dYdX is a decentralized exchange built on the Ethereum network delivering key financial instruments to users such as perpetuals, margin and spot trading, as well as lending and borrowing. dYdX equips traders with off-chain order books with on-chain settlement and enables them to short-sell tokens, increase exposure by longing with leverage, or earn interest on deposited tokens to move quickly. dYdX leverages StarkWare's Layer 2 to eliminate the need to trust a centralized exchange while trading, and thus combines the security and transparency of a decentralized exchange, with the speed and usability of a centralized exchange.

dYdX

Byron Gilliam

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



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<a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5434457">Strategy as financing franchise</a>



Bond investors are generally considered more sophisticated than stock market investors (there’s more math involved, for one thing) — and no one has ever accused professional bond investors of being less sophisticated retail stock market investors.



But a recent paper that does the math on Strategy’s valuation suggests they might be.



Equity investors, it finds, are paying the right price for Strategy’s equity — but only because bond investors are paying the wrong price for Strategy’s bonds.



This makes Strategy a “financing franchise” that can be valuable enough to justify the premium to NAV it usually trades at: “the ability to sell overpriced bonds to invest in fairly priced securities…creates an intangible asset whose value can make the market value of equity exceed the market value of the firm’s (tangible) assets.”



Why would bond investors continually overpay for Strategy’s bonds?



The authors suggest it’s because Michael Saylor is blinding them with science.&nbsp;



Strategy’s convertible bonds, layered preferred stock, optional conversion features and callable provisions — full of “various embedded optionalities and differing seniority levels” — are deliberately engineered to make “returns more salient while obfuscating risk.”



If so, this should reframe the debate around Strategy: Instead of asking how long it can sell shares above NAV, as investors typically do, we should be asking how long it can sell bonds above fair value.



Not forever, presumably.



“In our model, the pool of ‘dumb capital’ willing to purchase overpriced debt is not bottomless,” the authors caution.



By their calculation, an equity premium of 70-135% over NAV implies that Strategy will be able to sell overpriced bonds for about eight years.



That sounds optimistic to me — which might be why Strategy’s <a href="https://blockworks.co/analytics/treasury-companies/market-data/crypto-treasury-companies-mnav/">premium</a> to NAV has fallen to about 30% now.



This is all a bit academic. Are equity holders really doing the math required to build a “continuous-time structural credit model”?



After looking at all the bewildering equations in the paper, I highly doubt it. Even bond investors will struggle to make sense of the equation they use to value Strategy’s “intangible asset”:&nbsp;



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="660" height="168" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/Screenshot-2025-09-11-at-17.01.26.png" alt="" class="wp-image-107630" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/Screenshot-2025-09-11-at-17.01.26.png?w=660 660w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/Screenshot-2025-09-11-at-17.01.26.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/Screenshot-2025-09-11-at-17.01.26.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/Screenshot-2025-09-11-at-17.01.26.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/Screenshot-2025-09-11-at-17.01.26.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/Screenshot-2025-09-11-at-17.01.26.png?w=80 80w" sizes="auto, (max-width: 660px) 100vw, 660px" /></figure>



Still, it feels directionally correct: Strategy’s premium to NAV is falling because Michael Saylor is pushing up against the limit of how much overly complicated debt he can sell.&nbsp;



With an enterprise value of <a href="https://www.strategy.com">$108 billion</a>, Strategy might simply have outgrown the market for such debt.



But another implication of the paper is that you can’t be too small, either.



All digital asset companies are modelled on Strategy, but few, if any, are big enough to sell complex debt in the first place. If that really is what gives Strategy its value, most DATs shouldn’t trade any higher than 1x NAV.



Even I can do the math on that one.



<a href="https://blockworks.co/news/native-markets-leads-usdh-race">A hyper-crypto stablecoin race</a>



This week’s dog and pony show to select an issuer for a new Hyperliquid stablecoin looks — from a distance at least — like everything crypto is meant to be.



A DAO making a multi-billion-dollar decision: Validators — and the HYPE holders who stake with them — will determine who issues USDH, which is set to siphon as much as $5 billion away from USDC.



Profit margins being competed away: Most of the leading proposals promise to return all of their profits (the yield earned on reserves) to the Hyperliquid ecosystem.



A TradFi CEO <a href="https://x.com/JanvanEck3/status/1965193995182899702">making</a> his pitch on X: Decentralized decisionmaking means the head of a $130 billion asset manager has to do his lobbying on social media, and not, as CEOs are surely more comfortable doing, behind closed doors.



There are sceptics: <a href="https://x.com/hosseeb/status/1965520465172328717">Some</a> suspect the outcome of the vote has been predetermined in favor of Native Markets, a newly formed firm with no track record to support its proposal.



But this, too, might reflect what crypto was always meant to be.



After withdrawing his proposal for USDH, the CEO of Ethena Labs <a href="https://x.com/gdog97_/status/1966137801650614362">lauded</a> the Hyperliquid community’s willingness to consider a new entrant: “No one [cares] how big you are, your background, pedigree or financial resources. It is a level playing field where emergent players can win the hearts of the community and are given a fair shot at succeeding.”



There’s a lot to be sceptical about in crypto (see above and below), but the process around USDH seems like a timely reminder of what can make it worthwhile.



<a href="https://www.theverge.com/c/22947663/justin-sun-tron-cryptocurrency-poloniex">Justin Sun is a character</a>



Christopher Harland-Dunaway&#8217;s feature on Tron founder Justin Sun is full of colorful detail, much of which could get people in trouble: “More than one person believed that talking to me might put their lives at risk,” he writes.



One anonymous source, for example, told Harland-Dunaway that Sun was running an “insider trading team” out of Tron’s Beijing office.&nbsp;



(I’m guessing that refers to the Tron Foundation, since the Tron blockchain presumably doesn’t have an office.)



Another source said his job at TRON was “to make sure the TRX price is at some level Justin wants.” Sun, he claimed, instructed them to buy TRX when he knew that Tron was about to announce good news to the public.



This happened “all the time,” according to another ex-employee.



In this telling, Sun seems to almost go out of his way to invite legal trouble, without fear of the consequences: “Justin’s tolerance for risk is absurdly high,” another ex-employee said. “Like, absurdly high.”&nbsp;



For example, Sun appears to have bought the crypto exchange Poloniex with the express purpose of dismantling its KYC process: “Fake the KYC!” he screamed after being told it was slowing their efforts in China. “Fake it!”&nbsp;



Thereafter, he installed an automated KYC system designed to accept virtually any ID: “Didn’t matter if they submitted a pic of Daffy Duck,” a Poloniex employee said.



There are shades of Sam Bankman-Fried here as well: “I think over time, he started to see all the possibilities of using [Poloniex] as more or less his personal bank,” a source said, with the implication that Sun used customer funds in much the same way SBF did.



When Sun instructed employees to collect tiny amounts of bitcoin that customers had mistakenly sent to a wallet intended only for USDT, for example, “they understood Justin Sun would take the bitcoin personally.”



The tiny amounts added up: In what was known internally as “Operation Couch Cushions,”



230 bitcoin that customers had lost in the deep recesses of Poloniex’s “archaic” exchange was eventually recovered.&nbsp;



But he’s not just about the money.



Sun is quirky enough to have disappeared “for months” without telling anyone at Tron where he was going or when he’d be back.



When an employee finally reached him on the phone and asked where he was, he said “I’m in the forest with this [llama].”&nbsp;



As Harland-Dunaway tells it, Sun’s story reads like a classic rise-and-fall narrative — but without the fall.



Tron’s market capitalization hit an all-time high of over $30 billion in August, making Sun’s 60% stake worth $18 billion (on paper, at least).



The token is even available on US stock exchanges now: Tron Inc., a DAT that holds Tron tokens, was up as much as 17% today.



Crypto really is different.



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<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



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<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



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The Breakdown Newsletter

Thursday links: Overpriced debt, community-approved stables and Justin Sun

Ben Strack

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



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No one is really arguing whether the Federal Reserve will cut rates next week. The conversation has become: by how much? And how will that impact crypto markets?



It’s perfect timing for such a question, as more data dropped today.



The Consumer Price Index (CPI) increased 0.4% in August (on a seasonally adjusted basis) — up from a 0.2% rise in July. It rose 2.9% for the 12 months ending August, slightly up from the 2.7% annualized figure last month. Core CPI (excludes food and energy) rose 0.3% in August, as it did in July.



21Shares crypto investment specialist David Hernandez said this data reinforces that inflation continues to moderate to a level that supports next week’s rate cut expectations.



CME Group’s <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">FedWatch</a> tool (using price data of CME Group&#8217;s 30-day fed funds futures contracts), shows a shift in recent weeks. A month ago, the data implied a ~14% chance the Fed would hold rates steady on Sept. 17. That is now at 0%.&nbsp;



The market, as of Thursday afternoon, thinks a 25bps cut is much more likely than a 50bps cut:&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1572" height="334" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-87.png?w=1024&amp;h=1024" alt="" class="wp-image-107620" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-87.png?w=1572 1572w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-87.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-87.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-87.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-87.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-87.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-87.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-87.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-87.png?w=80 80w" sizes="auto, (max-width: 1572px) 100vw, 1572px" /><figcaption class="wp-element-caption">Source: FedWatch</figcaption></figure>



“This comes on the heels of yesterday’s PPI report, which pointed to a sharp softening of producer prices, suggesting that pipeline inflation pressures are easing,” Hernandez explained. “Together, the CPI and PPI data support the view that the Fed can afford to cut rates at their FOMC next week, increasing investor confidence across risk assets.”



Along with the CPI and PPI prints, we saw initial claims for state unemployment benefits rise to 263,000 last week. This was above some expectations and the highest total in about four years.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Aug. CPI rose 0.4%, more than expected. Annualized, that&#39;s 5% inflation. However, weekly unemployment claims spiked to 263K, the most since Oct. 2021. The Fed will look past rising inflation and cut rates anyway, due to rising unemployment, a mistake that will worsen stagflation.&mdash; Peter Schiff (@PeterSchiff) <a href="https://twitter.com/PeterSchiff/status/1966121258824970729?ref_src=twsrc%5Etfw">September 11, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Bitcoin rose above $114,000 yesterday before retreating a bit. It then reached as high as $114,700 this morning. It wasn’t far off that level at 1:45 pm ET:&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1544" height="1082" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-89.png?w=1024&amp;h=1024" alt="" class="wp-image-107622" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-89.png?w=1544 1544w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-89.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-89.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-89.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-89.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-89.png?w=367 367w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-89.png?w=372 372w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-89.png?w=313 313w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-89.png?w=80 80w" sizes="auto, (max-width: 1544px) 100vw, 1544px" /></figure>



Bitcoin’s next key technical level is just above $115,000, Hernandez explained — “where significant liquidation clusters could fuel increased volatility.” A Fed rate cut and dovish guidance could lead BTC even higher, he said.&nbsp;



“The rate cut opens the door for risk-seeking investors to look beyond bitcoin too — to tokens like solana and XRP, whose ETFs are highly anticipated to debut this fall,” the 21Shares pro argued.&nbsp;



The SEC is set to rule on various US solana ETF proposals by Oct. 10. Not to mention, we saw corporate buying of SOL spike last week, per Blockworks Research data.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="888" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-88.png?w=1024&amp;h=1024" alt="" class="wp-image-107621" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-88.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-88.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-88.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-88.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-88.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-88.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-88.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-88.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-88.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



These SOL buys are much smaller than those by companies acquiring BTC and ETH, but they’re becoming more frequent nonetheless. The below chart shows the same time span but with more assets — giving us a sense of the different scales of acquisition. <img loading="lazy" decoding="async" src="blob:https://cms.blockworks.co/be804058-9b6a-485a-8ead-bc82b14b7d3a" width="624" height="341">



Bitwise’s Matt Hougan noted in his latest CIO <a href="https://experts.bitwiseinvestments.com/cio-memos/solana-season">memo</a>, called Solana Season: “Its promoters argue that Solana is the only blockchain fast enough to support the tokenization of major assets at a global scale.” There’s that word tokenization again. I’m doing my best to give it a rest.



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Federal Reserve

What’s next for crypto markets as Fed rate cut expectation holds?

Kate Irwin

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



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The TGE for LINEA has begun — and Consensys CEO Joe Lubin is hinting that more tokens are coming.



LINEA is the token for Consensys’ existing Ethereum L2 zk rollup of the same name. The token comes roughly <a href="https://blockworks.co/news/linea-mainnet-ethereum">two years after</a> the Linea blockchain’s mainnet launch.&nbsp;



But LINEA isn’t the chain’s native gas token — it’s <a href="https://blockworks.co/news/linea-previews-eth-first-roadmap">using ETH for that</a>. LINEA also isn’t a governance token, either, which might lead some to ask: What is it for?



LINEA’s market cap was higher than $560 million at launch. That’s already been <a href="https://www.coingecko.com/en/coins/linea">sliced</a> down to $360 million as of Thursday morning — a 36% plunge in less than a day.&nbsp;



For better or worse, a token’s price history tells a story. While that story can certainly be manipulated or subject to macroeconomic pressure, token price fluctuations can also be an indicator of interest over time.&nbsp;&nbsp;



Lubin is now telling traders why he thinks the LINEA token is worth hanging onto: You may get a lot more tokens.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Well, just holding Linea will open up further rewards opportunities, mostly in other tokens; some from Consensys and some from protocols that we are aligned with. MetaMask and Linea are cooking somETHing together to make this happen. Together we are all bootstrapping the Linea… <a href="https://t.co/AGhPovMSBH">https://t.co/AGhPovMSBH</a>&mdash; Joseph Lubin (@ethereumJoseph) <a href="https://twitter.com/ethereumJoseph/status/1965986280828727566?ref_src=twsrc%5Etfw">September 11, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



“Just holding Linea will open up further rewards opportunities, mostly in other tokens,” Lubin <a href="https://x.com/ethereumJoseph/status/1965986280828727566">wrote</a> late Wednesday night. “MetaMask and Linea are cooking somETHing together to make this happen.”



He added: “If we notice, at some date in the future that you&#8217;ve held n LINEA tokens for m days, that just might lead to another token landing in your account.”&nbsp;



Does this mean MASK is coming?&nbsp;



Lubin previously <a href="https://decrypt.co/95039/metamask-consensys-30-million-users">confirmed</a> a MetaMask token was part of the bigger plan back in 2022, though that hasn’t materialized yet.&nbsp;



Now that the US regulatory outlook has changed, it’s possible that dream may be revived.&nbsp;



MetaMask recently <a href="https://thedrop.beehiiv.com/p/hot-take-friday">announced</a> its own stablecoin, mUSD, which will exist on Ethereum and Linea.



While we’re speculating, Lubin’s comments could alternatively mean some kind of yield could be in the works, whereby holding LINEA in your fox wallet results in other tokens (like ETH or mUSD) being earned over time.&nbsp;



But the way his comment was phrased — with other tokens just “landing” in your wallet one day — sounds more like he’s describing future airdrops across one-time events and not a steady earning mechanism.



Hence my speculation that a fox token (that’s not a stablecoin) could be coming.



Lubin’s comments didn’t appear to inspire a surge of buyers to drive LINEA’s price back up. Since his post, LINEA’s price has more or less remained stable around $0.02 with a $360 million market cap. The dangled carrot of future rewards might have prevented further selloffs, though.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="560" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-86.png?w=1024&amp;h=1024" alt="" class="wp-image-107614" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-86.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-86.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-86.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-86.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-86.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-86.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-86.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-86.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-86.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /><figcaption class="wp-element-caption">Image: A look at Linea’s profitability as a chain. </figcaption></figure>



As a chain, Linea is profitable for Consensys. It’s seen over $65 million in L2 revenue so far, with a profit of over $34.3 million after subtracting costs for proofs and other fees, according to SeaLaunch data on Dune.&nbsp;



It’s still much smaller than Base and Arbitrum from a profits standpoint, but it’s still in the game.



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ConsenSys

Consensys CEO Joe Lubin hints at future LINEA perks

Macauley Peterson

Starknet’s most ambitious upgrade to date has gone live, but it promptly reminded users of the risks of pushing cutting-edge infrastructure into production.



The layer-2 network rolled out its Grinta <a href="https://x.com/starknet/status/1962457868277305357">upgrade</a> earlier this month, a sweeping release that touches nearly every layer of its architecture. Among the headline features:



<ul class="wp-block-list">
<li>Instant transactions with ~0.5 second pre-confirmations, bringing a “Web2-like” user experience.</li>



<li>Seven-times faster block production, reducing latency for DeFi, gaming, and AI applications.</li>



<li>A new fee market modeled on Ethereum’s <a href="https://blockworks.co/tag/eip-1559">EIP-1559</a>, with STRK as the default gas token. Paymasters can still let users pay in ETH or stablecoins.</li>



<li>The first step toward sequencer decentralization, with three sequencers sharing responsibility instead of a single centralized one.</li>



<li>A mempool upgrade that lets users prioritize transactions by fee, akin to Ethereum’s gas bidding.</li>



<li>A standardized Paymaster API (<a href="https://github.com/starknet-io/SNIPs/blob/main/SNIPS/snip-29.md">SNIP-29</a>) to simplify integration for wallets and dApps.</li>
</ul>



<a href="https://blockworks.co/tag/starkware">StarkWare</a>, the team behind Starknet, framed the release as a historic milestone. “Starknet is moving from a centralized network to a credibly neutral, performant network ready to onboard millions of users,” the project said in its Grinta announcement.



<h2 class="wp-block-heading">Outage overshadows launch</h2>



But the triumph was quickly tempered. On September 2, just after Grinta’s debut, Starknet went offline for more than two hours. A chain reorganization wiped transactions submitted during a roughly two-hour window, frustrating users and raising questions about rollout strategy.



According to the incident report <a href="https://www.starknet.io/blog/starknet-incident-report-september-2-2025/">published</a> today, the root cause was “ungraceful recovery from earlier P2P issues on the Ethereum network.” Specifically, the sequencer processed an unprovable stream of transactions, forcing a rollback.



Developers acknowledged the severity: “It sucks, plain and simple,” StarkWare contributor Abdelhamid Bakhta <a href="https://x.com/dimahledba/status/1962810098922795030">wrote</a> on X. He emphasized, however, that “no one has decentralized a ZK rollup architecture on a live chain before. Setbacks come with the territory, but they drive progress.”



The upgrade’s scale contributed to the risk. StarkWare batched multiple features into a single release, rather than phasing them in. “Usually when we know there is a major upgrade coming that will anyway require a short downtime, we prefer to batch multiple features,” Bakhta <a href="https://x.com/dimahledba/status/1962810098922795030">explained</a> in response to community criticism. Strategically, he added, the team wanted Grinta live ahead of “something important coming very soon related to the Bitcoin plans.”



Reaction was mixed. Bakhta compared the episode to Solana’s repeated outages — a network that nevertheless retained developer momentum. “Bullish on Starknet downtime. Solana playbook, all planned,” he <a href="https://x.com/dimahledba/status/1962810098922795030">quipped</a>. Others noted the irony of a rollup, whose very selling point is Ethereum-grade reliability, suffering downtime.



Researcher Eric Wall, a StarkWare advisor, pressed why the rollout wasn’t staged more carefully. Bakhta <a href="https://x.com/dimahledba/status/1962810098922795030">countered</a> that progress in uncharted ZK rollup design comes with inevitable turbulence.



Despite the hiccup, Grinta marks a turning point. Starknet is now the first rollup to decentralize sequencing in production, technically, although all sequencers operated by StarkWare for now. Future phases will bring in independent operators, aiming to improve censorship resistance, reliability, and throughput.



As the outage fades from memory, the scope of the upgrade should come to the fore. As Bakhta put it: “We’re humbled by the issues, but proud of what we’ve achieved. Let’s fix it, learn from it, and keep building.”



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blockchain

Starknet’s Grinta upgrade is massive, but arrived with turbulence

Kunal Doshi

Shaunda Devens

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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With risk assets back in rally mode, crypto is leaning hard into the easing narrative. Softer inflation data has lifted expectations for Fed cuts, sending majors higher and reigniting speculative flows. In this environment, protocols are reaching for every tool available to capture attention and support valuations, from pump.fun buying ecosystem memes to Lido potentially experimenting with buybacks as a way to bolster token performance.



<h1 class="wp-block-heading">Market Update</h1>



It’s a field of green today with BTC, ETH and SOL up 2.3%, 1.7% and 2.7%, respectively in the last 24 hours. This follows the PPI surprising to the downside, falling 0.1% MoM vs a forecast +0.3%. Traders took it as proof that Trump’s tariffs aren’t fanning inflation.



All eyes now turn to tonight’s CPI print to confirm the trend and pave the path for rate cuts ahead. <a href="https://kalshi.com/markets/kxfeddecision/fed-meeting/kxfeddecision-25sep">Current odds</a> show an 82% chance of a 25bp cut next week, with even a 17% chance of 50bp cut. Expectations for three cuts this year have <a href="https://kalshi.com/markets/kxratecutcount/number-of-rate-cuts/kxratecutcount-25dec31">doubled</a> since last week. The anticipation of an easing cycle has turned sentiment bullish, with Pump the standout performer, up 46% in the last seven seven days.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="448" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=1024&amp;h=1024" alt="" class="wp-image-107587" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The easing cycle that began last September sparked Solana’s meme season, peaking in December 2024 when the Fed signaled slower cuts ahead. Potential airdrops from Meteora, Seeker, and maybe even Pump in Q4 could fuel the next wave. Historically, infrastructure plays like Raydium and Solana benefited most from meme trading, but flows now tilt towards Pump as a more direct play. In August, pump.fun drove 31% of Solana app revenue and currently dominates <a href="https://dune.com/queries/5440992/8878702">92%</a> of launchpad volumes.



<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/2025/09/image-79.png?w=1024&amp;h=1024" alt="" class="wp-image-107588" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-79.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-79.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-79.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-79.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-79.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-79.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-79.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-79.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-79.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Initially criticized as extractive, pump.fun has since emphasized community alignment. Its <a href="https://dune.com/adam_tehc/pumpfun-glass-full-foundation">Glass Full Foundation</a> injects liquidity into ecosystem tokens, while <a href="https://dune.com/adam_tehc/pumpfun-creator-earnings">Project Ascend</a> boosted creator earnings by 12x. Fading a project with PMF is a losing trade, and Pump keeps printing.



— <a href="https://x.com/Kunallegendd">Kunal</a>&nbsp;



<h1 class="wp-block-heading">Lido: Buybacks without profits</h1>



Lido contributors and <a href="https://www.steakhouse.financial/">Steakhouse</a> have proposed <a href="https://research.lido.fi/t/nest-network-economic-support-tokenomics/10648">NEST</a> (Network Economic Support Tokenomics), a buyback sink that uses stETH set aside by the DAO to buy LDO. The mechanism operates as follows:



<ol class="wp-block-list">
<li>Funding: The DAO fills NEST with a chosen amount of stETH via <a href="https://vote.lido.fi/">Aragon</a> votes.</li>



<li>Execution cadence: For any stETH held in NEST, at least one CowSwap order must be created every ~7,000 blocks (approximately once per day), with a maximum order size calibrated to stay under 1% slippage.</li>



<li>Keeper incentive: Whoever triggers an eligible order receives two basis points of the order size in stETH as a reward.</li>
</ol>



Two factors make this proposal particularly interesting. First, Lido DAO will be responsible for filling and topping up the NEST contract with stETH, meaning the buybacks are uncorrelated from the protocol&#8217;s direct earnings, a contrast to the majority of programs that fund themselves with revenue. With Lido&#8217;s treasury holding 26,816 stETH ($115 million), although there&#8217;s no indication of how much will be deployed, it&#8217;s likely that holders will appreciate any form of financial engineering that could support price appreciation.



<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/2025/09/image-81.png?w=1024&amp;h=1024" alt="" class="wp-image-107590" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-81.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-81.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-81.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-81.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-81.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-81.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-81.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-81.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-81.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



However, the irony is that Lido DAO has yet to turn a profit. The protocol has accumulated $345.4 million in cumulative losses since 2021, despite processing over $2.68 billion in gross staking rewards. While 2025 shows improvement with losses narrowing to just $200K (approaching breakeven), the fundamental economics remain challenging.



<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/2025/09/image-80.png?w=1024&amp;h=1024" alt="" class="wp-image-107589" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-80.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-80.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-80.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-80.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-80.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-80.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-80.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-80.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-80.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Interestingly, the topic has been discussed extensively before, particularly in 2024 after Uniswap&#8217;s fee switch proposal ignited a buyback meta among DeFi 1.0 projects. Hasu pushed back, arguing that revenues are insufficient to cover the runway and that the protocol should wait for profitability before implementing buybacks.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="448" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=1024&amp;h=1024" alt="" class="wp-image-107586" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-78.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



But with LDO trading 78% below its all-time high at $1.26, perhaps the DAO has grown tired of waiting. Watching the whole market pump, the prospect of deploying treasury assets to support token price may be more attractive than enduring another year of underperformance. 



— <a href="https://x.com/shaundadevens">Shaunda</a>



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Lido

Respect the PUMP: Crypto’s emerging meme season

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Inflation in the United States is made in Washington and nowhere else.”



— Milton Friedman
</blockquote>



When Fed Chair Paul Volcker raised short-term interest rates to as high as 22%, angry construction workers sent him two-by-fours in the mail in protest.



They had no other use for them, they explained, because his rate hikes were stopping them from building houses for people.



It was a fair point. The recessions Volcker induced with rate hikes are credited with ending inflation in the US — but they probably shouldn’t be because raising interest rates can only slow inflation in the near term.



In the medium term, higher interest rates might even do the opposite: The Fed fights inflation by reducing demand, but that can ultimately be counterproductive.



Putting home builders out of work, for example, reduces the supply of houses and fewer houses means higher house prices.



“Today’s demand is tomorrow’s supply,” John Cochrane writes in explaining why rate hikes can be counterproductive to durably reducing inflation. “The economy needs investment and housing.”



In the long term, higher interest rates are probably no help at all.



Inflation is ultimately a case of too much money chasing too few goods and higher rates don’t change that.



Why then did it work for Volcker? Cochrane argues it’s because “tight money in the early 1980s was quickly followed by tax, spending and regulatory reform.”



Those reforms reassured consumers and investors that the government would not have to resort to printing money to pay off its debts.



Volcker might get credit for that, too, however: It was the threat of repeated Fed-induced recessions that forced the White House and Congress to demonstrate they were committed to lowering the deficit over the long term. In Cochrane’s view, this is the only way to durably lower inflation: “The US has to persuade people that over the long haul of several decades it will return to its tradition of running small primary surpluses that gradually repay debts.” The Fed can’t help with that — but thanks to the legend of Volcker, everyone thinks it can.



Economist and ex-Fed board member Henry Wallich recognized this as long ago as 1975, <a href="https://oll-resources.s3.us-east-2.amazonaws.com/oll3/store/titles/1097/0102.08_LFeBk.pdf?utm_source=chatgpt.com">bemoaning</a> the mistaken belief that &#8220;deficits can do no major damage so long as the central bank does its job right.&#8221;



Volcker then supercharged that belief. He raised rates and inflation went down, so it seems like that’s all there is to it: When inflation happens, it’s the Fed’s job to fix it.



His successors have cemented that impression.



After the last FOMC meeting, for example, Chair Powell <a href="https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20250730.pdf">reassured</a> markets “there should be no doubt that we will do what we need to do to keep inflation under control.”



He has to say that, of course — a big part of how the Fed keeps inflation in check is by using the kind of confident language that keeps inflation expectations in check.



But the confident language also lets Congress and the White House off the hook.



Why do the hard, politically treacherous work of raising taxes, cutting spending and promoting growth if the Fed can simply control inflation with interest rates?



In other words, we have a free rider problem: Congress and the White House don’t feel responsible for inflation, so they do feel free to run giant deficits — always, even when the economy is good.&nbsp;



But what if interest rates were effectively set by the White House?



President Trump has recently been terrifying economists with a campaign to end the Fed’s independence, explicitly calling on the Fed to lower interest rates in order to make the deficit easier to finance.&nbsp;&nbsp;



This is the “fiscal dominance” that economists have long warned would undermine faith in the US dollar and risk runaway inflation.



But this non-economist wonders if it might have an entirely different effect.



Is it too naive to think that if the president politicizes the Fed, politicians will be forced to take responsibility for inflation?&nbsp;



Volcker spooked Congress into fiscal responsibility in the 1980s, and maybe voters, once they realize that inflation is made in Congress, could do so now.



There may not be any other choice, because the Fed is not so scary anymore.



If the Fed were to dramatically raise interest rates, the first-order effect would be higher interest costs on the government’s $37 trillion of debt, which in turn creates inflation by undermining people’s belief that the debt can ever be paid off.



That makes rate hikes unsuitable as a short-term fix for inflation and counterproductive as a longer-term one — and no longer something the Fed can plausibly threaten.



Ideally, recognition of this new reality would focus politicians&#8217; minds on the long-term fixes that only they can implement.



They will be reluctant, of course, because the fixes are politically unpopular and Congress would prefer that the proverbial two-by-fours continue to be mailed to the Fed.



But inflation is wildly unpopular, too, and if voters recognize that politicians are ultimately responsible for it, they might force them into action (or out of office).



To be clear, few economists are rooting for the president to succeed in his campaign to break the Fed, and it&#8217;s not my first choice, either.



But if you break it, you own it — and now is the time for the White House and Congress to own the inflation problem.



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How I stopped worrying and learned to love a politicized Fed

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I started covering Franklin Templeton half a dozen years ago while on the asset management beat at a B2B finance pub. I wasn’t aware of the term TradFi back then and knew little about crypto.



The $1.6 trillion money manager is still very relevant to my transformed beat. You might remember my July interview with Sandy Kaul, during which she said all Franklin Templeton products are likely to <a href="https://blockworks.co/news/franklin-templeton-products-onchain-exec-says">end up onchain</a>.&nbsp;



She promised there’d be more to come. Sure enough, the financial giant said today it would team up with Binance on digital asset initiatives and solutions.



The companies were vague, noting they’d share more details later this year. But essentially, they are combining Franklin’s tokenization muscle with Binance’s trading infrastructure and investor reach to bring offerings with “competitive yield generation and settlement efficiency.”



Blockworks Research data shows Binance’s prevalence in crypto today — with the definitive edge over competitors in spot volume, for example:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1352" height="741" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-76.png?w=1024&amp;h=1024" alt="" class="wp-image-107571" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-76.png?w=1352 1352w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-76.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-76.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-76.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-76.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-76.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-76.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-76.png?w=80 80w" sizes="auto, (max-width: 1352px) 100vw, 1352px" /></figure>



As Franklin Templeton’s Sandy Kaul said in a Wednesday statement: “We see blockchain not as a threat to legacy systems, but as an opportunity to reimagine them.”&nbsp;



And so we’ve seen the company migrate more into the crypto segment in recent years. It was one of the dozen or so issuers that lined up to launch a bitcoin ETF in January 2024. But well before that — in 2021 — Franklin launched a money market fund that used the Stellar blockchain to record transactions. A share of the fund is represented by one BENJI token, which the firm made accessible in digital wallets through an app.&nbsp;



I recall Franklin exec Roger Bayston telling me in mid-2023 how BENJI can essentially <a href="https://blockworks.co/news/stablecoin-with-yield-franklin-templeton">act as a stablecoin</a> while also generating income. That conversion was about a year before BlackRock launched a similar yield fund (aka BUIDL), which spurred tokenized treasury momentum.&nbsp;



BUIDL quickly surpassed Franklin’s product in assets under management, with the totals now standing at ~$2.2 billion and ~$740 million, respectively.&nbsp;&nbsp;



Speaking of BlackRock, today’s news kind of reminded me of the world’s largest asset manager <a href="https://blockworks.co/news/industry-watchers-execs-weigh-significance-of-blackrock-coinbase-deal">teaming up with Coinbase</a> in 2022.&nbsp;



The bottom line is this trend of TradFi and DeFi worlds coming together is in no way slowing. That means I’ll have to be cautious about not reusing headlines — whether one from <a href="https://blockworks.co/news/tradfi-bid-nasdaq-fidelity">earlier this week</a> or months back. <img loading="lazy" decoding="async" src="blob:https://cms.blockworks.co/42acb2e6-66f9-465c-8d35-6a2474c1a465" width="624" height="183">



<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="1586" height="344" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-77.png?w=1024&amp;h=1024" alt="" class="wp-image-107572" style="width:643px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-77.png?w=1586 1586w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-77.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-77.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-77.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-77.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-77.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-77.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-77.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-77.png?w=80 80w" sizes="auto, (max-width: 1586px) 100vw, 1586px" /></figure>



Franklin Templeton CEO Jenny Johnson has said she thinks we’ll see more financial market infrastructure transformation in the next five years than we’ve seen in the last 50.&nbsp;



Translation: It’s a rad time to be a crypto/finance journalist and reader.



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Binance

Fund giant-crypto exchange collab another bid to ‘reimagine’ finance

Jack Kubinec

VanEck plans to file for a Hyperliquid spot staking ETF in the US and an exchange-traded product in Europe, two employees at the firm told Blockworks.



HYPE would become the youngest token to earn an ETF filing from the crypto-friendly investment management firm, which currently offers bitcoin and ether ETFs among other crypto funds.&nbsp;



Hyperliquid has been a major focus for VanEck’s liquid fund this year, VanEck senior digital assets investment analyst Matt Maximo said.



The firm is considering allocating a percentage of the investment products’ net profits to HYPE buybacks, digital assets products director Kyle Dacruz added. Hyperliquid currently performs HYPE buybacks <a href="https://app.blockworksresearch.com/flashnotes/hype-still-cheap">equal</a> to nearly all of the platform’s revenue.



The pair declined to comment on when VanEck’s HYPE ETF filing may go live. A spokesperson for the firm did not immediately return a request for comment.



Hyperliquid is a layer-1 blockchain that underpins a popular perpetual futures exchange. The chain grew quickly after launching in 2023.&nbsp;



It has led all blockchains in network revenue for four consecutive weeks, according to Blockworks research data.&nbsp;



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="948" height="549" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-75.png" alt="" class="wp-image-107563" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-75.png?w=948 948w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-75.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-75.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-75.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-75.png?w=451 451w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-75.png?w=378 378w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-75.png?w=80 80w" sizes="auto, (max-width: 948px) 100vw, 948px" /><figcaption class="wp-element-caption">Source: Blockworks Research</figcaption></figure>



VanEck finds Hyperliquid to be an attractive ETF candidate because it has “plenty of demand” but does not currently trade on major US crypto exchanges like Coinbase, Dacruz said. A HYPE staking ETF would give US investors better access to the token — and perhaps nudge exchanges to list the token, he added.



The firm’s Hyperliquid products would depend on regulatory approval, although 21Shares successfully <a href="https://www.globenewswire.com/news-release/2025/08/29/3141292/0/en/21Shares-Launches-First-ETP-Tracking-Hyperliquid-the-Market-Leader-in-Decentralized-Perpetuals.html">launched</a> a European Hyperliquid ETP in August.&nbsp;



In the US, approvals may take a little more time. The SEC has a slew of crypto ETF applications to work through, including ones for larger tokens like XRP and SOL.



VanEck has also applied to list ETFs for AVAX, SOL, JitoSOL, and BNB.



The move comes amid a sweepstakes to issue USDH, a ticker <a href="https://discord.com/channels/1029781241702129716/1030197017655394447/1414930967843438663">reserved</a> for a Hyperliquid-aligned stablecoin. One of the contestants is Agora, a stablecoin startup co-founded by Nick van Eck, son of VanEck CEO Jan van Eck. The senior van Eck <a href="https://x.com/JanvanEck3/status/1965193995182899702">posted</a> on X defending Agora’s proposal to issue USDH, and VanEck <a href="https://finance.yahoo.com/news/exclusive-stablecoin-startup-agora-raises-120000399.html">reportedly</a> helps manage Agora’s reserves.



The CEO also added that the firm is “bullish Hyperliquid.”



Dacruz said VanEck’s decision to file for Hyperliquid ETPs is“completely separate” from Agora’s USDH bid and stressed that the products are not contingent on Agora being USDH’s issuer. He also noted Agora and VanEck are separate entities. 



If VanEck gets its HYPE ETF filing in first, it would continue a trend for the firm, which was also <a href="https://blockworks.co/news/eight-firms-listing-solana-etfs">first to file</a> for both Solana and <a href="https://www.nasdaq.com/articles/vaneck-files-for-first-ethereum-etf-in-us-2021-05-07">Ethereum</a> ETFs.



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VanEck plans to file for Hyperliquid staking ETF, European ETP

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



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A new financial app trend is emerging: Just add posting.



Last night, Robinhood <a href="https://x.com/RobinhoodApp/status/1965589746937446623">unveiled</a> “Robinhood Social,” an upcoming new tab within the Robinhood app that will let Robinhood users see and create posts about stocks and crypto tied to real trades and follow others’ accounts. There’s a “For You” page and a “Following” page, too.&nbsp;



Sounds a lot like Crypto Twitter, if you ask me.&nbsp;



But Robinhood’s also deploying these social media features to help show traders new assets to buy — which could ultimately keep users on the app longer and make Robinhood more money. Traders may also copy others’ trades, as TechCrunch has <a href="https://techcrunch.com/2025/09/09/robinhood-embraces-copy-trading-after-warning-competitors-about-regulatory-risks/#:~:text=Roughly%20nine%20months%20after%20suggesting,feature%2C%20all%20the%20more%20notable.">pointed out</a>, which is a tune-change from Robinhood’s prior concerns about the practice.



“Most people today use social media before trading, especially our active traders, yet social media is overrun with clickbait, marketing bots, fake profiles and doctored screenshots,” Robinhood VP of product Abhishek Fatehpuria <a href="https://x.com/i/broadcasts/1mrGmBVPjgBJy">said</a> during the company’s “Enter The Mainframe” event on Tuesday.&nbsp;



Robinhood thinks it’ll be able to establish itself as a trusted SocialFi platform because users are tied to Robinhood trading accounts.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Introducing Robinhood Social. Coming next year. Show off your recent gains, discuss strategies, follow your favorite traders, and make market moves in real-time.<a href="https://twitter.com/hashtag/RobinhoodPresents?src=hash&amp;ref_src=twsrc%5Etfw">#RobinhoodPresents</a> <a href="https://t.co/cLhiCw7bpH">https://t.co/cLhiCw7bpH</a> <a href="https://t.co/LYaLgkcuuM">pic.twitter.com/LYaLgkcuuM</a>&mdash; Robinhood (@RobinhoodApp) <a href="https://twitter.com/RobinhoodApp/status/1965589746937446623?ref_src=twsrc%5Etfw">September 10, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



But Robinhood isn’t the only consumer finance app pushing heavily into SocialFi features — Coinbase continues to add lots of social media features into the beta version of its wallet overhaul, too. Yesterday Base <a href="https://x.com/baseapp/status/1965532254433857959">said</a> users will be able to create posts from the Base app’s homepage and buy each other’s posts, much like what Zora also offers. Zora’s being integrated into Base (and Zora posting via the Base app now <a href="https://blockworks.co/news/zora-app-accounts-debate">accounts for a notable portion</a> of Zora’s overall activity).



Upstart players have also been trying to forge a name for themselves in the SocialFi space.&nbsp;



<a href="https://fomo.family/">FOMO</a> lets users track others’ trading activity by tying accounts to Twitter handles and letting them buy and sell tokens all on one mobile app. And Pump has made livestreaming a big part of its site — and recently added “Pump Chat” to its mobile app.



This year, we’ve even seen Kraken release a Venmo-like app hilariously dubbed <a href="https://play.google.com/store/apps/details?id=com.kraken.pay.app&amp;hl=en_CA">Krak</a>, which displays a list of your friends on the app and lets you send them crypto (they compare sending money on Krak to sending a DM).



A trend is clearly emerging: US crypto exchanges see social features as a key part of crypto’s future growth.&nbsp;



But will this latest SocialFi push amount to little more than a limited-time experiment — like the since-forgotten CoinbaseNFT?&nbsp;



I think this latest social push is going to stick around for a while, though it could run out of steam if traders get tired of juggling multiple apps.&nbsp;



Robinhood and Coinbase may be angling to swipe some of Twitter’s market share in the finance sector and retain users by becoming more like the “everything apps” WeChat and Naver have already become.



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Coinbase

From Base to Robinhood: Why trading apps are going social

Blockworks

US Securities and Exchange Commission chair Paul Atkins said during a keynote address on Wednesday that “most crypto tokens are not securities,” signaling a major policy shift for the agency. Speaking at the OECD Roundtable, Atkins <a href="https://www.sec.gov/newsroom/speeches-statements/atkins-keynote-address-inaugural-oecd-roundtable-global-financial-markets-091025">reiterated</a> the SEC’s Project Crypto initiative — first launched in July — and sharpened its focus by pledging that most tokens will fall outside securities law and that entrepreneurs will be able to raise capital on-chain without &#8220;endless legal uncertainty.&#8221;



He argued that for too long, the SEC relied on ad hoc enforcement actions that drove innovation offshore, and pledged instead to offer predictable regulatory guidance for digital assets.



The statement seemingly breaks with years of SEC practice since the 2017 DAO Report, which applied the Howey test to many token sales, leading to enforcement actions against exchanges and issuers. Under Atkins, the agency will distinguish more clearly between securities and non-securities, giving entrepreneurs firmer ground when structuring tokenized projects. He also endorsed a “super-app” platform model that would allow trading, lending, and staking under a single regulatory framework, aligning the SEC more closely with the European Union’s Markets in Crypto-Assets regime.



Atkins’ comments follow the President’s Working Group report on digital asset markets, which urged agencies to accelerate rulemaking to keep the US competitive.



This is a developing story.



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



This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Jeffrey Albus</a>&nbsp;before publication.



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regulation

SEC chair Atkins says most tokens not securities in regulatory shift

Polymarket crystallizes what the past couple days of X speculation and tea-leaf reading only hinted at: Native Markets, in collaboration with Stripe-owned stablecoins infra provider Bridge, is now the clear favorite to win the USDH ticker on <a href="https://blockworks.co/tag/hyperliquid">Hyperliquid</a>.



As of 12:30 p.m. ET, Polymarket betters gave Native around 65% odds, with <a href="https://blockworks.co/tag/paxos">Paxos</a> a distant second, and <a href="https://blockworks.co/tag/ethena">Ethena</a>, <a href="https://blockworks.co/tag/frax">Frax</a>, <a href="https://blockworks.co/news/stablecoin-adoption-timeline-tradfi-van-eck">Agora</a>, and <a href="https://blockworks.co/tag/makerdao">Sky</a> all but written off.



That lines up with early validator signaling. Infinite Field and CMI Trading have both <a href="https://x.com/ArthuronHL/status/1965516060603601171">publicly committed</a> to voting for Native, citing its Hyperliquid-alignment and execution speed. Voting is now open, and final vote tallies are expected Sunday.



Paxos is still in the running. After an initial pitch centered on regulatory pedigree, the issuer revised its proposal Wednesday, pledging a larger share of reserve yield to Hyperliquid’s Assistance Fund and deferring any issuer take until the product scales.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1912" height="880" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-73.png?w=1024&amp;h=1024" alt="" class="wp-image-107524" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-73.png?w=1912 1912w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-73.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-73.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-73.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-73.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-73.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-73.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-73.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-73.png?w=80 80w" sizes="auto, (max-width: 1912px) 100vw, 1912px" /><figcaption class="wp-element-caption">Source: <a href="https://polymarket.com/event/who-will-win-the-usdh-ticker-159">Polymarket</a></figcaption></figure>



The shift made their offer more competitive, and gives them a plausible path to upset if validator sentiment swings. 



But for now, the debate’s center of gravity has shifted firmly toward Native.



<h2 class="wp-block-heading">What validators heard in the roundtable</h2>



Much of that momentum was shaped in real time during yesterday’s multi-hour <a href="https://x.com/i/spaces/1YpKkkbbavmKj">community roundtable</a>. Three themes consistently rose to the surface.



Being “Hyperliquid-first” isn’t just a slogan. Validators pressed each bidder on how exactly they’d issue USDH. Native made clear it would mint directly on <a href="https://blockworks.com/analytics/hyperliquid/hyperliquid-financials-12748/hyperliquid-network-rev">HyperEVM</a> and anchor issuance to Hypercore from day one, with no wrapping or cross-chain friction.



Frax, initially planning to mirror frxUSD, reversed course and committed to native issuance after community feedback. Paxos emphasized it would also mint directly on-chain, with full fiat and brokerage rails attached. The message bubbling up from community feedback: USDH must behave like a system-native asset, not a bridged approximation. That alone seems to be enough to derail Sky’s bid, since its core protocol is on <a href="https://blockworks.co/tag/ethereum">Ethereum</a> mainnet.



Second, transparency and enforceability mattered more than raw numbers. Nearly all bidders promised a high percentage of reserve yield routed back to Hyperliquid — whether through buybacks or contributions to the Assistance Fund — but validators wanted more than vague percentages.&nbsp;



Native said its split would be contractually hard-coded. Frax leaned on its track record of on-chain streaming and dashboard visibility. Paxos <a href="https://paxoslabs.com/blog/usdh-v2">offered</a> monthly transparency reports and a rising allocation toward the Assistance Fund, now beginning at 50% and scaling toward 90–95%. For a validator set tasked with securing the economic base of the platform, the pitches that pointed to auditability rather than just “trust us,” are preferable.



Hyperliquid’s surging protocol revenue underscores why the USDH race has attracted so much attention. As seen in Blockworks Research data, Hyperliquid is now generating over $20 million in weekly revenue, with recent peaks pushing above $25 million. That translates to a projected run rate nearing $1 billion annually, making the platform one of crypto’s most lucrative venues.



<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/2025/09/image-74.png?w=1024&amp;h=1024" alt="" class="wp-image-107525" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-74.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-74.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-74.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-74.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-74.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-74.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-74.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-74.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-74.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /><figcaption class="wp-element-caption">Source: <a href="https://app.blockworksresearch.com/analytics/hyperliquid?dashboard=268">Blockworks Research</a></figcaption></figure>



According to Blockworks researcher 0xCarlos, <a href="https://blockworks.co/news/hyperliquids-usdh-battle-datco">the battle over who gets to issue USDH</a> is ultimately a bet on who can align best with this engine of yield.



“Migrating $5 billion in USDC deposits to USDH could represent an additional $200 million in revenue for Hyperliquid annually,” he noted — roughly an incremental 20% boost. The proposals diverge sharply in how that revenue would flow back into the ecosystem, but Hyperliquid itself looks to be the real winner, regardless.



Finally, the regulatory debate took center stage. Paxos and Bastion both leaned heavily into their NYDFS trust charters, painting them as essential for long-term compliance. Paxos framed many rivals as still “planning to get licensed,” implying a real risk of future shutdowns.



But that framing ran headlong into a different validator concern — sovereignty. Native’s argument was that relying on a single institutional issuer, even one as credentialed as Paxos, simply replaces one dependency (<a href="https://blockworks.co/tag/usdc">USDC</a>/<a href="https://blockworks.co/tag/circle">Circle</a>) with another. Its own architecture, they argued, is issuer-agnostic by design, with contractual off-ramps and modular custody. In other words, any concerns over a risk of Stripe’s influence is contained.



<h2 class="wp-block-heading">Questions on the process</h2>



In such a strong field, the apparent ease of Native’s ascent was bound to raise eyebrows. Dragonfly’s Haseeb Qureshi <a href="https://x.com/hosseeb/status/1965520465172328717">posted</a> on X that multiple bidders believed the race had been fixed from the start. Native’s initial proposal dropped almost immediately after the RFP was announced, he noted, suggesting advance notice. And while Ethena briefly surged on Polymarket following its detailed entry, odds collapsed just hours later — according to Qureshi, after validators dismissed its chances behind closed doors.



These allegations sparked heated replies. Some questioned Dragonfly’s close association with rival bidders like Ethena and Agora. Others argued that in a system where validators are free to stake based on whatever criteria they choose, early alignment is a feature not a bug.



The structure of the vote itself reinforces that. Delegators are not passive observers. Between September 11, when validator preferences are published, and the final vote on September 14, HYPE holders can re-delegate. If a validator appears unresponsive to its stake base, it can lose part of its power base. In that sense, the system is functioning as designed: a high-stakes political game.



What this episode made clear is that rapid governance timelines leave little tolerance for missteps in optics. With just a four-day window between proposal deadlines and the start of voting, teams already close to the Hyperliquid core had a significant leg up. Native’s deep familiarity with the validator set — and integration into HyperEVM infrastructure — meant its pitch was not just better prepared, but already partially vetted.



<h2 class="wp-block-heading">What could dent Native’s lead</h2>



Native’s offer appears to map cleanly onto the priorities of Hyperliquid’s validator set. The team is known for its ability to ship inside HL for months, and many trust that continuity matters more than a brand name.



But the race isn’t over.



Paxos, after its revised proposal, is increasingly competitive. It offers not only regulatory clarity but global distribution: Integrations with <a href="https://blockworks.co/tag/paypal">PayPal</a>, <a href="https://blockworks.co/tag/venmo">Venmo</a>, and top brokerages are on deck. For validators focused on growing USDH volume beyond HL’s internal ecosystem, that might be the more scalable long-term play.



Ethena’s <a href="https://mirror.xyz/0xF99d0E4E3435cc9C9868D1C6274DfaB3e2721341/vG9tVz8p6Da6vX8CiZ30A0CYM3wIiWlIBX6Zlj0qhQ8">proposal</a> also made waves. While not currently a frontrunner, it introduced several novel elements: a USDtb/BUIDL backing structure, ecosystem-wide basis trade infrastructure, and a plan to finance USDC migration with direct incentives. And it made clear that Ethena would natively mint on HyperEVM and even help launch Hyperliquid’s equities markets. If validator sentiment begins to prioritize aggressive external growth over internal alignment, Ethena could re-enter contention.



The one lingering concern is the <a href="https://blockworks.co/news/visa-bridge-card-stablecoin-adoption-latin-america">Bridge</a> tie-up. Some in the community have raised the alarm about relying on a Stripe subsidiary to manage mint and redemption infrastructure, especially as it now <a href="https://blockworks.co/news/tempo-stripe-paradigm-planned-l1">plans to launch its own blockchain</a>.



Native insists that their architecture is designed to be issuer-agnostic, and that swap-in/out functionality can be upgraded over time. Whether that satisfies sovereignty-minded delegates remains to be seen.



All eyes now turn to validator declarations expected Thursday. By then final proposal tweaks will be locked, and the governance machine will start to move toward a decision. It’s worth remembering: This vote is only about the ticker. Quote assets are likely to become permissionless under upcoming governance changes. But in a platform where monetary base, trading flows, and incentive design are so tightly coupled, the USDH decision will be about much more than branding.



At stake is the stablecoin standard that will define not only what many users trade on Hyperliquid, but who benefits from those flows. Native’s pitch is clear and long-standing, and so far the market is buying it. But there’s still time for one of the established players to make the case that long-term scale matters more than early integration and good vibes.



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Native Markets leads USDH race as validators signal early support

Donovan Choy

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



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Tens of thousands of tokens are launched on Solana daily.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="937" height="497" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-72.png" alt="" class="wp-image-107513" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-72.png?w=937 937w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-72.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-72.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-72.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-72.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-72.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-72.png?w=80 80w" sizes="auto, (max-width: 937px) 100vw, 937px" /></figure>



Every single one of those tokens needs a way to facilitate price discovery, and the standard way today is the bonding curve, popularized by Pump.



The problems of bonding curves are well known. Though Solana doesn’t have a public mempool, transactions are observable in flight via RPC queues and bundle relays. This creates a race environment wherein sniper bots can frontrun trades by pre-positioning ahead of organic demand, or sandwich the trades by bidding higher priority fees.



Launching a token is easy in theory, but tricky in practice. Of late, Solana teams are coming up with a slew of token launch solutions to address these challenges.



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



Metaplex is a team popularly known for providing the key token infrastructure on Solana. In July, the team diversified from this core product offering and launched the “Genesis” ICO launch platform.



To date, three projects have executed their token generation event with Genesis: DeFiTuna, Collector’s Crypt and Portals. Later today marks its fourth TGE launch with <a href="https://x.com/exotic_markets_/status/1962547894181081439">Exotic Markets</a>, a relatively new DeFi options protocol that went live on July 30.



Exotic is launching its token with Metaplex’s new “<a href="https://x.com/metaplex/status/1965097829049008601">Uniform Price Auctions</a>” feature, meant to facilitate organic price discovery while deterring frontrunning and sniping.



The auctions work as such: Users place bids for how many tokens they’d like to buy and at what price. All bidders eventually pay at the same clearing price, defined as the lowest bidding price that fully sells the supply.



Because bids are evaluated only at the end of the auction, there is no benefit for a sniper to jump ahead with a higher priority fee — a sniper that submits a high last-minute bid shoots themselves in the foot.



“Everyone gets the same price. There’s no frontrunning, no sniping, cabals and bundling. We’re solving for the trust and transparency issues surrounding token launches by bringing everything onchain so there’s no inside group with an edge and the community gets a chance to participate at the earliest stages,” Metaplex co-founder Stephen Hess told me.



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



Another player tackling fairer token launches is the <a href="https://blockworks.co/news/heaven-memecoin-launchpad-buys-back-everything">Heaven memecoin launchpad</a>.&nbsp;



Heaven pairs its launchpad with a proprietary AMM DEX, listing tokens exclusively from the first second of trading.&nbsp;



This vertical integration avoids the standard memecoin bonding curve and lets the team enforce anti-MEV protections during price discovery. At launch, the DEX says it applies a linearly decaying, six-second “sniper tax” to deter bots and last-second snipes.



<h2 class="wp-block-heading">Ellipsis&#8217; Gavel</h2>



Like Heaven, Ellipsis’ <a href="https://www.ellipsislabs.xyz/blog-posts/introducing-gavel">Gavel</a> follows a similar vertical integrated design by tying together the product of token distribution and a sandwich-resistant AMM. When tokens end their public sale, funds raised are migrated to Ellipsis’ AMM at the same opening price as the sale’s close to deter any post-sale sniping or arbitrage opportunities.



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



Meteora lets teams launch tokens on pools using “<a href="https://docs.meteora.ag/">anti-sniper</a>” features like decaying fees (Fee Scheduler), size-based surcharges (Rate Limiter), and gated early-access deposits.



These features work together to penalize early bot bursts and outsized purchases, thereby reducing extractable alpha for snipers. It slows down the first blocks of price discovery and lets organic demand get in their buys before public pools open.



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



Finally, there is <a href="https://blockworks.co/news/orca-solana-token-launchpad?utm_source=chatgpt.com">Orca’s Wavebreak</a> memecoin launchpad. Wavebreak retains a bonding curve model but adds several safeguards. It employs an “anti-bot” system that includes an onchain CAPTCHA system to slow bots in the curve phase.&nbsp;



While this design seems to improve fair access in the bonding phase for non-bot participants, it does not explicitly exclude automated bots and snipers.



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How Solana is cutting MEV snipers out of token launches

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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The past three days on the timeline have been strictly focused on the bid for USDH, a ticker on Hyperliquid.



As background, the USDH ticker, currently reserved, is set to be released through an onchain validator vote with the goal of launching a Hyperliquid-first and compliant USD stablecoin. Validators will vote on which team may purchase and deploy the ticker, using the same onchain mechanism as delisting votes. Teams interested must submit proposals in the USDH Discord forum, including their address, and the approved team will still need to participate in the spot deploy gas auction.



In the longer term, spot quote assets will become permissionless, starting with testnet, with staking and slashing requirements to be announced. The USDH ticker does not carry special privileges and will exist alongside multiple stablecoins within the Hyperliquid ecosystem. Voting for the ticker is based on stake, with proposals due by Sept. 10 at 10:00 UTC, validator intent to be declared by Sept. 11 at 10:00 UTC, and the final vote to occur on Sept. 14 between 10:00-11:00 UTC.&nbsp;



As of today, nine validators have announced who they intend to vote for, with six voting for Native Markets, two for Paxos and one for Ethena. The remaining 10 validators, who hold approximately 58% of stake, are unassigned (86.76M HYPE). Native Markets is currently in the lead with 30.8% of voting share, while Ethena and Paxos combine for 11.6%.&nbsp;



In terms of benefits for Hyperliquid and HYPE, there are a few things to consider. Firstly, it is interesting to see that incumbents from large teams (Ethena, Paxos etc.) are battling out to gain dominance within Hyperliquid by giving up a large percentage of their revenue.&nbsp;



Context regarding the three most relevant proposals:



<ul class="wp-block-list">
<li>Paxos: Milestone-based. Starts at 20% AF when &lt;$1 billion, rising to 70% at >$5 billion, capped at 70%.</li>



<li>Ethena: 95% passthrough to AF/HYPE, KPI could drop to 90% with 5% to an Ethena entity.</li>



<li>Native Markets: 50% of reserve yield streamed to AF, remaining 50% for growth across HIP-3, builder codes and DeFi frontends.</li>
</ul>



<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/2025/09/image-71.png?w=1024&amp;h=1024" alt="" class="wp-image-107507" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-71.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-71.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-71.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-71.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-71.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-71.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-71.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-71.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/09/image-71.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



For Ethena, the lowest contribution to the Assistance Fund would still be more than $40 million per year, even in the conservative KPI scenario. At full scale, its contribution rises to nearly $250 million, making it the strongest provider of direct economic value among the three. For Paxos, the lowest level of contribution is around $9 million per year at small scale, while its highest contribution tops out at roughly $183 million once it reaches the largest market share bracket. Native Markets, with a fixed 50% allocation, is currently the leader based on declared intent. Its range runs from about $23 million per year at the low end to around $130 million at full capture.



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0xResearch Newsletter

USDH and the search for another AF

Cracked Labs launches BattleCodes: Turning crypto events into a sport

Binance and Franklin Templeton announced a strategic collaboration to develop new digital asset products that combine blockchain technology with traditional finance.



The initiative focuses on evaluating tokenization use cases by combining Binance’s global trading infrastructure with Franklin Templeton’s experience in regulated fund management. Franklin Templeton manages $1.6 trillion in assets and has developed tokenized money market funds through its Benji Investments Technology Platform. Binance remains the largest cryptocurrency exchange by trading volume.



Executives from both firms said the collaboration is intended to increase efficiency in capital markets by lowering settlement costs and improving collateral management.



“We see blockchain not as a threat to legacy systems, but as an opportunity to reimagine them. By working with Binance, we can harness tokenization to bring institutional-grade solutions like our Benji Technology Platform to a wider set of investors and help bridge the worlds of traditional and decentralized finance,” said Sandy Kaul, head of innovation at Franklin Templeton.&nbsp;



Roger Bayston, who oversees digital assets, added it could “take tokenization from concept to practice for clients to achieve efficiencies in settlement, collateral management, and portfolio construction at scale.”



Binance’s Catherine Chen said the exchange’s goal “furthers our commitment to bridge crypto with traditional capital markets and open up greater possibilities.”



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



This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co">Jeffrey Albus</a>&nbsp;before publication.



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Binance and Franklin Templeton partner on tokenization

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
&nbsp;&#8220;Nobody goes to the store to buy a Swiss Army knife. It’s something you get for Christmas.”



— Jensen Huang
</blockquote>



Great businesses start as scalpels, not Swiss Army knives.



By choosing one thing to do, companies are more likely to get great at that one thing — and customers are more likely to know that’s the thing they do.



Here, for example, is Yahoo’s homepage, circa 1999: <img loading="lazy" decoding="async" src="blob:https://cms.blockworks.co/0f9c6e90-a5b4-4f0d-aa85-6c8ee5d5aeeb" width="624" height="271">



There’s a lot going on there — search, auctions, news, email, instant messaging — and Yahoo wasn’t particularly good at any of it.



Here’s Google’s homepage, circa 1999:



<img loading="lazy" decoding="async" width="624" height="219" src="blob:https://cms.blockworks.co/2162e9ff-dbf4-4579-8dfb-a35589f0f55c">



It’s easy to see why that proved to be the winner: the single-purpose website made it clear to users what Google does, and that helped Google get very good at doing it.



The fact that lowercase “google” has since become a verb and Yahoo doesn’t do anything more important than host my fantasy baseball league is evidence that being great at one thing generally beats being average at many things.



Will that apply to blockchains, too?



Bitcoin is a single-purpose chain — all it does is send bitcoin — and its simplicity might be the main reason it&#8217;s been such a success.



But Ethereum and Solana are also general-purpose chains and they, too, have had some success.&nbsp;



And neither approach seems to be encroaching on the other: Bitcoin has so far failed at DeFi and Ethereum has so far failed to become money.



So maybe both approaches can peacefully co-exist?



It might be too early to answer, because general-purpose chains will soon have a new, single-minded competitor.



Last week, Stripe and Paradigm formally announced the development of a stablecoin-focused blockchain, <a href="https://blockworks.co/news/tempo-stripe-paradigm-planned-l1">Tempo</a>, that feels like an instant favorite to win the emerging crypto payments business.



Tempo will be purpose-built for stablecoins, offering predictable fees (paid not in a native token, but stables), near-instant finality, “opt-in” privacy and compliance functionality, “lanes” exclusively for payments, and high throughput — all things that general-purpose chains struggle with.



Matt Huang, who leads the development of Tempo, <a href="https://x.com/matthuang/status/1964123449045242041">suggests</a> that being more narrowly focused will allow the chain to develop faster:&nbsp; “We feel urgency to build for the demand that’s coming and want fewer dependencies, including on the rate of Ethereum L1 progress.”



Calling out Ethereum like that might suggest that Tempo will have ambitions beyond payments.



Perhaps tellingly, Huang says that, while Tempo will start with a permissioned validator set, the chain will be “permissionless” from day 1 and will “decentralize further from there.”



A fully decentralized and permissionless blockchain that excels at payments sounds a lot like what you’d want a general-purpose blockchain to be.



Could Tempo pose a threat to Ethereum and Solana not just in payments, but in everything?



The Google example suggests it’s possible: they beat Yahoo at search, then expanded horizontally into email, cloud computing, smartphones, self-driving cars — becoming even more of a Swiss Army knife than Yahoo was in 1999.



There are several such examples: Microsoft was just BASIC, Amazon was just books, Apple was just PCs, Southwest Airlines was just Texas.



But there are counter-examples, too.



To name just one, single-purpose calculators used to be better for doing quick math than general-purpose computers, but who owns one now?



You’re more likely to have a Swiss Army knife in a drawer somewhere than a Texas Instruments calculator.&nbsp;



So, if general-purpose computers could make calculators unnecessary, maybe general-purpose blockchains can eventually make payments blockchains unnecessary, too.



Max Resnick is confident they will: “Decentralized blockchains,” he <a href="https://x.com/MaxResnick1/status/1964072214568784069">predicts</a>,&nbsp; “will be superior to centralized ones in every way” — including speed, scale, reliability, and even regulatory compliance.



If so, Tempo may have fired the starting gun in a race to make general-purpose chains super fast before a super fast, single-purpose chain can be decentralized.



This might be a race with no finish line: it might be impossible to be both decentralized and optimized for payments.



Mert Mumtaz, for example, <a href="https://x.com/tbpn/status/1964079154795860310">thinks</a> Tempo won’t even be a blockchain, let alone a general-purpose one: “How can you possibly have something that’s a payments-only chain?”



For Mumtaz, blockchains are decentralized by definition — and a decentralized blockchain is by definition general-purpose.



Tempo says they will progress toward decentralization.&nbsp;



But Mumtaz thinks that will inevitably flood the chain with frivolous things like Fartcoin, clogging things up and degrading the chain’s performance in payments.



There are only two ways to be a payments chain, he says.



One is to make the chain “not Turing complete,” like Bitcoin, “where you can’t do anything other than send money” — and the other is to “permission the chain.”



If so, Ethereum and Solana can rest easy that they’re not going to become Yahoo to Tempo’s Google.



But what if Tempo gets all the users without decentralizing?



If Tempo really is faster, cheaper, and where all the stablecoins will end up, users might go there not just for payments, but for everything — without regard to whether it meets Mumtaz’s definition of a blockchain.



So this might turn into more of a test than a race. Is decentralization the kind of thing people are willing to pay for?



Or the kind of thing you only get for Christmas?



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