Dark Eclipse

Byron Gilliam

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“I don&#8217;t get it. I still don&#8217;t get it.” — Tom Hanks, Big
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At a holiday dinner last night, I was asked to explain crypto to someone who is so new to the topic they had not previously heard of Ethereum.&nbsp;



I did a terrible job.



From attempting explanations of proof-of-stake, to smart contracts, to DeFi, to DePIN and then back to what a blockchain even is, I’m certain I left my audience far more confused than I found them.



It was a reminder that the best person to learn from is often just one step ahead of you on the subject, not 10 or a 100 — or someone that thinks about a subject twice a year, not every day.



<h2 class="wp-block-heading"><a href="https://pca.st/episode/babbbc92-4305-4a04-9039-26eb33d09dfd">Ben Thompson makes the tech case for crypto</a></h2>



For example, the tech expert Ben Thompson, who mentions crypto in his Stratechery newsletter about twice a year, explains why it matters better than any of the crypto experts who think about it daily.



Thompson helpfully starts at the beginning: “Blockchains are the idea that disparate groups can come to a consensus without any kind of centralized authority.”&nbsp;



That decentralization endows crypto with “all the qualities” of digital goods — endlessly duplicable, universally accessible, easily distributed — and yet, “it has scarcity.”



Thompson thinks this is conceptually interesting because it solves a problem he encounters as a writer of digital newsletters: “Digital goods are fundamentally hard to monetize because they are infinitely duplicable.”



In practice, however, he recognizes that crypto is mostly interesting as a way to send money peer-to-peer — which is why the case he makes for crypto is mostly about stablecoins.



Stablecoins, he says, represent “all internet sort of things” that he finds interesting — a universal ledger, scarcity, fast transactions — and none of the “downside” things: “the pure speculation on a coin going up, the wild swings in value.”



Net-net, “what you end up with [with stablecoins] is basically this currency that operates like the internet.”



That’s the definition I needed at dinner last night: Crypto is a currency that acts like the internet.&nbsp;



Thompson also explains why this is useful for the kind of fintech businesses he often writes about: “If you want to set up some kind of financial entity, you don’t have to build out the backend to track everyone’s finances…you can just build it directly on top of the blockchain.”



This allows fintechs to “offload” all the difficult parts of finance to a blockchain: holding money, reconciling accounts, keeping a ledger of transactions, and — perhaps most importantly — establishing trust.



“You get all that for free with blockchains.”



My neighbor at dinner — a real estate guy — would surely have seen the appeal in that.&nbsp;



Thompson’s explainer, offered way back in 2024, feels even more relevant at the end of 2025: Token prices are down bad, but traditional finance companies — like Stripe, BlackRock and Visa — are increasingly excited about offloading parts of their business to blockchains.&nbsp;&nbsp;



Thompson’s podcast will help you explain why.



<h2 class="wp-block-heading"><a href="https://medium.com/free-code-camp/explain-bitcoin-like-im-five-73b4257ac833">The best Bitcoin explainer</a></h2>



A Medium post from 2013 offers the most accessible introduction I’ve seen to what Bitcoin is and why it matters — and your best chance to explain it to beginners over the holidays.



The author begins on a park bench, using a simple apple exchange to illustrate the core purpose of blockchains: making digital apples behave like physical ones.



These blockchains, he says, “live in everybody’s computers [where] all the transactions that have ever happened, from all time, in digital apples will be recorded in it.”



As a result, sending one of those apples is “as good as seeing a physical apple leave my hand and drop into your pocket.”&nbsp;



It’s also as permissionless as exchanging real apples: “Just like on the park bench, the exchange involved two people only. You and me — we didn’t need Uncle Tommy there to make it valid.”



Uncle Tommy is a stand-in for banks, of course.



This setup makes for a deft explanation of proof-of-work: “You could participate in this network too and update the ledger and make sure it all checks out. For the trouble, you could get like 25 digital apples as a reward.”&nbsp;



It explains the idea of scarcity, too: “In fact, that’s the only way to create more digital apples in the system.”



With all that established, Bitcoin becomes far more understandable: “That system I explained exists. It’s called the Bitcoin protocol. And those digital apples are the ‘bitcoins’ within the system.”



This makes crypto money near-infinitely divisible and near-instantly sendable. To anywhere, no permission required.&nbsp;



But that’s not all that blockchains can do: “I can even make other digital things ride on top of these digital apples! It’s digital after all. Maybe I can attach some text on it — a digital note. Or maybe I can attach more important things; like say a contract, or a stock certificate, or an ID card…”



Perhaps disappointingly, crypto is only now — 12 years later — starting to put stock certificates and ID cards on blockchains.&nbsp;



But now that it’s finally happening, you should be ready to explain how and why it is.&nbsp;



<h2 class="wp-block-heading"><a href="https://www.youtube.com/watch?v=3ERuhks3GNk">Adopt a beginner’s mindset</a></h2>



In the classic movie <a href="https://youtube.com/shorts/lgTf-pYUfzk?si=tH2vVhQdaitNeHbO">Big</a>, Josh (Tom Hanks) is promoted from data entry to vice president of product development just two weeks into the job — all because the CEO is captivated by his childlike wonder for the toys they make.



Josh jumps straight to the top because he has the unfair advantage of being a kid trapped in a man’s body — this gives him insight into the company’s toys that no toy expert can match.



In a high-stakes product meeting with adults, he responds to a pitch for a toy building that transforms into a robot as any kid would: “I don’t get it.”&nbsp;



After the marketing data is explained to him, he shrugs, “I still don’t get it.”



His childlike line of questioning and reasoning then leads to a much better proposal: a robot that transforms into a prehistoric bug.



Josh’s method is not new.&nbsp;



The Zen concept of shoshin — adopting an attitude of openness, eagerness and lack of preconceptions when learning — dates back to the 13th century.



“In the beginner’s mind there are many possibilities,” a Zen master wrote. “In the expert’s mind there are few.”



This might still be the best way to learn a topic as complex and often bewildering as crypto: Approach it with the open mind of a beginner.



Fortunately, you don’t have to spend decades becoming a Zen master to practice shoshin (or be a 12-year-old boy) — you only have to channel Tom Hanks.



The next time someone explains a complex crypto concept to you (like auto-deleveraging or quantum resistance, to cite recent examples), don’t think you have to immediately understand.



Instead, say, “I don’t get it.” Then, after a second explanation: “I still don’t get it.”



By the third or fourth response, you probably will get it — maybe even well enough to explain it to me.



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The Breakdown Newsletter

A holiday guide to explaining crypto to your relatives

Marc Arjoon

Boccaccio

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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This Wednesday, BTC outpaced stocks as launchpads rose. More importantly, this week’s update highlights a clear structural shift in how crypto markets are being distributed. 



We also take a look at M&amp;A and fundraising over the past year, and note the drastic growth of mergers and acquisitions activity in crypto. Together, these trends point to a market where infrastructure, not listings, is becoming the primary driver of scale and access.



<h2 class="wp-block-heading">Indices</h2>



Markets leaned modestly risk-on over the last session, with crypto and growth assets leading while defensives lagged. BTC outperformed on the day (+1.6%), while the Nasdaq 100 (+0.1%) and Gold (+0.1%) were effectively flat, and the S&amp;P 500 slipped modestly (-0.4%), reinforcing the view that incremental risk appetite was concentrated squarely in crypto rather than across broader macro assets. Intraday volatility was noticeable across all lines, but dips were consistently bought, particularly during the US trading window.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-120.png?w=1024&amp;h=1024" alt="" class="wp-image-110507" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-120.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-120.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-120.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-120.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-120.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-120.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-120.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-120.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-120.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Within crypto, today’s tape was defined by aggressive rotation into trading themes. Launchpads (+3.9%) led the complex by a wide margin, followed by the Solana ecosystem (+2.3%) and DEXs (+2.1%). Crypto Miners (+1.9%), tokens with Buybacks (+1.9%), Exchange tokens (+1.9%) and plays like RWA (+1.9%) also finished green. On the other side, several categories saw sharp givebacks. Gaming (-6.4%) was the clear laggard, with Lending (-3.7%), Revenue Leaders (-3.5%), Ethereum ecosystem (-3.5%), and Memes (-3.4%) all posting steep declines.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-121.png?w=1024&amp;h=1024" alt="" class="wp-image-110508" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-121.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-121.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-121.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-121.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-121.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-121.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-121.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-121.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-121.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Within Revenue Leaders, HYPE (-3.0%) continues to underperform as concerns around sustainability, take fees and competition arise. Meanwhile, AAVE (-3.8%) was the worst performing asset in the index as concerns around Aave Labs and DAO alignment continue. This is despite Aave founder Stani Kulechov <a href="https://x.com/StaniKulechov/status/2000712591144804534?s=20">swapping</a> almost $10 million of wrapped ETH into AAVE to signal “alignment” with the token.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-122.png?w=1024&amp;h=1024" alt="" class="wp-image-110509" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-122.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-122.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-122.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-122.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-122.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-122.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-122.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-122.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-122.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Overall, the market action suggests tactical rotations rather than a broad risk-off shift. Volatility remains elevated and flows appear selective. Sustained follow-through will likely depend on BTC’s ability to hold recent gains and reassert leadership.



<h2 class="wp-block-heading">Market Update</h2>



Jupiter has integrated with Coinbase’s onchain trading stack to power swaps for Solana-based assets, bringing one of Solana’s most important liquidity layers directly into a mainstream crypto interface. The integration allows users to trade Solana tokens via Coinbase’s onchain experience, while Jupiter handles routing and execution across Solana DeFi in the background.



On average, Jupiter generates around $4 million in monthly revenue from its aggregator (ultra) offering and this integration paves the way to monetize this further.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1124" height="624" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-137.png?w=1024&amp;h=1024" alt="" class="wp-image-110534" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-137.png?w=1124 1124w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-137.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-137.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-137.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-137.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-137.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-137.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-137.png?w=80 80w" sizes="auto, (max-width: 1124px) 100vw, 1124px" /></figure>



So what’s actually happening? Well, rather than listing new Solana assets directly on a centralized order book, Coinbase is leaning into onchain rails. Jupiter acts as the execution engine, aggregating liquidity across Solana DEXs, optimizing routes, and settling trades onchain, while Coinbase provides the distribution, UX, and on- and off-ramps. For users, this means access to a much broader universe of Solana tokens than would typically be available through centralized listings, without needing to leave the Coinbase ecosystem.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1286" height="701" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-125.png?w=1024&amp;h=1024" alt="" class="wp-image-110512" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-125.png?w=1286 1286w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-125.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-125.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-125.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-125.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-125.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-125.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-125.png?w=80 80w" sizes="auto, (max-width: 1286px) 100vw, 1286px" /></figure>



<a href="https://x.com/solana/status/1999035191323759024"></a>



Coinbase is one of the leading exchanges in the world, with a large user base with roughly $80-$100 billion in average monthly trading spot volume.&nbsp;



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1001" height="680" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-126.png" alt="" class="wp-image-110513" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-126.png?w=1001 1001w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-126.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-126.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-126.png?w=378 378w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-126.png?w=384 384w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-126.png?w=322 322w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-126.png?w=80 80w" sizes="auto, (max-width: 1001px) 100vw, 1001px" /></figure>



<a href="https://www.theblock.co/data/crypto-markets/spot"></a>Similarly, Jupiter already sits at the center of Solana spot trading activity, with roughly $50 billion in monthly trading spot volume.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1124" height="624" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-136.png?w=1024&amp;h=1024" alt="" class="wp-image-110531" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-136.png?w=1124 1124w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-136.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-136.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-136.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-136.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-136.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-136.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-136.png?w=80 80w" sizes="auto, (max-width: 1124px) 100vw, 1124px" /></figure>



Together, they significantly expand how Solana-native assets reach retail users. Notably, Coinbase isn’t competing with Solana DeFi primitives here, it’s embedding them. This reflects a broader shift where centralized platforms increasingly act as frontends to onchain liquidity. The logic behind this is that onchain trading removes the long lead times associated with centralized exchange listings, allowing markets to form where liquidity already exists. Amid a market downturn, this integration may act as a rerating catalyst for both COIN and JUP by expanding trading volume and revenue potential.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-135.png?w=1024&amp;h=1024" alt="" class="wp-image-110529" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-135.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-135.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-135.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-135.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-135.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-135.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-135.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-135.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-135.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



However, permissionless markets cut both ways. Access to more tokens also means exposure to illiquid or malicious assets, so verification, liquidity checks and trade sizing remain essential. The Jupiter-Coinbase integration is less about a single partnership and more about a structural shift, where major exchanges increasingly rely on DeFi infrastructure to deliver broader market access and Solana’s trading stack becomes harder to ignore.



<h2 class="wp-block-heading">Fundraising and M&amp;A update</h2>



Crypto M&amp;A activity has experienced drastic growth over the past several quarters. M&amp;A volume in November 2025 alone reached approximately $10.7 billion, driven largely by Naver&#8217;s acquisition of Dunamu (operator of the Upbit exchange) for $10.3 billion.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="889" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-130.png?w=1024&amp;h=1024" alt="" class="wp-image-110517" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-130.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-130.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-130.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-130.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-130.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-130.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-130.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-130.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-130.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



This follows a strong Q3 2025 where crypto M&amp;A topped $10 billion for the first time, doubling the previous record of $5 billion and representing a 30x jump compared to the same period in 2024. By November 2025, total M&amp;A deal value reached $8.6 billion across 133 deals (excluding the Dunamu mega-deal), exceeding the combined total of the previous four years. M&amp;A has grown from $457,000 in Q1 2021 to $4.2 billion in Q2 2025, which represents a roughly 9000x increase.&nbsp;



The surge has been led by major exchanges executing aggressive expansion strategies. Coinbase completed six acquisitions in 2025, including the $2.9 billion purchase of Deribit, the current leading crypto options platform. Ripple acquired four companies, including the $1.25 billion purchase of prime brokerage Hidden Road, while Kraken completed five acquisitions, including NinjaTrader for $1.5 billion and Small Exchange for $100 million. Recent deals show continued momentum into December, with Paribu acquiring CoinMENA for $240 million, Stripe acquiring wallet provider Valora, Kraken purchasing tokenization firm Backed, and Galaxy acquiring liquid staking protocol Alluvial.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="889" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-131.png?w=1024&amp;h=1024" alt="" class="wp-image-110518" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-131.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-131.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-131.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-131.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-131.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-131.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-131.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-131.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-131.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Crypto fundraising has grown approximately 41%: from the previous cycle peak of $4.63 billion in January 2021 to the new high of $6.52 billion in July 2025.&nbsp;



Fundraising activity has been robust throughout 2025, though with more variation month to month. Fundraising peaked in July 2025 at $6.5 billion before decreasing to around $4-5 billion monthly through Q3 and Q4. Notable recent raises include Kraken securing $800 million across two rounds in November (including $200 million from Citadel Securities at a $20 billion valuation), Kalshi raising $1 billion at an $11 billion valuation for its prediction markets platform, Monad completing a $188 million public sale at a $2.5 billion valuation, and RedotPay closing a $107 million Series B for its crypto payments infrastructure. Year-to-date fundraising through November 2025 totaled approximately $36 billion, a significant recovery from the crypto winter years of 2023-2024 when monthly fundraising often struggled to exceed $1 billion.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="889" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-132.png?w=1024&amp;h=1024" alt="" class="wp-image-110519" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-132.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-132.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-132.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-132.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-132.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-132.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-132.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-132.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-132.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



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0xResearch Newsletter

Coinbase embeds Solana trading

Kunal Doshi

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We start with a risk-off tape across tech, crypto and miners, then zoom in on Robinhood’s prediction market roadmap.



<h2 class="wp-block-heading">Indices</h2>



Markets closed with a clear risk-off tone yesterday. Gold was the lone bright spot, finishing up 0.8%, while the S&amp;P 500 ended flat and the Nasdaq and BTC fell -1.38% and -1.89%, respectively.&nbsp;



The underlying drivers remain unchanged, with continued rotation out of the AI trade weighing on tech-heavy indices. This time, sentiment was rattled by reports that a key Oracle investor pulled out of a data center project. Although Oracle later disputed the claim, the headline was enough to push already cautious investors further into defensive positioning.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="851" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-140.png?w=1024&amp;h=1024" alt="" class="wp-image-110546" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-140.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-140.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-140.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-140.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-140.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-140.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-140.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-140.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-140.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



That weakness spilled into crypto, with every sector finishing in the red. One surprising holdout was the meme index, which declined just -1.2% despite typically being one of the most sentiment-sensitive sectors. The index found support from M (MemeCore), which was the only constituent to close green and gained 1.96% on the day.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="849" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-141.png?w=1024&amp;h=1024" alt="" class="wp-image-110547" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-141.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-141.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-141.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-141.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-141.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-141.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-141.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-141.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-141.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The hardest-hit sectors were Crypto Miners and AI, both down close to -9%. Miners continue to feel pressure from fears that the AI trade is rolling over, with IREN now down -31% over the past month. In the AI index, TAO was the weakest performer, falling -9% despite its recent halving.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1219" height="558" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-139.png?w=1024&amp;h=1024" alt="" class="wp-image-110545" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-139.png?w=1219 1219w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-139.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-139.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-139.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-139.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-139.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-139.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-139.png?w=80 80w" sizes="auto, (max-width: 1219px) 100vw, 1219px" /></figure>



Some hopium for the readers: Despite the negative market sentiment, BTC ETFs have flipped positive once again and notched $346.1 million worth of inflows yesterday. Let’s hope this trend can continue for at least a few consecutive days to end the year off on a slightly positive note.&nbsp;



<h2 class="wp-block-heading">Market Update</h2>



It feels like every other week brings a major development in prediction markets. This week it was Robinhood, which unveiled new prediction-market features at its keynote event. The growing focus makes sense. Prediction markets have become Robinhood’s <a href="https://finance.yahoo.com/news/prediction-markets-business-booms-where-135300625.html">fastest growing product by revenue</a>, with 11 billion contracts traded by more than 1 million users.



Sports continue to be the clear driver. They now account for about <a href="https://dune.com/datadashboards/prediction-markets">35%</a> of volumes on Polymarket and close to <a href="https://dune.com/datadashboards/prediction-markets">90%</a> on Kalshi. If we annualize sports volumes from the past four weeks across both platforms, that comes out to roughly $74.5 billion. For context, FanDuel saw about <a href="https://www.deucescracked.com/us-sports-betting-revenue-soars-to-14b-record-in-q4-2024/">$50.7 billion</a> wagered in 2024 and DraftKings around <a href="https://www.deucescracked.com/us-sports-betting-revenue-soars-to-14b-record-in-q4-2024/">$49.4 billion</a>. Prediction markets are no longer a niche product — they are directly competing with established Web2 incumbents.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="779" height="474" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-138.png" alt="" class="wp-image-110544" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-138.png?w=779 779w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-138.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-138.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-138.png?w=422 422w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-138.png?w=429 429w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-138.png?w=360 360w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-138.png?w=80 80w" sizes="auto, (max-width: 779px) 100vw, 779px" /></figure>



The final missing piece has been parlays. Parlays make up roughly <a href="https://www.sportico.com/business/sports-betting/2025/kalshi-nfl-parlays-volume-1234873711/#:~:text=around%2030%25%20of%20handle%20in%20Maryland%2C%20Illinois%20and%20New%20Jersey%20this%20year">30%</a> of sports-betting volumes and nearly <a href="https://www.sportico.com/business/sports-betting/2025/kalshi-nfl-parlays-volume-1234873711/#:~:text=around%2030%25%20of%20handle%20in%20Maryland%2C%20Illinois%20and%20New%20Jersey%20this%20year">60%</a> of industry revenues. They bundle multiple wagers into a single bet, offering much higher payouts but with far lower odds of winning. This is precisely why they are so lucrative for platforms.



Robinhood is now moving aggressively into this territory. It <a href="https://robinhood.com/us/en/newsroom/robinhood-presents-yes-no-event/">announced</a> that users will soon be able to trade combinations of outcomes, totals and spreads for individual NFL games. Looking ahead to early 2026, users will be able to create custom combinations of up to 10 outcomes for NFL games. Robinhood will also <a href="https://robinhood.com/us/en/newsroom/robinhood-presents-yes-no-event/">allow</a> trading on individual player performance. This is a meaningful leap from the basic win/lose markets currently offered and opens the door to far more speculation and volume. Robinhood <a href="https://www.cnbc.com/2025/12/16/robinhood-is-rolling-out-nfl-parlay-and-prop-bets-on-prediction-markets-platform.html">plans</a> to extend these features beyond football and eventually beyond sports altogether.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="814" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-142.png?w=1024&amp;h=1024" alt="" class="wp-image-110548" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-142.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-142.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-142.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-142.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-142.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-142.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-142.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-142.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-142.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The remaining question is how Robinhood chooses to build. Will these products be developed in partnership with Kalshi or brought fully in-house? This question became more relevant after Robinhood’s <a href="https://robinhood.com/us/en/newsroom/robinhood-prediction-markets-joint-venture/">recent</a> plans to build proprietary prediction market infrastructure through a joint venture with Susquehanna International Group. Coinbase also entered the picture this week by <a href="https://fortune.com/2025/12/17/coinbase-announces-stock-trading-and-new-kalshi-based-prediction-markets/">announcing</a> a partnership with Kalshi to roll out prediction markets to its users. The arms race is clearly underway.



Sports markets have found clear product-market fit this year. With distribution at scale and increasingly sophisticated products, Robinhood’s latest moves could give it a meaningful edge. If there were a market today for the prediction market leader by volume in 2026, my bet would be on Robinhood.



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Robinhood’s leap shows the prediction-market arms race is underway

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“A great challenge of life: Knowing enough to think you are right, but not knowing enough to know you are wrong.”&nbsp;



— Neil deGrass Tyson
</blockquote>



“Ideas are so fragile,” Sir James Dyson reflected in a <a href="https://pca.st/episode/d300cd05-42e6-4aab-aa3e-01bd51c8071f?t=3075">recent interview</a>.



He would know, given the extraordinary determination it took to protect the very fragile idea he spent a lifetime pursuing: a bagless vacuum cleaner.&nbsp;



Dyson originally found it so difficult to raise money for his idea that he still owns 100% of Dyson Limited, his maker of “cyclonic” vacuum cleaners (which really are so, so much better than the ones with bags).



Because such ideas are “so easily knocked away” by people who know how unlikely they are to succeed, Dyson warns prospective inventors and entrepreneurs that “experts are dangerous.”



Experience, he argues, doesn’t just add knowledge — it adds reasons to 1) not try things and 2) stop trying hard things.



This is why he hires students as young as 17 to work at Dyson.&nbsp;



“If you’re experienced, you know why not to do something or how not to do something,” he explains. “Whereas if you’re naive and you’re a young engineer&#8230;you don’t have that negativity.”



Having endured such expert negativity himself, Dyson now values the naivety he needed to ignore it.



“I love naivety,” he says, “because it creates a different way of doing things, and we’ve got to find different ways of doing things all the time.”



Similarly, Henry Ford was universally told that his different way of doing things wasn’t worth pursuing: An internal combustion engine could never compete with steam engines.



Ford persisted, of course, and steam engines were soon on the road to extinction.



“That is the way with wise people,” he wrote in his <a href="https://www.amazon.com/My-Life-Work-Autobiography-Henry/dp/149428300X">autobiography</a>. “They are so wise and practical they always know to a dot just why something can’t be done. They always know the limitations.”



Like Dyson, Ford therefore preferred employees with “a state of mind in which nothing is impossible.”



“The moment one gets into the &#8216;expert&#8217; state of mind,” he <a href="https://www.goodreads.com/quotes/306037-none-of-our-men-are-experts-we-have-most-unfortunately">warned</a>, “a great number of things become impossible.”



Most of the time, those things really are impossible.&nbsp;



But the opportunity cost of not pursuing the impossible is high: Dyson is now a $20 billion company and the Ford Motor Company is still making four million cars a year.



Such unlikely success stories are evidence that, in business, naivety and ignorance can be competitive advantages.



“If I ever wanted to kill opposition by unfair means, I would endow the opposition with experts,” Ford quipped. “They would have so much good advice that I would be sure they would do very little work.”



Startup investor Paul Graham makes a similar argument, valuing youthful naivety over expert experience.&nbsp;&nbsp;



“One reason the young sometimes succeed where the old fail,” he <a href="https://paulgraham.com/determination.html">says</a>, “is that they don&#8217;t realize how incompetent they are.”&nbsp;



This lack of insight allows youthful entrepreneurs to profit from a form of deficit spending — borrowing confidence from assumed future success: “When they first start working on something, they overrate their achievements,” Graham explains. “But that gives them confidence to keep working, and their performance improves.”



Dyson, for example, so overrated his ability as an engineer he believed it would take him just one year to build a commercially viable cyclonic vacuum cleaner.&nbsp;



It took him 14.



Had he foreseen that, it’s unlikely he ever would have gotten started — so it’s good that he naively didn’t.



“Someone clearer-eyed,” Graham adds, “would see their initial incompetence for what it was, and perhaps be discouraged from continuing.&#8221;



Dyson never got discouraged.&nbsp;



&#8220;I&#8217;d get up excited every morning,&#8221; he later recounted of his time spent building 5,127 non-working prototypes. &#8220;Even though I knew it probably wouldn&#8217;t work, there was always that chance it might.&#8221;&nbsp;



<h2 class="wp-block-heading">Never change, crypto</h2>



Crypto ideas are often easily — and often rightly — dismissed: Luna, memecoins, NFTs.



But I admire the industry’s enthusiasm, against all expert advice, in repeatedly pursuing them.&nbsp;



Because the enthusiasm, however naive, does occasionally pay off: Bitcoin, Ethereum, stablecoins.



Sometimes it’s an old idea that crypto reinvigorates with seemingly no knowledge of past failures, as with prediction markets.



Sometimes it’s an idea that people naively refuse to give up on — like Zcash.



On the whole, it’s been a disappointing year for crypto, but the recent success of things like prediction markets and Zcash is evidence that the industry’s youth, inexperience, disregard of experts and unrealistic persistence are all competitive advantages.



Crypto in 2025 is not as youthful as it was when, say, Jai Bhavnani co-founded Rari Capital at the age of 18 in 2020.



And the industry is getting ever more populated with experts coming over from traditional finance.&nbsp;



So it might be losing some of the naive edge that Dyson, Ford, and Graham so value.&nbsp;



But maybe there’s a happy medium to be found?



Dyson was encouraged when people kept telling him his idea for a new kind of vacuum cleaner would never work: “The more it was turned down, the more I realized I had something,” he said, “because they never really gave a good reason.”



In 2026, crypto will continue to be told by many experts it won’t work — often for good reasons.



Its success might be a function of which ones it judiciously ignores.



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History

The competitive advantage of not knowing you’re wrong

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“There was no lightbulb moment in the story of the lightbulb.” — Steven Johnson, How We Got to Now
</blockquote>



The lightbulb has come to be associated with serendipitous flashes of inspiration — the moment when a fully formed idea pops into an inventor&#8217;s head, prompting a shout of “Eureka!”



That’s not how the lightbulb itself was invented, however.&nbsp;



Popularly credited to Thomas Edison, the lightbulb was in fact the product of a century of trial and error by dozens of inventors around the world.



Electric light was first demonstrated by Humphry Davy in 1802.



The enclosed bulb mechanism was developed by Warren de la Rue in 1840.



Thomas Edison was born in 1847.



Many more contributed both before and after 1847 — the historian Arthur Bright <a href="https://www.researchgate.net/publication/227393062_The_Electric-Lamp_Industry_Technological_Change_and_Economic_Development_from_1800_to_1947_By_Arthur_A_Bright_Jr_Massachusetts_Institute_of_Technology_Studies_of_Innovation_New_York_The_Macmillan_Comp">lists</a> about two dozen individuals as co-inventors of the lightbulb, with Edison&#8217;s work representing its culmination, not its origin.&nbsp;



“The Edison lightbulb was not so much a single invention as a bricolage of small improvements,” Steven Johnson writes in <a href="https://www.amazon.com/How-We-Got-Now-Innovations/dp/1594633932">How We Got to Now</a>.



Edison’s primary contribution to that bricolage was the late-1870s invention of the carbonized bamboo filament that ultimately made lightbulbs longer-lasting, safe for indoor use, and commercially viable.



But even then, Edison was forced by the patent courts to share credit with Sir Joseph Wilson Swan, whose version of the lightbulb was notable for being the first to light both a private home (his own) and a public building (the Savoy Theatre).&nbsp;



Hence the portmanteau naming of the “Ediswan incandescent lamp” that consumers were offered from about 1880.



This joint custody of the lightbulb takes nothing away from Edison’s achievements as an inventor.&nbsp;



Just the opposite — because Edison did something even bigger than bring artificial lighting to the masses: He industrialized the act of inventing.



“Edison didn’t just invent technology,” Johnson explains, “he invented an entire system for inventing, a system that would come to dominate 20th-century industry.”



That system inspired a proliferation of corporate R&amp;D labs: teams of diverse specialists collaborating on problems, sharing financial upside, absorbing outside ideas, and freely building on each other&#8217;s work — a kind of “networked innovation” that’s infinitely more powerful than the popular image of the solitary genius inventor.



That, Johnson says, is the true lesson to learn from the story of the lightbulb:&nbsp;



“If we think that innovation comes from a lone genius inventing a new technology from scratch, that model naturally steers us toward certain policy decisions, like stronger patent protection. But if we think that innovation comes out of collaborative networks, then we want to support different policies and organizational forms: less-rigid patent laws, open standards, employee participation in stock plans, cross-disciplinary connections.”



And maybe crypto, too?



Crypto is first and foremost a way to incentivize the kind of open, composable innovation that builds powerful networks.



Edison proved that collaboration beats isolation, but his corporate model still relied on patents to retain proprietary control.



By contrast, the most transformative networks in history — Roman roads, standardized shipping containers, the internet, GPS — worked differently: They were open, permissionless infrastructure that anyone could build upon.



Christian Catalini makes the case for crypto by <a href="https://x.com/ccatalini/status/1983588222921023552">recounting the history</a> of these open-source networks: “Money,” he says, “is the last closed network.”&nbsp;



And crypto is the way to open it up, to everyone’s benefit: “Permissionless innovation will always create exponentially more value than a closed system,” he concludes.



At the end of a disappointing year for open-source crypto, it’s worth remembering just how powerful these networks can be.&nbsp;



There was no lightbulb moment in the story of the lightbulb — and there may be no single moment when crypto &#8220;arrives&#8221; either.&nbsp;



Both are products of networked innovation that only realize their full potential when they become networks themselves — the lightbulb was merely a glass ornament until it was plugged into an electrical grid.



Crypto is building that grid for the digital economy — open, permissionless infrastructure waiting for the next great idea to plug in and light up.



Let’s hope it happens in 2026.



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DePIN

The network is the innovation

Luke Leasure

Carlos

Another week, another MetaDAO advertisement

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
&#8220;The house of every one is to him as his castle and fortress.&#8221;



— Sir Edward Coke, the Attorney General of England, 1604
</blockquote>



In 1604, the Court of King&#8217;s Bench decided what’s now known as Semayne&#8217;s Case in favor of the defendant, Richard Gresham. Gresham had refused to open his door for a sheriff seeking to seize goods in Gresham’s possession to cover a debt.



Establishing what would become a foundational privacy principle — the home as a protected sanctuary — Sir Edward Coke reported that &#8220;the house of every one is to him as his castle and fortress.&#8221;&nbsp;



But even as Coke established those castle walls, he left open a gate for the King&#8217;s men to breach them: The court held that officers of the law, if in pursuit of criminal matters, were permitted to break down doors if they had to (but only after announcing themselves first).



421 years later, that’s still about where things stand.



Semayne’s Case is the ancestral reason why American law enforcement is today required to knock on your door and announce their presence when they have some business there — and also why they can, in some circumstances, knock the door down.



The Fourth Amendment protects against the search of your castle and seizure of your goods, but only if it’s unreasonable.



That is approximately the current state of financial privacy, too: Your banking transactions are private in the sense that your bank keeps them behind closed doors for only you to see.&nbsp;



But if law enforcement comes knocking, they have to open the door for them.



In the world of crypto finance, however, &#8220;privacy&#8221; has taken on a different, more absolute meaning.&nbsp;



To many in the industry, a “private” transaction is one that cryptography makes invisible to anyone but the user — a true financial castle with no backdoor gate for the King&#8217;s men to saunter through at will.



This is a return to crypto’s cypherpunk roots: absolute financial privacy, guaranteed by code.



But how cypherpunk are things really going to get?&nbsp;



Sometimes, it seems the answer is very — like when SEC Commissioner Hester Peirce self-identifies as a &#8220;freedom maximalist.”&nbsp;&nbsp;



As such, Peirce <a href="https://x.com/therollupco/status/1994472062862463026?t=sDJyWea3YKXDwP-GrB1eAw&amp;s=19">applauds</a> the new emphasis on privacy: “We have to recast the narrative around privacy mechanisms, because it’s become the presumption that if you want to keep your transactions private, you’re doing something wrong.”



That is a remarkably cypherpunk-sounding statement for a government regulator to make.



But what, exactly, does she mean by “private”?



“People in this country,” Peirce continues, “have a right to keep their financial transactions private absent suspicion they’re engaged in some illegal activity.” 



And if there is a suspicion of illegal activity?



 “There are ways for governments to get access to information to bring a case.”



In other words, nothing’s really changed since 1604: “Privacy” is the ability to keep your information private from everyone other than a government that thinks it has a good reason to see it.



Perhaps surprisingly, lots of crypto people seem to agree — including some crypto-privacy people.&nbsp;



Here, for example, is how Eli Ben-Sasson concisely defined privacy on a <a href="https://www.youtube.com/watch?v=EWEN0Kki3PE">recent episode</a> of Empire: “People who shouldn’t see your stuff don’t get to see it.”



That seems to imply that some people should see it — like a representative of law enforcement in possession of a warrant, maybe?&nbsp;



Ben-Sasson was the founding scientist of Zcash, crypto’s most cypherpunk project, so his privacy credentials are unimpeachable.&nbsp;



But his definition of privacy is not particularly radical: It’s “just like your everyday definition of privacy,” he said on Empire.



Notably, that would seem to include our everyday use of banks: “Everyone’s familiar with privacy in financial applications.”



So, is that all this renewed enthusiasm for crypto-enabled privacy is doing then? Recreating the degree of privacy we already have with banks?



Maybe not.



Shaul Kfir’s definition of privacy, also shared on Empire, implies something more than that: “Privacy,” he says, “is I get to choose who sees my stuff.”



So, not like banks then!&nbsp;



You can&#8217;t choose whether or not law enforcement sees your bank stuff, of course. The bank won’t even tell you when they do.



Kfir, who led development of the privacy protocol <a href="https://www.canton.network/connect?utm_source=google&amp;utm_medium=paid-search&amp;utm_campaign=brand+-+canton+network&amp;gad_source=1&amp;gad_campaignid=22410462610&amp;gbraid=0AAAAA9p5wM8MnXTho9ZQqxF1p11Vi_Gpj&amp;gclid=Cj0KCQiAgP_JBhD-ARIsANpEMxyY7ai_DDDo8KqU-n_sdq4g0BC2P1iYh-IkfGZBduydlzHqxomlCgMaAsGqEALw_wcB">Canton Network</a>, says that privacy, however defined, is both a “human right” and a “business need.”



I’m sure Ben-Sasson would agree.&nbsp;



I’m also pretty sure he would agree with Kfir’s stricter definition of privacy, even though it differs from his own — because Kfir’s is a better description of what Zcash does: Zcash empowers users to pick and choose who sees their stuff.&nbsp;



The service Canton Network offers, by contrast, does not appear to meet Kfir’s definition of privacy: “We did not try to solve for, like, ‘Hey, I can move money in my Chase bank account without Chase seeing it.’”



Nor does he think there&#8217;s much need for that: “It’s not a real problem [for our users],” Kfir says. “It’s an imagined problem.”



That implies that Canton Network fits our everyday banking definition of privacy, where the stakeholders who “should” see your transactions, can.



In other words — perhaps ironically — Kfir’s definition of privacy better fits what Ben-Sasson has built and Ben-Sasson’s definition better fits what Kfir has built — a fitting illustration of the confusion around what “privacy” really is.



Ben-Sasson told Empire that “it’s somewhat of a mystery [as to] why this is an issue in crypto.”&nbsp;



But is a blockchain only “private” if disclosure is strictly voluntary, as with Zcash?&nbsp;



Or does Canton Network’s more institutionally compliant model also qualify?



Either way, the old question of privacy has given the crypto industry a renewed sense of purpose.



Now we just have to decide what it means.



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A man’s blockchain is his castle

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As dispersion continues, this week has pointed to concrete shifts rather than narrative noise. Aerodrome’s net income moved toward breakeven as emissions fell in line with revenue, while USDai’s TVL showed stepwise growth. At the same time, tokenized assets continued to scale across credit, Treasurys and commodities, while new trading infrastructure, from ultra-low latency chains (Fogo) to equity perpetuals, pushed closer to traditional market benchmarks.



<h2 class="wp-block-heading">Indices</h2>



Markets leaned risk-off over the past week, with dispersion widening across both traditional and digital assets. BTC slipped (-2.3%) while the Nasdaq 100 (-2.1%) and S&amp;P 500 (-0.7%) also closed lower, reflecting a softening risk backdrop. Gold (+2.3%) stood out as one of the few macro hedge bids, suggesting incremental rotation toward defensives as positioning reset into year-end.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-109.png?w=1024&amp;h=1024" alt="" class="wp-image-110460" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-109.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-109.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-109.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-109.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-109.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-109.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-109.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-109.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-109.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Crypto sector indices told a sharper story. On the upside, Memecoins (+16.0%) and L2s (+9.7%) dominated weekly gains, pointing to short-term speculative flows and demonstrating renewed optimism around scaling narratives and higher beta players. AI (+1.3%), Lending (+1.0%), and Ethereum Ecosystem (+0.9%) also managed modest green prints. In contrast, weakness was pronounced across Solana Ecosystem (-10.5%), DePIN (-7.1%), RWAs (-7.0%), and Crypto Miners (-5.4%), underscoring pressure on structurally levered or capex-heavy themes. Launchpads (-2.3%) and DEXs (-2.8%) also lagged as volumes cooled.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-102.png?w=1024&amp;h=1024" alt="" class="wp-image-110453" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-102.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-102.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-102.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-102.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-102.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-102.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-102.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-102.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-102.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



While the L2 sector outperformed this week, under the hood, dispersion was notable. <a href="https://blockworks.co/price/merl">MERL</a> was the standout, ripping higher into the week’s close and finishing well north of its peers. <a href="https://blockworks.co/price/mnt">MNT</a> also saw strong relative strength, grinding steadily higher and holding gains even as the rest of the complex chopped sideways. OP and ARB tracked closer to the index average, posting modest gains but failing to show the same upside convexity. On the lagging end, BLAST remained the clear underperformer, trending lower throughout the week.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-104.png?w=1024&amp;h=1024" alt="" class="wp-image-110454" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-104.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-104.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-104.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-104.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-104.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-104.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-104.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-104.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-104.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



<h2 class="wp-block-heading">Charts for The Week</h2>



Aerodrome’s weekly net income (protocol revenue minus token emissions) is <a href="https://app.blockworksresearch.com/flashnotes/aero-merger-update-metadex03-and-cross-chain-expansion">transitioning</a> from a prolonged period of heavy losses to near breakeven and occasional profitability. Throughout most of 2024, emissions materially exceeded revenue, with weekly net losses reaching as much as ~$20 million at the trough, reflecting aggressive liquidity incentives. However, starting in early 2025, losses narrowed sharply as emissions declined and revenue stabilized, with recent weeks oscillating around zero and turning modestly positive at times. This inflection supports the view that Aerodrome’s unit economics are improving, with protocol revenue now broadly keeping pace with emissions for the first sustained period since launch.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-106.png?w=1024&amp;h=1024" alt="" class="wp-image-110457" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-106.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-106.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-106.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-106.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-106.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-106.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-106.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-106.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-106.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



USDai’s TVL trajectory reflects a classic step-function adoption curve consistent with institutional balance sheet deployment rather than organic retail inflows. TVL accelerated sharply in September as several large capital allocations entered the system. The discrete jumps suggest tranche-based deployments tied to predefined mandates. The plateauing of TVL above ~$550 million into November implies capital stickiness and low redemption pressure, reinforcing the view that USDai is functioning as a balance sheet instrument rather than a pure trading vehicle.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-107.png?w=1024&amp;h=1024" alt="" class="wp-image-110458" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-107.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-107.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-107.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-107.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-107.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-107.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-107.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-107.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-107.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Tokenization has evolved from a niche experiment to a strategic priority for global financial institutions. Today’s tokenized asset market is composed of $300 billion in stablecoins, $17.4 billion in private credit, $8.2 billion in US government debt, $2.3 billion in commodities, and $1.4 billion in public equities. Estimates underscore the scale of this shift. A report by BCG and ADDX projects that up to $16 trillion of real-world assets could be tokenized by 2030, spanning public equities, private markets, real estate and debt instruments. Similarly, Citi forecasts $4-5 trillion in tokenized digital securities and an additional $5 trillion in tokenized trade finance volume over the same period.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-108.png?w=1024&amp;h=1024" alt="" class="wp-image-110459" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-108.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-108.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-108.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-108.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-108.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-108.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-108.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-108.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-108.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



<a href="https://app.blockworksresearch.com/research/fogo-testnet-traction-and-mainnet-readiness">Fogo</a> stands out with industry-leading 40ms block times and ~1-second finality, delivering materially faster execution than Solana’s 400ms blocks and far superior responsiveness compared to Ethereum’s multi-minute finality. While Hyperliquid and Solana post higher peak TPS figures on paper, Fogo’s combination of ultra-low latency and sub-second finality positions it closer to traditional financial market infrastructure, reinforcing its thesis as an institutional-grade trading chain rather than a broad consumer L1.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-103.png?w=1024&amp;h=1024" alt="" class="wp-image-110455" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-103.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-103.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-103.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-103.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-103.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-103.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-103.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-103.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-103.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Outside of Root, the top nine subnets currently hold ~44% of all <a href="https://app.blockworksresearch.com/research/bittensor-positioning-for-the-post-halving-repricing">TAO staked</a> across subnets and receive 37.4% of TAO emissions. This concentration has been steadily declining from a high of ~52% in May 2025 as more TAO flows into smaller or emerging subnets. The trend suggests a gradual broadening of participation and a healthier distribution of stake over time.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-105.png?w=1024&amp;h=1024" alt="" class="wp-image-110456" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-105.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-105.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-105.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-105.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-105.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-105.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-105.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-105.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-105.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



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Capital gets selective

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“By 2026, Google’s main product will not be search but AI.”



— Kevin Kelly, 2016
</blockquote>



When Kevin Kelly met Larry Page at a party in 2002, he asked why anyone would invest in a company that offers its product for free: “I still don’t get it. There are so many search companies. Web search, for free? Where does that get you?”



Page’s response was both memorable and prophetic: “Oh, we’re really making an AI.”



That was two years before Facebook, three years before YouTube, five years before the iPhone and 20 years before ChatGPT.



For Kelly, it was an &#8220;aha&#8221; moment.



“Rather than use AI to make its search better,” he <a href="https://www.amazon.com/Inevitable-Understanding-Technological-Forces-Future-ebook/dp/B016JPTOUG/ref=tmm_kin_swatch_0?_encoding=UTF8&amp;dib_tag=se&amp;dib=eyJ2IjoiMSJ9.X73Zxh6EG6ZxXXRXYGrGPVI7xazRLJ2ncHB4DdyMBAW0kI4awqHgRbbhUZhFJ7Ug_j1nZHXCVsWRsiAH1AMOIEwWv7KB5egRyTON_kFeshv5fnK6C7weu8Epwm_I9D6Sm0SyI3TVepKzzuiogfjqiZgios3xxICdh4XthN3B9XBt2UHw4H9-f78GYORxLf0rqqvvtBWWxZ1wZgG_VsQLruPw7i9u18tSGmV5RJWBufk.SHrSP8fM-i9UEORTlGCtt34CVamxjGXTVyx792s2-uE&amp;qid=1765547592&amp;sr=8-1">wrote</a> in 2016, “Google is using search to make its AI better. Every time you type a query, click on a search-generated link, or create a link on the web, you are training the Google AI.”&nbsp;



Kelly was right about search engines — training AI would prove far more consequential than serving ads.&nbsp;



But from the perspective of 2025, we can make an even bigger claim: The true purpose of the entire internet was to train AI.



That, at least, is the view of Alex Tabarrok, who recently told Tyler Cowen that history will remember the internet primarily as the “agar culture for the growth of the AI” — i.e., the nutrient-rich petri dish whence it sprang.



“That’s why the internet’s important,” Cowen agreed. “We’re just beginning to realize this, right?”



“When we look back,” Tabarrok added, “we’ll think about… &#8216;What was the internet?&#8217; Putting everything online was for the AI. It wasn’t for us. I don’t think anyone thought about that.”



Except Larry Page!



And maybe Page’s dad, a pioneer in AI research.



And also Page’s co-founder, Sergey Brin, the machine-learning expert so well-versed in AI that he’s contributed code to Google’s large language model, Gemini.



None of those three made the cover of <a href="https://time.com/7339685/person-of-the-year-2025-ai-architects/">Time Magazine</a> as an &#8220;architect of AI” this week.



But they probably should have, because Google’s search engine did exactly what they intended it to.



“The ultimate search engine would understand everything on the web,” Page <a href="https://youtu.be/tldZ3lhsXEE?si=bLHftU0Um1UCXnqA&amp;t=224">explained</a> way back in 2000. “It would understand exactly what you wanted and give you the right thing and that’s obviously artificial intelligence; to be able to answer any question, because almost everything’s on the web.”



Who put it there? You did, of course.



“When you type ‘Easter Bunny’ into the image search bar,” Kelly wrote in 2016, “and then click on the most Easter Bunny-looking image, you are teaching the AI what an Easter Bunny looks like. Each of the three billion queries that Google conducts each day tutors the deep learning AI over and over again.”



We’re now up to 16 billion Google queries per day!



So, really you should be on the cover of Time Magazine this week — for the many years of important Googling you’ve done.



Thank you for your service.



Let’s check the charts.



More power, please:



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="830" height="656" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-96.png" alt="" class="wp-image-110438" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-96.png?w=830 830w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-96.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-96.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-96.png?w=325 325w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-96.png?w=330 330w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-96.png?w=277 277w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-96.png?w=80 80w" sizes="auto, (max-width: 830px) 100vw, 830px" /></figure>



<a href="https://www.a16z.news/p/charts-of-the-week-if-you-cant-join">Per a16z</a>, forecasts for data center power consumption have risen by 36% since just April. AI-related stocks were down today in part because they can’t get enough power to run all the data centers they need (or think they need).



Power to the people:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1230" height="689" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-94.png?w=1024&amp;h=1024" alt="" class="wp-image-110437" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-94.png?w=1230 1230w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-94.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-94.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-94.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-94.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-94.png?w=466 466w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-94.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-94.png?w=80 80w" sizes="auto, (max-width: 1230px) 100vw, 1230px" /></figure>



China’s big advantage in the race to AGI is that soon, it will be generating 3x as much power than the US is.



Investing role reversal:



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="893" height="509" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-99.png" alt="" class="wp-image-110440" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-99.png?w=893 893w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-99.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-99.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-99.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-99.png?w=458 458w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-99.png?w=384 384w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-99.png?w=80 80w" sizes="auto, (max-width: 893px) 100vw, 893px" /></figure>



Paul Kedrosky notes that as a percentage of sales, Microsoft (a traditionally asset-light business) is now spending more than double on capex compared to what Exxon (a traditionally asset-heavy business) does.



Not investing advice:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1376" height="642" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-100.png?w=1024&amp;h=1024" alt="" class="wp-image-110443" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-100.png?w=1376 1376w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-100.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-100.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-100.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-100.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-100.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-100.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-100.png?w=80 80w" sizes="auto, (max-width: 1376px) 100vw, 1376px" /></figure>



A Finra survey finds that 61% of investors under the age of 35 use YouTube for investing advice. To me, this suggests that Australia got it the wrong way around when it banned under-16s from social media this week. They should have banned over-30s instead.



The non-crisis of grocery prices:



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="824" height="590" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-97.png" alt="" class="wp-image-110441" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-97.png?w=824 824w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-97.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-97.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-97.png?w=359 359w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-97.png?w=365 365w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-97.png?w=306 306w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-97.png?w=80 80w" sizes="auto, (max-width: 824px) 100vw, 824px" /></figure>



Contrary to what social media would have you believe, there is no crisis of grocery store prices: As a percentage of disposable income, food at home (in blue) has gotten cheaper. In total (red), our food budget has remained unchanged, but only because we’re getting lazier (yellow).



The stock market isn’t only about AI:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="1059" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-95.png?w=1024&amp;h=1024" alt="" class="wp-image-110442" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-95.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-95.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-95.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-95.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-95.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-95.png?w=388 388w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-95.png?w=394 394w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-95.png?w=331 331w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-95.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The equal-weight S&amp;P 500 hit an all-time high this week.



A demographic time bomb:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1154" height="882" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-101.png?w=1024&amp;h=1024" alt="" class="wp-image-110444" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-101.png?w=1154 1154w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-101.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-101.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-101.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-101.png?w=336 336w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-101.png?w=341 341w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-101.png?w=287 287w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-101.png?w=80 80w" sizes="auto, (max-width: 1154px) 100vw, 1154px" /></figure>



Sam Bowman <a href="https://x.com/s8mb/status/1998775841459708175?s=20">shares</a> an incredible stat: “Every 100 South Koreans today will have only 6 great-grandchildren between them.” Not six each — six in total. Thankfully, AI should be doing most of the jobs by then.



All the persons of the year:



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="790" height="564" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-98.png" alt="" class="wp-image-110439" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-98.png?w=790 790w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-98.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-98.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-98.png?w=360 360w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-98.png?w=366 366w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-98.png?w=307 307w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-98.png?w=80 80w" sizes="auto, (max-width: 790px) 100vw, 790px" /></figure>



Note that The Computer was Time Magazine’s&nbsp; “person” of the year in 1982. Not labelled in the above is the 2006 winner: you. The 2006 award recognized the individual content creators populating the w<a href="https://en.wikipedia.org/wiki/World_Wide_Web">orld wide web</a> with YouTube videos, blog posts, Instagram photos and Reddit comments.&nbsp;



This year, “you” should rightfully have joined nine US presidents as a repeat winner, because if we hadn’t populated the web with our content, the &#8220;architects of AI” would’ve had nothing to work with.



Your training session is now complete. Please proceed outdoors.



Have a great weekend, readers of the year.



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Friday charts: The many, many architects of AI

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Performance across major assets diverged yesterday. Gold, BTC, and the S&amp;P 500 posted gains of 0.95%, 0.55%, and 0.39%, respectively, while the tech-heavy Nasdaq slipped -0.12%.



The divergence was driven largely by Oracle, whose shares fell -11% after disappointing quarterly revenues and higher spending guidance. That miss reignited <a href="https://www.cnbc.com/2025/12/10/stock-market-today-live-updates.html">concerns</a> around the durability of the AI trade and sparked a rotation out of tech and into lagging parts of the market, pushing the Dow Jones Industrial Average to fresh highs.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="846" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-93.png?w=1024&amp;h=1024" alt="" class="wp-image-110431" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-93.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-93.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-93.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-93.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-93.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-93.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-93.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-93.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-93.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Crypto sector performance echoed the uneven tape. Despite renewed skepticism around AI, Crypto Miners were the standout performers, rising 4.5% on the day. IREN, which makes up 24% of the index, gained 4.4% and helped lead the move. DeFi followed with a 1.93% gain, driven by strength in AAVE, ENA, and HYPE, which together account for 44% of the index and all closed higher.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="841" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-92.png?w=1024&amp;h=1024" alt="" class="wp-image-110430" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-92.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-92.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-92.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-92.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-92.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-92.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-92.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-92.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-92.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



On the downside, DePIN continued to struggle, falling -3.2%. The sector was dragged lower by FIL and GRASS, which dropped -6.2% and -7.2%, respectively. L1s were another surprise laggard, down -2.5% on the day. Even with BTC in the green, most L1 constituents finished lower, with SEI and BERA both posting losses of -9%.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1221" height="555" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-91.png?w=1024&amp;h=1024" alt="" class="wp-image-110429" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-91.png?w=1221 1221w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-91.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-91.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-91.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-91.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-91.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-91.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-91.png?w=80 80w" sizes="auto, (max-width: 1221px) 100vw, 1221px" /></figure>



Flows remain a headwind. After a strong $346.2 million day of ETF inflows on Dec. 9, momentum faded again with both BTC and ETH ETFs seeing outflows of -$154.2 million and -$42.3 million, respectively, yesterday. The lone bright spot continues to be SOL ETFs, which are still attracting low single- to low double-digit millions in daily inflows.



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BTC is up and L1s are down as flows turn messy again

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Trading is a hard way to make easy money.” — Wall Street aphorism
</blockquote>



<h2 class="wp-block-heading"><a href="https://open.substack.com/pub/zeneca33/p/letter-89-the-golden-age-of-crypto?utm_source=share&amp;utm_medium=android&amp;r=3qcul">The golden age of crypto is over</a></h2>



The newsletter writer Zeneca uses his perspective as a former poker player to declare that crypto’s golden era of easy money is over: “It’s only going to get tougher from here on out,” he warns.



When Zeneca started playing poker for money in 2003, he says “the average level of skill was extremely low,” and as a result, “basic strategies worked” to make money.



From there, however, the game progressively professionalized, and by 2010 making money in poker required learning math, statistics and game theory.&nbsp;



Today, the game is so efficient that, to have any chance of being profitable, you have to learn to play theoretically perfect poker from AI solvers. (Which really takes the fun out of it.)



This newsletter writer, using his perspective as a former equities player, can relate.



In the 1990s, you could make money in equities just by being a little quicker or paying a little closer attention than your human competitors.&nbsp;



If, say, you saw a positive headline about a company on the Reuters ticker, you had a few seconds to buy some stock that you could probably sell a few minutes later for a profit. It wasn’t that hard.



Better yet, investor flows were often bigger than traders could collectively accommodate.&nbsp;



This created easy money for anyone who cared to take it, sometimes by doing something as obvious as shorting stocks that were scheduled to drop out of an index and buying the ones being added, for example.&nbsp;



But equities professionalized on about the same timeframe as poker.&nbsp;



Starting in about 2000, quantitative and algorithmic trading made markets increasingly efficient at the same time that more and more people were trying to trade them.



By about 2005 there were too many traders trading against not enough investors — you could still make money trading, but it was increasingly hard work.



Now, though? Fuhgeddaboudit. Equity markets are so efficient you need a doctoral degree in a quantitative science to have any hope of trading them.



The crypto market seems to be progressing along the same path.&nbsp;



Zeneca likens crypto now to poker in 2012: “It’s still possible for many people to make it with a bit of work. But it’s no longer like shooting fish in a barrel.”



As with poker and equities, that’s partly because you’re now often competing with algorithms — sniper bots being one example.



Mostly, though, I think it’s what happened to equities by 2005: There are too many traders in crypto relative to the amount of investors in crypto.&nbsp;



Zeneca warns that traders waiting for a new wave of retail enthusiasm to make trading crypto easy again will be disappointed: “Just about anyone that has ever had any interest in speculating on crypto would have done so by now.”



I agree: Trading crypto won’t get any easier until there are more investors to trade against.



<h2 class="wp-block-heading"><a href="https://blockworks.co/news/blockworks-solana-investor-relations-platform">Blockworks launches investor relations platform</a></h2>



Blockworks is doing its part to attract the new investors crypto needs now with a platform offering “high-fidelity” data, institutional research, “ecosystem intelligence,” and investor relations workflows for Solana-based projects — in short, all the things that professional investors have long taken for granted in equities.



The platform will even provide quarterly reports, Dan Smith <a href="https://www.youtube.com/live/uju9vU4lfzo?si=lnLpCqY1kjlm_SIp&amp;t=18983">promises</a> — in a form that I’m guessing will make equity investors feel more at home in crypto.



Crypto builders looking to attract those kinds of investors can sign up <a href="https://lightspeed.vip/get-access">here</a>.



<h2 class="wp-block-heading"><a href="https://obviously.substack.com/p/why-your-coin-isnt-pumping">Why your coin isn’t pumping</a>&nbsp;</h2>



The crypto-native investor Santiago Roel Santos thinks it’s no mystery why tokens have been going down: “We valued casino flow like recurring software revenue.”



Token investors began paying attention to revenue this cycle and protocols began to prioritize, with notable success: An all-time high of <a href="https://1kx.network/writing/2025-onchain-revenue-report">$1.9 billion of value</a> was distributed to token holders in Q3.&nbsp;



But, perhaps disappointingly, these payouts have not helped token prices much.



Santos says that’s primarily because the quality of the revenue is so low: “You don’t give a Shopify multiple to a business that only makes money when the casino is full every three to four years.”



Critics responded to Santos by calling this a boomer take: Protocols are not businesses, they argue, they’re networks, so traditional metrics don’t apply.



Santos responded in turn with a <a href="https://obviously.substack.com/p/crypto-is-priced-for-network-effects">follow-up post</a> arguing that valuing crypto on its network effects leads him to the same conclusion: Tokens are egregiously overpriced.



“Crypto is valued at 5x–50x more market cap per user than Meta,” Santos says, “without having any of the economics that justify it.”



That’s kind of surprising, in a way: The purpose of crypto is to disintermediate businesses like Meta by creating peer-to-peer networks controlled by users who can come and go as they please.



Surely a user in that kind of network will be less valuable than a user trapped in a network like Facebook? Alternatively, it might be that crypto investors are paying up for tokens in anticipation of the imminent tokenization of everything — in which case, a huge influx of users will justify today’s valuations even if the open nature of blockchains makes it hard to monetize them.&nbsp;



Santos thinks the influx of users is possible, but doesn’t want to pay for it: “Right now,” he concludes, “too much future is priced in upfront.”



<h2 class="wp-block-heading"><a href="https://www.complexsystemspodcast.com/episodes/understanding-perpetual-futures/">Will crypto successfully export perps?</a></h2>



Patrick McKenzie thinks perpetual futures are unlikely to catch on with equities speculators, mostly because “liquidations are not the business model of traditional brokerages.”



“Liquidations” is a good business: Binance, McKenzie notes, charges a 0.5% liquidation fee on the notional value of the perps trades it liquidates.&nbsp;



On a trade leveraged 20x, that’s a 10% fee!



(This might explain why Binance’s BNB token is valued at $122 billion.)&nbsp;



McKenzie doesn’t think TradFi customers will pay those kinds of fees — especially as “learning on a day when markets are down 20% that you might be hedged or you might be bankrupt is not a prospect that fills traditional finance professionals with the warm and fuzzies.”



In other words, TradFi professionals are unlikely to accept the perps market practice of auto deleveraging (ADL).



McKenzie concisely defines ADL from the perspective of the broker: “You can either force the customer to enter a closing trade or you can assign their position to someone willing to bear their risk in return for a discount.”



Those are the only two options because perpetual futures are a “closed system” in which winning traders can only win as much as losing traders are willing to lose.



ADL is the clever mechanism by which trading venues ensure there are always enough losers to pay the winners. But it’s a messy process: By <a href="https://x.com/tarunchitra/status/1998451762232177041?s=20">one estimate</a>, perps venues liquidated winners 28x more than necessary during the Oct. 10 crash.&nbsp;



This estimate is <a href="https://x.com/chameleon_jeff/status/1998567869848891699?s=20">highly disputed</a>, but whatever the real ADL numbers are, margining practices are much friendlier in equities.



So it’s hard to argue with McKenzie’s conclusion that the crypto industry is unlikely to “export” its perpetual futures to traditional markets.&nbsp;



On the other hand, using perps to import retail speculators in search of easy money might still work.



People love to trade.



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crypto traders

Links: Trading, valuations, and the end of crypto’s ‘golden age’

Shaunda Devens

Fixing crypto’s broken investor relations

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
&#8220;The dollar is always going to be the reserve currency. Anyway, for a long time.&#8221;&nbsp;



— Jerome Powell
</blockquote>



When the price of oil suddenly quadrupled in 1973, Saudi Arabia was wholly unprepared for the billions of dollars that started flooding in.



Strictly speaking, the money never actually made it “into” the Kingdom: Global buyers of Saudi oil sent their payments to accounts at Citibank and JPMorgan in New York — where the money sat idle because Saudi finance officials barely knew how to move it, let alone invest it.



With billions piling up in non-interest bearing accounts, the Saudi Arabian Monetary Agency (SAMA) reluctantly asked an American banker, David Mulford, to manage it for them.



Mulford and a small team moved to the underdeveloped port town of Jeddah where they scrambled to secure accommodation in houses newly-built in a part of the desert with no roads (to get there, you simply drove over the sand).



The houses lacked telephones, televisions, mail delivery and even trash removal (the bankers left their trash in the sand for Bedouins’ goats to feed on).



The office they commuted to six days a week was even worse.



They were assigned a single room in a “decrepit” building, furnished with only chairs and desks — no computers or telephones.



“Across the hall from our room a simple toilet was set in a long, deep room with an open drain behind it,” Mulford wrote in his <a href="https://www.amazon.com/Packing-India-DAVID-MULFORD-ebook/dp/B00NU62U36/ref=sr_1_3?dib=eyJ2IjoiMSJ9.LOBUN5zB9XV0oSGK2tFiXyc1UhA-SVwKAJG3H-rIy99eO7oIlMLcXWcgl9PADmuEt9Hy5s6wE3QoN9rE02IQC7zz1VkT34SDz96Fs0ogcn-bAkQralgtN-7sViJC32oW-vO3BPg-oitFRYSLCnH6M6Np266erYCcdqKUlerTOuHbSV-S8O6TbMGy5BTH3QTF1KsrZmuzjZHUvaQAGLysjbso_Us7htB-mbFGYhXrLzY.QIz7Ev6QkEqIZ1X--TazBzBNkN2BkOtqT8I2pULHYIY&amp;dib_tag=se&amp;qid=1765389659&amp;refinements=p_27%3ADAVID+MULFORD&amp;s=digital-text&amp;sr=1-3&amp;text=DAVID+MULFORD">autobiography</a>. “This was used by our section of the building and flushed once a day at three in the afternoon.”



Investment deals were negotiated, agreed and processed via the building’s single telex machine (a kind of hybrid typewriter/telegraph) that was constantly in use — a single deal required dozens of telex messages and weeks to complete.



And yet, as Mulford recalls, “we had to invest money at the rate of approximately $500 million per day just to prevent ourselves from falling behind.”



Mulford’s account of his nine years at SAMA debunks the persistent conspiracy theory that the Saudis invested their oil money in US Treasurys as a quid pro quo for a security guarantee.



Instead, the Saudis invested in US Treasurys because they had to: No other market in the world could absorb the $20 billion a month the Saudis had to invest.



And none was so safe and easy to invest in — important factors when investing by telex.



SAMA actually tasked Mulford with moving 30% of their investment funds out of the US market. But he struggled to do it.&nbsp;&nbsp;&nbsp;



“In most markets outside the US in those days, a currency trade of $5-10 million was enough to move markets,” he explains, “so there were practical limitations on the amount of currency diversification that we could achieve.”



This, I think, challenges the idea that dollar dominance can be engineered through either coercion or clever policy: The Saudis chose Treasurys because of what America was, not what it promised or demanded.&nbsp;



Even in the 1970s economy — plagued with both recession and inflation and a president that resigned in disgrace — US financial markets retained the depth (quantities of high-quality assets), liquidity (easy tradability of those assets) and safety (rule of law) that made it the best option for the world’s largest investor.



Today, the US has all the best companies, too: Non-US investors own roughly <a href="https://www.apolloacademy.com/foreign-ownership-of-us-equities-treasuries-and-us-credit/">$19 trillion</a> of US equities (more than double what they own in Treasurys).



It also has a central bank that&#8217;s retained its inflation-fighting credentials despite political pressure to finance ever-bigger fiscal deficits.



The current head of that central bank, Jerome Powell, fundamentally <a href="https://finance.yahoo.com/news/powell-says-expects-dollar-remain-173200618.html?utm_source=chatgpt.com">attributes</a> the dollar dominance to “democratic institutions” and “the rule of law.”



That institutional foundation is central to its appeal.



“I think the dollar will remain the reserve currency as long as those things are in place,” he added.



There’s no guarantee they forever will be, of course — and many economists doubt they will be for much longer.



Ken Rogoff, for example, <a href="https://www.hoover.org/research/dollar-dominance?utm_source=chatgpt.com">warns</a> that the dollar is “fraying at the edges” as foreign investors worry about a “breakdown of our institutions,” unpredictable policy making (that may disadvantage foreign capital), and threats to central bank independence.



All of which is adding up to “a loss of confidence in investing in the United States.”



If so, efforts to manufacture demand for the dollar — through, say, promoting stablecoins — are unlikely to help much.



Stablecoins are in demand precisely because the dollar is in demand — a dynamic that’s unlikely to ever work in reverse.&nbsp;



If the US chooses to surrender the dollar’s structural advantages, no amount of manufactured demand will save it.



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Dollar

Dollar dominance can’t be manufactured

Jason Yanowitz

Michael Ippolito

The story of crypto is a story about adoption. In the beginning, crypto was purely a retail game. This was the bootstrap era.



Anonymous founders. White papers and dreams. Bitcointalk threads. Discords and Telegrams. If you wanted in, you had to live on Twitter/X and dig through governance forums and GitHub repos at 2 am.



Fun era. Important era. But from an institutional perspective, mostly uninvestable.



Then came the second phase: the scale-up era.



Exchanges professionalized. Custody got solved. DeFi protocols like Uniswap and Aave found product-market fit. Onchain businesses started to look less like toys and more like companies. Podcasts, newsletters, conferences and research gave the industry a real narrative layer.



That opened the door for the first serious capital.



Today, we are entering a new phase: the institutional era.



Stripe has a chain. Robinhood has a chain. Banks are issuing stablecoins. Prediction markets are integrating with major news outlets. Real revenue and cash flows are accruing onchain.



And the marginal buyer is changing.



For most of the last decade, flows came from two places: retail and crypto venture. Now, the next dollar is coming from liquid token funds, multi-asset hedge funds, asset managers, macro shops, family offices, and eventually, pensions and endowments.



The institutions want to buy our tokens.



We still make it way too hard for them.



<h3 class="wp-block-heading">The Institutional Gap</h3>



If you sit inside a fund and try to build a serious Solana allocation, you run into the same problems again and again:



<ol class="wp-block-list">
<li>Everything is fragmented. Data, docs, dashboards, governance, research, Twitter threads. Fifteen tabs open. No canonical place to diligence an ecosystem or a token.</li>



<li>You do not trust the numbers. Public aggregators are often wrong or inconsistent. Labels change. Definitions change. One bad input flows into your model or IC memo and the idea dies.</li>



<li>Nothing is written in your language. Most materials are built for crypto natives. Not for investment committees that think in revenue, retention, unit economics, risk, users, cash flows and execution.</li>
</ol>



This is not a talent problem or an interest problem. It is an information problem.



<h3 class="wp-block-heading">Introducing Lightspeed IR</h3>



Today, Blockworks is partnering with the <a href="https://x.com/solana">Solana Foundation</a> to launch <a href="https://lightspeed.vip/get-access">Lightspeed IR</a>, an investor-relations platform built for professional investors and token issuers.



We are starting with Solana because they sit at the intersection of crypto nativity and institutional relevance. They have real users, real applications, real revenue, and a cracked founder ecosystem. The story is there — it just needs to be delivered in a way institutions can underwrite.



Lightspeed IR is a gated, professional environment for:



<ul class="wp-block-list">
<li>Liquid token funds</li>



<li>Institutional allocators and asset managers</li>



<li>Family offices</li>



<li>Solana ecosystem teams and large token holders</li>
</ul>



What you get in one place:



<ul class="wp-block-list">
<li>High-fidelity onchain data&nbsp;on the Solana network and leading applications, powered by Blockworks’ data infrastructure</li>



<li>Institutional research&nbsp;that turns raw onchain activity into simple, fundamental frameworks and IC-ready memos</li>



<li>Ecosystem intelligence and IR workflows&nbsp;for roadmap updates, KPI packs, governance changes, token events and direct communication between teams and allocators</li>
</ul>



If you run a fund, Lightspeed IR becomes your Solana starting point.



If you build on Solana, it becomes your investor hub.



In a world of noise, Lightspeed IR is the signal.



We launch in Q1.



<a href="https://lightspeed.vip/get-access">Complete this form</a> to be the first to know when we go live.



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Blockworks

Blockworks launches investor relations platform with Solana

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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Markets leaned cautiously risk-on, with crypto outperforming a mixed backdrop in traditional assets. ETF flows had their biggest one-day surge since October as CPI, Treasury auctions and a dense FOMC week could reset risk appetite. In addition, we discuss the new WET token, the native token of the HumidiFi prop AMM.



<h2 class="wp-block-heading">Indices</h2>



Markets leaned risk-on, with crypto leading and traditional assets mixed. BTC posted a modest gain (+2.3%), outperforming equities where the S&amp;P 500 (-0.3%) and Nasdaq 100 (-0.2%) softened, while Gold held nearly flat (+0.3%). The standout laggard was the Perp Index, which contracted by -5.1%.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-80.png?w=1024&amp;h=1024" alt="" class="wp-image-110386" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-80.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-80.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-80.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-80.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-80.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-80.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-80.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-80.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-80.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Perps (-5.1%) were the day’s clear laggard, weighed down by a sharp intraday spike-and-fade across dYdX, GMX, and specifically HYPE. A midday squeeze briefly lifted the sector before momentum stalled and flows reversed into the close. JUP rose as much as 9% before retracing most of its gains. Meanwhile, HYPE has been struggling as of late, as builder codes create new frontend relationships with users, and the market anticipates a TGE from <a href="https://blockworks.co/news/lighter-opens-public-mainnet">rival Lighter</a>.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-79.png?w=1024&amp;h=1024" alt="" class="wp-image-110378" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-79.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-79.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-79.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-79.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-79.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-79.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-79.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-79.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-79.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Looking ahead, markets will pivot toward this week’s CPI print and a slate of mid-week Treasury auctions, both of which could reset risk appetite. With implied volatility still suppressed across majors, any macro surprise risks producing outsized moves.



<h2 class="wp-block-heading">Market Update&nbsp;</h2>



Flows finally turned meaningfully positive. BTC ETFs drove the bulk of the move ($287 million), ETH had its best day since Oct. 28 ($142 million) and SOL contributed marginally ($16 million). This is the first clean signal of risk appetite returning after nearly a month of choppy to negative prints. The flow spike likely reflects short-term positioning ahead of catalysts such as FOMC, inflation data, and jobs. It can also be attributed to quarter-end optics, as allocators often re-express benchmark exposure into liquid wrappers during macro-heavy weeks.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1124" height="624" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-77.png?w=1024&amp;h=1024" alt="" class="wp-image-110376" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-77.png?w=1124 1124w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-77.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-77.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-77.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-77.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-77.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-77.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-77.png?w=80 80w" sizes="auto, (max-width: 1124px) 100vw, 1124px" /></figure>



Still, AUM-to-market-cap ratios tell a different story. BTC remains stuck near ~6.6–6.8%, ETH continues its multi-month slide from ~3.3% to ~2.8%, and SOL, while rising, sits just under 1%. This divergence implies that price appreciation, not sticky inflows, has been the dominant force maintaining ETF sizes.



Meanwhile, BTC’s inflow looks more like tactical re-risking than renewed conviction. Derivatives markets show elevated basis but falling perp OI, a sign that capital currently prefers directional spot exposure over leverage.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1124" height="624" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-75.png?w=1024&amp;h=1024" alt="" class="wp-image-110375" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-75.png?w=1124 1124w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-75.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-75.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-75.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-75.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-75.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-75.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-75.png?w=80 80w" sizes="auto, (max-width: 1124px) 100vw, 1124px" /></figure>



ETF flows are becoming increasingly important for BTC, because traditional “DATCO” buyers aren’t carrying the bid anymore. The latest treasury holdings data shows that, aside from Strategy (MSTR), corporate accumulation has been effectively flat for months. Names like NAKAMOTO, SMLR, SQNS, and the smaller treasury cohorts have added marginal amounts at best, contributing almost nothing to incremental demand. Even MSTR can’t continue to accumulate in the same way it did before.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1124" height="624" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-76.png?w=1024&amp;h=1024" alt="" class="wp-image-110377" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-76.png?w=1124 1124w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-76.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-76.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-76.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-76.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-76.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-76.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-76.png?w=80 80w" sizes="auto, (max-width: 1124px) 100vw, 1124px" /></figure>



This is especially true as the major BTC DATCOs have mNAVs below 1, removing the once BTC-accretive play of diluting shareholders. In other words, the corporate balance sheet bid that helped define the prior cycle and earlier in this cycle isn’t showing up any time soon for BTC.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1124" height="624" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-78.png?w=1024&amp;h=1024" alt="" class="wp-image-110379" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-78.png?w=1124 1124w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-78.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-78.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-78.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-78.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-78.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-78.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-78.png?w=80 80w" sizes="auto, (max-width: 1124px) 100vw, 1124px" /></figure>



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ETFs flash a bid, HumidiFi tokenizes

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Money has been reduced to a simulacrum of its former self, a mere obligation by a counterparty to perform bookkeeping functions.” — Stefano Gogioso, A Quantum Moneyfesto
</blockquote>



In Star Trek, it took only seconds to travel from the Starship Enterprise down to a nearby planet.



Crewmembers only had to step into the Transporter, which dematerialized them into a pattern of energy (accurate to the quantum level) and beamed them to a target location where the energy would be converted back into matter so the person could be reassembled.



But is the person who beams back up the same that beamed down?



The official, in-universe answer is that they’re one and the same. The consciousness of transported crewmembers remains continuous, they say, thanks to the perfection of the Transporter’s quantum-level scan and reconstruction.&nbsp;



As proof, they cite crewmembers claiming a memory of being in transit.



But we’ve since learned how quantum-level transportation works, and that’s not it.



In quantum teleportation, first <a href="https://journals.aps.org/prl/abstract/10.1103/PhysRevLett.70.1895">discovered in 1993</a>, the only thing being teleported is information.



Teleporting, say, a qubit, requires that the original quantum state of that qubit be destroyed: By the laws of physics, collecting precise information on a quantum state collapses its superposition, thereby destroying it.&nbsp;



But the collected information can then be sent as classical data (ones and zeros) over a satellite or fiber optic cable and then, thanks to the physics-magic of entanglement, reassembled (from other particles) at its destination.



So the unsettling truth is that the Transporter on the Starship Enterprise can only have worked by killing its passengers — the crewmember who beamed down is not the one who beamed back up.



This has some sci-fi implications for the future of money.



In banking, the way money is &#8220;sent&#8221; from Bank A to Bank B is that Bank A subtracts a number in its spreadsheet and sends a message to Bank B instructing it to add the same number to theirs.



Only the message is sent, not the money — which is why we need banks: to send each other messages about our money.



With quantum money, however, the money sends its own messages.



Quantum money is the idea that value could be represented by the quantum state of a particle and exchanged via quantum teleportation.



“The most important thing to understand here is that quantum [money] behaves like a resource, not like data,” <a href="https://x.com/fabgenovese?s=20">Fabrizio Genovese</a> explained in an email.&nbsp;&nbsp;



Where a bank deposit is information about money and Bitcoin is a consensus record representing money, quantum money would be the money itself — an uncopyable atom, photon, or molecule that is money.



Not data about money but the physical resource of money.



This has utility because it would allow money to be secured and transported according to the unbreakable laws of superposition, entanglement and the no-cloning theorem.&nbsp;



In other words, physics might someday do what databases and distributed ledgers do now, but without the database or distributed ledger.



Quantum money would therefore have the self-custodial properties of physical cash: You could keep qubits of money in a hardware device the same way you keep cash in your pocket.



That would make exchanging money perfectly permissionless (no intermediary required) and perfectly private (there’s no ledger of transactions).



But quantum money would also have the transportable properties of digital money: Destroying the money on your device creates the sendable information required to recreate it on another device, however far away.



(There is a moment when the quantum state, in transit as classical data, does not exist — which proves that the Star Trek Transporter really is a suicide machine.)



Sending quantum money will be like sending physical cash in the mail. But better, because it arrives instantly.



Sending money over great distances created the need for banks, but solving that problem introduced the intermediaries that now control nearly all of our money.



Bitcoin, of course, is a way of making peer-to-peer transactions possible over great distances.&nbsp;



But quantum money would be the unstoppable way to do it.



“Blockchain transactions are not quite peer-to-peer,” Stefano Gogioso <a href="https://www.youtube.com/live/_ZoKdulXcVk?si=deNi9vnwICRAulOa">says</a>, “because there’s always going to be part of the mechanism that can stop your transaction from going through. For economical, political, or technological reasons.”



Nothing will stop a quantum transaction, for any reason.



There is one limitation, however: Unlike Star Trek, where Captain Kirk could beam down to a newly discovered planet, quantum money can only be transported to a hardware device prepared to receive it.



That device does not yet exist, so quantum money is not yet feasible — we’re three or four years away from the earliest iteration, Gogioso estimates.&nbsp;



When it arrives, though, it will be the safest conceivable way to send money.



Getting security from quantum states, Genovese says, is like getting energy from the Sun: “It’s what the universe gave us.”



As such, he expects all cybersecurity will eventually be done through quantum states — including money.



We&#8217;ll still have to give that money value, however, which might prove to be the hardest trick.&nbsp;



Building a transporter to teleport qubits is one thing; getting others to accept them as payment is another.



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