Cetus Protocol

Byron Gilliam

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



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&#8220;There are three creativities: creativity in technology, in product planning, and in marketing. To have any one of these without the others is self-defeating in business.&#8221;



— Akio Morita
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The TR-55 transistor radio, the first product sold under the Sony brand, was a technical success — released in 1955, it marked a leap in miniaturization, solid-state design and made-in-Japan innovation.



It wasn’t much of a seller, however, and Sony’s co-founder, Akio Morita, knew why. It needed a better marketing pitch.&nbsp;



So for its next product, Morita demanded that Sony’s engineers develop a gadget that he was sure would get people’s attention: a “pocketable” transistor radio.



By 1957, Sony had developed the world’s smallest radio, the TR-63 — a miracle of miniaturized components and clever engineering.



But it was a little too big to fit in a shirt pocket, which was Morita’s goal: “We liked the idea of a salesman being able to demonstrate how simple it would be to drop it into a shirt pocket,” he explained in his autobiography, <a href="https://www.amazon.com/Made-Japan-Akio-Morita/dp/0002177609/ref=sr_1_1?crid=4ZF0Q2S3B4TG&amp;dib=eyJ2IjoiMSJ9.0zcUUQcaQpbtKX_x1xOCuJKoRNc2MamfeyKAlF0zly4wWkHCkxmSqnMH50M34tzQ.bRsiaT1afnYAOO4qYvQLY3sWKopRwRbjGGTTosCLLJ8&amp;dib_tag=se&amp;keywords=made+in+japan+akia+morita&amp;qid=1746404065&amp;sprefix=made+in+japan+akia+morita%2Caps%2C122&amp;sr=8-1">Made in Japan</a>.&nbsp;



Instead of sending the engineers back to the drawing board, however, Morita solved his design problem with a marketing trick: “We had some shirts made for our salesmen with slightly larger than normal pockets, just big enough to slip the radio into.”



It worked better than even Morita could have imagined.&nbsp;



Not only did the TR-63 become an international hit that made Sony synonymous with innovation and high-quality products — it also kickstarted a revolution in global consumer electronics that would change the world’s perception of Japan.



Morita would go on to become — in the assessment of John Nathan, author of <a href="https://www.amazon.com/Sony-Private-Life-John-Nathan/dp/0618126945/ref=asc_df_0618126945?mcid=72054532ed0a3c389805f0c0816b3e3d&amp;tag=hyprod-20&amp;linkCode=df0&amp;hvadid=693310352361&amp;hvpos=&amp;hvnetw=g&amp;hvrand=17722954159000540309&amp;hvpone=&amp;hvptwo=&amp;hvqmt=&amp;hvdev=c&amp;hvdvcmdl=&amp;hvlocint=&amp;hvlocphy=9009671&amp;hvtargid=pla-568202304859&amp;psc=1">Sony: A Private Life</a> — “probably the greatest marketer of the 20th century, right up there with Steve Jobs.”



If that sounds like hyperbole, consider that Sony — a Japanese company — was rated <a href="https://www.yahoo.com/news/2006-07-13-sony-is-still-the-1-brand-seven-years-in-a-row.html">the number one brand</a> in America from 1999 to 2006.



It was such a significant accomplishment that when Morita died in 1999 at the age of 78, he was hailed as “the engine that pulled the Japanese economy.”



He wasn&#8217;t born a marketer, however — he started out as a kid who liked to tinker with electronics. He went on to become a physicist working for the Navy, and then co-founded Sony as an engineer.&nbsp;



Neither he nor his co-founder Masaru Ibuka had any notion of “merchandising or salesmanship” when they started Sony.&nbsp;



“It never occurred to Ibuka or me that there was any need for this,” Morita explained in his autobiography. “Ibuka believed strongly that all we had to do was make good products and the orders would come. So did I. We both had a lesson to learn.”



Both founders assumed that “in making a unique product, we would surely make a fortune.”



But when they made their first unique product — a ground-breaking, magnetic-tape recording device — they didn’t even make their investment back: “Everybody liked it, but nobody wanted to buy it.”



That’s when Morita learned the value of marketing: “Having unique technology and being able to make unique products are not enough to keep a business going,” he realized. “You have to sell the products” too.&nbsp;



He also realized he’d have to do the selling himself: “I was struck with the realization that I was going to have to be the merchandiser of our small company.”



This may be a universal truth of business: Every product, no matter how good, needs to be sold.



Blockchains, included.



<h2 class="wp-block-heading">Aim high</h2>



In his latest blog post, <a href="https://vitalik.eth.limo/general/2025/05/03/simplel1.html">Simplifying the L1</a>, Vitalik explains what Ethereum is aiming for — “to be the world ledger: the platform that stores civilization&#8217;s assets and records, the base layer for finance, governance, high-value data authentication, and more” — and how to achieve it: “This requires two things: scalability and resilience.”



Well, three things, probably: Morita would tell him that simplifying Ethereum requires marketing, too.



Ethereum’s decentralized and unofficial messaging has done a poor job of explaining what the world’s first smart-contract blockchain is, why it matters, or why anyone might want to use it.



Fortunately, Vitalik may have inadvertently fixed Ethereum’s messaging, too. “World ledger” is an excellent elevator pitch!



Using Bitcoin as a model, Vitalik’s new priority for Ethereum is technical simplicity: “One of the best things about Bitcoin is how beautifully simple the protocol is.”



He’s referring to Bitcoin’s code, which is simple enough that “even a smart high school student is capable of fully wrapping their head around and understanding” it.



(Note: I’ve looked at the code myself and, well…remind me never to match wits with a smart high school student.)



But Vitalik could equally have been referring to Bitcoin’s pitch to investors, which is beautifully simple, too: Everyone can immediately comprehend the appeal of “digital gold.”



“World ledger” may not be quite as intuitive as that, but it’s a major improvement on Ethereum’s previous attempts at branding: “World computer,” “ultra-sound money,” and “the app store of crypto” all required a good deal of explaining.&nbsp;&nbsp;



The explanation of “world ledger,” by contrast, seems far simpler: a decentralized platform “that stores civilization&#8217;s assets and records.”



Being simpler should give it a better chance to stick.



Simplifying any aspect of Ethereum will not be easy, however, as Vitalik warns: “Explicitly valuing simplicity requires some cultural change.”



But that change may already be underway — there’s a growing consensus that Ethereum’s development should be “<a href="https://x.com/sassal0x/status/1917764357641118184">reprioritized</a>” in favor of the base layer (rather than deliberately pushing transactions to layer-2 blockchains).



Just as importantly, there’s a growing recognition that Ethereum’s marketing needs to be reprioritized, too.



For example, Tomasz Stanczak, the newly appointed co-executive director of the Ethereum Foundation, has acknowledged that marketing is part of what’s needed to rebuild Ethereum’s “social layer.”



“On the marketing side, I think we don’t want to create a brand name or advertising style of marketing,” Stanczak told Bankless on a <a href="https://youtu.be/uEzt2ABF80g?si=MmSWYODCBAs5LXBh">podcast</a> this morning, “but better communication and clarity is also part of marketing.”&nbsp;



Better communication and clarity would fit Morita’s definition of marketing, too — marketing, he explained, is about showing people “the real value of what you are selling.”&nbsp;



The good news for Ethereum is that the value it’s selling can be a little aspirational — like Sony’s pocketable radio that didn’t quite fit into a pocket.



Similarly, Ethereum isn’t quite the world’s ledger just yet — but that sounds like a good thing to aspire to.



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The Breakdown Newsletter

Has Ethereum finally found its elevator pitch?

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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In mid-April, leaders in the Solana world took to X to post the same cryptic hash. Strings like this can conceal a message’s contents from the public, while still allowing anyone with the original data to verify its authenticity.



Some <a href="https://x.com/0x_Osprey/status/1912915445830848625">speculated</a> the hash was a method to coordinate Solana validators to patch a vulnerability in Solana’s code, and they turned out to be right: Shortcomings in the protocol’s confidential tokens product could have allowed a sophisticated attacker to mint unlimited new tokens, the Solana Foundation disclosed on Friday. The upgrade follows a similar vulnerability and patch situation that <a href="https://blockworks.co/news/lightspeed-newsletter-solana-outage-patch">went down in August</a>.



Solana’s token-2022 standard includes a feature named “confidential transfers” that allows addresses to transact on Solana without revealing the transfer amount. Confidential transfers are verified with a zero-knowledge proof. The bug was basically caused by some missing math that could have allowed someone who knew what they were doing to have invalid proofs be accepted by Solana’s zk program.



The bug being identified and then privately patched with the help of Solana validators provided some good engagement bait for Ethereum fans, but to be fair, I’m not sure what better option Solana had here. No user funds were lost, which is arguably the most crucial factor.



“Criticism of Solana&#8217;s zero-day bug fix makes me realize people have no idea how it would work on Ethereum,” Equilibrium investment partner Mika Honkasalo wrote on X. “TLDR; mostly the same process except feeling ‘holier’ to the ETH community.”



One person involved in Solana’s efforts to patch the bug said the process of privately patching a bug before publicly disclosing the vulnerability later on follows “established security protocols seen in other major blockchains and software projects.”



It’s also not like Solana validators are sharing war plans in a Signal chat. The Solana Foundation, Anza, and Jito contact validators through a patchwork of platforms and then share a hash as a kind of two-factor authentication to prove their outreach is legit, according to multiple people I spoke to involved with the response.&nbsp;



If you believe that Solana is the financial rails of the future, then that’s actually a pretty messy way to coordinate emergency software updates. Solana’s approach to this kind of thing is, arguably at least, a bit too decentralized.



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Cybersecurity

Solana says zero-knowledge proofs were root of mid-April bug

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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Roads that people drive fast on sometimes get speed bumps. I live in Queens, so I’d know.&nbsp;



While pro-crypto developments have <a href="https://blockworks.co/news/trump-first-100-days-crypto-policy">quickly proliferated</a> this year, we’ve seen a couple legislative slowdowns in recent days.&nbsp;



Nine Democratic senators — Digital Assets Subcommittee ranking member Ruben Gallego among them — noted they would not vote for the current version of the Guiding and Establishing National Innovation for US Stablecoins <a href="https://blockworks.co/news/senate-advances-stablecoin-bill">(GENIUS) Act</a>.&nbsp;



If it gets to the floor, that is.



Desired additions include “stronger provisions on anti-money laundering, foreign issuers, national security, preserving the safety and soundness of our financial system and accountability for those who don’t meet the act’s requirements,” they wrote in a Saturday statement.



This development made waves in the crypto community, especially considering the Senate Banking Committee advanced the bipartisan bill out of committee in March with an 18-6 vote that included five Democrats.



Gallego addressed the decision in a weekend X post:



<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">This isn’t some reversal out of nowhere by Dems. The fact of the matter is, Dems, including me and my team, were trying to negotiate with the Republicans for weeks. The bill that was introduced for floor consideration back-pedaled on a lot of the progress we made and did not… <a href="https://t.co/hq5HxtEmcx">https://t.co/hq5HxtEmcx</a>&mdash; Senator Ruben Gallego (@SenRubenGallego) <a href="https://twitter.com/SenRubenGallego/status/1919107948317454394?ref_src=twsrc%5Etfw">May 4, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Galaxy Digital research head Alex Thorn acknowledged that an updated draft of the bill was released on May 1. He argues in a <a href="https://x.com/intangiblecoins/status/1919387739444654508">note</a>, however, that nearly all the changes made in recent weeks “make the bill stricter on stablecoin issuers when compared to the version the Senate Banking Committee voted on.”



Essentially endorsing the GENIUS Act, Thorn’s note explains that the crypto industry “both gets a viable pathway while also being reigned in, it protects the financial system, and it helps America succeed geopolitically and in the shifting global economy.”



Amanda Fischer, Better Markets policy director and an ex-SEC chief of staff, sees the situation a bit differently:



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<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Since the Committee mark-up, the DOJ announced it’d no longer enforce anti-money laundering laws against crypto companies, POTUS launched a stablecoin &amp; did a $2B deal with a foreign government and Binance. If that’s not grounds for a “retrade” what is? <a href="https://t.co/H9cThLLhEY">https://t.co/H9cThLLhEY</a>&mdash; Amanda Fischer (@amandalfischer) <a href="https://twitter.com/amandalfischer/status/1919066651644858404?ref_src=twsrc%5Etfw">May 4, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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In the case there was trepidation given <a href="https://blockworks.co/news/bitgo-to-custody-wlfi-usd1">World Liberty Financial’s USD1</a>, CoinFund president Christopher Perkins <a href="https://x.com/perkinscr97/status/1919206924379177399">said</a>: “Enough of the politics, let&#8217;s focus on doing what&#8217;s right for a change.”&nbsp;



With everyone and their crypto moms sharing their thoughts on X, the CEOs of Blockchain Association, Crypto Council for Innovation and the Digital Chamber also put in their two cents.&nbsp;



They noted being “grateful” for the “significant strides” the GENIUS Act has already made and urged the Senate to bring the bill to the floor for debate this week.&nbsp;



“We hope to see meaningful refinements to further ensure US leadership in digital finance,” Kristin Smith, Ji Kim and Cody Carbone wrote.



So we’ll see how this snag impacts the timeline for when this legislation could see the light of day. Here at Forward Guidance, Casey recently <a href="https://blockworks.co/news/congress-crypto-market-structure-bill-regulation-cftc">shared an update</a> on the crypto market structure bill, too. We had previously heard a perhaps ambitious goal of having these passed by the end of the summer.



The Democratic senators did note in their GENIUS Act statement: “We recognize that the absence of regulation leaves consumers unprotected and vulnerable to predatory practices.”



So it would seem we’ll get there eventually.&nbsp;



Separately (but speaking of legislative speed bumps), Arizona governor Katie Hobbs vetoed a bill that would have allowed the state treasurer and retirement system to invest up to 10% of public funds in “virtual currency” like bitcoin.



Hobbs wrote in a <a href="https://www.azleg.gov/govlettr/57leg/1r/sb1025.pdf">letter</a> to Senate President Warren Petersen: “Arizonans’ retirement funds are not the place for the state to try untested investments like virtual currency.”



Interestingly, it appears the Arizona State Retirement System <a href="https://www.sec.gov/Archives/edgar/data/1558481/000089706925000898/xslForm13F_X02/informationtable.xml">owned</a> nearly 67,000 shares of Michael Saylor-led bitcoin treasury company Strategy at the end of Q1 (worth ~$19 million at the time).&nbsp;It would seem the “need for more education” trope continues to be a cliché with merit.



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congress

Crypto industry sounds off on legislative speed bumps

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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Tech giants Epic Games and Apple have been duking it out in court for years now, and Apple was just handed a <a href="https://www.documentcloud.org/documents/25924283-epic-v-apple-contempt-order/">ruling</a> that’s changed the US App Store’s rules.



A California judge found Apple to be engaging in anticompetitive practices. The ruling takes steps to stop “Apple’s continued attempts to interfere with competition.”



US apps are <a href="https://x.com/superwoj/status/1918134583234535489">no longer barred</a> from adding external links, buttons, or other ways to get users to leave the app to “browse NFT collections owned by others.”



Apple won’t stop US App Store apps from adding pathways to external pages, and apps can now encourage users to go to those pages.



The main reason this was a point of contention is because apps downloaded from Apple’s App Store are subject to <a href="https://developer.apple.com/app-store/review/guidelines/">Apple’s rules</a>, which prioritized in-app purchases and restricted or made it difficult for developers to link to external marketplaces.&nbsp;



In-app purchases got hit with a fee from Apple (up to 30%) on every purchase, which resulted in slimmer margins for developers and/or higher prices for consumers. Now, Apple’s not allowed to slap that “Apple tax” on app purchases made externally (but can still collect up to 30% on in-app purchases).



I previously saw some crypto games getting around Apple’s old rules with strategies like vaguely hinting to users via in-game messages that the “PC version” offers some items not available on the iOS version’s shop. Apps also didn’t link to said versions or tell players directly how to get NFTs to use in their games.&nbsp;



But that’s not a great gaming experience, and it probably confused some players.



Because of the ruling, Apple approved a Spotify update that will let the streaming giant offer more pay transparency and external links for users. Epic <a href="https://x.com/TimSweeneyEpic/status/1917716512347152499">said</a> it’s finally bringing Fortnite back to the US iOS App Store this week as well. EU gamers have been able to get it through Epic’s own games store since August, <a href="https://www.pcmag.com/news/fortnite-returns-to-android-globally-ios-in-eu-as-epics-fight-with-apple">thanks to the EU’s Digital Markets Act</a>.&nbsp;



So, what does this latest ruling mean for crypto?&nbsp;



Apps of all kinds — from games to trading apps, NFT marketplaces and wallets — can now openly link to external pages where users can make purchases without incurring Apple’s fees. It means indie crypto games can be more sustainable and more transparent to users without gray-area phrasing. It also means marketplaces like OpenSea can directly link to the web versions so users can buy NFTs.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf3CvWGsoNbEDi3SbCkPN1X4MsWked9UGJk9JiHRWcWyiYNuI2V-ZZmc6yy9tLJ_ntNY_nL8jkSsW6uLNVcGALGxIajiC2T6rLiu9lK6sea91J5088vVLsEiJ8gCR1dsTufti4LFw?key=7M5mjXCmi_7PCPWjVvVfQ1Ce" alt=""/><figcaption class="wp-element-caption">Apple’s new language around NFTs</figcaption></figure>



Apps using iOS have always been able to offer in-app purchases, and some chose not to in large part because of the profit margins with those fees.



It’ll help smaller developers trying to break even, as well as more established firms looking to boost revenue and see long-term growth.&nbsp;



This ruling could make mobile games an even bigger portion of the blockchain gaming sector. Last year, Game7 Research found mobile games were the most popular platform for crypto game developers, making up roughly 30% of that market.



Making users leave the app still isn’t ideal, but it’s better than what it was before.



The decision’s receiving positive feedback from executives in the crypto gaming space. Mythical Games COO Arron Goolsbey <a href="https://www.linkedin.com/posts/arron_games-creators-opengardenday-activity-7323970603315593216-Esul?utm_source=share&amp;utm_medium=member_desktop&amp;rcm=ACoAABKdI6YBVCnELgEXIz0Jo0Q13EHkptJChqw">applauded</a> Apple’s changes, “even if they were reluctant to open the door to a wider, more connected future.”&nbsp;



Sam Barberie, Sequence’s head of strategy and partnerships, <a href="https://www.linkedin.com/posts/sambarberie_epic-vs-apple-opens-doors-for-developers-activity-7325157244331864067-gv4h?utm_source=share&amp;utm_medium=member_desktop&amp;rcm=ACoAABKdI6YBVCnELgEXIz0Jo0Q13EHkptJChqw">said</a> it’s “massive” for NFTs and blockchain games.



“Such high fees made it unviable for most Web3 games to target mainstream audiences on the US appstore [sic] but now the friction is gone,” Immutable cofounder Robbie Ferguson <a href="https://x.com/0xferg/status/1918126839928897645">wrote</a> on X. “We’ve still got a long way to go before Web3 gaming is truly mass-market but a huge source of friction just got removed.”



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Apple

What Epic Games’ App Store ruling means for crypto

David Canellis

Pete Rizzo

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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Yes, Warren Buffett is one of the greatest to ever do it. But he clearly has a blind spot for Bitcoin.



It’s seven years ago today that Buffett famously called Bitcoin “rat poison squared” in front of CNBC reporter Becky Quick.



Buffett, who at 94 has just <a href="https://www.nytimes.com/2025/05/03/business/berkshire-earnings-warren-buffett.html">confirmed</a> that he’s stepping aside as Berkshire Hathaway CEO at the end of the year, has actually been negging Bitcoin since May 2013. At Berkshire’s annual shareholder meeting, an audience member <a href="https://buffett.cnbc.com/2018/06/26/buffett-a-z-bitcoinand-cryptocurrencies.html">asked</a> Buffett and Munger how they viewed the rising significance of Bitcoin.



“Charlie, I hope you know something about this subject, because I don’t know a thing,” Buffett said. By that point in 2013, the price of bitcoin had jumped from $11 to almost $150 in the past six months.



<h1 class="wp-block-heading">On This Day: Rat Poison Squared</h1>



Munger was blunt. “I have no confidence whatsoever in bitcoin being any kind of a big universal currency.”



“That would certainly be my gut reaction,” Buffett replied. “But I haven’t really looked into it. I’ll put it this way, of our $49 billion, we haven’t moved any to bitcoin.” Cue audience laughter.



“Well, the truth is that I don’t really know anything about it. That doesn’t always stop me from talking about things, but it will in this case.”



The takes never improved from there. “It’s not a currency, it does not meet the test of a currency, I wouldn’t be surprised if it’s not around in 10 or 20 years,” Buffett said a year later.



“Stay away from it. It’s a mirage, basically…the idea that it has some huge intrinsic value is just a joke in my view,” he added a few days on from that.



There are already <a href="https://blogs.cfainstitute.org/investor/2015/01/14/warren-buffett-wrong-on-bitcoin-the-bitcoin-proof/">many</a> <a href="https://bitcoinmagazine.com/business/what-warren-buffett-gets-right-about-bitcoin">thoughtful</a> <a href="https://www.forbes.com/sites/kashmirhill/2014/03/26/warren-buffett-says-bitcoin-is-a-mirage-why-marc-andreessen-thinks-hes-wrong/">critiques</a> of Buffett and Munger’s opinions on Bitcoin out there. And his investment philosophy — of not investing in anything he doesn&#8217;t understand — has obviously worked.



“We just have to focus on eight or 10 stocks, business basically, that we think are decent businesses,” Buffett said in 2018. Berkshire Hathaway’s stock price has tripled since then. Bitcoin’s price, meanwhile, has multiplied almost 13 times in the same period, although directly comparing the two makes little sense.



Does that make Buffett wrong? Sure, in the way that someone who bought Amazon instead of Google 10 years ago is wrong. Both Berkshire and Bitcoin have clearly won: 5.5 million percent returns since 1964 for the former, nearly 137 million percent since 2010 for the latter.



Regardless of how cashed-up Berkshire may be — even without buying bitcoin — it has still missed out big time.



Had Buffett allocated only 2% of Berkshire’s $57.9 billion to bitcoin in May 2018, instead of calling it rat poison squared, the firm might’ve bought up to about 137,000 BTC, potentially for under $8,500 per coin on average.&nbsp;



The same haul today would be valued at more than $13.1 billion, boosting Berkshire’s current cash holdings by almost 30%. 



What doesn’t kill you is meant to make you stronger. And what you don’t know can’t hurt you. But as it turns out, it can make you poorer, relatively. Even if you’re very, very rich.



— <a href="https://x.com/dcanellis">David</a>



<h1 class="wp-block-heading">The Historian’s View</h1>



You know the saying: One man’s rat poison is another man’s treasure…



If you need more proof of the errors of Buffett’s worldview, there’s the tale of HyphyMikey, a BitcoinTalk user who for all we know is still holding on to this 100 BTC gold bar he posted for sale, exactly 12 years ago. Today, the artifact lives on on social media as a talisman from an earlier Bitcoin time, one when you might be someone like HyphyMikey, an early forum user who bought this heirloom (alongside two 25 BTC gold coins) and <a href="https://bitcointalk.org/index.php?topic=196320.0">then tried to sell it to purchase a new car</a>.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcjNpTc5NO56iDGgDM4Om0seJj6vdbUdRtNjfWijKFy8Sadrt-9RgmJMuLbAprmsdwyGDGyL0_m6Z_1xIxDBbvFy5Y-d0ppQgiUhgAzkzNf_kXM7_XB_REPLvOFSspCGyQRaShpSg?key=c_hyr5oLrM_EKwJKfnsOEck_" alt=""/></figure>



Did Hyphy sell? We don’t really know. All told, there’s about 214 of these $10 million Bitcoin bars <a href="https://casascius.uberbills.com/">floating around</a>, though only 37 are “active” and yet to be redeemed for their BTC. (This is where you run into the whole difficult-to-trace part of Bitcoin.)



Though we might never know, it’s another reminder to HODL your BTC. In another 10 years, who knows how expensive this bar will get (and how much more wrong Buffett will be).



— <a href="https://x.com/pete_rizzo_">Rizzo</a>



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Bitcoin

‘Rat poison squared’: 7 years since Buffett’s Bitcoin barb

Katherine Ross

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



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In the past few months, we’ve talked about the <a href="https://blockworks.co/news/crypto-fundamentals-metrics-to-watch">rise of fundamentals in crypto</a>.&nbsp;



I take a similar stance to Arca CIO Jeff Dorman when looking at projects: I’m not expecting them to start producing revenue tomorrow, but I’m very aware that projects will need some sort of vision about how they plan to make money. VC raises can truly only get them so far.&nbsp;



But Dorman, in this <a href="https://blockworks.co/podcast/empire/0b22230a-2840-11f0-bf59-bb1feb638e99">week’s episode of the Empire podcast,</a> made an interesting point. Some projects can win in the social value category without necessarily relying on other fundamentals.&nbsp;



“You&#8217;ve got financial value, which is cash flows. You&#8217;ve got utility value, which is some form of usefulness. And then you have social value. And social value is real. It&#8217;s much harder to define. But you can&#8217;t dismiss it,” Dorman explained. He clarified that he’s not just thinking about memecoins or memestocks, but projects that have really catered to and built up social value.



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="The Ultimate Coinbase Debate: Can It Survive? | Jeff Dorman" width="1024" height="576" src="https://www.youtube.com/embed/1dWhiGn4HkQ?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>
</div></figure>



If you’re searching for a winner in this category, it may be Ripple. XRP, at a market cap of $126 billion, is arguably overvalued.&nbsp;



“ But that doesn’t [mean that] because there is no financial value, there is no utility value. It&#8217;s a hundred percent just social value,” Dorman explained. The “ social value of being one of the oldest cryptocurrencies and having this massive following could one day lead to something that does have financial value.”



Dorman compared it to a call option, referring to the contract between a buyer and seller to purchase a stock at a certain price within a set period.&nbsp;



To its credit, Ripple is eyeing ways to boost its own financial profile. Ripple <a href="https://blockworks.co/news/crypto-tradfi-intersections-ripple-blackrock">acquired Hidden Road,</a> giving it access to a new business with the added bonus of a US broker-dealer license.&nbsp;



And, if we’re to believe a <a href="https://www.bloomberg.com/news/articles/2025-04-30/ripple-is-said-to-have-offered-to-buy-stablecoin-rival-circle">report from Bloomberg</a> last week, Ripple also attempted to approach Circle with a hefty bid between $4 and $5 billion. The bid, at this point, is pretty on par with what Circle itself is eyeing upon public debut, but it’s too early to say whether or not it <a href="https://blockworks.co/news/circles-valuation-could-top-5b-post-roadshow">can debut at that valuation.&nbsp;</a>



All of this is to say that Ripple is clearly trying to take advantage of its dominance and expand its reach, which has the added potential of boosting its fundamental value.&nbsp;



So fundamentals aren’t key to success yet, but I also wonder if any other project could copy what Ripple’s done at this stage. It seems to be in a league of its own.



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Empire Newsletter

How Ripple built up ‘social value’: Arca CIO

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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Worshipping at the Church of Satoshi has never been a bulletproof vocation. The sect of Hal Finney is a different story.



Yes, even this Supply Shock has spent sizable energy on what Satoshi said over the four-ish short years that the pseudonym was active… and subjected you to all sorts of <a href="https://blockworks.co/news/satoshi-nakamoto-age-birthday-50-clues">hypotheticals</a> and <a href="https://blockworks.co/news/satoshi-disappear-day-cia-bitcoin">assumptions</a> about their motivations for leaving.



Satoshi is/was clearly a brilliant individual. But if their decision to “<a href="https://blockworks.co/news/bitcoin-satoshi-patrick-bateman-commonalities">move onto other things</a>” means anything at all, we must treat whatever Satoshi said or signaled publicly as starting points on a larger journey.&nbsp;



All of Satoshi&#8217;s emails and forum posts have only ever set Bitcoin in a certain direction. They rarely cut the actual path.&nbsp;



Hal Finney is someone who did cut the path. 



The legendary Cypherpunk would’ve turned 69 years old today, May 4, a day celebrated across the world even beyond Bitcoin circles.



<h1 class="wp-block-heading">Bitcoin Legend — Hal Finney</h1>



Hal was the second person after Satoshi to ever run the Bitcoin software, only seven days into its lifespan, making him Bitcoin’s first real user.



“When Satoshi announced the first release of the software, I grabbed it right away,” Hal said on <a href="https://archive.fo/JJP9q#selection-1125.0-1076.38">BitcoinTalk</a> in March 2013. “I mined block 70-something, and I was the recipient of the first bitcoin transaction, when Satoshi sent ten coins to me as a test. I carried on an email conversation with Satoshi over the next few days, mostly me reporting bugs and him fixing them.”



We can only ever infer the pre-Bitcoin history of Satoshi. There’s no record of the pseudonym before the white paper. He appeared out of the ether, a manifestation of the radical corpus that contained the Cypherpunk <a href="https://mailing-list-archive.cryptoanarchy.wiki/">mailing list</a>, Tim May’s <a href="https://groups.csail.mit.edu/mac/classes/6.805/articles/crypto/cypherpunks/may-crypto-manifesto.html">Crypto Anarchist Manifesto</a> and David Chaum’s <a href="https://chaum.com/publications/">voluminous</a> academic papers.



Hal’s own history is meanwhile woven into the very texts from which Satoshi sprung. Living in Temple City, California, he spent years closely developing Pretty Good Privacy (PGP) with Phil Zimmermann — <a href="https://blockworks.co/news/cypherpunk-movement-history-wired-1993">another Cypherpunk legend</a> — when it was still unclear whether contributing to the software was an illegal act. Hal worked there until he retired in 2011.



Hal also built and operated two of the first-ever cryptographically-based anonymous remailers in the early ‘90s, which novelly allowed users to send emails without revealing any information about their identities.



<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">Running bitcoin&mdash; halfin (@halfin) <a href="https://twitter.com/halfin/status/1110302988?ref_src=twsrc%5Etfw">January 11, 2009</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div><figcaption class="wp-element-caption">The greatest Bitcoin tweet of all time</figcaption></figure>



These are acts of activism. Hal had pushed persistently, for decades, in defense of our right to privacy in a digital world increasingly surveilled by governments and corporations. He was also a key force in the protracted Cypherpunk war for anonymous digital cash that gave us Bitcoin.



“When Satoshi announced Bitcoin on the cryptography mailing list, he got a skeptical reception at best. Cryptographers have seen too many grand schemes by clueless noobs. They tend to have a knee jerk reaction,” Hal <a href="https://archive.fo/JJP9q">recounted</a>.



“I was more positive. I had long been interested in cryptographic payment schemes. Plus I was lucky enough to meet and extensively correspond with both Wei Dai and Nick Szabo, generally acknowledged to have created ideas that would be realized with Bitcoin. I had made an attempt to create my own proof of work based currency, called RPOW. So I found Bitcoin fascinating.”



Fitting Hal’s legacy into this humble article will never be feasible. Still, I can say this: In 2025, it’s very easy to take our right to encryption — the shared core ingredient for online freedom and Bitcoin — for granted.&nbsp;



End-to-end and other manners of encryption may now be commonplace, but there are still grave concerns over the power that tech companies, financial intermediaries and state forces have over our lives. We are surveilled by default and complacency is too convenient. Normalized.



<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">I am proud to recognize the <a href="https://twitter.com/HRF?ref_src=twsrc%5Etfw">@HRF</a>’s incredible freedom and privacy focused initiative honoring Hal’s legacy through the Finney Freedom Prize. 🙌 Congratulations to the 2nd halving era’s winners—your work truly embodies the spirit Hal believed in. 🌟 <a href="https://t.co/PxvN0T6csr">https://t.co/PxvN0T6csr</a>&mdash; halfin (@halfin) <a href="https://twitter.com/halfin/status/1877759826983522443?ref_src=twsrc%5Etfw">January 10, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div><figcaption class="wp-element-caption">Fran Finney, Hal’s wife, celebrates Hal’s legacy with an annual <a href="https://secure.alsnetwork.org/site/TR?fr_id=1510&amp;pg=entry">Running Bitcoin Challenge</a> to raise money for ALS Research.</figcaption></figure>



Hal built and sharpened tools for mitigating those threats, even right up until the end of his life. We must use those tools and all others like them. Promote them.



“Currently I&#8217;m working on something Mike Hearn suggested, using the security features of modern processors, designed to support ‘Trusted Computing,’ to harden Bitcoin wallets,” Hal posted on BitcoinTalk around 18 months before his passing, even as he was “essentially paralysed” due to ALS.&nbsp;



“It&#8217;s almost ready to release. I just have to do the documentation.” Hal was referring to bcflick, for which he’d earlier released a <a href="https://bitcointalk.org/index.php?topic=154290.0">prototype</a>.



Cypherpunks write code.&nbsp;



Hal Finney wrote code.



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First Bitcoin user: Celebrating legendary Cypherpunk Hal Finney

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
&#8220;I do not fear computers. I fear the lack of them.&#8221;



— Isaac Asimov
</blockquote>



Bill Gates <a href="https://www.cnbc.com/2025/03/26/bill-gates-on-ai-humans-wont-be-needed-for-most-things.html">expects</a> that within a decade, humans will no longer be needed “for most things.”



We’re entering an era of “free intelligence,” he explains, in which expertise in all subjects will be commoditized — the best doctors and teachers, for example, will be AIs.&nbsp;



“It’s very profound and even a little bit scary,” Gates <a href="https://www.harvardmagazine.com/2025/02/harvard-bill-gates-ai-and-innovation">told</a> Harvard Magazine, “because it’s happening very quickly, and there is no upper bound.”



Listening to ex-Google CEO Eric Schmidt <a href="https://x.com/vitrupo/status/1911934053378588842">tell it</a> is even scarier: “Within the next one year, the vast majority of programmers will be replaced by AI programmers.”



Within five years, he adds, we&#8217;ll achieve artificial general intelligence, after which AIs will be as smart as the top expert in any field — and within six years we’ll achieve artificial super intelligence, where a single AI is smarter than the sum of all human intelligence.&nbsp;



“There’s no language for what happens with the arrival of this,” he warns.



But I wouldn’t worry too much just yet — these remain predictions about the future and the future, as Yogi Berra tells us, is famously hard to predict.



Also, evidence from the present suggests that humans won’t be so easily replaced.



For example, the founder of Cursor <a href="https://x.com/amanrsanger/status/1916968123535880684?t=8px6XEfAM8KWKnRiZC7c8w&amp;s=19">said</a> this week that the AI code editor he developed is now writing one billion lines of code per day.



That’s a lot — almost certainly more than the total lines of code written by every software developer in the United States put together.



And yet, the Bureau of Labor Statistics <a href="https://data.bls.gov/oesprofile/">estimates</a> there are at least 1.6 million software developers still employed in the US.



That could be about to change, who knows?



But if AI is already writing a billion lines of code without any discernible effect on employment, I suspect that’s an indication that human programmers have many years of employment to look forward to still.



Another indicator: Subscriptions for Microsoft’s Copilot have <a href="https://ben-evans.us6.list-manage.com/track/click?u=b98e2de85f03865f1d38de74f&amp;id=abd0ff0a30&amp;e=cfa7b309bc">reportedly</a> been stagnant for a full year now — which suggests that Copilot really is an “AI companion” for human employees (as the company markets it) and not a replacement for them.



Similarly, OpenAI <a href="https://techcrunch.com/2025/02/20/openai-now-serves-400-million-users-every-week/">reports</a> that ChatGPT has over 400 million active weekly users now — almost 5% of the world’s population!



But I still have to type this newsletter out myself.&nbsp;



LLMs don’t seem to be taking any other jobs, either: “We find muted effects of AI on employment due to offsetting effects,” one <a href="https://www.nationalaffairs.com/blog/detail/findings-a-daily-roundup/job-assignment">academic study</a> reports. “Highly exposed occupations experience relatively lower demand compared to less exposed occupations, but the resulting increase in firm productivity increases overall employment across all occupations.”



<a href="https://bfi.uchicago.edu/wp-content/uploads/2025/04/BFI_WP_2025-56-1.pdf">Another study</a> found similarly that despite widespread adoption of LLMs, “AI chatbots have had no significant impact on earnings or recorded hours in any occupation.”



So even newsletter writers appear to be safe for now.



And even if not, we’ll probably find something else to do.



Benedict Evans recently <a href="https://www.ben-evans.com/benedictevans/2023/7/2/working-with-ai">recounted</a> the long history of new technologies leading to higher, not lower, employment, citing examples such as the invention of typewriters and adding machines: &#8220;What did that do to clerical employment? People hired far more clerks. Automation plus the Jevons paradox meant more jobs.&#8221;



Evans illustrates this point by noting that the vast floor of human calculators that Jack Lemmon worked on in <a href="https://www.rogerebert.com/reviews/great-movie-the-apartment-1960">The Apartment</a> has since been replaced by a single spreadsheet.



But there are far more people employed using spreadsheets today than there ever were using adding machines.



In some places, the greater concern is that there are too many jobs and not enough people: Greece, for example, introduced a six-day work week last year “due to the twin perils of a shrinking population and shortage of skilled workers,” as The Guardian <a href="https://www.theguardian.com/world/article/2024/jul/01/greece-introduces-growth-oriented-six-day-working-week">reported</a> it.



Similarly, at least part of the reason for the persistent <a href="https://www.haas.berkeley.edu/wp-content/uploads/Howard_Wang_Zhang_Housing-Supply-and-Construction-Labor-Dayin-Zhang.pdf">shortage of affordable homes</a> in the US is that there aren’t enough humans available to build them.



This could change, of course.&nbsp;



ChatGPT may soon write this newsletter faster and better than I can — I’ve noticed, not without trepidation, that it’s slowly been getting better at proofreading individual sentences for me.



And even construction workers may someday fear for their jobs.



Analysts at Bank of America <a href="https://www.actuia.com/en/news/according-to-a-bank-of-america-study-3-billion-humanoid-robots-will-be-in-service-by-2060/">predict</a> there will be three billion humanoid robots roaming the planet by the year 2060, doing everything from handling hazardous materials to caring for the elderly.



2060 is still a long way off, however, and chances are we (like Jack Lemmon) will have found better things to do by then.



In the meantime, though, let’s keep ourselves busy by checking the charts.



How it’s going so far:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdjjcD-7dCneloeehpy60rwtUGsiFzdgLesw1gOfzVSwmz_bL4TC4OkY7cJaaI19VVuHZmhkWzwUq5dgylStbdp6x1HOm54lstIxgLBU3HB3o_WKVZOC28N7ryb3dk9rwq8gG80xQ?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



A simple but amazing chart: Exactly one month after Liberation Day, Nasdaq is 3.2% higher. That is ….not what I expected. Also, Liberation Day was ONE month ago??? Feels like 10 years.



Not all is well in markets, however:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcF1HD5lGzeWtpUiph1GfoW2MAL3K2eGUS8GdnB2uY4ik0bhzZLtV2E8mlPdrz70k30R257E_TwrxvtVEijLRqN1eakU8QLQh8_RjgIXUdtTOgPdPXDmulbL_-oWDdGtwsg1B6v?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



Gold is up, the dollar is down and oil is down a lot. This seems more consistent with yesterday’s <a href="https://x.com/SpencerHakimian/status/1918059517461577913">news</a> that tariffs are costing Apple $900 million a quarter and this morning’s <a href="https://www.reuters.com/business/us-cedes-little-ground-key-tariffs-talks-with-japan-nikkei-says-2025-05-02/">news</a> that Japan isn’t interested in the trade deal currently on offer.



Zooming out:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeD2uZMhzrvjK_2q_b9_rQDZpThDqzck5lmwtiAut7vv9CeU73kv_PDOGgwGCSfq7AOADIFP0EcoYwTGo5BZlUWeOJQp7iuQJGl-T4U1RL5V9fOSt5Rkt6vGPOpODGQlseS5LBl_Q?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



The US dollar tends to move in decade-long trends. With Japan now <a href="https://www.reuters.com/markets/asia/japans-us-treasury-holdings-among-tools-trade-talks-finance-minister-kato-says-2025-05-01/">threatening</a> to unload its massive stockpile of US Treasurys, it’s easy to see why the next trend might be down.



The economy’s firewall:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcUsBU4IPyLPOiXKzvLY6GC5aNtoqxzrjmBl8-Jo6ndwuE1opDEkS7uJXjwZZTeR5RX8CbDSNNW7qUG8WD_mp9P55nSv4KcMFy4vDLyNTVOHQPiroEt3uLomgisIGxhtmPGrKYpug?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



This morning’s report that the US added 177,000 jobs in April, which is encouraging, but of course backward looking, according to <a href="https://x.com/Markzandi/status/1918298122088005718">Mark Zandi</a>: “The job market remains a firewall between continued growth and a downturn. But…the firewall feels fragile. Unless the trade war de-escalates in the next few weeks, the firewall will come down, and a recession will ensue.”



Looking forward:&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd-DdnPGZIDI4Zv8cIr2J8KgItSu3-yvfOP5LjfUsbUawDrnQ4FL5X7BaoIOWrG8AL5POgjjsfdYjhFCffuzOxgKLMuTgxSLzycdu0aN7_RRxZZjVnyb6OK1w_7DtaotFovay70OA?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



Torston Slok warns that this morning’s employment data was collected the week after Liberation Day tariffs were announced and that the correlation to University of Michigan survey data suggest that employment is set to turn lower and “perhaps even negative.”



Don’t forget the little guys:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd0QHrPSuXA6xLcjnZEhC_dG6Sonw5FoJaLnDgud4cv4h8DqKTbMNMY43ygxhji-wt-ScA_tZag5DMcO6SeXVgiScfRMtr6emZXfzNaiqqYM1ZjI99dh4kOkotwwKo4UNS7UoyUVg?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



Apple can weather tariffs at even a cost of $1 billion a quarter, but smaller businesses dependent on imports from China probably cannot.



Congratulations to the class of 2025:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfTFZHlgHM_X4XgiKqJoJYcW7Qaaoqq_BnV7rbCAgLSE9NETDXOcJ2plO3tQR30WuOvCwBiFrj2As2oYdHjTER8qHH-Cc_gPpYPV9cHKieO1hzme-LPpuAzq-qr11fWznpzQNwc7Q?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



This chart from the Atlantic shows that contrary to the historical norm, recent college graduates now have a higher unemployment rate than the average American. (I’d probably still trade places with them though.)



It’s cheaper to stay in school, at least:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXefQQqhCR7lmuoyhLaEVpyl2DUSLQ9ICMJRhWcxlVhrWL_rVbqZ_4U4oX_GSS_-sPcP8Zox2Symyt0slalGewA9pa6t41jPNFk5qZTUsAJhO8SpWGIroneeS5ieqSB9-zRGaeSBQA?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



Bloomberg’s Jon Authers notes that Covid broke the multi-decade uptrend in the cost of college, which is now headed lower.



Recession odds:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="828" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=1024&amp;h=1024" alt="" class="wp-image-101512" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The Polymarket odds have been ticking up, which seems weird given what stocks are doing. One analyst <a href="https://x.com/dailychartbook/status/1918312020824473871">estimates</a> that stock prices are now pricing in only a 34% chance of recession. Even more discordant is the <a href="https://www.bloomberg.com/news/videos/2025-04-22/economic-uncertainty-higher-than-past-recessions-hunter-video?srnd=phx-markets">estimate</a> from Constance Hunter, chief economist at the economist intelligence unit, who puts the probability at 80%.



Not a prediction:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeEJwkr7nEFKXp0_r6AjDlvFwQqNAPtRCLcdqpr7q8slLIo3SjgTX8cqpVa2S-bItl8sH4d5mZ6yzW26clLMFtkg4GVuNlrBQIDe4DSTPXAmCxJCXFZ-j0wc7Lz_Ice8GuVko6UJg?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



The <a href="https://www.vizionapi.com/blog/tariff-tracker">latest data</a> from Vizion’s Global Ocean Bookings Tracker shows exports from China to the US down 48.6% from a year before. “Maybe the children will have two dolls instead of thirty,” the president <a href="https://x.com/Acyn/status/1917634492539494557">said</a> in response this week. “Maybe the two dolls will cost a couple of bucks more.”



That sounds pretty recessionary to me — but maybe he’s right that the boats are filled with “stuff we don’t need.”



As long as we keep the jobs we need, I think everyone would be fine with that.



Let’s hope that’s what the markets are telling us.



Have a great weekend, naturally intelligent readers.&nbsp;



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Friday Charts: Will natural intelligence keep us employed?

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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Have you ever wondered why stock trades take days to settle? Have you ever looked at the UX nightmare that is fractional ownership and thought, How in the world is this still the norm? And why is it exactly that your shares must live inside custodial black boxes?



These design failures boil down to the fact that the US equity market is fundamentally outdated. It&#8217;s <a href="https://ir.nasdaq.com/news-releases/news-release-details/nasdaq-study-shows-legacy-technology-and-regulation-preventing">trapped</a> inside legacy infrastructure, shackled by intermediaries and probably <a href="https://www.zdnet.com/article/if-cobol-is-so-problematic-why-does-the-us-government-still-use-it/">coded</a> in COBOL.



Efforts to modernize the system are usually surface-level. We might get faster messaging or marginally updated interfaces, but the core always seems to remain untouched. Hence, we live in a holding pattern of settlement delays, bloated fees and an ecosystem that is as opaque as it is exclusionary.



Enter Project Open, a <a href="https://www.sec.gov/files/ctf-written-project-open-wireframe-04282025.pdf">newly submitted SEC pilot proposal</a> with blockchain at its core. Jointly proposed by the Solana Policy Institute, Superstate and Orca (and with legal support from Lowenstein Sandler), Project Open is a <a href="https://x.com/SolanaInstitute/status/1917650618677686764">request</a> for exemptive relief that would allow equity securities to be issued, registered and traded directly on public blockchain networks like Solana.



The Solana Policy Institute, which <a href="https://www.solanapolicyinstitute.org/blog/announcing-the-launch-of-solana-policy-institute">launched</a> at the end of March, is a non-partisan advocacy group <a href="https://blockworks.co/news/solana-policy-institute-ceos-political">aiming to help policymakers</a> understand the role public blockchains can play in economic and social infrastructure. Project Open is its first major public action.



The group <a href="https://www.sec.gov/files/ctf-written-project-open-wireframe-04282025.pdf">submitted</a> a 20+ page legal framework to the SEC&#8217;s <a href="https://blockworks.co/news/sec-new-crypto-task-force">crypto task force</a> this week, complete with registration pathways, KYC onboarding, smart contract-based settlement, investor education modules and blockchain-native transfer agent roles.



Issuers would file traditional-style registration statements, which is same-same with how we do things now. The main difference involves using a digital token class instead of paper shares. Transactions would settle instantly, wallet-to-wallet, onchain.



Project Open takes a head-on approach to compliance, proposing a pilot program with a gated issuer cohort, 18-month duration and SEC oversight baked in.



Investors would hold &#8220;Token Shares&#8221; in whitelisted wallets after passing KYC and educational onboarding. A registered transfer agent would track all shares using the blockchain as the system of record, with super-admin rights to fix errors, recover assets or enforce restrictions. No custodians. There wouldn&#8217;t be any net settlement. No post-trade ambiguity. Just delicious, deterministic finality.



Project Open proposes trading on rails using smart contracts (a la Orca AMM or bilateral P2P swaps) rather than traditional exchanges. The filing even outlines how tokenized trading mechanisms would navigate existing rules like Reg NMS and broker-dealer custody requirements — or bypass them via targeted exemptions.



It&#8217;s frankly an opportune time for this proposal to land, what with <a href="https://blockworks.co/news/gary-gensler-resigning">Gary Gensler out</a>, the subsequent <a href="https://blockworks.co/news/sec-potential-shift-enforcement-actions">rollback of enforcement actions</a>, and new SEC Chair Paul Atkins <a href="https://blockworks.co/news/sec-chair-nominee-crypto-past">signaling</a> openness to &#8220;huge benefits&#8221; from blockchain infra.



We&#8217;ve heard a similar song a lot lately. In his investor letter last month, BlackRock CEO Larry Fink <a href="https://www.blackrock.com/corporate/investor-relations/larry-fink-annual-chairmans-letter">said plainly</a>:



&#8220;Every stock, every bond, every fund — every asset — can be tokenized. If they are, it will revolutionize investing. Markets wouldn&#8217;t need to close. Transactions that currently take days would clear in seconds. And billions of dollars currently immobilized by settlement delays could be reinvested immediately back into the economy, generating more growth.&#8221;



If he&#8217;s right, then Project Open may be the first serious attempt to give that future a regulatory foundation in the US.



The goal is for internet capital markets to settle in seconds, run on open infrastructure, and restore user-level control. Faster, fairer, cheaper, smarter, with the opacity dial thinned to nil.



Project Open reads like the culmination of years of onchain trial and error. It&#8217;s the sober recognition that blockchain tech is ready for real finance, not just DeFi.&nbsp;



If the SEC says yes, even conditionally, it would be a meaningful convergence of TradFi and crypto — on the scale of ETFs, and just as important as tokenized Treasurys onchain.&nbsp;



If it says no, the status quo holds&#8230;for a little longer, anyway.



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Lightspeed Newsletter

Project Open makes its case to the SEC

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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Financial giants mulling ways to better serve clients clamoring for crypto is no longer surprising.&nbsp;



That doesn’t exactly make it any less significant, though.&nbsp;&nbsp;&nbsp;&nbsp;



First up is Morgan Stanley, which is reportedly working on adding crypto trading to its E*Trade platform (possibly next year). A spokesperson declined to comment when I requested for details.&nbsp;



This <a href="https://www.bloomberg.com/news/articles/2025-05-01/morgan-stanley-plans-to-offer-crypto-trading-to-e-trade-clients">report</a> — citing people familiar — doesn’t shock us, given our own reporting in recent weeks and months (even years). It’s even less surprising now, given the changing <a href="https://blockworks.co/news/trump-first-100-days-crypto-policy">US regulatory landscape</a> could ease burdens for TradFi players wanting to offer more crypto services.



So, if Morgan Stanley is thinking about this, will they follow through?&nbsp;



In a word, ZX Squared Capital co-founder CK Zheng told me: “Yes.” Particularly as they assess a market Zheng says could grow by 10x or 20x in the next decade. And, ya know, the whole thing about portfolio diversification.



Bitcoin held up better than many other risk assets during last month’s market volatility, added Zheng, an ex-valuation risk management director at (where else) Morgan Stanley. He spent nearly two decades in a similar role at Credit Suisse.&nbsp;&nbsp;&nbsp;



“With the ongoing <a href="https://blockworks.co/news/us-economy-shrank-q2-fears-tariff-impact">tariff wars</a>, many investors may want to diversify away from US equities, US bonds and <a href="https://blockworks.co/news/trump-sell-us-assets-trade-deficit">US dollar assets</a>,” Zheng said.



Charles Schwab, meanwhile, plans to offer spot bitcoin and ether trading within the next 12 months, CEO Rick Wurster <a href="https://www.reuters.com/business/finance/charles-schwab-ceo-says-investors-are-de-risking-diversifying-2025-05-01/">told</a> Reuters.



This matches what a Schwab representative <a href="https://blockworks.co/news/charles-schwab-spot-crypto-etfs-plan">told me</a> in November, and again yesterday — that it planned to offer spot crypto trading once there’s “more clarity in the regulatory environment.” The rep added: “We anticipate that will happen, and we’re getting ready for that eventuality.”&nbsp;



They didn’t immediately share with me what the company’s waiting for specifically (but I’m thinking a <a href="https://blockworks.co/news/congress-crypto-market-structure-bill-regulation-cftc">market structure bill</a>, at least).&nbsp;



Another tidbit I heard from the Schwab spokesperson — the company in Q4 saw a 400% increase in traffic to the crypto <a href="https://www.schwab.com/cryptocurrency">page</a> on Schwab.com.



In the meantime, Schwab and other brokerages (<a href="https://blockworks.co/news/vanguard-opposes-platforming-eth-etfs">but not Vanguard</a>) allow investors to access spot and futures crypto ETFs, as well as blockchain equity ETFs like the fund <a href="https://blockworks.co/news/first-charles-schwab-crypto-etf-set-to-launch-next-week">Schwab launched</a> in mid-2022. Bitcoin and ether futures too, but only for Schwab clients with futures accounts.&nbsp;



You might remember that Morgan Stanley started allowing its financial advisers to offer the BlackRock and Fidelity bitcoin ETFs to certain clients. This soliciting <a href="https://blockworks.co/news/on-the-margin-newsletter-morgan-stanley-bitcoin-adoption">was different</a> from what it did before (allowing investments into such products only if clients actively sought them out).



Let’s throw another financial behemoth name in here: Wells Fargo. The bank <a href="https://blockworks.co/news/merrill-wells-fargo-offer-bitcoin-etfs">made available</a> unsolicited spot bitcoin ETF purchases to certain clients (via Wells Fargo Advisors or its WellsTrade platform) in early 2024.



More recently, the Wells Fargo Investment Institute called digital assets “investable as they continue to evolve” in a March <a href="https://saf.wellsfargoadvisors.com/emx/dctm/Research/wfii/wfii_reports/Investment_Strategy/digital_assets_intro_to_digital_assets_basics.pdf">report</a> meant to address common questions.



Brian Rehling, who leads WFII’s global fixed income strategy, told me this was a response to “an increasing number of inquiries from clients and investment professionals about digital assets and if they should include allocations in their portfolios.” Most of these questions are limited to bitcoin for now, he added.



A Wells Fargo spokesperson didn’t want to comment today on any possible spot crypto trading plans — instead reiterating the ability for clients to buy bitcoin ETFs.



The proliferation of spot crypto trading on Wall Street would clearly be a milestone beyond the existing ETF access.&nbsp;



“Even though many investors can invest in bitcoin ETFs, spot bitcoin trading will provide easy 24/7 direct trading access with less fees,” Zheng said.&nbsp;



And while <a href="https://blockworks.co/news/revenue-diversity-analysts-coin-buy-rating">Coinbase</a> and <a href="https://blockworks.co/news/robinhood-crypto-diversification-q1-earnings-trading">Robinhood</a> offer this today, there would be a segment of investors that would appreciate the familiarity of traditional institution platforms — and their reputations, the exec noted.&nbsp;



“This will make the competition more fierce, and potentially make their services better and safer with lower transaction fees,” Zheng added. “In the end, spot trading will be a commoditized business.”



As crypto natives might say, it’s probably nothing.



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Charles Schwab

Spot crypto trading to become ‘commoditized’ as Wall St. interest persists

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We now know what’s been hinted at for a while: MapleStory’s crypto spinoff, MapleStory N, is finally launching on May 15.



On May 8, players in select countries will be able to <a href="https://docs.maplestoryn.io/announcement/let-the-countdown-begin">pre-download</a> the game.



The new game will be a 2D, sidescrolling MMORPG like the original game. MapleStory N is part of MapleStory Universe (MSU), which also includes plans for a mobile game version for players plus MapleStory N SDK and Project ModN (a blockchain game sandbox) for developers.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdRG-ge3gkm8vxVNmO36WPam6EAVI_SBYSIrKdlfOenmKKoDA58m4NmofBjp4tfJZT15rdOUTbOrtdeCZbfjD43E10EszgEXwyRco8nB_RAqM685XCUF3MAd6MvRbH7J7YIbplSpA?key=Sj-kQXDqHg6-zTmxL_bjkIE5" alt=""/></figure>



MapleStory N uses its own Avalanche L1 (also referred to as a subnet) to facilitate player-to-player game item trading without an in-game shop. Players will be able to buy and sell in-game items and create game items, too.



MapleStory N will have a built-in anticheat feature and use AvaCloud’s security infrastructure. The game has been tested with millions of onchain activities already across roughly 972,000 registered wallets. The team estimates they had about 506,000 total users during the prelaunch period.



The original MapleStory game from Nexon sports a pixelated “chibi” anime aesthetic where players can choose from different character classes such as warrior, magician, bowman, thief or pirate. Players can join guilds, auction items, enhance items, level up, navigate dungeons, battle monsters and bosses, and select new skills — to name a few ways players engage with the world.&nbsp;



But there’s a hitch with MapleStory N: It won’t be available in the US, most of Europe, or countries like Japan and South Korea.



MSU’s <a href="https://msu.io/policy/terms">terms</a> put forth a long list of over 50 restricted countries — that’s 1 in 4 countries in the world. Ten months ago, some Redditors <a href="https://www.reddit.com/r/Maplestory/comments/1dncvyi/maplestory_univerese_country_restriction/">noticed</a> this. Notably, Norway, Switzerland, Canada, Mexico, Australia, South Africa, India, and some countries in southeast Asia are not on that restricted list:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdqBgCh2ANaiwRr66huVczaYtMB8DVEzVd-zeytPE004FolR1CD4xon_SfQfnKd7eYTFiSoL_6dMsAAkJBYY1tk1yzwGzrh0bg_srN1FPOpN-QBBXb5W3DwO4YZw__7bb7TR7R6?key=Sj-kQXDqHg6-zTmxL_bjkIE5" alt=""/></figure>



That list is still the case today, though MapleStory N is apparently trying to support more regions.



Being banned in the US and much of Europe could pose a significant problem for this game, because it won’t really be able to reach Western audiences, which make up a large part of the game industry’s spenders. South Korea and Japan are also important markets in gaming.&nbsp;



In fact, MSN will not be available in the top <a href="https://newzoo.com/resources/rankings/top-10-countries-by-game-revenues">7 largest gaming markets</a> globally. It will only be available in 2 of the top 10 markets by revenue (Mexico and Canada).



Yes, players may try to use VPNs to get around these restrictions, but some platforms are able to identify and block VPN use.



What’s strange is that other crypto games, like <a href="https://blockworks.co/news/off-the-grid-token-launch-anticipated">Off The Grid</a>, have launched with a token and dedicated Avalanche L1 in the US without problems.&nbsp;



MapleStory’s terms say that all of these countries are barred from playing its game because of “the status of crypto sanction or regulations in each country.”&nbsp;



But the US, under Trump, has pivoted toward a favorable stance on cryptocurrencies overall. The SEC has also dismissed a slew of prior investigations into OpenSea, Uniswap, and others.



If the MSU doesn’t change its terms, this game won’t get nearly the audience it otherwise could. I think that’s sad, because this one is promising.



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Gaming

MapleStory N launches in 2 weeks — but not in the USA

Donovan Choy

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A lot has happened since I last <a href="https://blockworks.co/news/movement-launches-mainnet">wrote</a> on Movement. At the time, the chain was not live.



About a month later, on April 15, Blockworks’ Katherine Ross and Jack Kubinec <a href="https://blockworks.co/news/movement-market-maker-investigation">broke a story</a> on market maker “misconduct” around the project’s MOVE token on the Binance exchange.



The market marker was <a href="https://x.com/zachxbt/status/1904499840089772445">alleged</a> by ZachXBT to be linked to market making firm Web3Port. At the time, MOVE traded at $0.29, about 74% down from its highs of $1.12 in December.



Movement Labs co-founder Rushi Manche was also reportedly taking a “temporary leave” from the company, a claim that Manche neither explicitly affirmed nor denied at the time.



As of yesterday, Movement officially <a href="https://x.com/movementlabsxyz/status/1918134801028268187">confirmed</a> that Manche has been suspended “in light of ongoing events” regarding “organizational governance and recent incidents involving a market maker.”



The market maker in question was confirmed to be Web3Port in a CoinDesk exposé <a href="https://www.coindesk.com/tech/2025/04/30/inside-movement-s-token-dump-scandal-secret-contracts-shadow-advisors-and-hidden-middlemen">published</a> on Wednesday.



The market maker reportedly sold 66 million MOVE tokens (worth $38 million and about 2.64% of the total circulating supply at the time) on Dec. 9, 2024 — the day of the token’s Binance listing. On Mar. 25, Binance <a href="https://www.binance.com/en/support/announcement/detail/478515187fab440fa80e56137c148a1b">banned</a> the market maker engaged by Movement after it netted a profit of $38m.



In the aftermath of the Binance ban, Movement quickly condemned the market maker, citing that the firm’s actions were “against our wishes, without our consent, and in breach of our agreement.” Within the same <a href="https://www.movementnetwork.xyz/article/movement-network-foundation-statement">blog post</a>, Movement quickly announced a $38 m MOVE buyback program to “return the USDT liquidity to the Movement ecosystem.”



Coinbase exchange announced also today its decision to <a href="https://x.com/CoinbaseAssets/status/1917976973046853893">suspend</a> trading on the MOVE token. MOVE has plummeted to $0.19, down about 21% in the last 24 hours.



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



CoinDesk’s piece revealed that Web3Port had initially floated a contract with Movement Foundation that included a clause allowing the market maker to liquidate its MOVE positions on the condition that the token reached a $5 billion FDV, then shared profits on a 50-50 basis.



Movement initially pushed back against the contractual agreements. Yet, after some revisions, the resulting signed agreement retained the market maker’s ability to “sell tokens for a profit,” CoinDesk reported.



According to Movement Foundation’s general counsel YK Pek, the renegotiated agreement used a “variable interest” mechanism, where a portion of tokens would be loaned to Web3Port only when the token price exceeded a certain rate.&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">31/ Anything in excess of 0.25, 50% of it would be paid as &#39;variable interest&#39; to the Foundation. So at 0.30, the Foundation would earn 0.25+0.025 and the MM would earn 0.025. In other words, after the &#39;agreed principal USD value&#39;, the MM earns an upside. <a href="https://t.co/nRm9KpcNqo">pic.twitter.com/nRm9KpcNqo</a>&mdash; wassielawyer （哇西律师） (@wassielawyer) <a href="https://twitter.com/wassielawyer/status/1918182021530292437?ref_src=twsrc%5Etfw">May 2, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



This was an improvement over the previous proposed clause that would not require the market maker to sell any tokens below a $5b FDV price. It helped to solve for the “incentive misalignment with a hard dump figure at 5bn,” Pek said in the X post.



Web3Port’s contract with Movement Foundation was brokered through Rentech, a questionable middleman entity that looks to be a Web3Port subsidiary.



The real controversy, Movement Foundation’s general counsel YK Pek said, was that the foundation was misled into entering an agreement under a false impression, rather than on the terms themselves.



Disclosure: Blockworks co-founder Jason Yanowitz is an angel investor in Movement Labs.



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0xResearch Newsletter

Movement’s Rushi Manche faces suspension amid market maker controversy

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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Picture the iconic Spider-Man meme with the various Spider-Men pointing at each other.



Got it in your head?



Kraken said yesterday that it turned the tables on a North Korean hacker who was trying to get a job at the exchange.



I spoke to Kraken’s chief security officer, Nick Percoco, who gave me some details that are, honestly, just perfect for a Friday edition.



Percoco told me Kraken had received a list of email addresses tied to hackers. They, as one would expect, checked to see if any of those addresses would pop up around Kraken. One did. The person had applied for a job and was in a pool of candidates.



Basically, he explained, the person’s resume wasn’t standout enough for the hiring team to otherwise pay attention. But the team decided to see what would happen if they proceeded with the hacker.



According to Percoco, given some red flags, the person wouldn’t have gotten very far in the job application process. For example, when the person joined a Zoom call, it was under a different name (not the name he’d used on the application), and then he quickly changed it.



When Percoco virtually sat down with the individual for one of the cultural interviews, things got interesting. It was Halloween, so naturally, Percoco asked the individual what he was doing for Halloween. After an extensive conversation, he claims it was pretty clear the person didn’t understand the holiday.



Then, when asked to pull out his phone and show his Google map location (to verify that he was in Houston, Texas), the individual struggled with that, too, Kraken said. It took him a few minutes of pretty obvious scrolling to find Texas on his Google Maps, per Percoco.



While this story is amusing now, it pulls back the curtain on a bigger problem in crypto. These bad actors are actively trying to infiltrate US crypto companies.



Percoco warned that companies have to be more careful about who they’re hiring and how they verify them. In Kraken’s case, the individual had enough missteps that he wouldn’t have made it through the normal process. But hiring someone directly through Discord, for example, could leave a project at risk.



His advice for screening a candidate that’s raising some red flags is to have them go to a place like a local Starbucks or McDonald’s and order something. That way — on a Zoom or virtual call — you can see where they are and it gives the interviewer insight into the location. For example, a McDonald’s in Germany would have German on the packaging instead of English, he said.



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Kraken thwarts hacker’s ill-intentioned job application

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



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



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



Q: Will you let Worldcoin scan your eyeballs?



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



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



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



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



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



Seems like an easy choice.



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



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



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



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



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



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



Don’t we all want to be unique?



And anonymous?



Seems like something true crypto cypherpunks should embrace.



Q: Should stablecoins be allowed to pay interest?



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



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



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



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



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



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



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



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



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



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



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



Still, though, 19.5%!&nbsp;



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



Q: How is the president’s stablecoin doing?



Right.&nbsp;



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



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



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



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



Ugh.



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



It means people are losing their minds again.



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



Number go up, I guess.



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

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



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



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



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



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



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



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



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



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



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DEXs

Ellipsis Labs claims credit for mysterious top Solana DEX

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



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



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



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



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



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



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



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



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



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



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



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



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



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



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Cetus ProtocolCETUS

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