerate its growth and expand its reach as a provider of digital asset credit,” said Sidney Powell, CEO of Maple Finance.



Maple said that the transaction was a “major milestone” for the institutional adoption of crypto.&nbsp;



Cantor says it plans to make $2 billion of financing available in its initial phase.&nbsp;



“Institutions holding bitcoin are looking to broaden their access to diverse funding sources, and we are excited to support their liquidity needs to help them drive long-term growth and success,” Cantor’s Christian Wall said.&nbsp;



Cantor tapped Anchorage Digital and Copper as custodians.



The firm, helmed by Commerce Secretary Howard Lutnick’s son, Brandon Lutnick, announced that it would launch its Bitcoin financing business <a href="https://www.cantor.com/cantor-fitzgerald-partners-with-digital-asset-custodians-anchorage-digital-and-copper-co-to-support-bitcoin-financing-business-">earlier this year.</a> Lutnick, who stepped down from the company when <a href="https://blockworks.co/news/trump-appointments-cantor-fitzgerald-sec">tapped as commerce secretary</a>, has been a <a href="https://www.bloomberg.com/news/articles/2025-05-13/tether-s-150-billion-managed-by-unknown-brit-in-the-bahamas-usdt">supporter</a> of Tether for years.&nbsp;



Cantor <a href="https://www.cantor.com/tether-softbank-group-and-jack-mallers-launch-twenty-one-a-bitcoin-native-company-through-a-business-combination-with-cantor-equity-partners/">announced</a> in April that it was teaming up with Tether and SoftBank. The three formed Twenty One Capital through a merger with Cantor Equity Partners, a blank-check vehicle.&nbsp;



“With a visionary leader at the helm and backing from two renowned industry leaders, Twenty One is designed to help investors capture value from bitcoin’s growing global demand and increasing institutional adoption,” Cantor Fitzgerald Chair Brandon Lutnick said at the time.&nbsp;



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Cantor’s Bitcoin financing business announces first transactions

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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The crypto boom isn’t just boosting interest in the US — it’s boosting interest across the world.&nbsp;



Gemini’s <a href="https://www.gemini.com/blog/introducing-the-2025-global-state-of-crypto-report">State of Crypto Report </a>found in a survey that Singapore has the highest ownership rate at 28%, a 2% increase from last year. Meanwhile, the UK jumped to 24% from 18%.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfxv2VQ625o8XlVfySP4OKHmk-iyrHcZNRgwDgcsUeamR9jtVvpDKPsNekgefKAf7xtKU51HHU6H4cz-6rPIrfoiYfcIu6VwzEiEmSWCLKbOrS-8qf48ZuY5o2QISTfxpcjjk2z2g?key=TYYZLjQ4yNoAz4KPY-S4Qw" alt=""/><figcaption class="wp-element-caption">Source: Gemini</figcaption></figure>



It’s obviously hard to deny the impact of the US opening up, and that was cited as a big reason for folks across the world who are crypto-curious but not ready to commit to owning any (yet).&nbsp;



“Nearly a quarter (23%) of non-crypto owners in the US said the launch of Strategic Bitcoin Reserve makes them more confident in the value of cryptocurrency. This sentiment was echoed by respondents in the UK and Singapore, where about one in five (21% and 19%, respectively) non-owners said they were more confident due to President Trump’s Strategic Bitcoin Reserve,” the report said.&nbsp;



But what I found to be the most interesting nugget was actually about memecoins. Before you roll your eyes, hear me out.&nbsp;



France is the leader for memecoin adoption so far this year. A whopping 67% of French crypto investors own memecoins, which is pretty firmly above the 59% of Singapore investors and 58% of Italians that own memecoins.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXchlyh7HK3xPnkFgV7tCb6jejr__VuqA0hAGjkwdyyhcyBf6Cvnj_hz64SIM6ZHqRDz8XzLy1DjZolYVcm95fChsq6tutNrgN_qV7YvuB1Q-UymiM1Sq6OH0v4f2QEqht23-zFn?key=TYYZLjQ4yNoAz4KPY-S4Qw" alt=""/></figure>



The survey also found that memecoins seem to be working as an onramp for investors, with 94% of folks surveyed reporting that they own both memecoins and other crypto.&nbsp;



“In the US, 31% of investors who own both memecoins and traditional cryptocurrencies report that they purchased their memecoins first, followed by 28% in Australia and the UK, 23% in Singapore, 22% in Italy, and 19% in France,” the report said.



But for the more buttoned-up investors, ETFs have helped act as an onramp. In the US specifically, Gemini found that two in five US investors surveyed own crypto ETFs. The products have also seen a jump over in Italy, United Kingdom, Australia and Singapore.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf4zYGergdhuuojVnbmuI7hK0GiUAH_zDP4xrBGHmEUa0bXSXOzgr_J90KP3PIaV4tF_u9h7dDaDZMobr_SSLVyR8IDM4TtB5JDsMPNYTZ6zxM6ecxCtTzhy-fNzebA08mGqEiKWA?key=TYYZLjQ4yNoAz4KPY-S4Qw" alt=""/></figure>



I always caveat these types of reports by cautioning that they’re giving a glimpse into survey results, which means we may not be seeing the full picture for a lot of the momentum we’ve seen.&nbsp;



However, there’s no denying that the results give us an interesting snapshot of the appetite for crypto at this point.&nbsp;



It’s also nice to see how global adoption continues, something we’ve been touching on but haven’t had a chance to delve into. Admittedly, right now it’s pretty easy to get lost in the US narratives as they continue to dominate.&nbsp;



One thing’s for sure, though: Love ‘em or hate ‘em, memecoins have managed to stick, not only as a way to onboard folks but as a way to allow investors to diversify their crypto holdings if they’re feeling, well, adventurous.&nbsp;&nbsp;



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Empire Newsletter

‘Memecoins are an onramp to crypto’: Gemini Report

Jeff Albus

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



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For all its speed and throughput, Solana has always wrestled with the fact that the tech powering its performance was also limiting its potential.



Proof-of-history, <a href="https://blockworks.co/news/solana-proof-of-history">the cryptographic clock</a> that helped set Solana apart from other blockchains, gave the network a unique way to order events before consensus. However, it never solved consensus itself.



Instead, PoH had to be paired with Tower BFT, a Byzantine fault-tolerant mechanism layered atop Solana&#8217;s block stream. It worked, but it was complex, hard to optimize and increasingly outpaced by the ambitions of the network and its builders.



Last week, Solana announced a <a href="https://drive.google.com/file/d/1y_7ddr8oNOknTQYHzXeeMD2ProQ0WjMs/view">proposal</a> to sunset both proof-of-history and Tower BFT in favor of something new: Alpenglow.



Alpenglow is a structural reimagining of how time, consensus and data flow across the network. <a href="https://www.anza.xyz/blog/alpenglow-a-new-consensus-for-solana">Developed by Anza</a>, a core engineering team spun out from Solana Labs, Alpenglow completely outmodes the innovations inherent to proof-of-history.



It’s introducing a streamlined consensus framework that collapses sequencing, voting and block finality into a single integrated design.



The big flashy headline here is that we&#8217;re looking at global finality in under 150 milliseconds — though your mileage may vary, based on network conditions, validator participation, etc. etc.



The problem wasn&#8217;t that PoH was flawed, so much as that it had to be paired with layers of coordination to finalize blocks. PoH sequenced events with a verifiable delay function, producing a ledger of time that validators could use to agree on order.



That sequence still needed to be voted on, though, and still had to be finalized and confirmed. And in a world where Solana was already pushing 400ms block times, finality (not production speed) became the network&#8217;s big bad bottleneck.



Tower BFT took 12.8-ish seconds to finalize a block. To mask that lag, Solana introduced “optimistic confirmations,” giving dapps a probabilistic guarantee of finality. But it wasn&#8217;t enough. Finality really, really needs to match production.&nbsp;



To that end, Alpenglow <a href="https://drive.google.com/file/d/1y_7ddr8oNOknTQYHzXeeMD2ProQ0WjMs/view">introduces</a> two core components: Votor and Rotor.



Votor is the new finality engine, capable of reaching consensus in one or two voting rounds. If 80% of the stake is online, finality can be achieved in a single round. If only 60% is responsive, it falls back to a second. Both paths run concurrently, and whichever completes first wins.&nbsp;



Rotor, meanwhile, reworks how data spreads through the network. Built as a refinement of Solana&#8217;s Turbine protocol, Rotor replaces Turbine&#8217;s layered tree with a single flat relay structure. It leverages erasure coding and deterministic relay assignment to broadcast data with minimal hops and maximal bandwidth.&nbsp;



It&#8217;s so fast that the speed of light — the literal geographic delay between nodes — becomes the primary limit. Which, if you&#8217;re anything like me, had you &#8220;<a href="https://youtu.be/BDuZqYeNiOA?feature=shared&amp;t=52">1.21 JIGAWATTS?!</a>&#8220;-ing and &#8220;GREAT SCOTT!&#8221;-ing off the furniture the first time you read it.



The result is a protocol where finality is about as instantaneous as anyone could have dreamed. In simulated testnets with Zurich as a reference node, 65% of Solana&#8217;s stake reached notarization in under 50ms. Full finality landed at 150ms median, sometimes as low as 100ms.



This is not a latency illusion. There&#8217;s no probabilistic middle ground. This is true, verifiable cryptographic consensus, faster than most Web2 APIs.



And even under adverse conditions, Alpenglow remains performant. Its &#8220;20+20&#8221; resilience model can tolerate 20% adversarial stake and 20% non-responsive stake while still achieving consensus.



For builders, the implications are immense. Games, payment apps and real-time protocols no longer have to hedge against finality lag. There&#8217;s no second-layer cheat.&nbsp;



For developers building reputation, automation or sensitive coordination layers on Solana, Alpenglow unlocks a pathway to transactions that are deterministic, final and global in less than the blink of an eye.



There is much to get philosophical about here. Alpenglow will give Solana something rare in blockchains: a sense of present tense. No waiting, no guessing. Just the truth, right now.



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blockchain

Solana eyes Alpenglow for next-gen consensus layer

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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Eric Adams is pulling a Donald Trump. Or he’s trying to, at least. That was my takeaway from the inaugural NYC Crypto Summit at Gracie Mansion last week.&nbsp;



Adams — New York’s controversial, no-longer-federally-indicted mayor — hasn’t talked about crypto much since taking office in 2022.



Adams promised on the campaign trail to take his first three paychecks in bitcoin. When the city’s Treasury department <a href="https://www.nyc.gov/office-of-the-mayor/news/041-22/mayor-adams-receive-first-paycheck-cryptocurrency">couldn’t make this happen</a>, he opted to buy BTC and ETH himself on payday.



For the last several years, the War on Rats has been the Adams administration’s main focus. But last month, city officials announced the Crypto Summit — a press conference followed by private roundtable discussions with industry executives and city officials.&nbsp;



The purpose, Adams said, was to come up with new ways the city can leverage crypto and blockchain technology to create jobs, improve operations and expand access to financial services. The event was complete with speeches from Tether co-founder Brock Pierce and Bitcoin Center creator Nick Spanos. There was also an open bar starting at 2 pm.&nbsp;



Spanos (and most of the people at the roundtable, I’m told) is primarily interested in <a href="https://blockworks.co/news/comptroller-audits-nydfs-bitlicense">abolishing the BitLicense</a>, the Department of Financial Services-issued business license digital asset companies need to operate in the state. The fact that the mayor of New York City does not have the authority to nix the BitLicense was not mentioned.&nbsp;



After a couple hours of roundtable discussion, the party moved outside. Hundreds of guests donning attire falling somewhere between “boardroom and ballroom,” per an attendee I spoke with, gathered under a tent in Gracie Mansion’s backyard for a post-summit reception. Several other attendees told me they only came to get a look inside the famous house.&nbsp;



It doesn’t take an experienced political strategist to gather that Adams is probably looking for money. His first words to the crowd on Tuesday were literally “I smell money.”&nbsp;



He’s running for re-election — this time as an independent — and his competition already has amassed <a href="https://www.nytimes.com/interactive/2025/05/06/nyregion/nyc-mayor-funding-neighborhood-donations.html">big budgets</a>. We all saw what crypto industry donations did for Trump’s campaign. I imagine Adams has been taking notes.&nbsp;



That doesn’t necessarily mean we won’t or can’t see New York crypto policy evolve, and who knows what the new advisory council will come up with. But for now, I’m not holding my breath.



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BitLicense

Eric Adams crypto summit features all-day open bar and BitLicense criticism

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



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Animoca Brands co-founder and Chair Yat Siu has been focused on blockchain gaming investment and development since as early as 2018. That year was arguably the year crypto gaming started — and things have certainly changed a lot since then.



Sentiment around crypto gaming isn’t what it was just a few years ago. From crypto gaming influencers to <a href="https://blockworks.co/news/crypto-games-shouldnt-monetize-early-nfts">VCs</a>, there’s the general feeling that things are still down right now. Crypto game studios have been shuttering, with at least three announcing that they’re closing their doors in the past month alone (Nyan Heroes, <a href="https://blockworks.co/news/ember-sword-shuts-down">Ember Sword</a>, Blast Royale). A lack of continued funding has been repeatedly cited as the main reason studios are shutting down.



<h2 class="wp-block-heading">Changing the narrative</h2>



Siu told me in an interview that blockchain gaming’s perceived value will only rise if “the sentiment in gaming broadly, not including Web3, [increases] as well.”&nbsp;



“Right now, we’re in the bitcoin meta,” Siu said. “In the short term, it has to be macro gaming triggers, as in, what are the positive narratives around gaming that could sort of lift the market?”



Crypto gaming has a different demographic than non-crypto, regular gaming. A portion of its community are there purely for the financial aspects of the game. There are players, there are retail investors, and there are extractors, and there’s sometimes people who might fall into multiple categories at the same time.&nbsp;



“You have a speculative quality that goes into the project, an open market that creates a new type of energy and engagement,” Siu said of crypto games. “The portion of people that actually buy your token [&#8230;] are not exactly the same people that are playing the game.”&nbsp;



If crypto game studios target the right type of user, they’ll see a better ROI, Siu explained.



Financial speculation in crypto gaming isn’t going away anytime soon. In fact, it’s part of what draws many to it.&nbsp;



“That’s something that I think people really didn’t understand — or in some cases, who refused to understand […] that they don’t like this idea, and they treat the volatility of the speculation more as a bug than a feature,” Siu said.



<h2 class="wp-block-heading">GTA’s potential</h2>



The Animoca co-founder also suggested that players adding crypto tokens to their own Grand Theft Auto 6 roleplay servers someday isn’t out of the realm of possibility — and GTA studio Take-Two Interactive may not quash those this time around (GTA 6 is expected in 2026, and GTA has never had crypto elements).&nbsp;



GTA 6 is a highly anticipated game. Rumors have swirled in recent years about crypto being added to the game officially, but no evidence of any blockchain elements has ever surfaced. That’s led me to conclude those are rumors, and nothing more.&nbsp;



Regardless, GTA 6 will be the latest in a mega-franchise that’s been around since 1997. GTA 5 has made billions of dollars, and GTA 6’s latest trailer got <a href="https://venturebeat.com/games/take-two-reports-solid-earnings-and-explains-gta-vi-delay/">nearly half a billion</a> views in less than a day. Analysts predict GTA 6 will <a href="https://www.ft.com/content/1413cdb1-aee9-422f-8b78-15aa0bf40dca">make $3.2 billion</a> in revenue in its first year.



Could GTA 6 be the game that gets investors — and players — more excited about gaming again, causing the rising tide to lift all boats? It’s possible.



“Take-Two does have a position that you can’t run crypto on GTA 5 roleplay service,” Siu said. “That rule came up when the SEC was playing whack-a-mole. So it’s a timing question as well, and I think obviously these companies are gonna be conservative.”



Note: This interview has been condensed for clarity.



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Animoca Brands

Animoca Brands’ Yat Siu shares how crypto gaming could make a comeback

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



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Second chances are increasingly rare in today’s world. But they do happen.



On Sunday evening, it was one year since then-Presidential candidate Trump pledged to commute the double-life sentence of Silk Road founder Ross Ulbricht, live on stage at the Libertarian National Convention at the Washington Hilton.&nbsp;



Eight months later, on his second day in office, Trump one-upped himself by granting Ulbricht a full and unconditional pardon, releasing him from prison after serving 12 years.&nbsp;



#FreeRoss worked. Now, Ulbricht is set to publicly address the Bitcoin world for the first time since his release this Friday, at Bitcoin 2025 in Las Vegas.



<h2 class="wp-block-heading">Living History</h2>



Ross has been free for four months. Throughout that time he’s kept up the habit of documenting his experiences, which he shares on X.



Reading over his tweets gives an insightful look into the effects of incarceration. Ross tweeted in March: “For over a decade, I didn&#8217;t have water fixtures that I could turn off and on. In prison, everything is on buttons with timers.”



“After nearly two months in freedom, I still find myself staring at faucets and shower heads, waiting for them to turn off! So weird.”



<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">First birthday in freedom today. Beautiful day grilling by the pool. I&#39;ve been given a new life. It&#39;s like being born again.&mdash; Ross Ulbricht (@RealRossU) <a href="https://twitter.com/RealRossU/status/1905404620878590447?ref_src=twsrc%5Etfw">March 27, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Ross has also shared a string of “firsts” since his release: First birthday and Mother’s Day. First time touching grass with his bare feet. First <a href="https://www.instagram.com/p/DJCn4vUzasa/">cheeseburger</a>. And soon, the first Bitcoin conference.



“My big speech at Bitcoin 2025 is just a week away, but I am feeling surprisingly serene about it. I&#8217;m just looking forward to connecting with so many of you at once. It feels like I am coming home,” he tweeted last week.



Ross is also preparing for a period of travel, which “means downsizing and turning the page.”



He initially sought to auction off some of his personal belongings on eBay, but Ross <a href="https://x.com/RealRossU/status/1904648263338467786">struggled</a> to verify his identity in order to actually sell anything. He’s since turned to Scarce City, the Bitcoin-powered collectibles marketplace, where he’s listed 13 artifacts from his life before and after his stint behind bars.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1512" height="919" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=1024&amp;h=1024" alt="" class="wp-image-102992" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=1512 1512w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=423 423w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=429 429w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=360 360w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=80 80w" sizes="auto, (max-width: 1512px) 100vw, 1512px" /><figcaption class="wp-element-caption">Check out the full Bitcoin 2025 Ross Ulbricht collection on <a href="https://scarce.city/collections/b25-ross-ulbricht-collection">scarce.city</a></figcaption></figure>



There’s his prison sneakers, sweatsuit and t-shirt, (the latter two come with a laundry bag), and three of his oil paintings created in prison, each one a collaboration with another inmate, Omega, who taught him techniques. Ross’s prison notebook is there, his prison locker lock and three ID cards, two featuring him with a full beard.&nbsp;



Capping the auction off are a trio of items with clear sentimental value for Ulbricht: a down sleeping bag, djembe drum and backpack, including a pair of Vibram FiveFingers shoes. Each item was used leading up to Ulbricht’s 2013 arrest in San Francisco.



The auctions run for another three days and have so far attracted bids totaling 0.2875 BTC ($31,500). Something tells me those figures will rise heading into Friday.



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Ulbricht auction sees $31K BTC ahead of first appearance since release

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



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M&amp;A season is in full swing.&nbsp;



Sheraz Ahmed, managing partner at STORM Partners, told me that the acquisitions — and potential futures buys — “signal a shift.”



“We’re moving from a fragmented ecosystem to one where a few dominant players are absorbing the best tech. That brings legitimacy, sure, but it also raises questions about decentralization,” he added.



One big player looking to make a few more acquisitions is Coinbase.&nbsp;



“We are looking at acquisition opportunities, doesn’t mean we swing at every pitch,” CEO Brian Armstrong told Bloomberg earlier this month. He was careful to add that it doesn’t mean that they’re going to be interested in every opportunity, however.



One of the biggest potential targets is obviously <a href="https://blockworks.co/tag/circle">Circle</a>, especially now that there have been multiple reports that firms including <a href="https://blockworks.co/tag/ripple">Ripple</a> are interested in the stablecoin issuer. Coinbase and Circle obviously have a pretty close working relationship, so it would make sense that if Circle were to sell itself, Coinbase might be one of the top contenders to buy it.&nbsp;



“I definitely believe that Coinbase will go after Circle,” Bitwise’s Ryan Rasmussen told me because of the “attractive opportunity” that Circle presents. Coinbase has roughly $9 billion in cash, he noted, which means that the firm is ready to deploy capital.



“They already clearly leaned into USDC as the go-to stablecoin across the <a href="https://blockworks.co/tag/base">Base</a> ecosystem, and really across Coinbase…You get yield on USDC just for holding it in your account. So I think from an issuer perspective, it makes a lot of sense.”



A bid for the stablecoin issuer goes towards a larger goal that both he and Bitwise think Coinbase has: Becoming the Amazon of crypto.&nbsp;



“When you look at it through that lens, it opens up a wide range of ideas…stablecoin issuers like Circle [are] certainly an obvious target for them, and we&#8217;ll think they&#8217;ll be pursuing that. But I think their vision of growing beyond crypto financial services opens up a whole new world, like developer tooling, companies like Alchemy, for instance, that could help grow their Coinbase Cloud or apps being built on Base,” Rasmussen said.&nbsp;



He could also see Coinbase mulling a bid for RWA platform <a href="https://blockworks.co/tag/securitize">Securitize</a> and making an AML/KYC play with <a href="https://blockworks.co/tag/chainalysis">Chainalysis</a>. But if Coinbase wants to zero in on the onchain economy, then he could see Alchemy becoming a target for them.&nbsp;



“If you look at where Coinbase is heading, it’s pretty clear they’re building a vertically integrated crypto empire. They’re not just interested in trading volume — they want infrastructure, compliance, and reach. I’d expect them to go after targets that give them regulatory licenses, especially in <a href="https://blockworks.co/tag/mica">MiCA</a>-aligned jurisdictions, or firms that can plug into Base and deepen their layer-2 or DePIN exposure,” Ahmed said.&nbsp;



“Custody, analytics, and wallet infrastructure are all in scope. It’s less about acquiring hype, more about securing long-term dominance.”



However, Rasmussen’s skeptical that Coinbase would consider a different stablecoin issuer if Circle’s off the table. Instead, he’d expect them to go after a firm in the payment and service provider segment of stablecoins.&nbsp;



“If they can&#8217;t get Circle as an issuer, I do think it makes sense to go after the next layer, which is that payment and service provider space as it relates to Coinbase or to stablecoins. And they have things like Coinbase commerce, for instance, which stablecoins integrate into and make it easy for consumers and businesses to interact with each other using stablecoins,” Rasmussen said.



Once Coinbase figures out the stablecoin category, Rasmussen expects the firm to switch over to focusing on tokenization and looking for acquisition targets there. As I mentioned above, one of the most attractive targets in that specific sector is Securitize.&nbsp;



“We’ve seen, with their acquisition of Deribit, they’re prepared to go after the sector leaders,” he said. “It’s the most attractive candidate to immediately add value.”



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Circle

Coinbase could become the ‘Amazon of crypto’

This is a segment from The Breakdown newsletter. To read full 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 human mind is a story processor, not a logic processor.”&nbsp;



— Jonathan Haidt
</blockquote>



Is the bond market sentient?



You might think so after reading about how “bond vigilantes” pushed the 30-year Treasury yield above 5% this week.



It was a dramatic move and our impulse, as always, was to explain it by anthropomorphizing the market — projecting motives, desires and fears onto an amalgamation of prices.&nbsp;



CNN, for example, ran a <a href="https://www.cnn.com/2025/05/22/investing/bond-market-selloff">headline</a> promising to explain “Why the bond market is so worried about the ‘Big, Beautiful Bill.’”



The proximate cause appeared to be passage of a budget bill whose tax cuts, if enacted and extended for a full decade (as they usually are), would likely add at least $5.3 trillion to the national debt.



But the bond market is not a person, so it probably can’t “worry” about tax cuts or budget deficits.



Even more carefully worded reporting like Reuters’ assessment that “investors worried about the country&#8217;s increasing debt burden” might be overstated — because correlation and causation in markets is notoriously difficult to untangle.



At Jim Simons’ quantitative hedge fund, Renaissance Technologies, a data entry error once caused a trading algorithm to buy 5x as many wheat futures as it intended, making prices shoot artificially higher.



The next day, the Wall Street Journal reported that analysts attributed the move to “the market” anticipating a poor upcoming harvest.



It’s not an unusual occurrence: Every headline about what’s happening in markets is simply a guess at what may have caused it.



Simons didn’t bother to try.



“Our entire premise,” he explained, “was that human actors would act the same way humans did in the past.”



It worked out pretty well for him: Over 30 years, Simons’ flagship Medallion Fund returned 66% per year (before fees).



66%! Per year!



Instructively, Simons achieved those astonishing returns by letting his algorithms make all the decisions — algorithms that were able to spot patterns of human behavior in markets without reimagining the market as a person.&nbsp;



I take that as a reminder that the bond market cannot coordinate to punish fiscal irresponsibility or enact monetary justice, as the term “vigilante” implies.



Instead, its movements simply reflect the expectations of countless investors who are constantly making all kinds of decisions for all kinds of different reasons.



Still, metaphors like “bond vigilantes” can be a helpful shorthand when we’re trying to discern patterns in the noise — which, being humans, we can’t help doing.



The collective decision making of all those investors pushed 30-year yields to 5.15%, presumably on tax-cut fears — and then back down to 5.03%, presumably on tariff fears.



I guess.



Let’s check the charts to see what other patterns we can make out.



Inflation is not the story:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcOFyqZCn5pdRCSCnAniZ380kqz2NSevk3QRDOoqYrxV_ZuvgpWe3MYyjZNwR-BNveHy1qCw71_so_xccVOEsSzJ1XvxIgCbDjECs6FhwGNI9NMgShTXyt1pCqqkv6FGI-Du-vS?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



The Cleveland Fed’s Nowcast model sees US CPI rising 0.12% in May. That works out to just 1.44% annualized, so I think we can rule out “inflation worries” as the reason bond yields are up.&nbsp;



Bonds may be decoupling from GDP:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcPSSHh6QxBA1lpcHxQxGxF9obT76J36J8LPVeOtMBjIx5EE59WbWa8RkrCCq_QldNyl4GhEVAJMxKnFtd9Ae7tbf92dxsVYnE8gSGD85TsEWBQ63xd3jJbpO8q8B9SZTR8pxVDgA?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



Juliette Declercq highlights the unusual divergence between Treasury yields and the ISM’s survey of manufacturing activity — higher yields and lower GDP is, um, not what we want.&nbsp;



The reverse Laffer Curve:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdKeCuZ1mjUVnnxnslOhDPLnBekHRvByYUbyAtR6wHZ9YeAhl0r00im1Qhe4fGhWhewUYhuifW0F6rIpWaaOjsYyiwYbs1dX4c8AapEb54vmHsE_1T3mADqRId7KF7r5u606utrew?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



On the campaign trail, President Trump said that his proposed tax cuts would “be revenue-neutral when you add growth because we’re going to have magnificent growth.”&nbsp;



But history shows that rising deficit spending is correlated to slower GDP growth. &#8220;Stimulus does not stimulate,&#8221; <a href="https://x.com/RA_Insights">Research Affiliates</a> concludes.



A listicle for the US economy:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcyLVBE7514HAg2qIU-rCEiGQkuL2NzPNBqHAfDrZ4lLpeFRJumKXdtTqfwYr4feJCH1JvyB4TaWlKYolHIA960R5BSpkV3dJn9ZLHmKQ4-8sdwqH1D8muOrescNGT0U9LIMcYs?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



The Atlanta Fed has Q2 growth tracking at 2.4%, but Torsten Slok lists 10 reasons why things are likely to get worse thereafter.&nbsp;



Annoyingly, they are all self-imposed. Analysts at Deutsche Bank have an even longer list — they <a href="https://fortune.com/2025/05/20/us-economy-experiencing-death-by-thousand-cuts-deutsche-bank/">warn</a> it will be “death by a thousand cuts” for the US economy.



Europe’s self-imposed tariffs:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdKC-_VrQqu7wGbcWZW2_oeHcz3Y0FxOy4jXawLurjAXzdJqA-YKephwd9E0VKxF1W9t0LdJvoCrKibf8LhOu4Y8wcnlrZgvIJnDkLE0WlRARwVVB0A-p1oIxgvIjkN-fVEDPyAnw?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



President Trump threatened the EU with a 50% tariff on goods this morning, which is disappointing after things had seemed to have settled down. But the EU imposes similar tariffs on itself — Luis Garicano <a href="https://www.siliconcontinent.com/p/the-myth-of-the-single-market">estimates</a> that the internal barriers to trade (country-specific rules and regulations, mostly) between EU countries are equivalent to an internal tariff of 45% on goods and 110% on services. Ouch.



The EU stock market does not seem worried, however:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcFo3ADtmnYUCQVh36xhc2frCdQKut666K0mf8_rkMZVbzq3lNQ59roW5eaGOEBRqUCIfPcAZWKVWA12J35EjtEB0C59WvA7Vc568G0c-kPYlkOrftkwXFo3DXcFBE0v7ucIAuhrg?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



Bitcoin (in purple above) is up 17% over the past month, but it still hasn’t quite caught up with European equities — they’re up 21% on the year.



The vigilantes visit Japan:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeDElx0pSvNXKB7FHdTFCUz8iK-D0b4w7gOKXY_2MC7Pu1IhN0Dfyl7NwX9zmWYi9XihdSZAVM6K4FUz8CM7fTte4m1w6raK05NP9-PSms1HPmrGBnZzYGa4f3DriLU5WKV_Nx_EA?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



The bond vigilantes have always been conspicuously absent in Japan despite the country’s world’s leading debt-to-GDP ratio of 250%.&nbsp;



But they may finally have arrived. This week, yields on 30-year Japanese government bonds rose above 3% for the first time on record (which dates back to only 1999 when the 30-year tenor was first issued).&nbsp;



Fun Japan fact: The four longest-operating companies in the world are all in Japan, led by the construction company <a href="https://en.wikipedia.org/wiki/Kong%C5%8D_Gumi">Kongō Gumi</a>, which was founded in the year 578! Not fun Japan fact: This morning&#8217;s inflation data showed the price of rice is up <a href="https://www.rte.ie/news/business/2025/0523/1514511-why-rice-prices-are-soaring-in-japan/">98% year over year</a>.&nbsp;



Foreigners are a little worried about the US:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfes4tJkWzRFyfeJBvjxHmrjJ1Zz6pggtH-THDys5eLZLn9einb2B4MepUQegOVsf0euJSnNUd0OPas_hLf4bNPjq5gYWdIYR2mKIGKgAKgwZcL_LMYgb3_C2g3aXha5Pz0t4psQw?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



Torsten Slok shows that foreign participation in 30-year Treasury auctions is at a multi-year low. But the y-axis on his chart starts at 57.5% so I guess they’re not that worried.



For when markets are closed:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcbxE7X2MlVMA4kG0WZTB-cOSaVdlW53dpwbFB4sELOUmTr0pHF8MsYWcI3i6xkhmUqipxHYAx6syQqzAB6JJXAZOX4lbaj8a6vCK00Z_JIBETzVPzoFL_b_WT--fTP3-pln5dpvQ?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



Americans subscribe to nearly five streaming services per household now — because we love stories, of course.



Have a great weekend, storied readers.



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I hosted Permissionless Labs CEO David Rhodus <a href="https://www.youtube.com/watch?v=Ke20r3gJSXE">on the Lightspeed podcast</a> this week, and he gave me an overview of Pipe Network, the company’s forthcoming content delivery network (CDN) that’s being built on Solana.&nbsp;



His pitch made some intuitive sense: CDNs — which temporarily store online content on servers around the world to get closer to end-users — haven’t seen much innovation in 25 years. Pipe could let content be stored even closer to users, which would make their content load faster.&nbsp;



But outside of the product itself, what made an impression on me was the disciplined approach Rhodus described for his DePIN project.&nbsp;



Rhodus said Pipe will be “ruthless” about tokenomics.&nbsp;



“We’re emitting tokens when useful work is done,” Rhodus said. “While we want a lot of nodes, we also want to coordinate them into areas that customers will find useful.” This could look like focusing on business deals where Pipe supplements existing CDN infrastructure in low-performing areas and presumably uses its token to incentivize node operation in those areas.



DePIN is hailed as one of Solana’s most useful business sectors, but the bottom line has proven tricky for these companies so far.&nbsp;



Businesses like Helium and Hivemapper promise to wrest power from legacy infrastructure providers and give control to everyday people, but noble as that goal may be, the economics don&#8217;t always make a ton of sense.&nbsp;



A Messari <a href="https://messari.io/report/state-of-depin-2024">report</a> from the end of 2024 found that 350 DePIN tokens had a collective $50 billion in market capitalization. However, this class of startups has struggled to find mass market adoption and justify that collective valuation.&nbsp;



That’s partly why Rhodus advised potential founders to “go as long as possible” before adding crypto elements to a business.



“Don&#8217;t focus on crypto at all until you&#8217;ve got users and revenue,” Rhodus said.



The days of simply plugging in some kind of mining device and getting lucrative token rewards regardless of a node’s value to the larger network may need to end if the DePIN sector is going to mature past hype and create sustainable businesses.



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