CYPHER•GENESIS (Runes)

Donovan Choy

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



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In an open-source industry where applications can and are easily forked, “aggregation theory” — the investor thesis that the winner should build on top of and integrate as many applications as possible — caught on as a promising idea during <a href="https://blockworks.co/news/will-defi-summer-return">DeFi summer</a>.



Middleware DeFi aggregators like 1inch, Matcha, Summer.fi (previously Oasis) and Instadapp have all pursued this idea to the fullest, but aggregation theory largely hasn’t panned out (<a href="https://blockworks.co/news/solana-venue-jupiter-released-mobile-app">Jupiter</a> in Solana world is an exception).



Ethereum DEX aggregators have not outcompeted Uniswap, even though in theory they should.



Instadapp was one such DeFi aggregator that built aggressively on top of blue-chip DeFi protocols like Uniswap, Maker, Aave, Compound and Curve.



After two years in development, Instadapp has reinvented itself. From being the builders of a classic aggregator product, Instadapp has evolved into a platform with a full-fledged DeFi product: <a href="https://blog.instadapp.io/fluid/">Fluid</a>, while the original Instadapp sits separately as a yield aggregator product.



Instadapp’s pivot has been quite successful: Fluid currently has <a href="https://defillama.com/protocol/fluid#information">$1.2 billion</a> in TVL across its money market, while the Fluid DEX on Ethereum is seeing about $428 million in 7-day <a href="https://fluid.instadapp.io/stats/1/dex">trading volumes</a> — currently the third-largest DEX behind Curve and Uniswap.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcMZiKJga7OqGcEVy2KUHp2AMk6sToemt9B_ZZKVFUAbk9mAxaCh6bEIGJgLh2wte33w4BJuDJqLBBMSjqPEJtLy37X3Kr1ZXsAyoiGrJBoTj_EXPQVZtvMjs0lwNX6XMBto1LXXQ?key=FNOYQp3t0h1phfdaGMWESlwr" alt=""/></figure>



Let’s backtrack for a minute. What is Fluid?



The first thing to know is that Fluid is not one app, but a superapp ecosystem. Fluid’s pooled liquidity layer forms the foundation of the protocol, on top of which sits its own DEX (<a href="https://blog.instadapp.io/fluid-dex/">launched</a> in early November), money market and other vault applications.



Fluid’s suite of applications borrows aggressively from many of DeFi’s market-tested primitives such as Uni v1’s auto rebalancing, Uni v3 concentrated liquidity, Aave’s utilization rate curves, Maker vault’s debt ceilings and more.



But it also brings to the table a slew of original DeFi innovations — namely more capital-efficient ways of liquidity provision — through its “smart collateral” and “smart debt” features.&nbsp;



For instance, smart debt lets borrowers denominate their debt into trading pairs as liquidity for a Fluid DEX trading pool.



By doing so, traders on Fluid DEX can trade between assets on somebody else’s debt. From the borrower’s perspective, you can maintain an active loan while simultaneously earning fees from traders to offset your original debt, thereby making debt a productive asset.



In sum, “smart debt” creates liquidity in an entirely opposite direction by which LPs seed liquidity in an AMM pool (i.e., deposit liquidity in two tokens and receive an LP token).



Smart debt has allowed trading pools like <a href="https://fluid.instadapp.io/stats/1/dex">USDC-USDT</a> with $20 million of liquidity to emerge on Fluid DEX, while technically being worth $0 in TVL.



“Smart collateral” on the other hand allows LPs to take their LP positions from lending, and rehypothecate them as collateral for AMM liquidity on the Fluid DEX. This allows LPs to earn DEX trading fees on top of lending fees.



This is not technically new — DEXs in the past, such as Cream Finance, have experimented with enabling the use of LP tokens as collateral — but Fluid is managing to execute it more efficiently.



“In Fluid DEX v2, we plan to allow users to select their ranges on both collateral and debt, which will be a breakthrough,” Instadapp chief operating officer DMH told Blockworks.



Fluid’s governance is governed by the INST token. The token has historically languished as a dead token, until a recent 4x pump in the last month.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXepfbvmvMtnZYT2o6qDYzL-mDQyyu9IochNVZcSYvv8-AF4lgbMazYIkJ5l4JFk1_4BOKT3zQ2h_ibGRDbYG7Mlnjo9nmOmwOIohMIG0REJ7jpmFYzNJ47BIO98RPh-qqIFvlIW?key=FNOYQp3t0h1phfdaGMWESlwr" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://coinmarketcap.com/currencies/instadapp/">Coinmarketcap</a></figcaption></figure>



A new governance proposal <a href="https://gov.instadapp.io/t/rebranding-and-growth-plan-for-fluid-protocol/985">published</a> yesterday is seeking to convert INST to FLUID at a 1:1 ratio without any dilution or total supply changes.



Upon hitting a target of $10 million in annualized revenues, Fluid will commence a token buyback program to create value accrual for the token.



Finally, the proposal also wants to spend 12% of tokens to fund growth initiatives like pursuing CEX listings, market making and fundraising and seeding an additional 5% of tokens for FLUID liquidity across DEXs.



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DeFi superapp Fluid is coming for Aave and Uniswap’s lunch

David Canellis

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



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If crypto were an ocean, Terra was a whirlpool the size of a Maelstrom.



And by all accounts, when that Maelstrom collapsed in on itself, in May 2022, the chaos sucked the liquidity right out of crypto markets for a solid year.



Stablecoins were crypto’s primary liquidity machine at the time and massive chunks of the market simply pulled the plug.



Tether withstood a month-long <a href="https://blockworks.co/news/the-historic-significance-of-tether-16b-bank-run">$16 billion</a> “bank run” on USDT, while Circle net burned over $30 billion USDC between June 2022 and November 2023.&nbsp;



At the same time, Paxos was <a href="https://blockworks.co/news/binance-stablecoin-busd-flipped-by-cardano-polygon">winding down Binance stablecoin</a> BUSD — redeeming about $20 billion worth of stablecoins over a 12 month period. A period that coincidentally ended just as bitcoin’s current run was heating up in late 2023.



Looking back, it’s clear that liquid staking and restaking tokens may have helped plug the leak as the <a href="https://blockworks.co/news/vaneck-casts-doubt-on-do-kwons-rescue-plan">rolling liquidations</a>, <a href="https://blockworks.co/news/genesis-reveals-exposure-to-bankrupt-three-arrows-capital">bankruptcies</a>, and <a href="https://blockworks.co/news/sbf-trial-day-1">fraud cases</a> played out.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdQFPopBlCwonOA6t3cV7OZ2dPdM03hc10wCHP5-GASwAvmw3cgXGOKXmRRVwNDOVIetMV3MCZsbSnGPEMWBT6sW5yH0isIwLQiJfBbiazuAhS0-ecG0Mt4-SYK9qYmKQFdHRkqfg?key=uBjjNWx3OQs7lRKtSA8a1oj1" alt=""/></figure>



This chart plots the market cap of stablecoins (blue) alongside liquid staking (purple) and restaking (pink) tokens since Q1 2021.&nbsp;



Combining the three token classes forms what I’ve called crypto’s liquidity engine.



Notice that as tens of billions of dollars were being drained from crypto via stablecoin redemptions — starting with Terra and into the middle of the chart — liquid staking tokens expanded to mitigate those losses.&nbsp;



It kept crypto’s liquidity engine on an even keel for a solid 10 months, with liquid (re)staking tokens taking off at the first hint of a reversal of the stablecoin redemption trend.



Terra is now a blip in crypto market history. Stablecoin supplies have just set a new all-time high close to $194 billion (about $6 billion higher than just before Terra), while liquid staking and restaking tokens are also at a fresh combined peak of $92.5 billion.



That makes crypto’s liquidity engine nearly $300 billion deep — with apparently no Maelstrom in sight.



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How crypto’s liquidity engine grew after Terra’s collapse

Katherine Ross

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



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Bitcoin Jesus will not go quietly into the night…or pay $50 million in alleged unpaid taxes.&nbsp;



Roger Ver, who was <a href="https://blockworks.co/news/roger-ver-tax-fraud-charges">arrested in Spain</a> in April of this year, is arguing that the Department of Justice’s tax fraud charges are “unconstitutional.”&nbsp;



The DOJ filed a “defective indictment,&#8221; Ver’s lawyers <a href="https://storage.courtlistener.com/recap/gov.uscourts.cacd.915322/gov.uscourts.cacd.915322.21.0.pdf">say</a>, that misquotes communications between Ver and his legal teams and — stop me if you’ve <a href="https://blockworks.co/news/nft-artists-sue-sec-regulatory-uncertainty">heard this one before</a> — “hangs on a semblance of regulatory clarity that never existed.”



Ver’s defense claims that Bitcoin Jesus tried to get ahead of the murky tax code in 2014 (which, to be fair, is still a bit unclear 10 years on) by hiring an unnamed law firm to consult on his decision to leave the US. As part of that, they conducted a hypothetical scenario where Ver sold all of his holdings, but the thing is, as Ver’s lawyers explained, he couldn’t sell his bitcoin back in 2014.&nbsp;



“On March 2, 2014, however, such a sale was likely impossible as a technological matter and catastrophic as a matter of market value. At the time, BTC was a thinly traded market with a limited number of active traders,” the filing said. And, unfortunately, the only marketplace to really sell off large amounts of bitcoin was Mt. Gox — which had just collapsed.&nbsp;



So Ver, along with multiple tax experts and attorneys, had basically tried to calculate unrealized gains and exit taxes with all that in mind. Per his lawyers, Ver was also exploring the cost if he was personally on the hook for bitcoin held by his companies.



Obviously, with this being a tax case, there’s a lot of back and forth about the unrealized gains, and Ver’s previous communications regarding his bitcoin sales and how he recorded his bitcoin holdings. But essentially, the motion to dismiss falls back on the fact that the current tax code — and by current, I also mean the framework that existed in 2014 — didn’t really account for crypto.&nbsp;



The indictment relies “on impermissibly vague laws that, at all relevant times, provided no basis for a person of reasonable intelligence to understand the proper application of tax laws to digital currencies; and they rely on the government’s persistent trampling on basic rights and notions of fair play,” his team argued.



The timing of this filing is what’s really interesting. Ver is set, as of right now, for a trial in lower Manhattan starting in early February of next year that could see him potentially extradited to the US. <a href="https://blockworks.co/news/empire-newsletter-trump-presidential-ticket">We’ve talked endlessly</a> about the incoming administration and its seemingly favorable view of crypto and Manhattan prosecutors, to this point, are <a href="https://www.google.com/search?q=manhattan+us+attorney+to+reduce+crypto+cases+prosecutor&amp;rlz=1C5CHFA_enUS1087US1087&amp;oq=manhattan+us+attorney+to+reduce+crypto+cases+prosecutor&amp;gs_lcrp=EgZjaHJvbWUyBggAEEUYOTIHCAEQIRigATIHCAIQIRigAdIBCDkxNTNqMGo5qAIAsAIB&amp;sourceid=chrome&amp;ie=UTF-8">already reducing the amount of crypto cases</a> they go after.



Whether or not Bitcoin Jesus can succeed in getting his case tossed is up to the judge at this point, but I bet his team feels there couldn’t have been a more perfect time for this filing.



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Roger Ver ready to fight over $50M in BTC taxes

Macauley Peterson

Squid has unwrapped a decentralized intent-based liquidity protocol that promises cheaper, faster, and more efficient cross-chain swaps.



The Cross-Chain Order Routing and Auction Layer (CORAL), which went live today, uses a request-for-quote (RFQ) system, enabling users to execute swaps across chains with minimal costs and near-instant finality.&nbsp;



CORAL’s intents handle swaps natively, unlocking market maker order book pricing similar to CoWSwap. This approach eliminates slippage and ensures optimal execution by directly engaging with liquidity providers during the transaction process.



“With CORAL, we’ve removed the borders between chains [to] allow liquidity to flow with minimal friction,” said Fig, Squid’s co-founder.



The new protocol builds on the successful Squid 2.0 upgrade, which focused on abstracting away complex cross-chain transaction flows with multiple hops.



Read more: <a href="https://blockworks.co/news/squid-upgrade-cross-chain-abstraction?utm_source=blockworks-research.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=solving-multichain-pain-points">Squid sinks its tentacles into cross-chain abstraction</a>



One interesting property of the design is that <a href="https://blockworks.co/news/zk-rollups-cheaper-with-scale?utm_source=blockworks-research.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=solving-multichain-pain-points">like a zk rollup</a>, the more transactions come through, the cheaper it becomes for the end user.



That’s because the architecture allows for batching intents, which &#8220;saves a significant amount of gas and delivers users the best execution possible for their swaps,&#8221; Fig said.&nbsp;



This makes it “the cheapest decentralized intent protocol” on the market, even edging out market leaders like Across Protocol, he said. By reducing the per-order gas overhead, “as you scale, it becomes basically free.”



Across Protocol uses more complex <a href="https://app.blockworksresearch.com/unlocked/across-protocol-based-on-intents">cryptographic batching processes</a>, while CORAL leverages Axelar’s secure general message-passing protocol. Like Across, this approach pushes all bridge and routing risks to market makers, who handle the backend complexities of asset transfers. Users receive native assets on their destination chain, eliminating the need for wrapped tokens or trust in external validators.



CORAL’s flexibility goes beyond swaps. It allows developers to build complex DeFi applications using pre- and post-hooks, enabling actions like depositing cross-chain-swapped assets into yield farms with one click.



“I think we’re on a trajectory to have all the assets on one or two chains,” Fig said. “This tech allows you to hold native assets and not really have to bridge them.”



The protocol is now live on major chains including Ethereum, Arbitrum and Base. Plans to integrate Solana, Sui and Aptos are slated for January, and Cosmos-based chains through <a href="https://blockworks.co/tag/ibc?utm_source=blockworks-research.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=solving-multichain-pain-points">IBC</a> later in 2025.



Also on the road map: the ability to aggregate multiple messaging protocols, such as Hyperlane, which will add support for another 40-50 EVM-compatible blockchains. These additions will create a “network of networks,” significantly enhancing interoperability.



Altogether, Squid is positioned as a front-runner in <a href="https://blockworks.co/newsletter/research/issue/post_07a45426-69f7-4e72-9bb6-c84e92857ebd">achieving true chain abstraction</a>, where users interact with assets seamlessly, regardless of their originating chains.



“Cross-chain swaps are now as cheap as single-chain swaps, so we can really move toward full chain abstraction, where users don’t need to think about which chain their assets are on,” Fig said.



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Squid greases cross-chain liquidity

Despite platforms such as Twitter and Telegram and their vocal audiences, there is a significant gap in direct, in-depth feedback between protocols and the crypto community. This often leads to a mismatch between products launched and their fit in the market.



However, as Web3 matures, it’s realizing that in order to build better products with real use cases, it must truly understand its consumers and their needs on a deeper level.



<h2 class="wp-block-heading">A Call to the Crypto Community</h2>



Web3 marketing studio, SCRIB3, is inviting participants from all corners of the crypto industry to take part in an industry-first focus group. Whether you&#8217;re a developer building the next killer dApp, a user exploring different blockchain ecosystems, an active Discord member, or a token holder invested in the future of your favorite projects – your voice matters.



This focus group aims to bring together a diverse range of perspectives in order to:



<ul class="wp-block-list">
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<li>Bridge the feedback gap between project teams and consumers</li>



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<h2 class="wp-block-heading">Driving Innovation Through Collaboration</h2>



SCRIB3 is going beyond just a focus group, pushing for an industry-wide collaborative effort to fix the industry based on real user experiences, expert insights and informed opinions from crypto natives.



Through answering a few simple questions you can provide nuanced feedback to help drive user-centric development and directly influence how blockchain platforms evolve to meet real-world consumer needs.



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Share your thoughts and help set a new industry standard.



<a href="https://nh6td5cc2h1.typeform.com/SCRIB3FG">Take the survey</a>.



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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New Focus Group Aims to Gather Real User Insights on Crypto Infrastructure

Jack Kubinec

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



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Coinbase is <a href="https://blockworks.co/news/binance-coinbase-transaction-revenue-sol">making a lot of money</a> from Solana traders these days, but the influx of demand is also causing some headaches for America’s largest crypto exchange.



Coinbase is receiving more Solana send and receive requests “than ever before,” according to an employee, and so-called dusting attacks have become commonplace, causing Coinbase to take longer than usual to show SOL transactions on users’ accounts. This gets at an interesting problem Solana faces: While the blockchain processes data very quickly, the venues that need to make use of that data sometimes struggle to keep up.



Coinbase’s struggle is with data indexing, which is the process of taking blockchain transaction data — which comes as a jumble of bits — and putting it in a format that things like crypto exchanges can read.&nbsp;



When a blockchain produces as much data as Solana does, this can get demanding and pricey.&nbsp;



To contextualize how much data Solana produces, Blockworks Research data lead Dan Smith pointed to an experiment run by Eigen Labs to show the capacity of its EigenDA data product. Eigen Labs posted every block from 19 blockchains for a period of time in September, representing roughly 20 terabytes of data, and Solana accounted for a staggering 97% of the total. Coinbase’s indexers currently “can’t keep up” with Solana demand, a protocol specialist at the exchange <a href="https://x.com/ann_droo/status/1863432918590181788">wrote</a> on X.



Making matters worse, dusting has become “constant” on Coinbase, the protocol specialist <a href="https://x.com/ann_droo/status/1863789971913494981">wrote</a>.&nbsp;



Dusting refers to sending tiny amounts of crypto to many wallet addresses in hopes of tracking them. I moved SOL around on Coinbase while writing this article, and my wallet received two different dust transactions. This “dust” is trivial to the sender, but it can become a big strain for Coinbase’s data load.



And Solana’s indexing challenges run deeper than just volume.



Solana indexing is particularly difficult compared to Ethereum because the former lacks a uniform interface for smart contracts, which are the computer programs that run on the blockchain.&nbsp;



“[W]hen you look at your transactions across many of these [Solana] programs, the data is just a jumble of bytes which are not human readable,” Tristan Frizza, founder of Zeta Markets, said.



Since there’s no established way to read the data, it becomes difficult for indexers, block explorers, or data platforms like Dune to break down what different Solana transactions are actually doing.&nbsp;



Helius CEO Mert Mumtaz said the Solana development platform will be rolling out three new features in the next two months that he estimated could solve 80% of Solana’s “read layer issues.”



But until then, exchanges will keep having to index a blockchain that is seeing record demand.



Time to man the battle stations, Coinbase.



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Coinbase indexers buckle under SOL demand, ‘dusting’ attacks

Ben Strack

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



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A fund issuer has adjusted several of its crypto ETFs to accommodate those seeking a different type of exposure to the space. They’re crypto futures funds that had lost some luster when spot products became available — but now feature a twist.&nbsp;&nbsp;



Bitwise officially converted three of its futures-based ETFs to “Trendwise” products that rotate between crypto and US Treasurys based on crypto market price trends.&nbsp;



Essentially the funds will stick to investing in crypto futures when the 10-day exponential moving average of the price of BTC or ETH is above the 20-day EMA (when prices are gaining momentum), the company said Tuesday. They would rotate into Treasurys when the opposite is occurring.



In other words, the strategies consider price momentum in an effort to boost risk-adjusted returns while reducing downside risk.



Bitwise launched its BTC futures ETF in March 2023. It brought to market an ETH futures offering (and one holding both BTC and ETH futures contracts) in October 2023. A year later from the latter launches (just weeks ago), the firm then revealed these planned adjustments.



The fund strategy changes are a few of the latest examples of crypto ETF innovation. As <a href="https://blockworks.co/news/planned-crypto-etfs-post-options">we’ve written about</a> previously, a number of issuers have filed for so-called buffer or covered call strategies, for example, after the listing of <a href="https://blockworks.co/news/bitcoin-etf-options-trading-begins">bitcoin ETF options</a>. Others seek to bring new crypto assets (<a href="https://blockworks.co/news/vaneck-files-for-solana-etf">solana</a>, <a href="https://blockworks.co/news/forward-guidance-newsletter-xrp-etf-filing">XRP</a>, <a href="https://blockworks.co/news/canary-capital-litecoin-etf">etc</a>.) into the ETF wrapper.&nbsp;



WisdomTree <a href="https://www.sec.gov/Archives/edgar/data/2046791/000121465924019800/wtxrp112224s1.htm">published</a> plans for a planned XRP fund on Monday — following <a href="https://blockworks.co/news/bitwise-files-for-spot-xrp-etf">Bitwise</a>, 21Shares and Canary Capital.



Though US spot bitcoin ETFs have been the category’s chief asset gatherers — with $31 billion of <a href="https://farside.co.uk/bitcoin-etf-flow-all-data/">net inflows</a> since their <a href="https://blockworks.co/news/sec-approves-bitcoin-etf">January launches</a> — the crypto space appears poised to evolve and grow as more investors come in (and potentially under the oversight of more <a href="https://blockworks.co/news/trump-lenient-crypto-regulation">crypto-friendly</a> regulators).&nbsp;



With that, there should be plenty of demand for more nuanced products, and those with a focus beyond the largest crypto asset.



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A new kind of crypto ETF weighs market trends

Casey Wagner

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



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Congressional leaders are back on the Hill today for the final weeks of the session, and they have their work cut out.&nbsp;



The current federal spending plan expires on Dec. 20, but a government shutdown seems unlikely (at least at this point). Both Republicans and Democrats have expressed interest in passing a continuing resolution that would fund the government through March.&nbsp;



The upside for the GOP is they get to put off making bigger decisions until they have control of both chambers. The downside is President-elect Donald Trump probably doesn’t want Congress tied up in appropriation bills when he’s trying to get nominations through the Senate and pass tax, immigration and <a href="https://blockworks.co/news/unpacking-trump-potential-tariff-policies">tariff policies</a>.&nbsp;



For Dems, the Senate would prefer to focus on getting as many of President Biden’s judicial nominations confirmed before the end of the year. Plus, funding bills need a 60-vote threshold in the Senate, and Republicans only have 53 seats. So Democrats are hardly ceding all their power.&nbsp;



A three-month stopgap, for better or for worse, is probably what is going to happen. For those looking to see significant crypto policy movement in the first quarter of 2025, this isn’t great news.



Still, industry officials seem confident that the second Trump administration will bring a new era of crypto policy to the US. Coinbase chief policy officer Faryar Shirzad told CNBC this week that he sees versions of the <a href="https://blockworks.co/news/house-passes-act-fit21-with-bipartisan-support">FIT21</a> bill and the <a href="https://blockworks.co/news/stablecoin-bill-bipartisan-support">Clarity for Payment Stablecoins Act</a> moving “fairly quickly” next year.&nbsp;



There’s no denying that a Republican majority in the House and the Senate (narrow as it may be) bodes well for getting crypto policy over the finish line. But at the end of the day, it comes down to what lawmakers — namely, committee heads — want to prioritize.&nbsp;



We could see some action from Trump in the form of executive orders, especially should he hire a “crypto czar,” a potential position <a href="https://blockworks.co/news/donald-trump-speaks-bitcoin-2024">Blockworks first reported on</a> in July. The crypto czar would likely have a team, potentially made up of industry execs and interested parties, we’ve heard from people close to the matter. If you’re looking to read the tea leaves on who might make up this new crypto policy council, I’d start with Trump’s top industry donors.&nbsp;



In terms of agency actions, the Senate will need to confirm SEC Chair Gary Gensler’s successor, plus a replacement for resigning Commissioner Jaime Lizárrage.&nbsp;



<a href="https://x.com/EleanorTerrett/status/1863803574121050306">Rumor</a> has it that Trump could name his pick to lead the SEC today. One <a href="https://unchainedcrypto.com/trump-taps-paul-atkins-for-next-sec-chair-making-good-on-his-crypto-promises/">outlet</a> reported that Trump already asked former SEC Commissioner Paul Atkins to head the agency (citing those “familiar with discussions”), but that Atkins has not yet accepted. Atkins did not immediately return Blockworks’ request for comment.&nbsp;&nbsp;



Another name that has come up in SEC chair speculation is Brian Brooks, an ex-acting comptroller of the currency.



The next SEC chair would probably replace Sanjat Wadhwa, who currently works as acting director of the division of enforcement. This has potential to really shake up how the SEC <a href="https://blockworks.co/news/sec-crippling-digital-assets">pursues</a> enforcement actions and which actors it chooses to target.&nbsp;



As for ongoing enforcement actions, I’ve said before that I’m skeptical we’ll see the SEC just drop these cases as the process is a bit more complicated than that. But stranger things have happened.&nbsp;



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Congress is back in session. Here’s what to expect in these final weeks. 

New cross-chain solutions are tackling persistent challenges presented by Ethereum’s rollup-centric roadmap.



Safe’s Safenet, planned for release in 2025, aims to operate as a transaction processor network atop existing blockchains, offering execution guarantees for cross-chain transactions.



Safenet’s design — announced today — introduces a set of capabilities targeting longstanding issues in DeFi, such as speed, security and liquidity fragmentation. It reimagines transaction processing by unbundling execution and settlement, akin to VisaNet’s architecture.



At its core, Safenet aims to dramatically improve transaction efficiency, processing transactions in under one second thanks to <a href="https://blockworks.co/podcast/bellcurve/8dcb7122-c486-11ee-9d5a-1f6f0a61552c">an intents-based solver network</a>. This level of performance would bring cross-chain operations closer to real-time usability, allowing users to move assets or execute transactions between different blockchains almost instantaneously.



Read more from our opinion section: <a href="https://blockworks.co/news/drop-traditional-bridges-for-interoperability">Want cheaper and safer interoperability? Drop traditional bridges</a>



Whether transferring tokens or interacting with dapps, delays in moving across chains have traditionally hindered such activity, leading to a siloed user experience.



“Safenet addresses DeFi’s biggest challenges: fragmentation, latency and complexity,” Lukas Schor, co-founder of Safe, <a href="https://safe.global/blog/introducing-safenet">said</a>.



By leveraging Safenet Processors, users gain access to instant liquidity and secure, composable transactions that span onchain and offchain networks.



The network is secured by user-defined policies and a decentralized validator network — staking the <a href="https://blockworks.co/price/safe">SAFE</a> token — and the system is geared towards providing robust protection against risks like address poisoning and other vulnerabilities.



Validators actively oversee processor activity, and can flag any malicious behavior. This oversight, combined with user-set transaction rules, creates a <a href="https://csrc.nist.gov/glossary/term/defense_in_depth">defense-in-depth</a> security layer that reduces exposure to common threats.



On the <a href="https://blockworks.co/newsletter/research/issue/post_07a45426-69f7-4e72-9bb6-c84e92857ebd">chain abstraction</a> front, Safenet’s ability to unify balances across chains represents a major step forward in usability. Instead of requiring users to manage separate wallets or bridge assets manually, Safenet plans to present a single, consolidated view of their holdings.



Current Safe wallets secure $112 billion in assets, 75% of which is on Ethereum. They already allow for switching between multiple networks, deploying the same Ethereum address across many chains, but Safenet extends the abstraction beyond EVM-based networks to incorporate non-EVM-compatible chains like Solana, according to the <a href="https://blockworks.co/tag/safe">Safe</a> team.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcH_ATJ03yGo39ncHv_5kkcAXpLj8tXs4oKIOst6h1Z8AGiqpZGy-3nFNVDr2_2MV9ERAyLvXyN6yDKCr65FVi6mtw9OHFeUdZ4S4nFBrFJvNjqlYIJ1lU3vZhBdul9F9gz72FOmQ?key=qOrp2o31eFStOc0xGp5HJ-YP" alt=""/><figcaption class="wp-element-caption">Safe TVL over time | Source: <a href="https://dune.com/safe/all">Dune / Safe</a></figcaption></figure>



Safe expects to bridge the gap between onchain and off-chain ecosystems as well, for example by enabling users to interact with centralized exchanges and payment systems using the same unified asset balance. This flexibility simplifies asset management while expanding the ways users can engage with their holdings.



DEX activity accounts for about 5% of the Total Volume Processed (TVP) on Ethereum mainnet by Safe accounts, according to Richard Meissner, co-founder of Safe.



“The remaining volume is a mix of asset transfers, treasury management, DAO governance actions and complex DeFi operations like liquidity provisioning,” Meissner told Blockworks.



He notes that what differentiates Safe’s wallet from other solutions is its focus on <a href="https://blockworks.co/news/safe-whitepaper-smart-accounts">providing smart accounts</a>.



“By advancing smart accounts, we offer features not possible with traditional EOA accounts like multisig, private key recovery [and] automation,” Meissner said.



Safe is betting that features like these will make it appealing for businesses to move more of their operations onchain.



A key component of Safenet&#8217;s functionality is its integration with <a href="https://erc7579.com/">ERC-7579</a>, a standard that defines interfaces and behaviors for modular smart accounts to ensure interoperability across different implementations or “modules.”



By adopting ERC-7579, Safenet can facilitate the unbundling of transaction execution and settlement, similar to how VisaNet operates in traditional finance.



To do so, Safe, in collaboration with Rhinestone, developed the <a href="https://docs.safe.global/advanced/erc-7579/7579-safe">Safe7579 Adapter</a>, which enables Safe accounts to comply with the ERC-7579 standard.



Such standards are crucial for interoperability. For instance, modules such as spending limits, role-based account access and recovery can be incorporated into Safe accounts.



Safenet is set for alpha release in Q1 2025, initially supporting cross-chain accounts and basic liquidity functions. By mid-2025, Safenet will introduce third-party processors and compatibility with the Safe Apps SDK, enabling new use cases such as off-exchange settlement and subscription services.



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Safenet is Safe’s bid for an ‘onchain VisaNet’

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



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XRP’s up 120% in the past week. It’s also seen a “stark uptick” in volatility, according to Kaiko analysts.&nbsp;



Realized volume is up over 100%, marking its newest high since July 2023 (in case you need a refresher, that’s when the <a href="https://blockworks.co/news/judge-rules-ripple-xrp-not-security">court ruling about institutional sales</a> was filed).&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd2fQwveD1X4zZaHx2wFPKcPc_M33stx8VdfZ3dfHYmXPfI79p2qr493LX4Aa8e6CKOAJDkKqeHWDBs1wfTHYcUt-EfehZm9uzFQAU5r06Jw-7vx7hGN5WUlXlnUDf5ErHt6M4PFQ?key=jJ40DRYgfdzyTtQF67k_KEIo" alt=""/></figure>



And here’s something interesting: XRP’s move over the weekend actually eclipsed bitcoin volumes.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcAQr7Tspsnm4qbpxsRnztDvL8qTWIcl3G0yIyXwUEeRlAKWzaAxmlCJahjz0r4SsWggY3D1fg5-JZKBH5P4umUoVFFlgiHhbGjLQ7QFMKWW0QCIOlxWPv6rBPOVlvtJRffMz39?key=jJ40DRYgfdzyTtQF67k_KEIo" alt=""/></figure>



“Seeing stronger volumes accompany a move higher in prices implies that the move has a broad base and is less likely to be just a fleeting change,” analysts wrote.



For Kaiko, these data sets suggest that tokens that had previously been in the SEC’s line of fire could see some reprieve — and a potential jump — as the SEC enters into a new era. One in which the market feels pretty comfortable betting that the agency won’t take as much offense to crypto’s existence, though we don’t know who will be handpicked by President-elect Donald Trump to lead the new regime.&nbsp;



My colleague, Fox’s Eleanor Terrett, thinks there’s a possibility that we could have a name as soon as today.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">🚨NEW: <a href="https://twitter.com/realDonaldTrump?ref_src=twsrc%5Etfw">@realDonaldTrump</a>’s pick to replace <a href="https://twitter.com/GaryGensler?ref_src=twsrc%5Etfw">@GaryGensler</a> as <a href="https://twitter.com/SECGov?ref_src=twsrc%5Etfw">@SECGov</a> Chair could be announced as soon as tomorrow, sources tell <a href="https://twitter.com/FoxBusiness?ref_src=twsrc%5Etfw">@FoxBusiness</a>. Stay tuned 📺.&mdash; Eleanor Terrett (@EleanorTerrett) <a href="https://twitter.com/EleanorTerrett/status/1863803574121050306?ref_src=twsrc%5Etfw">December 3, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Dragonfly’s Haseeb Qureshi, on the <a href="https://blockworks.co/podcast/empire/b7e750d2-b0f0-11ef-816f-37aace07b75c">Empire podcast this morning</a>, had an interesting read-through about the interest in XRP and how that translates into this broader cycle — because, surprise, I always like to find an excuse to zoom out. Basically, he thinks this is a sign that folks aren’t just here for the memes.&nbsp;



“Most people don&#8217;t want to do this nihilistic thing of ‘I&#8217;m just betting that this thing is going to go up and down’ because they don&#8217;t actually think they&#8217;re gambling. They think that they are investing in the future,” Qureshi said.



Don’t get me wrong, David and I know there’s an <a href="https://blockworks.co/news/empire-newsletter-memecoins-winning">appetite for the memes</a>, but I think Qureshi’s point is a salient one: Those who are new in crypto or who have been in crypto have heard talking heads, analysts, even Trump, say that there’s valuable technology in this space and that’s why they’re here. Memes just happen to make it fun…for those who want to partake.&nbsp;



I’m with Qureshi here, and <a href="https://blockworks.co/news/retail-adoption-crypto-cycle">WisdomTree’s Jason Guthrie</a> (which, funny enough, <a href="https://www.sec.gov/Archives/edgar/data/2046791/000121465924019800/wtxrp112224s1.htm">filed</a> for an XRP ETF just yesterday).&nbsp;



Let the memes pump but don’t let them overshadow the fact that more concrete interest is on the rise — and change is on the horizon.



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Tokens in SEC’s ‘crosshairs’ could benefit from new era: Kaiko

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



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If you need any more reassurance that working with crypto is tipped to get easier, look no further than Coinbase listings.



In fact, the rate of Coinbase listings has rapidly accelerated.



Over the past two years, until the election in November, the exchange had made 88 listing announcements specific to the US — an average of 3.8 listings per month.



Since Trump’s win around this time last month, Coinbase has made 16 such announcements — either for its flagship US exchange or specifically for the state of New York.



Of those new coins, seven are related to memecoins: WIF, PEPE and FLOKI were all listed on Coinbase in mid-November, while the former was opened to New York residents this week.



Those aren’t micro-cap memes from pump.fun. They are hugely popular established memecoins with vocal followings, which were often seen pestering Coinbase to list the tokens on X over the years.



Coinbase then added MOODENG on Monday — an actual pump.fun coin — capping off a pent-up meme rollout that felt like years in the making.



<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">Assets added to the roadmap today: Moo Deng (MOODENG)<a href="https://t.co/rRB9d3hSr2">https://t.co/rRB9d3hSr2</a>&mdash; Coinbase Assets 🛡️ (@CoinbaseAssets) <a href="https://twitter.com/CoinbaseAssets/status/1863600476077347065?ref_src=twsrc%5Etfw">December 2, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Prior to Trump’s win, Coinbase had only listed one memecoin in the past two years, BONK, in December 2023. The exchange then made BONK available in New York earlier this year, in May.



Coinbase and other exchanges have been historically slow to offer their full suite of coins to New York residents, on account of the Attorney General’s Office’s <a href="https://blockworks.co/news/eth-security-alleges-nyag">penchant for securities lawsuits</a>.&nbsp;



Other, more substantive coins have been given the Coinbase nod since the election. Helium’s MOBILE is now available in New York alongside DEGEN, ARB, SEI, AIOZ, 1INCH, EGLD, and SD.&nbsp;



Still, Coinbase opting into memecoins to such a degree makes absolute sense for its bottom line. Memecoins bring volume which directly converts to trading fee revenue for Coinbase.&nbsp;



The move, while potentially hindered by the continued potential of a disagreeable SEC, was probably overdue. But its actual impact on Coinbase’s own valuation may not convert so easily heading into a second Trump term.



Coinbase’s share price has tracked bitcoin’s price performance almost exactly over the past year and has been slightly underperforming against it in the past two weeks.&nbsp;



If the market is indeed pricing in potential revenues from a memecoin supercycle powered by Coinbase, it’s not yet showing up. MOODENG, though, has more than doubled, so there’s that.



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What Coinbase listings say about crypto in the US

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Over the weekend, the anonymous founder of Jupiter <a href="https://x.com/weremeow/status/1863331338662851026">used</a> a racial slur multiple times in an X post — and the Solana DeFi giant’s competitors perceived an opportunity.&nbsp;



The post came in response to another anonymous account asking whether a memecoin containing the slur could be verified on Jupiter. Meow, Jupiter’s founder, left the post up for roughly a day, arguing that he didn’t have malicious intent when making the post. He also reposted an “n-word pass” and wrote that he “didn’t know that there is such a big difference between r &amp; a” in reference to the slur.



Some <a href="https://x.com/punktaveira/status/1862920449849475296">pointed</a> out that meow is not American and “sees everyone using” the term online, so he may not have grasped the word’s potential hurtfulness.



Still, the crypto community’s response was swift and mostly negative, with Solana ecosystem leaders calling out the behavior and multiple posters pledging to sell Jupiter’s native token. Meow eventually issued an apology for the post, saying, “Racism is obviously completely unacceptable and I love you all.”



The market didn’t seem to care much about the incident, however: JUP slid 7.7% over the past 24 hours, but multiple major Solana DeFi tokens drew back 5-10% over that time frame, and JUP’s fall occurred several hours after meow’s racist remark. JUP traded relatively flat on Saturday, and seemingly even saw its price <a href="https://x.com/NFTDoctor33/status/1863271689901007037">increase</a> relative to other Solana DeFi tokens immediately after the post.



Jupiter’s killer feature is a so-called aggregator that automatically routes user swaps across multiple venues to achieve the best possible price for users. In short, you get more value per dollar when swapping on Jupiter than on Phantom or Coinbase, for instance.&nbsp;



Jupiter has a pretty big moat with this feature, <a href="https://blockworks.co/news/lightspeed-newsletter-solana-top-swap-venue">as we’ve written before</a>, but would-be competitors spied an opportunity after meow’s snafu.&nbsp;



Solana-compatible swap app DFlow essentially came out of stealth after the faux pas, posting instructions for how developers could switch their APIs away from Jupiter. DFlow’s founder wrote “crypto needs a massive change culturally,” citing meow’s post as evidence.&nbsp;



“After the Meow posts on the weekend, I think [it’s] becoming clear to everyone that a reasonable competitor for their swap product has to come in,” Chris Chung, CEO of the Solana-based aggregator Titan, told me in a text.&nbsp;



However, Chung added that “value is everything,” and any Jupiter competitors would have to significantly outperform Jupiter to convince users to switch.



I think another part of this story, if it winds up being much of a story at all, could be the institutional side of things. Risk-averse institutions moving into crypto will likely look to do business with professional-seeming founders, and posting racial slurs on social media probably won’t fit the bill.



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Competitors circle after Jupiter founder posts slur

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The transatlantic trade-dependent Euro Area is prepping for Donald Trump’s second term and the return of <a href="https://blockworks.co/news/unpacking-trump-potential-tariff-policies">higher tariffs</a>.&nbsp;



US tariffs may lower Euro Area GDP by 0.4%, the Institute of International Finance (IIF) estimated in a Monday <a href="https://www.iif.com/portals/0/Files/content/GMV112824_1.pdf?_cldee=lsLWvuz3QvsAwiEHJO7ijR0EsuBaJzBwedgHP1ZQGrditXVvdV8arfFQxfGAEfH3&amp;recipientid=contact-fcc886d04c2bec1180f8000d3a0f728a-a4a766cd70174c6ebac34b07ffbe7fe5&amp;utm_source=ClickDimensions&amp;utm_medium=email&amp;utm_campaign=Press%20Emails&amp;esid=609654fc-b2b0-ef11-b8e8-00224831e115">note</a>. With many European countries yet to fully recover from the pandemic and increased competition from <a href="https://blockworks.co/news/on-the-margin-newsletter-china-stimulus-stagnation">China</a>, renewed tariffs could lead to a &#8220;substantial economic hit,” the report adds.&nbsp;



Among the countries most likely to be impacted are Germany, France and Italy. Machinery and industrial goods exports from Italy and Germany are expected to be hit especially hard by new policies. Germany, the US’s largest exporter, also heads into its second straight year of zero growth. France could see exports of goods in the aerospace and luxury industries decline by as much as 4% over Trump’s next term, according to the IIF.&nbsp;



But, as a new tariff scenario chart from <a href="https://www.bloomberg.com/news/features/2024-12-01/trump-trade-war-explaining-tariff-scenarios">Bloomberg Economics</a> points out, Trump’s statements, which often shake global currencies, come much faster than the tariff policies themselves. Those could take weeks if not months, depending on how liberally Trump plans to take advantage of the International Emergency Economic Powers Act.&nbsp;



Aside from timing, there’s also likely to be a discrepancy between Trump’s threats and what actually happens (during his first term, Trump walked back his initial proposed tariff on Mexico after the country agreed to increase border patrol).&nbsp;



We’ll be watching as policies unfold, and as the next administration continues to tease its plans (I’d keep an eye on Truth Social).



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Euro Area preps for Trump second term, tariff risks 

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



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November was an <a href="https://blockworks.co/news/crypto-impacts-since-election-outcome">eventful month</a> for crypto, as you know — jumpstarted by Donald Trump’s <a href="https://blockworks.co/news/revisiting-trumps-crypto-promises-after-his-election-win">election win</a>.&nbsp;



Bitcoin rose 37.3% last month, CoinGlass <a href="https://www.coinglass.com/today">data</a> shows. That was the asset’s best performance in <a href="https://blockworks.co/news/btc-healthy-correction-pre-thanksgiving">November</a> (the month with the highest average BTC returns, at 46%) since 2020, when bitcoin gained 43%.



Looking ahead, December is not historically as good a month for BTC (+4.9% returns on average). Bitcoin price did rise by 47% in December 2020 (also after a presidential election); but from 2021 to 2023, the asset’s returns were -18.9%, -3.6% and +12.2%, respectively.&nbsp;



Bitcoin has been <a href="https://blockworks.co/news/btc-price-predictions-thanksgiving">unable to breach</a> the $100,000 level — with some analysts attributing that to investor profit-taking, as well as put option-fueled resistance as traders hedge against possible dips.



BTC was trading around $95,650 at 2 pm ET — down 1.6% from 24 hours prior.



Jeff Embry, managing director of crypto hedge fund Globe 3 Capital, told me he does not necessarily expect specific developments this month to impact crypto markets. Rather, he predicts “an across-the-board continuation” from November of <a href="https://blockworks.co/news/matt-hougan-crypto-reputational-risk">strong crypto demand</a> spurred by the US “taking its boot off the throats of the innovators, risk takers and investors and telling them ‘we support you now.’”



“Before November, the most recent peaks for BTC and ETH were in mid-March,” he explained. “That is an eight-month consolidation period in a bull market, so that market was ready for a catalyst to push to new highs, and the November election provided that catalyst in a gigantic way.”



Globe 3 Capital’s end-of-year BTC price prediction (proclaimed at the start of 2024) was $124,000 — a number Embry said the firm is sticking to. Some others have pointed to $80,000 as a support level in the case of a drawdown.&nbsp;



“Of course, higher prices depend on higher demand and we are seeing demand across the board from <a href="https://blockworks.co/news/retail-adoption-crypto-cycle">retail</a>, [high-net-worth individuals], institutions, sovereign wealth funds and governments themselves,” Embry added.



We certainly saw plenty of examples in November of <a href="https://blockworks.co/news/company-treasuries-btc-reserve-asset">companies buying BTC</a> for their treasuries. That appears set to continue.&nbsp;



From Nov. 25 to Dec. 1, MicroStrategy bought 15,400 bitcoins for roughly $1.5 billion in cash, according to a Monday <a href="https://assets.contentstack.io/v3/assets/bltb564490bc5201f31/blt5893191db18fb0f0/674da9940da03cdc38b54e22/form_8-k_12-02-2024.pdf">filing</a>. Bitcoin miner Marathon Digital revealed (also today) it intends to offer $700 million of convertible senior notes — the proceeds of which will primarily go toward buying more BTC.&nbsp;



MicroStrategy founder Michael Saylor <a href="https://x.com/saylor/status/1863323760511627565">shared a video</a> explaining why Microsoft should hold BTC on its <a href="https://blockworks.co/news/microsoft-bitcoin-balance-sheet">balance sheet</a>. Such a proposal is on the tech giant’s agenda for its Dec. 10 shareholder meeting; though the board recommends a vote against it (noting it already considers this), it’s something to keep an eye on.&nbsp;



Then there’s the Federal Reserve’s rate decision on Dec. 18. Polymarket odds suggest the market expects a 25-basis point decrease (67% chance). Rate cuts have historically been good for risk assets like bitcoin.&nbsp;&nbsp;



Finally, the industry continues to await clarity around a possible US strategic bitcoin reserve. To Embry’s point about governments <a href="https://blockworks.co/news/brazil-bill-for-national-bitcoin-reserve">showing interest</a>, US support for this would likely lead to more countries doing <a href="https://blockworks.co/news/bitcoin-as-a-potential-us-reserve-asset">the same</a>.



But analysts at Compass Point Research &amp; Trading believe the BITCOIN Act (<a href="https://blockworks.co/news/senator-lummis-bitcoin-reserve-bill-crypto-policy">floated</a> by Sen. Cynthia Lummis) has a less than 10% chance of becoming law.



“We do not expect the Republican-controlled Congress, which will be focused on expiring tax provisions and the federal budget, to allocate funds for this purpose,” Joe Flynn and Ed Groshans wrote. “The primary challenge this action would encounter is the deficit financing of BTC purchases.”



Though Trump could issue an executive order (perhaps creating a subaccount within the Treasury’s general fund), they added, a future administration could undo the action.&nbsp;



The bottom line? As the weather gets colder for many of us, the crypto narratives are poised to keep heating up.



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What to watch for in December after an eventful November

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



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XRP’s stunning 380% rally in the past month has catapulted it into the crypto spotlight. It has not only flipped solana (SOL) in market capitalization, but also Tether (USDT) today. With a market cap already at all-time highs, and now a fully diluted valuation (FDV) twice that of SOL, XRP’s ascent reflects a mix of regulatory clarity, network adoption and speculative fervor.



<h2 class="wp-block-heading">Political winds and market sentiment</h2>



The conclusion of Ripple Labs&#8217; protracted <a href="https://blockworks.co/news/sec-files-ripple-appeal-precedent">legal battle</a> with the US SEC is one driver of XRP’s explosive growth. After years of uncertainty, the $125 million penalty <a href="https://blockworks.co/news/ripple-fined-civil-penalty-sec-lawsuit">imposed</a> was far below the SEC’s initial $2 billion <a href="https://blockworks.co/news/sec-wants-multi-billion-sum-from-ripple">demand</a>, removing a massive <a href="https://blockworks.co/news/empire-newsletter-ripple-sec-legal-battle">overhang</a> on XRP and allowing institutional and retail investors to re-enter the market with confidence.



The <a href="https://blockworks.co/news/forward-guidance-newsletter-sec-ripple-inflation">significance</a> of XRP’s legal victory transcends its price action, <a href="https://x.com/JohnEDeaton1/status/1863313228178301182">according</a> to attorney John E. Deaton. Deaton is a prominent <a href="https://blockworks.co/news/elizabeth-warren-challenger-senate">advocate</a> for XRP holders who sued the SEC over its 2020 enforcement action. He referred to the <a href="https://blockworks.co/news/judge-rules-ripple-xrp-not-security">SEC’s claim</a> that all XRP tokens were illegal, regardless of their use case or the circumstances under which they were acquired, unprecedented “gross overreach.”



The US election has also played a role in XRP’s ascent. Trump’s <a href="https://blockworks.co/news/donald-trump-declared-president-2024-election">victory</a> has been interpreted as a signal not only for potentially more <a href="https://blockworks.co/news/trump-lenient-crypto-regulation">favorable</a> cryptocurrency regulations, but also toward specifically <a href="https://blockworks.co/news/donald-trump-economic-new-york-club-comments/">favoring</a> “homegrown” networks, initially launched by US companies.



That’s helped drive bids in similar stars of prior <a href="https://blockworks.co/news/altcoin-market-returns-against-btc">cycles</a>.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcQrFmIGzM3s7JDpxpaA5eXbkkwx1VH55xweaUFdntPetv4SxKqB7k71aDAJ5YT5HOP0RkMISby2OTOkQNo0rtKOV4BUsdi5afh-G6rqcfqTFxeeSGuf98bTBosJcM6RCsDLwVwXQ?key=umEP6-PRlbPVp1Uv-ziCfQBI" alt=""/><figcaption class="wp-element-caption">Top performers (from the top 100) since the election (H/T <a href="https://x.com/HsakaTrades/status/1863321129680527369">Hsaka</a>)</figcaption></figure>



There’s also a nostalgia factor, says Mena Theodorou, co-founder at crypto exchange Coinstash.



“The resurgence of many of these older coins highlights the muscle memory of <a href="https://blockworks.co/news/retail-adoption-crypto-cycle">retail traders</a>, who likely got their first exposure to the crypto markets through these coins and are now returning to their favourites as they re-enter the current bull market,” Theodorou told Blockworks.



The result is that, for many, XRP represents a “comeback story,” building momentum through both narrative and a bit of substance.



<h2 class="wp-block-heading">The rise of XRP memecoins</h2>



Another more recent factor in XRP’s expansion is the proliferation of memecoins on the XRP Ledger. Tokens such as DROP, SIGMA and RPLS have sparked interest among the gambling crowd (if they can figure out how to use the chain).



Low transaction costs and high throughput are available in every ecosystem these days, so this could be a temporary rotation play. Memecoins have a penchant <a href="https://blockworks.co/news/midwest-blockchain-conference-highlights">to attract</a> retail investors, but meme trading volumes on XRPL are a <a href="https://dexscreener.com/xrpl">modest</a> $78 million over the past 24 hours.



<h2 class="wp-block-heading">ETF speculation</h2>



Beyond memecoins and political tailwinds, <a href="https://blockworks.co/news/xrp-etf-contingent-on-election-and-sec-appeal">speculation around</a> the approval of XRP-focused ETFs is one final driver. As Bloomberg’s Eric Balchunas notes, the introduction of ETFs would likely “open the floodgates” for institutional capital. Newfound <a href="https://blockworks.co/news/canary-capital-litecoin-etf">regulatory clarity</a> has also positioned XRP as a <a href="https://blockworks.co/news/forward-guidance-newsletter-xrp-etf-filing">viable alternative</a> to Solana and Ethereum for institutional adoption simply because of its size, even as few in the technical community take it seriously.



XRP’s price action reflects this optimism, with the market pricing in a high probability of approval given recent developments.



Ripple CEO Brad Garlinghouse, for his part, has <a href="https://www.bloomberg.com/news/videos/2024-10-23/xrp-etf-is-inevitable-says-ripple-ceo-video">described</a> an ETF as “inevitable.”



The crypto asset XRP has already attracted attention from firms like <a href="https://blockworks.co/news/bitwise-files-for-spot-xrp-etf">Bitwise</a> and 21Shares, whose filings for ETFs could further legitimize and amplify XRP’s appeal to institutional investors. The SEC’s initial deadlines for a decision on the ETF filings are in May and June next year, respectively.



As the third-largest crypto asset, XRP is impossible to ignore. But whether it can sustain its newfound favor, however, will depend on its ability to translate hype into lasting adoption.



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XRP flips USDT as rally pushes market cap to all-time high

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We’re three weeks out from Christmas.



As David pointed out in today’s Empire newsletter, we’re in an interesting spot, which leads WisdomTree’s Jason Guthrie to wonder if there’s enough momentum to last till the end of the year.&nbsp;



I personally don’t have a crystal ball, so that’s a little hard to work out as it stands. If you were on an early Thanksgiving break last week, then you may have <a href="https://blockworks.co/news/btc-price-levels-to-watch">missed the price levels to watch with bitcoin</a>, but that’s about as far as we can go in trying to predict what’s next.&nbsp;



So instead, what about how we’re looking at this moment?



“The space, to me right now, does feel reasonably healthy,” Guthrie said.&nbsp;



“​​There aren&#8217;t a lot of individual projects or companies that seem to be bolstering or driving this in a very meaningful way. And I think that&#8217;s very distinctly different from previous cycles where there was a hyped-up innovation, whether it was NFTs or memecoins or something like that, or one big firm like FTX that really seemed to be kind of dominating the narrative … that feels a little shakier than what we&#8217;ve got now, which just seemed like a more diversified groundswell, if you like, through the space more generally. People are building innovative things we don&#8217;t have … it seems much more use case focused,” he added.&nbsp;



Though, to be fair, at this point it does seem like memecoins are one of the dominant narratives. How long that lasts is anyone’s game, especially given they’re seen as a pathway in for retail.&nbsp;



Guthrie’s not sure we’re going to see the same level of retail excitement this cycle as we saw last go around, leading him to think that we might see a bit more of a “muted run. ” That’s not necessarily “an unhealthy thing for the space in any way,” he said.



Instead, this might be the cycle where we see more real adoption, rather than a small crowd of retail with high-net worths putting large portions of that into crypto.&nbsp;



“I would rather that that demand was coming from tens of millions of people doing something that makes sense for them, rather than a handful of people putting in a very large portion of their portfolio. And I think retail coming back in the future might look much more like a general risk-on sentiment, as opposed to this really loud hype from a relatively small community,” Guthrie said.



Perhaps there’s space for both the retail crowd that wants to dabble in memecoins, and those adding crypto to portfolios as a risk-on investment.



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