Convex Finance

Byron Gilliam

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“It&#8217;s like heroin: You do a little and you want a little bit more.”&nbsp;



— Jim Sinegal on the danger of raising prices
</blockquote>



The Monday after meeting Jim Sinegal for coffee in 2001, Jeff Bezos informed his top executives that, going forward, Amazon would model itself on the price-obsessed retailer that Sinegal had built: Costco.&nbsp;



Like Costco, Amazon had always promised low prices, but unlike Costco, it hadn&#8217;t always delivered. There were plenty of deals to be had at Amazon.com, but they weren’t always the best deals.



After meeting Sinegal, Bezos made it his mission to change that.&nbsp;



“There are two kinds of companies,” he told his executive team, “those that work to try to charge more and those that work to charge less. We will be the second.”



Bezos found Sinegal inspirational because keeping prices low at Costco had become, in Charlie Munger’s words, “almost a religious duty.”



“When other companies find ways to save money, they turn it into profit,” Munger explained. But when Costco finds ways to save money, they pass it on to customers.



Another prominent Costco investor, Nick Sleep, described this as “scale efficiencies shared.”&nbsp;



“Savings achieved through purchasing or scale are returned to the customer in the form of lower prices, which in turn encourages growth and extends scale advantages.”



Or, as Sam Walton put it, “keep costs low and pass the savings on to customers.”



It’s not charity, of course. “You can generate far more [profit] at a cheaper retail price than you would have by attempting to sell the item at a higher price,” Walton explained.



This philosophy of passing all savings on to customers is what turned Costco and Walmart into what Nick Sleep called “retail’s version of a perpetual motion machine.”



It takes a near obsession with low prices to become that.



Sinegal was so committed to keeping prices low that when a new CEO suggested raising the $1.50 price of Costco’s hot dog and soda combo (which was being sold at a loss), Sinegal shot back: “If you raise the effing hot dog, I will kill you. Figure it out.”



They did figure it out — by building a factory to make the hot dogs themselves.



As a result, the price of a hot dog and soda at Costco hasn’t changed since 1984.



Bezos was similarly obsessed with prices.



Soon after his meeting with Sinegal, Amazon began scraping competitors’ websites in search of any product offered anywhere for less than it was on Amazon.com.



When it found one, Amazon’s website automatically matched it.



If that meant selling something for less than it cost them to procure it, so be it.&nbsp;



Amazon not only passed efficiency gains and cost savings on to customers, it sold products at a loss to force itself to get more efficient and find more cost savings.



It’s not the only way to run a business, of course.



Luxury goods makers like <a href="https://www.google.com/search?client=safari&amp;sca_esv=97ba584d5f1b9119&amp;rls=en&amp;q=Herm%C3%A8s&amp;si=AMgyJEv4SzCgky5yjH-2ngoVwLJNIjQ20h2ebpIlCJ5wxSO-Qx_2EPeWqq0TYK-Xm1muFNvu1f6ywfB6ehtxTtb715Q2lvCODiVz61pzQ_Be_Axg4xTi0jMmUdQ38421Ng70QptUnA9x&amp;sa=X&amp;ved=2ahUKEwjW3MPlkeCOAxUzJNAFHUuoM_IQ_coHegQIGhAE&amp;ictx=0">Hermès</a> keep prices artificially high to create a sense of exclusivity, for example, and Nvidia prioritizes sky-high profit margins so it can plow the profits back into R&amp;D.



It isn’t always a good way to run a business, either.



Companies like WebVan and MoviePass prioritized low prices, but failed because they couldn&#8217;t find enough efficiencies or cost savings to make the prices sustainable.



(MoviePass is now trying again with higher prices.)



Even McDonald’s, famous for its meal deals, has <a href="https://www.wsj.com/business/mcdonalds-value-inflation-fast-food-38611481?gaa_at=eafs&amp;gaa_n=ASWzDAhGtk_GbUniCuqsA1L_pwpFtFDgIvJXEkpnWcail_XP0UJWFhGwCbzvIsPz_nY%3D&amp;gaa_ts=68877bd6&amp;gaa_sig=rwDgMCmFJp4Nz-Jy4IDBdvsR0XcyFhaAKPFSqwY2kcUVgGHWwI1RWQ74ebX3tJv1yFHgMyrj-VaPhcevl6bfcQ%3D%3D">recently struggled</a> to keep prices low enough to maintain its reputation for value.&nbsp;



One way to frame this dynamic is that some companies choose to have low margins (as part of a business strategy), while others are forced to have low margins (because they&#8217;re in a bad business).



As a rule of thumb, you want to invest in companies that have low margins by choice and not by necessity.



That might be a good way to think about layer-one blockchains, as well.



<h2 class="wp-block-heading">If you raise the effing MEV…</h2>



It’s not particularly expensive to create blockspace, so there’s no obvious reason why blockchains should have pricing power.



Kyle Samani, for example, <a href="https://youtu.be/qZq6bxfVQBE?si=ZcEuIjrVC-7JtUvC&amp;utm_source=mail.blockworks.com&amp;utm_medium=referral&amp;utm_campaign=crypto-s-enduring-mystery-why-l1-blockchains-have-value">thinks</a> blockchain fees will ultimately be close enough to zero that maximal extractable value (MEV) will become the sole reason layer-1 blockchain tokens have value.



MEV is the profit earned by validators who have the right to order the transactions in any given block, and on Solana, virtually all MEV is captured with software that’s created by Jito Labs.



Validators run Jito’s software to optimize MEV extraction and to share those profits with the SOL holders who’ve staked their tokens with them.



Now, however, a new Jito processing system — the Block Assembly Marketplace (or BAM) — will shift some MEV capture from the Solana blockchain to the applications running on top of it.



To me, this sounds a lot like Costco choosing to forgo profits in order to pass efficiency gains through to customers.



“BAM could lead to a reduction in topline revenue for the Jito DAO and SOL token holders,” <a href="https://x.com/0xcarlosg">Carlos Gonzalez Campo</a> wrote in a <a href="https://app.blockworksresearch.com/flashnotes/jito-bam-near-term-headwinds-for-sol-and-jto">recent report</a> for Blockworks Research.



Even in an asset class that doesn’t worry much about revenue, this should probably give token holders pause: “The shift to app-specific sequencing,” the report continues, “raises questions about the economics of the network.”



But Campo believes this is ultimately for the best: “By enabling apps to internalize transaction sequencing, Jito is acting as a good steward for the [Solana] network, despite forgoing meaningful incremental revenue in the short- to medium-term.”



He still expects Solana’s revenue to rise over the next year because “the increase in aggregate demand” should offset lower fees per transaction.



But this appears to be a defensive measure: “A significant motivator behind BAM is that Solana is losing the perps race to Hyperliquid.”



Sinegal might not be impressed. Adopting the Costco model would mean relentlessly pursuing efficiencies and then passing the savings through to customers as a matter of course, not just in response to a new competitive threat.



Sam Walton preached “everyday low prices,” regardless of what the competition was doing.



But if lowering fees at the expense of short-term profits becomes part of Solana’s culture, it could work out well for token holders. An investment portfolio of just Walmart, Costco and Amazon would have outperformed just about everything over the past 30 years or so.



Their “shared efficiencies” business model is not for everyone, however, because selling hot dog combos for $1.50 is a tough business.



And what’s made Costco great isn’t just that it’s managed it — it’s that it chose to.



If Solana is also a business, is it the kind that can choose to sacrifice profitability?&nbsp;



Or is it the kind that has to?



We might soon find out.



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The Breakdown Newsletter

What blockchain investors can learn from Costco

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 some time now, Solana&#8217;s pitch <a href="https://www.solanaroadmap.com">has hinged</a> on the levers of bandwidth and latency.



However, as we&#8217;ve seen from the limitations of high-frequency trading systems and the often uneven performance of existing onchain order books, high throughput and sub-second finality alone are likely insufficient to support the future of global markets.



While that may sound counterintuitive for a chain built on speed, it&#8217;s now emerging as the core thesis of a new, community-authored roadmap that lays out how Solana can become the backbone for internet capital markets.



Released last week, this <a href="https://www.anza.xyz/blog/the-internet-capital-markets-roadmap">new roadmap</a> was co-authored by Anatoly Yakovenko (Solana Labs), Max Resnick (Anza), Lucas Bruder (Jito Labs), Austin Federa (DoubleZero), Chris Heaney (Drift) and Kyle Samani (Multicoin Capital).



They argue that in addition to solving for bandwidth and latency, the network <a href="https://x.com/solana/status/1948432399333044621">must also account </a>for market microstructure.



Solana wants to be the best place to build — not just for liquidity and scale, but for custom markets themselves. To do that, it needs to let applications control the rules of their own transaction sequencing.



The roadmap <a href="https://x.com/anza_xyz/status/1948408290112889240">proposes</a> a shift toward application-controlled execution (ACE), a model that would give smart contracts granular control over how trades are ordered and settled.



ACE breaks with the single-leader norm in favor of programmable execution environments and multiple concurrent validators.



Combined with infrastructure upgrades like <a href="https://blockworks.co/news/jito-upgrade-block-assembly-marketplace">Jito&#8217;s Block Assembly Marketplace</a> (BAM), the <a href="https://blockworks.co/news/solana-exec-founds-internet-depin">DoubleZero</a> fiber network and the upcoming <a href="https://blockworks.co/news/solana-alpenglow-next-gen-consensus-layer-speed">Alpenglow consensus engine</a>, Solana apps will soon be able to define bespoke order-matching rules designed to rival Wall Street systems.



BAM, rolling out in late July, <a href="https://x.com/jito_sol/status/1947293546182025551">enables</a> apps to integrate custom sequencing logic — effectively delivering ACE today via a decentralized, TEE-powered network. It turns Solana blockspace into a programmable sandbox where developers can ship tailored order flow logic without forking clients or cutting BD deals with validators.



DoubleZero, currently <a href="https://x.com/doublezero/status/1947730722380227061">live on testnet</a> with over 100 validators and 3% of mainnet stake, reduces latency and jitter across the network by replacing the public internet with a multicast fiber backbone. It&#8217;s expected to go live on mainnet in mid-September.



Alpenglow, currently slated for late 2025 or early 2026, <a href="https://x.com/anza_xyz/status/1924491939040133515">finalizes</a> blocks in ~150ms and simplifies Solana&#8217;s consensus logic to support faster execution and future features, such as MCL and async program execution (APE).



By these <a href="https://www.youtube.com/watch?v=_F6YKiC1MI4">powers combined</a> — along with MCL, which introduces multiple simultaneous leaders — developers will be able to build high-performance markets without relying on good validator behavior or suffering from the single-leader bottleneck.



If successfully executed, the post’s authors believe that Solana apps will offer fairer, faster and more transparent trading, closer to a CEX experience but without compromising decentralization. Devs will unlock permissionless experimentation with tools like speed bumps, quote protection and order privacy. And for institutions, it will open the door to globally synchronized, composable liquidity onchain.



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blockchain

Solana roadmap targets market microstructure with ACE

Casey Wagner

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



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Friday’s the deadline for most countries to negotiate new trade agreements with the US.



President Trump on Sunday reached a deal with the European Union that would establish a 15% levy on imports to the US. It’s less than the original rate proposed on Liberation Day (20%) and half of what Trump threatened the EU with earlier this month (30%).&nbsp;



The rate is higher than the 10% baseline most imports to the US have had since the spring, when the White House first said it would delay higher rates.&nbsp;



Additionally, the EU will purchase $750 billion in US energy and invest $600 billion in the US by 2028, the White House added in a Monday statement. The feasibility of the investment, however, is being <a href="https://www.politico.eu/article/eus-600bn-us-investment-will-come-exclusively-from-private-sector/">questioned</a>.&nbsp;



Investor reaction to the deal was subdued, but still positive. Futures moved higher on Sunday night, and the S&amp;P 500 and Nasdaq Composite indexes were trading in the green for the first half of Monday’s session. Both had dipped lower by 2 p.m. ET.&nbsp;



Economists largely agree that the deal is a good thing — or, at the very least, it’s better than nothing. An all-out trade war between the US and EU would have been a true worst-case scenario, so the agreement brings a sense of relief to both sides. That said, the details are not exactly being universally celebrated. Plus, the details are still a bit murky.



Some “strategic products” are exempt from the 15% tax (i.e. aircrafts, select chemicals and agricultural products and other raw materials). What’s currently not exempt? Luxury goods. LVMH shares were trading 2% lower at the time of writing.



European Commission President Ursula von der Leyen said Monday that more items could be added to the exemption list should negotiations continue.&nbsp;



The White House called the agreement a &#8220;colossal deal” that helps “liberate America from unfair trade practices.” Other countries involved are less enthused. Just ask French Prime Minister François Bayrou.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcKLFLoA8yv-8XGjgSoKk4KI-4dOASWvmut2o963PN2ctez3hU0hI0u3_6h0Nr-V6KfrzBPJ7bIAab44r-FSJjHB-qTT_ZiIyq91u3rfAM-vxJHVHlnFVfiR9w-zdp_UfngCI1f?key=ht3xDkP_szEI-Tjka4S--w" alt=""/></figure>



It’s a busy day for the president, and not just because of tariffs. He’s currently in Scotland meeting with British Prime Minister Keir Starmer.&nbsp;



The two are discussing trade and the humanitarian crisis in Gaza, per the White House. Trump told reporters Monday morning that the US will offer aid to Gaza, saying there is “real starvation” in the region.&nbsp;



And let’s not forget about China. Officials have a little longer to ink a deal, but not much. Higher tariffs on both Chinese and American goods will go into effect on Aug. 12.&nbsp;



Chinese and American officials are meeting in Sweden today to discuss how to proceed. More on that (and future trade developments) later this week.&nbsp;



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Donald Trump

US inks trade deal with EU days before deadline

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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The last time Zora was in the <a href="https://blockworks-research.beehiiv.com/p/vitalik-s-new-l1-scaling-plan-456481d76685267c">limelight</a>, the protocol was seeing an all time-high of 20-25k tokens created daily.



That was in April, just before the ZORA token-generation event — launching a “<a href="https://support.zora.co/en/articles/4796161">for fun only</a>” token that was universally panned by the Crypto Twitter commentariat.



The ZORA token dumped immediately on launch, daily tokens created cratered to less than 5k, and price had largely stagnated until last week.&nbsp;



Now it’s back. ZORA is today trading 227% up on the week, and its mobile app is <a href="https://x.com/js_horne/status/1949570371285315677">climbing</a> ranks on the iOS App Store.



Nearly 40k tokens were created yesterday, the highest in the protocol’s history. About 15-50% of the tokens (denoted in blue below) are coming from Base App, Coinbase’s newly rebranded wallet app.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdzj-ZxXpfV5FyQ_euqvhAKuja2UcuaC9xRLXZGhz2b9PsOcJ7VBWCgzqqdjLzY-EkERBH8czbrS0S0JDuBL1UmgzBJyk2Lz3B2_X8SVuNwLaAqPNXoLqhHUZmzFo69ie6DoV2GjA?key=MktSgORwkkHHEzwd57U5Fw" alt=""/></figure>



<h2 class="wp-block-heading">The economics of Zora</h2>



Zora is not a difficult product to understand.



It’s pump.fun with a social network. Or think Instagram, but tokenized into oblivion.



Here’s roughly how it works:



You are a social media influencer, and you post cool stuff on Zora. Each of your posts are tokenized as an ERC-20 token with a 1 billion supply. You receive 1% (10 million).



People think your post will go viral, so they buy it (via Uniswap under the hood), and you earn a 1% cut of the trading fee paid in ZORA. That’s the first revenue stream for creators.



These trades are paired against your “<a href="https://support.zora.co/en/articles/6338497">Creator Coin</a>,” which is basically your profile tokenized when you sign up on Zora. Your username is the ticker.



Every Creator Coin has a 1 billion supply, 50% of which is immediately tradable.&nbsp;



The other half vests linearly to you over five years. But here’s the catch: It only pays out to you when someone really likes you and trades your Creator Coin. That’s the second revenue stream for creators.



You quickly see how the incentives line up.&nbsp;



Make cool content, people buy your tokenized posts, you earn 1% trading fees. Become super popular, people speculate on your Creator Coin, your market cap grows, you get paid out more.



Most Zora trading volume is coming from Creator Coins — about $33 million yesterday.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc_ctetBNrrIMrPlYZXRjDABvK3h7Sa0XJ6MRsdzblT-qxzWF2SNmQ0TGStzh-ocAXRZFGhVG4m-2wWbYzet2MUk7pYRWyw5xr8F6jlB_AblHSoTUo2CBlS9Jtwje7flN3Au8NNdA?key=MktSgORwkkHHEzwd57U5Fw" alt=""/></figure>



I imagine that is quite lucrative for content creators.



Consider <a href="https://dexscreener.com/base/0x80a46421e3edbd8a25d623859ea875c344ca4427eb87605eae626bcf8a03a413">JACOB</a>, the Creator Coin of Zora co-founder Jacob Horne. It’s the second-largest Creator Coin, with a $6.2 million market cap today.



At a linear vesting rate of 500 million tokens over five years, that’s 273,973 tokens vested a day. Or about $3,397 in daily value at a $6.2 million market cap.



Contrast that with a typical Instagram creator who takes years to build a 50k following, and gets paid something like $100-$500 for a sponsored post, based on <a href="https://www.shopify.com/sg/blog/influencer-pricing#">Shopify’s</a> estimates.



Zora draws a lot of <a href="https://x.com/aeyakovenko/status/1949535075118494008">comparisons</a> to Pump for the way that it both attracts speculators to trade on low-cap tokens.



The key distinction is that Zora is attempting to anchor this activity to a native social network, betting that a durable network effect will sustain engagement.&nbsp;



(Pump appears to be moving in a similar direction with Twitch‑style livestreaming.)



That may explain Zora’s decision to deploy on Base, despite having already developed its own OP-stack L2 chain in 2023.



Zora’s revenue-sharing tokenomics is undoubtedly superior to traditional social networks. But without a genuinely organic social graph — and that is the most daunting task of them all — it’s hard to see Zora maintaining its momentum.



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0xResearch Newsletter

Breaking down Zora’s latest ‘Content Coin’ fad

The cloud computing space is dominated by centralized giants like AWS, Google Cloud, and Azure, but Fluence is breaking the mold with a decentralized, enterprise-grade alternative. Offering a cost-efficient and open compute platform, Fluence eliminates the need for proprietary cloud providers, providing businesses with enhanced flexibility and resilience.



Fluence has onboarded customers which it has saved over $2 million compared to the centralized cloud, rewarded compute providers with over $1million in ARR (in USDC and FLT) and has a pipeline of 90 companies comprising $7.5mm in ARR. This early traction bodes very well for the growth of Fluence and shows the potential for the platform to be a significant player in the critical compute ecosystem by providing a viable alternative to the centralized clouds.



By shaping the Cloudless future, Fluence leverages DePIN (Decentralized Physical Infrastructure Networks) to offer affordable, high-performance compute solutions. As these solutions scale, the platform offers attractive opportunity for investors to earn yield by securing the network.



Fluence’s innovative staking and reward system is designed to attract institutional compute providers with predictable returns in exchange for their hardware contributions. Simultaneously, it appeals to individual and institutional investors who can stake its native token, FLT, to help secure the platform and earn rewards.



In this guide, we’ll explore Fluence staking, why it presents an attractive opportunity for investors, and what sets it apart from typical staking models.



<h2 class="wp-block-heading">The Fluence Platform: A Decentralized Compute Marketplace</h2>



Fluence is a decentralized marketplace that connects businesses requiring enterprise-grade computing power with professional infrastructure providers such as PiKNiK, Nebula,and Kabat, all of which operate from top-tier (Tier IV) data centers.



In stark contrast to centralized giants like AWS, Google Cloud, and Azure, Fluence’s open network offers significant cost savings, often up to 75% cheaper. Fluence&#8217;s infrastructure runs on the same Tier IV data centers used by leading Web2 businesses, ensuring a high level of reliability. Its lower cost provides a viable alternative to traditional cloud providers, reducing the risks of rising costs, censorship, and inefficient cross-platform data sharing.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Fluence has architected its platform to enable a large, low cost and resilient network. To be successful, the platform requires an economic model that provides trust and attracts institutional providers who look for stable returns. Resources provided to the network should be easily discoverable, provably accounted, efficiently utilized, and fairly compensated, and customers should receive high quality and predicable service at a significantly lower price than comparable cloud platforms. The network should be resistant to misbehavior and dishonest actors, ensuring they are penalized for incomplete work.” &#8211; <a href="https://www.fluence.network/blog/flt-staking-for-compute-resources/?utm_source=blockworks">The Fluence DAO</a>
</blockquote>



<h3 class="wp-block-heading">Key Components of the Fluence Platform</h3>



<ol class="wp-block-list">
<li>Compute Providers Fluence’s decentralized compute marketplace features providers that commit their hardware resources for rent. Providers earn FLT tokens when their hardware proves availability and USDC their hardware is rented by customers. </li>



<li>Proof of Capacity (PoC) Mechanism Fluence ensures providers meet their commitments through a Proof of Capacity (PoC) system. Compute capacity is measured in Compute Units (CUs), which consist of 1 core, 4GB RAM. This mechanism ensures transparency and provable capacity dedicated to the network. </li>



<li>Continuous Readiness and Rewards Providers submit cryptographic proofs to the Fluence blockchain to demonstrate their capacity and readiness. They receive FLT rewards for idle CUs every epoch, which is currently set as a 24-hour period. In order to be able to participate in the reward protocol, FLT stake is required to activate the providers’ capacity. </li>



<li>Stakers Stakers collateralize FLT tokens to activate compute providers’ capacity, ensuring network reliability. In return, stakers earn FLT rewards or USDC for helping to secure and decentralize Fluence’s platform. The Fluence protocol allows and supports delegated staking including liquidity pools. </li>



<li>Customers Customers rent compute services using stablecoins (USDC), making transactions predictable for themselves as well as providers by reducing the volatility typically encountered in cryptocurrency-based systems.</li>
</ol>



<h2 class="wp-block-heading">Staking with Fluence</h2>



Unlike most compute networks, which require the compute provider to stake tokens, Fluence enables delegated staking that allows any FLT holder to stake and secure the network. Furthermore, it allows innovative projects, like Parasial, to offer capital efficient liquid staking pools. Fluence believes that institutional hardware providers prefer to focus on hardware operation rather than managing tokens, while the universe of investors seeking yield is much larger. By allowing any FLT holder to stake, Fluence lowers costs for compute providers and encourages community and institutional participation.



The Fluence&nbsp; staking model is unique in that it is based on a fixed USD value, not an arbitrary number of tokens. This fixed value ensures that the stake is adequate to build trust while maintaining predictable regardless of bull or bear markets.



Rewards are paid in FLT, but are adjusted daily to target $10 per core, or $600 per month for a 64-core CPU. When a customer rents capacity, payments are made in USDC rather than FLT.



<figure class="wp-block-table"><table class="has-fixed-layout"><tbody><tr><td>Stake per 64-core CPU</td><td>$12,000</td></tr><tr><td>Annual reward for staker (assuming 20% reward share)</td><td>$1,440&nbsp;</td></tr><tr><td>Stake yield&nbsp;</td><td>12% USD-based</td></tr></tbody></table></figure>



<h2 class="wp-block-heading">From Staking To Compute Rentals</h2>



Investors stake FLT to activate provider hardware and ensure that the network operates reliably. Hence, staking aligns compute providers with customers. If a provider fails to deliver on its commitments, they forfeit revenue, lose unvested rewards and risk having the (delegated) stake slashed.



With FLT staked to activate hardware committed to the network, providers create and submit proofs to confirm compute unit availability, forming an on-chain Capacity Commitment listed on the Compute Marketplace. Now, customers can browse the marketplace, publish their compute requirements and negotiate a price.



Once a match aligning a customer’s requirements with a provider’s capabilities is made, a smart contract, aka a deal, is created and funded by the customer.&nbsp; In order to make the contracted compute available to the customer, the contracted compute capacity transitions from proving its availability to serving the customers workload.&nbsp;



Providers and stakers continue earning for the duration of the deal.&nbsp;



While deal revenue is paid out to compute providers and to stakers upon the completion of the contract, staking rewards for proving capacity are vested over six months, with 1/182 of the rewards unlocked each day to encourage long-term participation.



For more information on Fluence staking mechanisms, including reward calculations and claiming rewards, consult the <a href="https://www.fluence.network/blog/flt-staking-faq-2/?utm_source=blockworks">FLT Staking FAQ blog.</a>



<h2 class="wp-block-heading">Staker Rewards</h2>



Provider rewards target $10 per month per compute unit, or $600 per month for a 64-core CPU (deducting for four cores lost to overhead). These rewards are shared as determined by the provider and published on the marketplace. For example, a provider may propose to reward a staker with 20% of the server income.



<h2 class="wp-block-heading">Empowering Community Involvement</h2>



In most compute and storage DePIN projects, staking is typically limited to hardware providers, leaving little opportunity for the broader community and investors to actively participate.



Fluence, however, takes a different approach with delegated staking enabling full community participation. This not only allows investors to engage directly but also enhances the security and reliability of the platform&#8217;s compute marketplace. It also enables third party projects to innovate and create solutions on top of the underlying mechanics which should drive more use for FLT and exchange staking capital efficiency.&nbsp;



Furthering its commitment to community participation, Fluence governance is managed by the Fluence DAO, a Swiss-based association designed to give token holders real decision-making power while protecting participants from legal liability.&nbsp;



Through on-chain voting, the DAO allows the community to propose and approve governance changes. Additionally, the DAO elects a Governance Committee to safeguard the integrity of the process, ensuring decisions are made transparently and fairly, free from the risk of malicious or rogue voting.



<h2 class="wp-block-heading">Why Stake with Fluence? An Investor’s Perspective</h2>



Institutional investors are increasingly seeking innovative, reliable opportunities in decentralized infrastructure. Fluence’s staking model checks all the boxes:



<ul class="wp-block-list">
<li>Predictable USD-Denominated Rewards: FLT rewards are adjusted daily to maintain the USD-equivalent value of around $10 per core per month. </li>



<li>Institutional-Grade Security and Trust: Each compute job is secured through proofs, replacing reliance on centralized providers with verifiable, on-chain guarantees. Slashing mechanisms penalize non-performance, ensuring reliability. </li>



<li>Sustainable Growth: Rewards are vested over six months, ensuring long-term engagement from providers and stakers alike.</li>
</ul>



<h2 class="wp-block-heading">How to begin staking</h2>



To begin staking, head to the <a href="https://stake.fluence.network/?ref=fluence.network/?utm_source=blockworks">Fluence staking app</a>, where you can track and manage your staked positions, monitor the status of Capacity Commitments and withdraw FLT rewards.



For those who might find the typical staking requirements (between $6,000 to $12,000 in FLT) prohibitive, Fluence has partnered with Parasail, a leading DePIN staking solution, to offer smaller investors an easier entry point by providing liquid staking pools, with more innovative pools to come. Learn more <a href="https://docs.parasail.network/delegation-guides/guide-for-fluence-stakers/?ref=fluence.network/?utm_source=blockworks">about liquid staking</a>.



<h2 class="wp-block-heading">The Future of Fluence and FLT Demand</h2>



FLT is the backbone that secures harmony between compute providers and stakers, upholding a staking model designed to drive long-term utility and demand for the token by:



<ul class="wp-block-list">
<li>Locking FLT into staking commitments, reducing circulating supply</li>



<li>Creating a direct correlation between network expansion and FLT staking requirements</li>



<li>Encouraging long-term holding through structured reward vesting</li>



<li>Supporting a stable economic model that avoids inflationary token rewards common in other staking models</li>
</ul>



The protocol targets $200 of FLT stake per compute unit, meaning that every increase in compute capacity directly drives a proportional rise in FLT staking demand. For context, at launch in March 2024, Fluence had a waitlist of over 600,000 CPU cores, representing a potential $170M in FLT staking demand. However, Fluence is only onboarding capacity in alignment with customer demand, scaling the network as needed. This approach ensures a sustainable token economy, with fresh capital flowing into the ecosystem to access the real-world benefits of compute power.



Furthermore, unlike inflationary staking models, Fluence&#8217;s staking mechanism encourages long-term holding through structured reward vesting. This prevents excessive token emissions, ensuring sustained network participation and maintaining long-term stability.



<h2 class="wp-block-heading">Customers: Third Party Node Provider Sector</h2>



Fluenc’s initial customers and pipeline consists of companies in the large and growing third party node provider sector. The third party node provider sector is comprised of hundreds of companies that provide services to blockchains, to individuals and to enterprise customers that outsource the effort and complexity of running blockchain nodes.&nbsp; Because most of the companies in this sector are private and the service is usually included in the broad category of cloud services, projections of the industry size range significantly from $500 million to $2 billion.&nbsp; Regardless of the current size, it is clear that the industry is growing very quickly with estimates of 30-40% annual growth. Even taking the low end of the market size of $500 million presents a substantial market opportunity for Fluence.&nbsp;



Compute comprises 40-50% of third party node provider’s cost structure which make this industry particularly interested in lower cost compute. A fifty percent savings on compute has a substantial impact on their margins. and as providers adopt Fluence and lower their cost structure, any provider that doesn’t adjust its cost profile will be at a disadvantage. Third party node providers also understand the benefit of decentralization which is a priority for some of their customer base such as blockchains.



We think this sector is a terrific initial customer base that is well suited to adopt the Fluence platform and as customers onboard, Fluence will grow quickly in this substantial market, positioning it to add additional sectors.&nbsp;



<h2 class="wp-block-heading">A New Era in Decentralized Compute</h2>



Fluence is setting the stage for the future of decentralized computing by combining security, accessibility, and innovation. Through its staking model, the platform empowers participants to play an active role in shaping the future of computing—whether by securing resources, earning rewards, or contributing to the broader Web3 ecosystem.



For institutional investors, Fluence offers a stable and predictable opportunity to align with decentralized infrastructure. For individuals, it provides a chance to participate in a movement that’s transforming how computing resources are accessed and used.



As Fluence continues to pioneer advancements in DePIN, its DePIN staking mechanism stands as a beacon of innovation—representing not just an investment in a network but in a vision for a more secure, equitable, and efficient technological future. To participate in securing the most innovative compute DePIN, head to the <a href="https://stake.fluence.network/?ref=fluence.network/?utm_source=blockworks">Fluence dApp</a>; to experience the Fluence Cloudless solution, <a href="https://www.fluence.network/virtual-machines/?utm_source=blockworks">test-drive a Fluence virtual private server (VPS)</a>. To learn about Fluence, visit <a href="https://www.fluence.network/?utm_source=blockworks">our website</a>. To stay up to date on all Fluence news, follow Fluence on <a href="https://x.com/fluence_project">X</a> and join the community on the <a href="https://fluence.chat/?ref=fluence.network/?utm_source=blockworks">Discord</a> and <a href="https://t.me/fluence_project?ref=fluence.network/?utm_source=blockworks">Telegram</a> channels.



This content is sponsored and does not serve as an endorsement by Blockworks. The veracity of this content has not been verified and should not serve as financial advice. We encourage readers to conduct their own research before making financial decisions.



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Revolutionary DePIN staking on Fluence: An investor’s guide

This is a segment from The Breakdown newsletter. To read more 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">
“I don&#8217;t know what&#8217;s going to happen tomorrow and I can&#8217;t relive yesterday, but I live in the moment if I can.”&nbsp;



— Ozzy Osbourne
</blockquote>



Stock markets made new highs again this week, but the mood is hardly celebratory — possibly because it feels like investing is about to get much harder.



How do you invest for the long term when 1) AI might change everything and 2) the US government is $38 trillion in debt (and counting)?



This week, Jim Cramer said the ballooning national debt made him “worried for his kids” — so much so that he took the unthinkable step of recommending bitcoin as a hedge against monetary debasement.



Quite the reversal for someone who said as recently as 2022 that he “would not touch crypto in a million years.”



(Note: 2022 was three years ago.)



I get it, though.



Watching yesterday’s <a href="https://x.com/JustinWolfers/status/1948519156661583974">surreal exchange</a> between President Trump and Fed Chair Powell, both in hard hats, made me despair for the long-term health of my investment portfolio.&nbsp;



What investments can you rest easy with when the world’s only risk-free asset — US Treasurys — no longer seem free of risk?



You could buy gold, of course, and that has been working lately: The original inflation hedge is up 40% over the past year.



But an inflation hedge is all gold usually is: Over the last 2,000 years, its real, inflation-adjusted return is approximately 0%.



That will maintain your purchasing power, which is nice, but it won’t help you retire.



Also, you don’t want to be hiding in gold when they start mining it <a href="https://www.astroforge.com">from asteroids</a> or creating it in <a href="https://www.ft.com/content/06f91e0d-3007-40bd-b785-86fef4890809">fusion reactors</a>.



Is bitcoin a better hiding place then?



That, too, has been working: The newest inflation hedge is up 80% over the past year, cementing its reputation as digital gold.



But it’s hard to have a 50-year view on such a new asset.



On that kind of timeline, people as smart as Cliff Asness and Matt Levine can <a href="https://www.youtube.com/watch?v=lhCL4R3JFOc">think</a> that “most of the probability” for bitcoin is “zero.”



Finding investments where most of the probability is not zero is not as easy as it used to be.



Land has been a reliable safe haven over the centuries — they’re not making more of it, as they say.



But in an age of demographic collapse, we might need less of it.



It’s <a href="https://www.2oceansvibe.com/2025/06/18/japan-now-has-over-9-million-empty-homes-due-to-declining-population/">estimated</a> that by the year 2038, one-third of the homes in Japan will be abandoned for lack of anyone to live in them.



I’m not sure land will hold its value when the entire developed world looks like Japan a decade or two from now.



Still, if we’re headed toward monetary debasement in this decade, a portfolio of gold, bitcoin and land is probably a good bet.



But what if this decade turns out to be surprisingly good?



If the real story over the next 10 years or so turns out to be an AI-driven boom in productivity, a portfolio of gold, bitcoin and land might doom you to decades of underperformance (and declining purchasing power).



That is what the researchers at Epoch AI expect: They <a href="https://epoch.ai/gradient-updates/ai-and-explosive-growth-redux">estimate</a> that “even when AIs have only automated 30% of all economically useful tasks, economic growth rates may exceed 20%.”



20%!!!



It’s hard to fathom a world of 20% GDP growth — the US government might even manage to balance its budget in that scenario.&nbsp;



But even that unthinkable outcome may be understating the upside.



The Economist <a href="https://www.economist.com/briefing/2025/07/24/what-if-ai-made-the-worlds-economic-growth-explode">noted</a> this week that growth theorists who attempt to model the progress of technology “have long posited that if ideas beget more ideas with sufficient velocity, growth should increase without limit.” (Emphasis added.)



Sam Altman seems to think that’s where we’re headed: He <a href="https://blog.samaltman.com/the-gentle-singularity">believes</a> AIs will be capable of begetting ideas as soon as next year, and that “2027 may see the arrival of robots that can do tasks in the real world.”



That would put markets on a crazy train to who knows where.



If investors sense that labor will soon be automated out of existence, there will be a mad scramble to secure the largest possible share of the post-labor economy.



“What should you do if you think an explosion in economic growth is coming?” <a href="https://www.economist.com/briefing/2025/07/24/what-if-ai-made-the-worlds-economic-growth-explode">The Economist asks</a>. “The advice that leaps out from the models is simple: own capital, the returns to which are going to skyrocket.”



But not just any capital.



20% growth would likely mean 20% interest rates too, which would destroy the value of your gold, bitcoin, land and any stocks not directly involved in the AI productivity boom.



You’ll have to choose carefully, and maybe sooner than you’d expect.



It’s exhausting to think about. And maybe we shouldn’t.



This week, Anthropic <a href="https://www.perplexity.ai/page/anthropic-research-reveals-ai-nTyemJTvTTGRYTnTHxe4EQ">publicized</a> its findings that AI models suffer from “inverse scaling” — which is to say an AI model that’s given more time to think tends to produce worse results.



AIs think pretty much like humans do, so we too probably suffer from inverse scaling.



If so, now may be the time to follow Ozzy’s advice — in investing and everything else — and try our best to live in the moment.



Let’s check the charts.



AI automation and GDP growth:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfH2qmLItgtT8ZklT3rIsjlFdp35eVT0O-lkzSSMYBS2I7XrU4uTxV8sPpUUuZNgDIgDJNxnUip3IE-MnAdq2g1nK_h20xr0fcaUhPw5eLdT2UirXj80i3-fjufzZOTkJNt1UR4?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



Pick your level of AI automation (the X-axis) and this chart from Epoch AI will tell you what level of GDP growth to expect. The TL;DR is that “the fraction of labor tasks automated by AI doesn’t need to be very high to yield very large growth impacts.” Per the chart, if only 20% of tasks are automated, they expect GDP to grow at an unfathomable 10% per year.



Revenge of the dorks:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfGzs_Ic4PfCblfwVv2SLk3uV4cIPaGGE4ei6wziu9zZK_SjTVmQghVjyiKh_4TtgAj8wtybkg6d6g0eRjYztldPjxYH-2d8iIwcYJ6Vith216yVykjVubWuskRh99xhwXiuQAYzQ?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



The Reddit gang is back and this time they’re betting on Dunkin Donuts, Opendoor, Rocket Companies and Kohl’s. Why those four? I doubt even an all-knowing AI could make sense of it. But if you think AI is about to take all the jobs, rolling the dice one last time in memestocks may be less irrational than it seems.



There’s a lot of dice rolling right now:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdWzt4H0_qOfRJGkr6CkkdJDnJfWvm2cRInRL9AtvyPArZMWC47l4zFZo1aFxKjJGhPvXrMqXz7AnbOMLYregsxhDQ6tJcWmY1uZG5VQ9456Tl1TXyCIlW3AGzuY9W88VimZ8yf6w?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



Data from Goldman Sachs shows that, as a percentage of overall activity, trading volumes in the most speculative stocks have rarely been higher than now. As an <a href="https://x.com/MikeZaccardi/status/1948765446322172298">indicator</a>, that is generally bullish before it’s bearish.



Tariffs have not slowed China’s export boom:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdLvt7-Iqe_f0v83nFvtwV-HwUJ1R2BWhUY5HqMe-W74jliMvScOVBs_wja66Iz2l05DBNcc4mFYuV9ZvzCbQF7StYPmSDXf_-Y5qW7VqkN937GceeQcZI5PApLhILS4Mjh5pPa8g?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



The more obvious reason for equities being at all-time highs is that the Liberation Day tariffs were not nearly as disruptive to the global economy as generally feared. China’s exports, for example, continue to boom. That show of strength may be why President Trump is <a href="https://www.wsj.com/economy/trade/trump-china-trade-dealmaking-995d7717?gaa_at=eafs&amp;gaa_n=ASWzDAhRbI_gSMPUJ4LK_077KY05Ndu0WoHsiR_tr4kaKml2BGZmEvt5uTk7io0POT0%3D&amp;gaa_ts=6883d7f6&amp;gaa_sig=8VwkSZsudBXfFLAQLPJkSajI1AzfeEKgEBriqIeolX2rtJOToF1-2UxGGazaL6AtHTMFNkzVFDXK3T7B5Mg6Ug%3D%3D">reportedly</a> more willing to make concessions to get a deal done.



China is flooding the world with cars:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdKA_ht_E1oXcF8sMBRoxpOuezEYJWo0ygYhbC_E9C6-2sy-NDo3uQsHVZH4c3EJP6AvEMbkXbIg1uBzSSPk7v4K8DAMd3y3T1cbFxkux2OMgIPNfxAVh-LfAJfDkZN_KcP8jjZ5w?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



I’m glad we still have an auto industry in the US, but if I could buy a high quality EV for <a href="https://insideevs.com/features/761423/byd-seagull-drive-in-china/">$8,000</a>, I would.



Humans remain in demand:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcBRV7lZ8T_Sg7JLVy_rIQtdcxKSXk_Ce5TVIWNxHjdyKGMgHHKy7bhLHQnrbilY8L1MYXpKVvP3_oJaGoll43kMGwB8Fg-dDUyVQtUqDdT_KXQLxkuxf52lZdBv3BJnmOR4SON?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



The Atlanta Fed’s wage tracker shows US wages growing at 4.2% — still well in excess of inflation (however measured).



Robots are not taking the jobs yet:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeqxst8YNwHavnhnns88ZaE7j4y2lz08bCbio_WyK3p0Ul9nu93_IHZHMY01g3T7aM0-Fw13veA1DdQk0X8l-NelrPFL_RwaoIpdSxUebApwneEnGDojrSPiVXNRNZCegmG8in-gw?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



Against the popular narrative, the FT’s data analysts find that “US jobs at high risk from generative AI have not been more likely to shed young workers since ChatGPT launched.” (So far.)



False alarm:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcUqoOL8gQ7qgbUVpI1AMTmH7P9Vw4JMxAtbh5obXms-ErqsHFiSinS0ow3wciQ3FRO-O1M5pyAWRIC5HFswa-1NkpIoFjJSqhzGcQEMcXSvCjuL96b7eZYNjc9B7dr2FRE0en_Ug?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



<a href="https://polymarket.com/event/us-recession-in-2025?tid=1753471341405">Polymarket</a> bettors believe that the odds of the US going into recession this year are down to just 18%.



Comfortably familiar:&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfHu7g8HZ3b3lZYDVnKEp7ddjh17Gyolke0O8x0TVaNaatyqFlR7eB1y0qBGuO47g2RBPcrnpSkEvzgkLDN9nVi0VUE4rLuS0ZsDuZWvvC9diO1lOZ2gyth_BvD4BaTlWw_Wm-RTQ?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



The US economy is on pace to grow 2.4% in Q3.&nbsp;



Could we soon be growing at 10x that?



It’s thinkable — but a long way from predictable.



Have a great weekend, productive readers.



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Friday charts: Crazy train investing

Ben Strack

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



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



Given the recent GENIUS Act signing and certain firms soon reporting Q2 earnings, it’s as good a time as any for a crypto stock update.&nbsp;



After the stablecoin-focused bill became law, Compass Point analysts downgraded Circle stock from neutral to sell.



Their CRCL price target declined from $205 to $130, according to a Monday note.&nbsp;&nbsp;



Analysts Ed Engel and Abdullah Dilawar anticipated the rally leading up to the <a href="https://blockworks.co/news/genius-act-passes-house">GENIUS Act signing</a>, but predicted the “sell-the-news” drop that came. Shares of CRCL were trading around $195 at 1:30 p.m. ET — down 14% in the last five days.



Competing stablecoins products from traditional banks and fintechs will also put pressure on CRCL’s premium valuation, they argued.&nbsp;



While CRCL&#8217;s $53 billion market cap (when the note was published) implied long-term expectations of ~25% market share and ~30% EBITDA margins, the $130 price target assumes 15% longer-term market share and 20% EBITDA margins.



Circle is set to report its second quarter earnings during an Aug. 12 webcast.



Moving on, Jefferies kicked off its coverage of Galaxy Digital on Tuesday with a buy rating and a $35 price target. I missed this while in court at the <a href="https://blockworks.co/news/roman-storm-government-may-rest-case">Roman Storm trial</a>.



GLXY’s stock price was just above $30 at 1:30 p.m. ET — up about 12% this week.&nbsp;&nbsp;



Being a “comprehensive provider for institutions seeking digital asset exposure” gives Galaxy an edge over more specialized peers like prime brokerage FalconX, liquidity provider Cumberland, market maker Wintermute and bitcoin-focused firm NYDIG, Jefferies analysts argue.&nbsp;



The GENIUS Act could open up new stablecoin-related business opportunities (like custody or issuance partnerships), they added. <a href="https://blockworks.co/news/us-house-passes-clarity-act">The CLARITY Act</a> would likely contribute to “incremental” revenue opps as institutional players enter the segment.



Beyond that, roughly two-thirds of Galaxy’s enterprise value stems from its data center business, according to Jefferies. The company bought Argo Blockchain’s Helios mining facility in 2022 and is hosting CoreWeave AI and HPC operations there.



We’ll be listening to what Mike Novogratz has to say during Galaxy’s Aug. 5 earnings call.&nbsp;



Before Circle and Galaxy report their earnings next month, Coinbase will share its Q2 results on July 31.&nbsp;



Compass Point analysts, in a July 16 note, increased their Coinbase price target from $195 to $330 (COIN shares traded for ~$395 this afternoon). But it reiterated its neutral rating, rather than opting for “buy.”



Headwinds for the crypto exchange include US trading activity moving toward US ETFs, CME futures and decentralized exchanges. Monthly data from competitors like Robinhood and Exodus affirms weak Q2 trends to that end. 



<img loading="lazy" decoding="async" width="624" height="321" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdFahGeN_g-af1h7aDPB_19dbDWe4Q0Y8_jK2pMIbNrIcSHdgL7qLbLLhRPpdk6CudaYGu26OGYr9Cdruyy-5G6LEOL6r6f1xVtKCc0HI2psZCas-B2-02kh4isBcqbXTN1r8CzwA?key=MFFChMm_9dlxyWTwVrYrqw">



Compass Point analysts estimate that Coinbase’s transaction revenue decreased 45% quarter over quarter.



“We&#8217;re hesitant toward shorting COIN during a crypto bull market and potential for Fed rate cuts — either from Powell or his successor,” Engel and Dilawar wrote. “However, if rate cuts and CLARITY act are postponed beyond 3Q25, this could pressure COIN&#8217;s valuation amid deteriorating fundamentals.”



Before you go enjoy your weekend (after reading the rest of this newsletter, of course), I’ll mention one other crypto-linked stock that just turned heads with its latest hire.&nbsp;



Nasdaq-listed SharpLink Gaming today <a href="https://x.com/ethereumJoseph/status/1948720039370092831">named</a> Joseph Chalom, BlackRock’s former head of digital asset strategy, as its co-CEO.&nbsp;



You might recognize the SharpLink name. It’s that <a href="https://blockworks.co/news/bitcoin-treasury-strategies-sharplink-eth">Joe Lubin-led company</a> that all of a sudden got really into Ethereum. It held 360,807 ETH, as of July 20. (For more on crypto treasury strategies, consider reading <a href="https://blockworks.co/news/companies-holding-crypto-phase-one">this</a>).&nbsp;&nbsp;



Sharplink’s stock is up about 110% from a month ago, but has dropped roughly 30% in the last week. Crypto equities remain a segment we’ll be watching closely.&nbsp;



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Circle

Crypto stock outlooks fluctuate after GENIUS, ahead of Q2 reports

Macauley Peterson

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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From BOB’s breakthrough hybrid rollup design to VeChain’s TradFi-powered comeback, this week brought a wave of architectural pivots and regulatory advances.



<h2 class="wp-block-heading">1. BOB rules</h2>



BOB (Build on Bitcoin) just <a href="https://bob.build/blog/hybrid-zk-rollup">deployed</a> a first-of-its-kind rollup that uses zero-knowledge proofs for fraud resolution within an optimistic rollup framework.&nbsp;



Built with <a href="https://risczero.com/blog/RISC-Zero-OP-Kailua">OP Kailua</a>, a new OP Stack extension by RISC Zero and <a href="https://blockworks.co/news/risc-zero-launches-boundless-testnet-base">Boundless</a>, the system enables cheaper, faster fraud challenges — finalized in minutes rather than days.



This novel approach could catapult BOB to Stage 1 and Stage 2 status on <a href="https://l2beat.com/scaling/summary">L2Beat</a>, setting a new bar for trust-minimized <a href="https://blockworks.co/news/unlocking-bitcoin-defi-potential">Bitcoin DeFi</a>. Anyone can challenge a transaction with just 0.5 ETH, drastically lowering the entry point for rollup participation. It’s a breakthrough that combines zk finality with the accessibility of optimistic design.



<h2 class="wp-block-heading">2. Summer Optimism</h2>



Optimism’s Upgrade 16 just went live — and not a moment too soon.&nbsp;



L2Beat is <a href="https://x.com/l2beat/status/1935615549809054043">preparing</a> to downgrade any rollup lacking robust fraud-proof governance back to Stage 0 status. The <a href="https://gov.optimism.io/t/successful-upgrade-superchain-upgrade-16-optimism-mainnet/8673">upgrade</a> enables native cross-chain messaging and new bridge contracts, plus a higher gas ceiling (from 200m to 500m) to accommodate rising demand. With chains like <a href="https://blockworks.co/tag/base">Base</a> and <a href="https://blockworks.co/news/kraken-ethereum-layer-2-superchain">Ink</a> relying on the OP Stack, preserving Stage 1 classification is critical.&nbsp;



If Superchain wants to lead, decentralization can’t remain theoretical. It has to get real.



<h2 class="wp-block-heading">3. Much OS, very zk</h2>



In truly-the-funniest-outcome news, Dogecoin devs are <a href="https://github.com/dogecoin/dogecoin/discussions/3869">floating</a> a radical idea: integrate zero-knowledge cryptography directly into the base chain via a system dubbed DogeOS. The goal is to make Dogecoin more than a meme by enabling verifiable computation and smart contract-style capabilities.&nbsp;



If adopted, DogeOS would be one of the first native zk enhancements on a major proof-of-work chain, bringing new utility to a network historically known more for vibes than engineering prowess.



The proposal’s still in early stages, but it marks a notable shift toward tech seriousness in the Doge ecosystem.



<h2 class="wp-block-heading">4. Stablecoin alliance</h2>



<a href="https://blockworks.co/tag/anchorage-digital">Anchorage Digital</a> and <a href="https://blockworks.co/podcast/0xresearch/ea8714c8-1c84-11f0-b77f-a3c6884d9409">Ethena Labs</a> are <a href="https://www.anchorage.com/blog/anchorage-digital-partners-with-ethena-labs">teaming up</a> to launch the first stablecoin built specifically for the US under the <a href="https://blockworks.co/news/genius-act-passes-house">new GENIUS Act</a>. USDtb, currently issued offshore, will now be minted by Anchorage’s federally chartered crypto bank.



Anchorage’s stablecoin platform is designed for institutional-grade compliance and programmability, and Ethena’s USDe has already become the <a href="https://defillama.com/stablecoins">third-largest</a> stablecoin in DeFi by TVL. With this move, USDtb becomes a vehicle for mainstream financial integration, in addition to its DeFi-native appeal.



<h2 class="wp-block-heading">5. Expanding the polycule</h2>



Polymarket acquired <a href="https://blockworks.co/news/polymarket-qcex-acquisition">QCEX</a>, a CFTC-registered exchange, effectively clearing a regulatory path into the US market. For longtime observers, this was inevitable.&nbsp;



“Prediction markets are gradually reshaping how people engage with real-world events,” Chiliz’ Max Rabinovitch told Blockworks.&nbsp;



Sports betting is a huge opportunity for the onchain prediction market, particularly after <a href="https://www.nytimes.com/athletic/6481190/2025/07/10/sports-betting-trump-bill-tax/">provisions</a> in the giant <a href="https://blockworks.co/news/crypto-bills-in-congress">spending bill</a> nicknamed the “One Big Beautiful Bill Act” stand to neuter professional sports gambling. As regulatory clarity improves, Polymarket and others could bridge traditional markets with decentralized prediction infrastructure.



<h2 class="wp-block-heading">6. The cross-chain&nbsp;spin cycle</h2>



Centrifuge just <a href="https://centrifuge.io/blog/centrifuge-v3-multichain-launch">launched</a> v3 across six chains (Ethereum, Base, Arbitrum, Avalanche, Plume and BNB Chain), creating the most interoperable RWA infrastructure to date. Powered by <a href="https://blockworks.co/tag/wormhole">Wormhole</a>, this version enables fund managers, DAOs and fintechs to launch fully customizable onchain products with native chain abstraction. The platform has already <a href="https://blockworks.co/news/janus-henderson-clo-token-1b">secured</a> a $1b allocation from Janus Henderson via Grove. With v3, Centrifuge is bridging DeFi-native capital and institutional-grade financial products in one unified stack.



<h2 class="wp-block-heading">7. Might as well Jump</h2>



<a href="https://blockworks.co/news/solana-chain-running-pure-firedancer">A new L1</a> from ex-Citadel and Jump traders has gone live with a 40ms block time and a fully integrated trading stack.&nbsp;



Built on SVM with enshrined dapps like Ambient and Fluxbeam, Fogo positions itself as a performance-maximized, Hyperliquid-style platform — but ostensibly without sacrificing decentralization.&nbsp;



While the tech stack is fresh, the competitive field is anything but empty. Newcomers like Lighter, <a href="https://blockworks.co/news/ostium-dex-points-rwa-arbitrum">Ostium</a>, Reya and Main.Exchange all want a piece of the perps pie. Fogo’s bet? That TradFi-grade latency and native infra will pull top traders into its orbit.



<h2 class="wp-block-heading">8. VeChain staking program </h2>



2017-era ICO darling VeChain is reintroducing itself to the world with a $15m <a href="https://www.prnewswire.com/news-releases/vechain-launches-15m-stargate-staking-program-following-sec-crypto-guidance-302186226.html">staking program</a> and a suite of TradFi partnerships. <a href="https://blockworks.co/tag/bitgo">BitGo</a> is onboard for custody, <a href="https://blockworks.co/tag/franklin-templeton">Franklin Templeton</a> is <a href="https://cointelegraph.com/news/franklin-templeton-benji-vechain-enterprise-payments">integrating</a> BENJI and validator management now includes <a href="https://blockworks.co/news/keyrock-launches-us-entity">Keyrock</a>.&nbsp;



The newly launched StarGate staking system uses NFTs to simplify compliance and reward participation — right as the SEC is pondering staking clarity. It’s all part of VeChain’s “Renaissance” <a href="https://x.com/vechainofficial/status/1877403277564014950?lang=en">upgrade</a> aimed at modernizing tokenomics, improving developer UX and getting institutions back onchain.&nbsp;



Can a legacy L1 regain relevance in the age of limitless appchains and well-funded competitors? Watch this space.



<h2 class="wp-block-heading">9. Going Ape</h2>



GameSquare (Nasdaq: $GAME) has <a href="https://www.prnewswire.com/news-releases/gamesquare-acquires-iconic-cowboy-ape-cryptopunk-from-defi-pioneer-robert-leshner-302513150.html">acquired</a> CryptoPunk #5577 — <a href="https://cryptopunks.app/cryptopunks/details/5577">the “Cowboy Ape”</a> — from Robert Leshner in a $5.15 million equity deal. It’s the first NFT-for-equity treasury play by a public company, and part of GameSquare’s larger strategy is to integrate digital assets across brand, treasury and yield products.&nbsp;



Leshner, meanwhile, has recently attempted a contested takeover of Liquor House (LQR), which <a href="https://www.reuters.com/markets/deals/liqour-house-adopts-poison-pill-defend-against-robert-leshner-bid-2025-06-14/">stalled</a> after a poison pill defense.&nbsp;



With this move, he exits one of the most iconic Punks and joins GameSquare’s cap table instead.



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</ul>

ZK breakthroughs, onchain comebacks and stablecoin shakeups

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>.



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



Bitcoin news (and crypto news more broadly) has clearly defined tropes. But they aren’t static.&nbsp;



Tropey headlines tend to play on our base instincts. Fraud stories were historically a go-to for legacy and mainstream outlets looking for a quick hit about crypto — “Bitcoin Thief Allegedly Bought Royalty Rights to Rap Songs, Has Middling Taste” from <a href="https://www.vice.com/en/article/bitcoin-thief-allegedly-bought-royalty-rights-to-rap-songs-has-middling-taste/">VICE</a> in 2019 is a prime example.&nbsp;



That story, and others like it, had <a href="https://blockworks.co/news/crypto-fraud-financial-scam">less to do with Bitcoin</a> and more to do with crime, but the crime itself wasn’t particularly interesting. Bitcoin brought the novelty factor to an otherwise-dull low-level crime. Consider your click harvested!



Over time, those types of stories have given way to a trope more relevant to bitcoin holders: “Old whale moves coins for the first time in ages.”



The most recent iteration has played out this month. Across two weeks, an address dormant since 2011 transferred a total of 80,009 BTC ($9.3 billion) to Galaxy Digital.&nbsp;



Come this morning, Galaxy had directed more than 10,000 BTC ($1.2 billion) to a number of exchanges across an eight-hour period.&nbsp;



The price of bitcoin slid nearly 2.5%, from about $118,000 to under $115,300, before recovering slightly.



<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">Update:<a href="https://twitter.com/hashtag/GalaxyDigital?src=hash&amp;ref_src=twsrc%5Etfw">#GalaxyDigital</a> has transferred nearly 30,000 <a href="https://twitter.com/search?q=%24BTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$BTC</a>($3.5B) out today, most of which went directly to exchanges and were sold. Then <a href="https://twitter.com/hashtag/GalaxyDigital?src=hash&amp;ref_src=twsrc%5Etfw">#GalaxyDigital</a> withdrew 1.15B <a href="https://twitter.com/search?q=%24USDT&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$USDT</a> from exchanges.<a href="https://twitter.com/hashtag/GalaxyDigital?src=hash&amp;ref_src=twsrc%5Etfw">#GalaxyDigital</a> still holds 18,504 <a href="https://twitter.com/search?q=%24BTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$BTC</a>($2.14B).<a href="https://t.co/bVtNwP2iXI">https://t.co/bVtNwP2iXI</a> <a href="https://t.co/Wv1cD3aHbf">pic.twitter.com/Wv1cD3aHbf</a>&mdash; Lookonchain (@lookonchain) <a href="https://twitter.com/lookonchain/status/1948665986573631687?ref_src=twsrc%5Etfw">July 25, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Around the same time, a separate whale awoke to <a href="https://news.bitcoin.com/2011-bitcoin-whale-wakes-after-14-years-moves-470m-but-why-now/">move</a> almost 3,963 BTC ($462.5 million) between addresses, although at this point it doesn’t appear to have made it to any exchanges.



We don’t usually get any closure when these types of transfers happen. In the past five years or so, there have been at least a dozen other instances of dormant Bitcoiners awakening to shuffle coins amounting to over 195,400 BTC ($22.8 billion) when combined, by my very quick count.



Of that dozen, only three are believed to have led to coins actually being sold on exchanges, including this morning’s situation with Galaxy. The possibility does exist that each of the others were peer-to-peer, over-the-counter sales, but we’ll never know for sure.



Still, the “dormant whale moves bitcoin” trope is the perfect blend of feel-good and abject terror.&nbsp;



We’ve all heard the horror stories about <a href="https://www.bbc.com/news/articles/c74zel3ng1vo">lost private keys</a> to bitcoin fortunes, and maybe even lived a few of them ourselves. Hearing about old coins being accessed for the first time in a&nbsp; decade is the great antidote.



Meanwhile, the notion that the 30% of all coins which haven’t <a href="https://cryptoquant.com/asset/btc/chart/network-indicator/utxo-age-bands-percent?window=DAY&amp;priceScale=log&amp;metricScale=linear">moved</a> in at least five years — almost six million BTC, worth $696 billion — might one day be suddenly sold is a little scary, depending on how heavy one’s bags are.



Which makes for perfect clickbait, no matter how scant the details.



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

Bitcoin

Bitcoin whales are waking up — it’s perfect clickbait

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>.



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



“Animal spirits are definitely back in the market,” Empire co-host Jason Yanowitz told Dragonfly’s Rob Hadick on <a href="https://blockworks.co/podcast/empire/7900066a-68de-11f0-80af-3b985c1e852b">this week’s Round Up</a>.&nbsp;



If you’re not super familiar with the term, it’s basically saying that human emotions and behaviors are driving the market action rather than fundamentals or technicals.&nbsp;



Hadick noted that the rise of animal spirits is interesting given that retail “hasn’t been back in a long time.” And folks are eager to invest.&nbsp;



But it looks like, to Hadick’s eye, that the frothiness is coming down, and he wouldn’t necessarily be surprised to see either a bottom or less volatility happen in the next few weeks. He also noted that, seasonally, August is not great for markets, which could have an impact on crypto.&nbsp;



Now let’s take a look at pump.fun after, well, not such a fun week for the token.&nbsp;



Hadick noted that there was concern about liquid fund demand even before this week, because he’d heard that the team “had told people they were going to raise $250 million from the liquid funds and then the rest was going to be to retail. And then when they released the tokens, it looked like it was more like $770 million to liquid funds.”



<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="Don’t Overtrade The Retail Cycle | Weekly Roundup" width="1024" height="576" src="https://www.youtube.com/embed/ATnR23lHUzA?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>



“That alone had raised people&#8217;s concern that there just wasn&#8217;t liquid fund demand anymore. Everybody had gotten filled on the demand they had. And so when it launched, there was an expectation that frankly [with] everybody there, there was no buyer left who had real size. And I think we&#8217;ve seen that play out pretty significantly,” he said.



And then there’s the fact that pump.fun founder Alon Cohen said that the airdrop wasn’t coming anytime soon in an <a href="https://www.twitch.tv/threadguy">interview</a> with Thread Guy earlier this week.&nbsp;



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXehh3wDomdeGnrAw1sQ7pS2znQjYUBExU8TMO1kivOxhLSFT5udJVivsoihggBpO0DMmsPfnBN8Wd9zvJWPUhgVLLj7hkXOPIyFaSa3yo99hS0wmbMZnkXsqUdMVnKC6YFQYv95iw?key=KW6dZVYy0C2VEe-QoFiT_A" alt="" style="width:619px;height:auto"/><figcaption class="wp-element-caption">A look at the price action of Pump’s token, courtesy of Blockworks Research</figcaption></figure>



And, as folks recalibrate their expectations, Hadick noted that there seems to be more interest in pump.fun competitors like Bonk than in the OG launchpad. It doesn’t help that there could be a Bonk airdrop, Hadick believes.



“ Bonk is sharing more revenue with the creators. And so there is more demand…or there&#8217;s more incentive from the creators themselves,” Hadick noted.



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



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Empire Newsletter

Animal spirits are ‘back in the market:’ Empire

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
&#8220;I woke up and realized life is great and people are awesome and life is worth living.&#8221;&nbsp;



— Hulk Hogan
</blockquote>



<a href="https://x.com/iampaulgrewal/status/1947394411119448175">Blockchain common stock</a>



In its recent S-1 filing, Figma disclosed that it authorized the issuance of “blockchain common stock,” which it describes as “shares of our capital stock in the form of blockchain tokens.”



Figma is a SaaS company that has no vested interest in crypto, so it seems significant that it’s seriously considering issuing equity in the form of tokens.



That deliberate phrasing matters because equity in the form of tokens is fundamentally different from the “tokenized equity” that people have recently gotten excited about.



The tokenized stocks offered by Robinhood and others are less than they seem: just an onchain receipt for something that remains resolutely off-chain.



Blockchain common stock, however, is issued natively onchain: The token is the equity.



This removes counterparty risk and off-chain dependencies; enables composability (for use in DeFi), programmability (governance or compliance, say, via smart contracts); and potentially broadens access to anyone with a digital wallet.



All of which together should lower the cost of capital formation.



Tokenized stocks are a new form of recordkeeping, but blockchain stocks are a new form of capital markets.



<a href="https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-president-donald-j-trump-signs-genius-act-into-law/?utm_source=chatgpt.com">BSA applies to stablecoins (sort of)</a>



Under the heading “Combating Criminal Activity,” a White House statement declares: “The GENIUS Act explicitly subjects stablecoin issuers to the Bank Secrecy Act, thereby clearly obligating them to establish effective anti‑money laundering and sanctions compliance programs with risk assessments, sanctions list verification, and customer identification.&#8221;



It’s overselling it. The Bank Secrecy Act will only apply to the institutions that mint and redeem stablecoins with the issuer — once the tokens are in circulation, they won’t be any more subject to compliance checks than they are now. (Which is not at all, basically.)



It’s like a bar that lets everyone drink as long as the person buying has an ID: KYC one, serve all.



It’s unlikely North Korea was planning to mint USDC with Circle, so applying the Bank Secrecy Act to stablecoins doesn’t make them as compliant as bank deposits.



This is part of what makes stablecoin payments so much cheaper than bank transfers: far fewer compliance people to pay.



<a href="https://www.wsj.com/finance/regulation/banks-pig-butchering-fight-fraud-92c06642?st=XMuwiC">You can sue your bank for doing what you told them to</a>



The Wall Street Journal’s heartbreaking story of an elderly couple losing their entire life savings — over $5 million — to a crypto investment scam is a reminder of why bank transfers are so expensive.



The victim had to switch banks multiple times before he finally found one that would allow him to make transfers as large as $300,000. “It’s his money,” the bank reasoned.&nbsp;



At one of his previous banks, a compliance officer froze his account over a $1,000 transfer because “the name on the Zelle account where he was trying to send money didn’t match the name in the email address he was given.”



The victims are now suing the bank that allowed the transfers, arguing that it should have recognized their customer was being defrauded.



The story suggests most banks probably would have saved the victims from themselves, but that level of compliance is expensive.



<a href="https://arxiv.org/pdf/2507.01963">Memecoins are even scammier than you thought</a>



A recent academic study reports that 82.6% of the 34,000 memecoins examined showed evidence of “extensive use of artificial growth strategies designed to create a misleading appearance of market interest.”



Strategies include wash trading, rug pulls, pump-and-dump schemes and the newly discovered “Liquidity Pool-Based Price Inflation” (or LPI).&nbsp;



LPI is where manipulators exploit the constant product formula (x*y=k) of low-liquidity pools on decentralized exchanges to send tokens higher with a shockingly small amount of money: The study finds that, on average, it takes just $54 to send a memecoin 500% higher.



It works for big ones too, because the liquidity in these pools are so low: 88.1% of coins with market caps above $1 billion had just 0.1% of their reported market cap in the pools.



“These findings reveal that manipulations are widespread among high-performing memecoins and suggest that their dramatic gains are often likely driven by coordinated efforts rather than natural market dynamics.”



If you’ve made money in memecoins then, it’s probably because you just happened to be on the right side of the manipulation.



<a href="https://www.prnewswire.com/news-releases/gamesquare-acquires-iconic-cowboy-ape-cryptopunk-from-defi-pioneer-robert-leshner-302513150.html?tc=eml_cleartime">The first NFT treasury company?</a>



GameSquare, which has a $141 million market cap, has issued $5 million of stock in return for a CryptoPunk NFT as part of “a differentiated treasury management strategy.”



Pretty smart: Crypto is undermining traditional finance from the inside.



<a href="https://www.msn.com/en-us/money/economy/cantor-fitzgerald-offers-to-buy-the-rights-in-potential-refunds-from-companies-that-have-paid-trump-s-tariffs/ar-AA1J1A4I">There’s at least a 30% chance tariffs will be repealed and refunded&nbsp;</a>



Wired reports that Cantor Fitzgerald is paying 20% to 30% for the right to collect a refund on the new tariffs that a US importer has paid since April 2.&nbsp;



Cantor has reportedly told customers they have “the capacity to trade up to several hundred million of these.”



By “trade,” I imagine it means “buy,” so the 20% to 30% it’s offering is one indication that the president’s post-Liberation Day tariffs will be repealed and refunded.



Cantor’s offer probably understates the odds, since it has to add in something for the time value of money, collection risk and its own risk-adjusted return.



Either way, Cantor is in a good position to judge because it’s run by the two sons of the pro-tariff Commerce Secretary Howard Lutnick.



(Lutnick&#8217;s sons, Kyle and Brandon, are both in their 20s, so it’s fair to suspect he still keeps tabs on the company.)



That is an obvious conflict of interest, but maybe a useful one: Market prices are more informative when insiders are allowed to trade.



<a href="https://www.coingecko.com/en/coins/xrp">XRP hits an all-time high</a>



Ripple’s XRP token now has a fully diluted value of over $300 billion.



This seems like a lot given the still <a href="https://messari.io/report/state-of-xrp-ledger-q1-2025">modest amount of activity</a> on the XRP Ledger more than a decade after its launch.



A decade seems like plenty of time to execute on any business plan, and Ripple has so far failed to replace SWIFT as the settlement layer for cross-border payments.



Maybe it was just early and now is the time. (You can do a lot with a $300 billion market valuation.)



In other asset classes, however, “early” is almost always synonymous with “wrong.”



I take the new highs in XRP as evidence that in crypto, you can be wrong for an unusually long time.



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Thursday links: Blockchain stocks, barroom compliance and NFT treasuries

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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Solana is $200! Wait, no it’s not. Wait, yes it is. Wait, no it’s not.



We’re more than halfway into what may prove to be Solana’s most memorable year to date. And my, how fast the year is going by! 



Before it slips away altogether, here are my five biggest Solana moments of 2025 thus far:



<h2 class="wp-block-heading">5. Raydium spins up its own launchpad</h2>



In February, news slowly trickled out that the Solana memecoin cash cow pump.fun was going to be ending its unofficial partnership with Raydium and <a href="https://blockworks.co/news/pumpdotfun-ditching-raydium-rumor">launching an AMM</a> of its own.



This closed what had been a very lucrative pairing for Raydium, which had made tens of millions of dollars from pump.fun tokens to that point.



So, Raydium swung back and <a href="https://blockworks.co/news/raydium-launching-pumpfun-version">created a memecoin launchpad</a> of its own. After a slow start, the gambit seems to be working: Raydium-supported letsbonk.fun <a href="https://app.blockworksresearch.com/analytics/solana/?dashboard=339">raced</a> to over 50% of launchpad market share two weeks ago.



<h2 class="wp-block-heading">4. Pump.fun announces a token</h2>



When I started hearing pump.fun wanted to raise $1 billion by selling a token, first I went “What?”, and then I went, “Huh?”



Sure enough, <a href="https://blockworks.co/news/pumpdotfun-token-sale">we first reported</a> that the ICO would be carried out at a $4 billion valuation. Many complained that the action was extractive from a business that has already generated nearly a billion dollars in trading fees.&nbsp;



But the market didn’t mind too much: pump.fun exceeded $1 billion in private and public sales for PUMP when all was said and done.



<h2 class="wp-block-heading">3. SIMD-228 defeated</h2>



In January, Multicoin Capital’s Tushar Jain <a href="https://www.youtube.com/watch?v=Oyb7I-Ptayw">came on Lightspeed</a> to pitch SIMD-0228, a proposal to cut Solana’s token inflation rate and introduce a market-based inflation mechanism.&nbsp;



This was the most voted-on Solana proposal ever, and a number of smaller validators were concerned about tighter margins stemming from fewer inflation rewards. Others expressed worries about uncertain outcomes the proposal may have created.



In the end, somewhat surprisingly, the proposal — which had support from several key figures in Solana — <a href="https://blockworks.co/news/what-simd-0228-failing-means-for-solana">failed to pass</a>.



<h2 class="wp-block-heading">2. Trump launches a memecoin</h2>



It’s tough to top this one. On Friday night before his inauguration, the incoming POTUS <a href="https://blockworks.co/news/trump-memecoins-rock-solana">launched a memecoin</a> on Solana.



Solana experienced severe congestion as traders raced to buy the coin, and SOL climbed to an all-time high. The token had interesting downstream effects, like <a href="https://blockworks.co/news/solana-stablecoin-supply-soars">suddenly spiking</a> Solana’s USDC supply.&nbsp;



Solana folks generally take pride in the fact that although many of us wish he had not launched a memecoin at all, at least Donald Trump launched his memecoin on Solana.



<h2 class="wp-block-heading">1. Alpenglow</h2>



At the Solana Accelerate conference in May, Anza announced Solana’s biggest upgrade ever: Alpenglow.



Interestingly, this project <a href="https://www.youtube.com/watch?v=KN5Novxjybs">got started</a> when researchers wrote a paper exploring some problems with Solana consensus, and Anza hired them to come fix it.



The end result <a href="https://blockworks.co/news/solana-alpenglow-next-gen-consensus-layer-speed">claims to be</a> a 100x <a href="https://www.helius.dev/blog/alpenglow">reduction</a> in block finality and the end of <a href="https://blockworks.co/news/solana-proof-of-history">proof-of-history</a> as we know it. It could be live as soon as December, making Solana run ever faster. 



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History

5 biggest Solana moments of 2025 (so far)

Felix Jauvin

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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This morning, I had the good fortune of interviewing Jens Nordvig.



The interview will be <a href="https://www.youtube.com/@ForwardGuidanceBW/videos">out tomorrow</a>, but I wanted to give a teaser around something incredibly important: Fed independence.



Nordvig is the founder of Exante Data and was previously managing director at Goldman Sachs, senior investment associate at Bridgewater, and head of fixed income research at Nomura.&nbsp;



At this point, everyone knows that President Trump <a href="https://blockworks.co/news/trump-criticizes-fed-chair-powell">doesn’t like</a> Jerome Powell very much and thinks interest rates should be <a href="https://blockworks.co/news/inflation-data-trump-tariffs-july">meaningfully lower</a>.&nbsp;



Specifically, the lens of criticism has shifted from the traditional dual mandate of the Fed — stable prices and maximum employment — toward what fiscal authorities view as a more relevant mandate, managing the debt load of the US government. One of the key arguments being made is that the Fed should lower interest rates so that interest payments on US debt come lower, thereby lowering the fiscal deficit.&nbsp;



This subordination of monetary policy to fiscal priorities of debt load management is what I view as the more correct definition of fiscal dominance.&nbsp;



Fiscal authorities set policy, and monetary authorities are there simply to make it the least painful. Nothing more, nothing less.



The last time that this happened was in the 1940s, when the Fed formally employed yield-curve control to cap rates at certain levels and its primary purpose was to buy US debt and manage the debt load. This regime ended in earnest with the Fed Treasury accord of 1951, which reinstilled Fed independence. Ever since those accords, we’ve been in an era of monetary dominance.&nbsp;



We are now in the early innings of this transition.



The primary risk associated with <a href="https://blockworks.co/news/fed-independence-in-question">dwindling Fed independence</a> is the potential for inflation expectations to become unanchored. In simple words, this looks like inflation concerns being instilled in society and a common realization that the Fed cannot get a meaningful handle on those inflation expectations.&nbsp;



In practice, the traditional goal of central banks having a 2% target for inflation serves as a codified intention to prevent inflation expectations becoming unanchored.



Unfortunately, this slow but steady erosion of Fed independence by the Trump administration is already beginning to percolate into inflation expectations, and the risk of these becoming unanchored is increasing meaningfully.&nbsp;



Jens brought a fascinating chart to our discussion that highlights this emerging dynamic.&nbsp;



The chart below shows the cumulative and predicted changes in five-year US breakeven rates, both as predicted by changes in oil and independent variables:



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXesmf-ygloOZuq3KuyehPt-4RyrujDC5xiAuKLpbd7cc5KU_Yebh1W4kEuk_RE2hMaUKRDzCZNLA58f2O0_P-Re2LvB-W_tAj_LII3UBcJj3aQN9_pFghBpfC1sMR3UkbzquQcZ?key=b5MFdWxy17gqX0PVMAkv4g" alt="" style="width:649px;height:auto"/></figure>



Typically, breakevens track the price of oil since it’s the largest driver of inflation. What’s concerning right now is that breakevens are surging while oil is hardly moving and, if anything, is declining.&nbsp;



In Jens’ view, this is a distillation of the market beginning to price-in, and become concerned with, inflation expectations becoming unanchored as Fed independence erodes. 



With <a href="https://blockworks.co/news/fomc-june-powell-term-end">Powell’s term ending</a> in the winter of 2026, keep an eye on this market and whether this concern accelerates. The bedrock of the financial system depends on these expectations remaining well-anchored.



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Federal Reserve

How inflation breakevens signal eroding Fed independence

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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Ethereum’s validator exit queue surged past 475,000 validators this week, pushing the unstaking wait time to nine days — the second-longest in Ethereum’s post-Merge history. Galaxy Digital Research <a href="https://www.galaxy.com/insights/research/why-eth-unstaking-queue-swelled">attributes</a> the spike to a cascading unwind in liquid staking token (LST) leverage. Its report traces the stress to one trader’s large capital rotation: “This volatility was driven by a sharp reduction in ETH supply on Aave, initiated by large withdrawals from the platform by a wallet tagged to the HTX exchange [formerly Huobi].”



That liquidity removal sent Aave’s ETH borrow rates <a href="https://x.com/JackMandin/status/1947799861308625353">soaring</a> from ~3% to over 18%. The result? Negative carry for stETH loopers — users who recursively borrow ETH to buy more stETH.



Galaxy notes that when rates jumped over 10%, leveraged positions became unprofitable, prompting a mass unwind.



This unwind played out through two channels. Some loopers sold stETH on AMMs, pushing the peg down by 30-60 basis points. Others opted for validator redemption, leading to the massive queue buildup. Although May’s <a href="https://blockworks.co/news/ethereum-pectra-fork-live">Pectra upgrade</a> lifted the fixed churn cap — raising today’s allowance to roughly 12 exits per epoch — the wave of withdrawal requests still overwhelmed that higher limit, pushing the queue out to more than nine days.



That delay created a feedback loop: With redemption time rising, arbitrageurs now require higher yields to justify holding depegged stETH. As Cork Protocol’s Robdog.eth <a href="https://x.com/robdogeth/status/1948033585404878957">explained</a>, “the annualized yield of [buying stETH at a discount and redeeming] with a nine-day delay is 25%, which…is fairly profitable. If the queue becomes 18 days instead of nine, the arbitrage take rate becomes 100-110 bps.”



Importantly, the unwind hasn’t tanked ETH itself. ETH spot ETF flows <a href="https://farside.co.uk/eth/">remained strong</a>, with $300 to $600 million in daily inflows over the past week. That demand absorbed much of the selling pressure.&nbsp;



“Investor appetite for the two biggest blockchains is undeniable,” Dom Harz, co-founder of hybrid L2 BOB, told Blockworks. “ETH is outperforming the original blockchain so far this month.”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfivuARuM424RwyJgUamU2U68uPF9STzHaJ57yzzDRZdc389VL40PgeyvrNmRhqrZRNmM8eOFkCnG4Jilgb8jRV-FLgNl2SBk58QSTENvX1O8Q8C_O9tOIgO4tpCkD9m_KqtjDOYQ?key=B-5jFzKQMHOXbOEGFSWq6A" alt=""/></figure>



Source: <a href="https://blockworks.co/analytics/crypto-etfs">Blockworks Research</a>



Some traders have speculated that the depeg may also reflect spot ETH scarcity at OTC desks as institutional <a href="https://blockworks.co/news/year-old-us-ether-etfs">demand via ETFs intensifies</a>. Wintermute’s CEO <a href="https://x.com/EvgenyGaevoy/status/1945596541193818187">noted</a> a week ago that its books were “virtually out of ETH,” prompting concerns that funds are sourcing ETH by dumping stETH. While plausible at the margin, onchain flows and redemption patterns suggest leveraged stETH loop unwinds remain the dominant driver, with OTC demand playing, at most, a secondary role.



Still, the event underscores a chronic weak point in Ethereum’s liquid staking stack. The <a href="https://dune.com/oasisapp/steth-eth-peg-history">stETH/ETH peg</a> remains around 0.995, while onchain AMM liquidity for stETH dropped from $280 million to $180 million. Most major lending protocols (like Aave and Maker) use stETH’s redemption oracle, not market price — shielding users from immediate liquidations. But if the queue stretches further, slow-burning interest accrual could start forcing more severe deleveraging.



Galaxy Research frames this episode as a warning shot. “[T]his episode highlights the continued fragility of the ETH liquid staking and restaking ecosystem,” the report notes. It calls for design improvements like peer-to-peer exit markets, rate smoothing and fixed-term vaults to reduce reliance on redemption queues.



The loopers, meanwhile, are caught in what one analyst called a “trilemma”: Accept a 5-6% loss by selling at a discount, wait nine-plus days while paying high interest, or hold and pray rates fall.&nbsp;



Said Robdog.eth: “These guys thought the stETH looping trade was free money and now they are stuck between a rock and a hard place.”



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Ethereum stakers face 9-day wait as stETH loops fall into the red

The US government expects to rest its case against Tornado Cash co-founder Roman Storm on Thursday following yesterday’s anticipated testimony from an expert witness.



The defense is set to counter the prosecution’s efforts to show Storm could have better guarded against “bad actors” using Tornado Cash — the crypto mixer used for transaction privacy around which this case centers.



IRS Criminal Investigation special agent Stephan George took the stand to share findings that appeared to link a portion of the funds stolen from Hanfeng Lin to Tornado Cash.&nbsp;



Lin testified last week that a fraud recovery service told her to contact Tornado Cash about retrieving her funds. The defense was <a href="https://www.therage.co/tornado-cash-mistrial-hangfeng-lin/">reportedly</a> considering a mistrial motion after a subsequent witness, FBI Special Agent Joel DeCapua, didn’t link Lin’s funds to Tornado Cash — putting the relevance of Lin’s testimony in question.



But George said Wednesday he used public blockchain data — along with Chainalysis Reactor and TRM Labs — to find that a portion of Lin’s stolen funds that left Crypto.com ultimately went to Tornado Cash in November of 2021. 



He used an accounting method known as Last In, First Out (LIFO) — which assumes the disposal of crypto acquired most recently. When defense attorney Keri Axel challenged LIFO during cross-examination, George defended the method as a generally accepted accounting principle that the IRS “respects.”



Axel’s cross-examination of George was set to continue Thursday morning.&nbsp;&nbsp;



While the possibility of a mistrial was briefly mentioned in court Tuesday, the defense did not immediately comment about whether that’s still being considered.&nbsp;



&#8220;It&#8217;s usually not the situation that a trial is declared a mistrial merely because a witness&#8217;s testimony is not entirely germane,” Patrick Gruhn, a former partner at Crypto Lawyers LLC and FTX’s ex-head of Europe, told Blockworks. “Courts generally expect a lot more — egregious misconduct or prejudicial facts against the jury — before they suspend a trial.”



Though George linking Lin’s funds to Tornado Cash was an attempt by prosecutors to clear up a point of contention that arose, the charges against Storm go well beyond that.&nbsp;



At the heart of this case is whether Storm essentially helped criminals — such as North Korean state-sponsored hackers, The Lazarus Group — hide stolen funds, as the government alleges. He is charged with conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money transmitting business.



Key questions of the case, as shared in opening statements last week, include whether Tornado Cash was immutable and if the developer is responsible for how software is used.



Defense attorney Keri Axel said in her opening statement: “It’s not a crime to make a useful thing that is misused.”



Read more: <a href="https://blockworks.co/news/roman-storm-trial-opening-statements">‘He lied’: US government makes opening plea to jury in Roman Storm trial</a>



After the jury left the courtroom on Wednesday afternoon, the prosecution told Judge Katherine Polk Failla that it had two witnesses remaining and could wrap up by Thursday morning.&nbsp;



Though the defense had not finalized its slate of witnesses before the court let out on Wednesday, Storm’s attorneys said they could rest their case as soon as Monday. Storm has not yet decided whether he will take the stand, they added.



“I assume you don’t have a hacker testifying,” Failla quipped. “That would be interesting.”&nbsp;



<h2 class="wp-block-heading">Hacker takes the stand</h2>



The prosecution did put a hacker on the stand on Tuesday. That was Shakeeb Ahmed, who is currently serving a three-year sentence after <a href="https://www.justice.gov/usao-sdny/pr/former-security-engineer-sentenced-three-years-prison-hacking-two-decentralized">pleading</a> guilty to computer fraud last year. Ahmed, a former technical lead in Amazon’s bug-bounty program, detailed how he stole $12 million worth of crypto from exchanges Crema and Nirvana in 2022.



He put his own funds into a Tornado Cash pool to “anonymize” them before using a third party — known as a relayer — to withdraw them. He then went on to hack the Crema exchange. He did not use Tornado Cash at any point leading up to, or after, he hacked the Nirvana exchange.



The defense, during cross-examination, made clear to the jury that Ahmed never put stolen funds into Tornado Cash.&nbsp;



“You didn’t use Tornado Cash for the [hack] proceeds?” defense attorney David Patton asked.&nbsp;



“Correct,” Ahmed said.



Patton also asked whether Ahmed ever communicated with Storm and the other Tornado Cash founders, or conspired with them to commit crimes.



“I did not,” Ahmed noted.



<h2 class="wp-block-heading">Questioning Tornado Cash’s design choice</h2>



The prosecution sought to establish, through another witness, that Storm — along with Tornado Cash co-founders Roman Semenov and Alexey Pertsev — could have made changes to the protocol to guard against bad actors using it.&nbsp;



The Office of Foreign Assets Control (OFAC) deemed the Lazarus Group responsible for the $625 million Ronin Bridge hack in March 2022 and sanctioned the entity. Tornado Cash <a href="https://x.com/TornadoCash/status/1514904975037669386">said</a> the following month that it was using a Chainalysis oracle contract “to block OFAC-sanctioned addresses from accessing the dapp.”



Philip Werlau, an investigator at AnChain.AI, testified that — while that blocked sanctioned entities from using Tornado Cash’s web application — founders did not implement this control for deposits made via its Command Line Interface (CLI).&nbsp;



“If there are two doors to a building and you only close one, you’re not preventing access,” Werlau said.



Werlau also explained how Tornado Cash could have maintained an offchain registry with users’ personal info collected through a username-password system.



Anticipating this testimony, defense attorneys noted to the judge earlier that day that while Tornado Cash could have been designed differently, that doesn’t mean what Storm built was illegal.



This sentiment came out during the cross-examination, when defense attorney Brian Klein raised his voice — asking Werlau if one reason to make pools immutable would be to make them less subject to hacks. That could reduce the ways a pool could be attacked, Werlau acknowledged.&nbsp;



Klein then asked Werlau if he provides personal info when he uses the Ethereum blockchain.



As Werlau paused to think, Klein rephrased, almost shouting: “There’s nothing like the registry you proposed, is there?”&nbsp;



“That is correct.”



Werlau, seemingly uncomfortable with the confrontation, looked up at the clock. A break for lunch was not far off.&nbsp;



<h2 class="wp-block-heading">The scene and the stakes</h2>



This writer sat 20 or so feet from Storm over the last two days, even passing him during breaks en route to the bathroom and elsewhere. The Tornado Cash founder appears calm, but walks with pace.



Sitting next to Axel on the courtroom’s left side, Storm often gazes toward the judge, stand and jury, stone-faced, blinking infrequently behind his glasses. Occasionally, he will scribble something on a Post-It and hand it to a member of his defense team. This writer did not once see Storm roll his eyes or shake his head.&nbsp;



Trial attendance ranged from roughly a dozen to two dozen people on Tuesday and Wednesday — meaning there are plenty of empty seats.&nbsp;



While not as high-profile a case as the Sam Bankman-Fried trial, Blockchain Association legal head Marisa Coppel noted its outcome will shape how developers, regulators and policymakers navigate the future of crypto innovation.



“A conviction could set a dangerous precedent by criminalizing the act of writing and publishing open-source code, amplifying fears among US developers and pushing innovation offshore,” she told Blockworks. “An acquittal, by contrast, may reaffirm that software creation alone isn’t a crime and could help restore confidence in building decentralized tools.”



Keep an eye on Blockworks for more <a href="https://blockworks.co/tag/roman-storm">Roman Storm trial updates</a>. 



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Cybersecurity

Hacker, IRS agent take Storm trial stand as government winds down case

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



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Anything that won&#8217;t sell, I don&#8217;t want to invent. Its sale is proof of utility.”



— Thomas Edison
</blockquote>



The first idea that put Helium co-founders Amir Haleem and Shawn Fanning (of Napster fame) on the long road to building a decentralized, crypto-powered mobile network had nothing to do with decentralization, crypto or mobile networks.



Instead, they were looking for a way to keep track of the very expensive drones they kept losing over windy San Francisco.



It’s not surprising that it turned into something else — the tech industry has a rich history of unintended consequences resulting from such brainstorming.



YouTube was launched on Valentine’s Day, 2005, as a video-based dating site: “Tune in, hook up.”&nbsp;



Shopify began as a website selling snowboards.



Instagram was originally a location check-in app called Burbn.



This is why it’s commonplace for VCs to say that they invest in founders, not ideas.



They have no alternative, really.&nbsp;



“In the beginning of a startup,” Marc Andreessen notes, “you know a lot more about the team than you do the product, which hasn’t been built yet.”



The job of early-stage funding is to give founders room to wander their way to a product.



In the case of Helium, that wandering process was funded by crypto enthusiasts.



Founded way back in 2012, Helium has long been one of the few examples crypto enthusiasts could cite as evidence the industry might produce something other than yet more ways to trade crypto.



For most of that time, it remained an aspirational example.&nbsp;



Helium’s original business plan (inspired by those lost drones) was to use crypto tokens to crowdsource the buildout of a wireless network for sensors, trackers and other “internet of things” gadgets.



It succeeded: The network is up and running. 



But it hasn’t generated the kind of revenue that Thomas Edison would say proves its utility.&nbsp;



Also, the internet of things isn’t much of a topic anymore.



Helium’s pivot to mobile services, however, is becoming more and more of one — and recent sales are proof that the network which has been built has utility.



In a recent <a href="https://app.blockworksresearch.com/flashnotes/helium-halving-tailwinds#forward-outlook">report</a> for Blockworks Research, <a href="https://x.com/0xMetaLight">Nick Carpinito</a> cites the “explosive growth in Data Credit (DC) burn” as a reason to be optimistic about both Helium and its token, HNT.



Data credits are how users pay to access the Helium network, so their “burn” is one measure of how useful they think the network is.



They appear to be finding it more and more useful: “The monthly DC burn rate attributed to mobile usage recently surged from ~$189,000 in early March 2025 to ~$361,000 in June 2025,” Carpinito wrote.



Most of that comes from carriers like AT&amp;T and T-Mobile which pay to route traffic through Helium hotspots when their customers lose signal indoors.



This is a cheaper, more effective way for the carriers to provide coverage in buildings that their cell towers struggle to penetrate. It’s a rare example of real-world companies paying to use something built with crypto-based incentives.



But it’s not just about token incentives.&nbsp;



When a customer of, say, AT&amp;T connects to the Helium network, a Solana-based smart contract keeps a record of how much data is transferred and then facilitates payment (in the HNT token), between two crypto wallets.



Sometimes this is facilitated by Nova Labs, the company that developed the Helium network, but the smart contracts are open to anyone who wants to integrate directly with the network, as I’m told Telefonica is now doing in Mexico.



This, I think, is crypto at its best: enabling all-new economic activity, incentivized with tokens, that’s managed on a blockchain and accessible to anyone.



<h2 class="wp-block-heading">You can’t beat free</h2>



In his note for Blockworks, Carpinito focuses mostly on carrier offload as a source of growth for Helium.



But Frank Mong of Nova Labs, the company that developed the Helium network, seems more excited about the plans that Helium Mobile offers to individuals.



In a recent conversation, Mong (who also related the above drone anecdote to me) highlighted that Helium Mobile has recently been adding as many as 2,000 subscribers a day.



Importantly, the cost to Helium Mobile of acquiring these customers has been unusually low: just $10 to $15 per customer, according to Mong — vs. the $100+ that it costs its traditional competitors.



“There’s magic here,” Mong told me.



It’s not hard to figure out the trick, though: Helium offers a free mobile plan.



(It might even be less than free, after earning rewards for data sharing.)



I assume that’s a loss leader for Nova Labs, which runs Helium Mobile, but those are all customers who can be upsold on paid plans or monetized in other ways.



Mong’s near-term ambition is to get to a million such customers using the Helium-branded network, and also a million gateways providing the WiFi they connect to.



That would still be small, relative to telco giants like AT&amp;T and T-Mobile, but huge by crypto standards.



Mong is not measuring Helium as a crypto business, however.



“I think we can dominate the telco industry,” he told me.



And maybe other things too.



“Our aspirations are bigger than providing internet access,” Mong told me.



He wouldn’t be pressed on specifics, which is wise: The history of tech startups demonstrates that they rarely go where their founders expect them to.



Also, this is crypto: You can just build a network and see what people do with it.



Helium has invented something that sells (to paraphrase Edison), and that is much needed proof that crypto can have real utility.



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