ExclusiveCoin

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">
“Trust is one of the greatest economic forces on Earth.”



— Charlie Munger
</blockquote>



<h2 class="wp-block-heading">What money will the world trust next?</h2>



The Spanish dollar (a.k.a. pieces of eight, a.k.a. Spanish peso) was the first global currency.



From the 16th through 19th centuries, silver coins minted by the Spanish government circulated on all six of the world’s inhabited continents, and were legal tender on five of them (parts of Europe, Africa, Asia, and both Americas).



In many of those places, they were so welcome you could even cut them into halves, quarters, or eighths and spend the pieces as change (hence the name “pieces of eight” for a whole coin).



The Spanish dollar wasn’t quite a global reserve currency, but that’s only because central banks didn’t yet hold reserves.



But it served as a store-of-value reserve for private savers around the world — and that makes today’s US dollar the institutionalized, fiat-era successor of the Spanish dollar.&nbsp;



Both global currencies served the same function: to reduce friction in international trade by providing a near-universal medium of exchange, unit of account, and store of value.



Today’s global reserve currency pays homage to its predecessor in both name and symbol — the &#8220;$&#8221; dollar sign is thought to have evolved from the mark for the Spanish currency (the dollar sign is still also called “the peso sign” for that reason).



But the debt goes deeper.



The first US dollar, established as the basic currency unit of the United States in 1792, was a silver coin deliberately designed to have roughly the same metallic content as a Spanish dollar: ~24 grams of pure silver (plus about two grams of copper to make it more durable).



The US government did not mint nearly enough of them to go around, however, so Spanish dollars continued to circulate widely alongside US dollars — the two dollars were treated as interchangeable in daily transactions for many years, with the Spanish dollar even remaining legal currency in the US until 1857.



That was natural enough, since both dollars had the same metallic content.



But the lesson of the Spanish dollar is that it wasn’t just about the metal.



Instead, the Spanish dollar became the first world currency because people trusted its issuer.



Dozens of countries issued silver coins in the 17th century, but the Spanish dollar found favor because it came from highly standardized royal mints in the Spanish colonies — and because it was backed by a powerful empire that enforced quality control and valued the integrity of its currency.



People didn’t weigh every Spanish dollar they received, for example, or inspect its purity — if it came from a Spanish mint, they trusted that it had both the quantity and the quality of silver that the Spanish government said it did.



After Latin American countries won independence, however, Spain lost control of the silver mines and nearby minting facilities that had supplied the world with Spanish currency.



The newly independent countries of Latin America continued to mint nearly identical silver dollars — but political instability led to inconsistent minting, intentional debasement, and even counterfeiting at poorly supervised provincial mints.



Partly as a result, merchants and bankers around the world began favoring money from more reliable issuers like Britain and the US — not because they had more silver, but because they had more trust.



There’s a lesson in that.&nbsp;



The British pound sterling became the next global currency, backed by its convertibility into gold and also the trust in British institutions — you couldn&#8217;t melt down a pound note, but people trusted the Bank of England to exchange it for about 7.3 grams of gold on demand.



But global currencies came to be valued for more than their metal — trust in a government’s credit, a central bank’s stability, and the liquidity of its financial markets soon became equally as important.



In the 19th century, the British pound sterling — backed by gold, sensible British governance, and London’s advanced banking system — overtook the Spanish dollar as the preferred medium for large-scale finance and reserves.



The next global currency, of course, did away with the metallic backing altogether: the US dollar is backed only by our faith in the Federal Reserve, the US government, and US financial markets.



But maybe not for long.



The US still has the world’s largest economy, deepest financial markets, and strongest property rights — but erratic government policy and heated rhetoric is making people question how much they should trust the US dollar.&nbsp;



So much so that many are rethinking where to place their trust next.



Ken Rogoff thinks it could be China’s renminbi.



“There are a lot of countries,” he told the <a href="https://www.youtube.com/watch?v=6ZiZpi6AEko">Monetary Matters podcast</a>, that “don&#8217;t trust the United States. They would just rather deal with China. They understand China&#8217;s business, they know what China wants … They&#8217;d rather China had [their information] than Donald Trump.”&nbsp;



The consequence, he says, is that you might soon find yourself in “some African city” that used to love US dollars and “you&#8217;ll pull out your dollars and they’ll go, ‘What are those? Where are the renminbi?’”



That will be quite a change.



Others think the change will be even bigger — that the next global currency won’t be issued by a government at all: Bitcoin is a “trustless” form of money that many believe will transcend the trust issues that undid the Spanish dollar and British pound, and now bedevil the US dollar.



It would make for a natural evolution: Spain was trusted to mint silver money &gt; the US was trusted to issue fiat money &gt; bitcoin will be trusted to create magic internet money.



It would still have to be trusted, though, because “blockchain applications are never fully trustless,” as Vitalik once commented in a <a href="https://link.mail.beehiiv.com/ss/c/u001.5yMUnFGBFiy9jJgiqJ8glTwYwDK1WrHmNhjzb73bFcyN3Wug4KKcSaB61qXlbbgU673lKFNaG8UyC9r-cmdBqxpVQmZIp4VJ36wmCQea6ZUVbbGm21Wc3P23kznR7qdZ-YFKglKGhzmF-gJFnPxj6G8Jjh1oTyhPZHuHcCTfr9PLQ1xjfkBV9HNPIV7IwBlfV503InqTPw0_fApLYjyeji9B2BrDKcfDsOLOzMH6C2_Pum3aG3FOy-hq0Vom8hxACgn15jBK2vVeFJzCyC4udw/4b0/VM7QRPOfTCSvaniBjUngSg/h2/h001.WV4G0zgA_PACYHj6wO3r1-jWSHmWkvRuwjcogx_6EL8">blog post</a>.&nbsp;



Bitcoin’s $2 trillion market cap is evidence that it’s already trusted by an astonishing number of people — but I’m not sure it will ever be trusted by the much greater numbers required to make it a global reserve currency.



Because history shows that people trust governments to issue their money.



But it also shows that the US dollar wasn’t the first global currency — and probably won’t be the last, either.



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



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



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



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

An uneasy world may soon look for its next ‘global money’

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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Starting in June of 2022, Solana Spaces operated a brick and mortar store for Solana-branded merchandise and user onboarding in New York’s Hudson Yards development. The venture’s biggest financial backer then was FTX, and it (along with a second store in Miami) <a href="https://decrypt.co/121863/solana-spaces-closing-stores-in-nyc-and-miami">folded</a> in early 2023 following the exchange’s implosion.



This week at Solana’s Accelerate conference, Solana Spaces returned as a pop-up store with a new core team. The project doesn’t have FTX backing, but the reboot began with a very “2025” source of funding — a memecoin.&nbsp;



Solana Spaces season 2 has more limited ambitions than the original, running pop-up stores for crypto merchandise alongside crypto conferences. For the faithful who descended on the New York pop-up, there was a general sense of pleasant surprise that a memecoin team pulled off a brick-and-mortar store activation.



The lower east side pop-up was bustling with crypto natives on Tuesday morning. Merch was on sale from a variety of Solana-based projects and NFT collections. I purchased a mug and checked out by paying with stablecoins from the Phantom app on my iPhone.&nbsp;



When another customer came up to check out, Amol Gharte — a Solana Spaces core team member who was working the register — didn’t have the item’s price handy and joked that he could make one up.



“It’s all made up anyway,” the customer responded, and Gharte and I shrugged and nodded our heads at the vague declaration. A second customer stepped up to pay but somewhat sheepishly pulled out a credit card, explaining that he wanted to get credit card points from the purchase.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeguOGCVPG75tSFwgJsfh0IiJacxE54B_7EJLZ12By9nBeX9kIadmIP3vYLi4lsT4RQ7Icv3BFgwjDCLp28-Xds-lF-A8bScXcYVwA9tl9U-H1hTGgRqS-fJZIOBZ-F9mQKJOHP?key=-IwutMucqNNqfC1Y2f6sRg" alt=""/></figure>



A fan of the old Hudson Yards store launched a memecoin called STORE in January which briefly eclipsed $12 million in market capitalization, according to DEX Screener data. Some early buyers of the token — which is now closer to $3 million in market cap — came together to try and revive Solana Spaces, Gharte told me. He added that the Solana Spaces team hasn’t sold its tokens and has self-imposed a vesting period.



The project is partly self-funded but also has inked sponsorship deals and received grant funding from the Solana Foundation, Gharte said.



The vision for Solana Spaces is to continue running pop-ups during crypto conferences, where Spaces gives crypto teams a place to sell their merchandise, and Solana Spaces collects 20% of the profit, Gharte said. He estimated 70% of sales volume is paid with credit cards compared to 30% in stablecoins.



I found Vibhu Norby, who was founder and CEO of the original Solana Spaces before building a Jupiter-acquired NFT app named DRiP, steaming a cloth banner in the back of the store. He told me he was “skeptical” when he saw a memecoin community crop up around reviving his deprecated business, but he gave the team some initial capital, support and introductions, and he hoped they could figure it out.



Norby told me he was initially drawn to starting Solana Spaces by a belief that blockchain communities can form network states, a Balaji Srinivasan-coined term for digital communities forming their own real-world communities. Norby added that in crypto, traditional identity markers tend to be replaced by things like profile pictures or merchandise.&nbsp;



“To me, there is a higher meaning to it. It’s not just a merch shop. Here you come and you find your home, and you walk away with a piece of that,” Norby said.



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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/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
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conference

Solana Spaces comes back to life in NYC

Casey Wagner

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



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President Trump today made a visit to Capitol Hill for the House GOP Conference Meeting in hopes of convincing Republican holdouts to support his “big, beautiful” tax bill.&nbsp;



Despite ongoing fighting within the GOP, Trump told reporters before the meeting that the party is more unified than ever.



“This is really just a pep talk,” he said this morning. “We have a very unified House and we have a very unified Senate.”&nbsp;



Trump added that Republicans who don’t get on board could face an uphill battle in midterm elections.&nbsp;



The bill seeks to extend Trump 1.0-era tax cuts, increase defense and border security spending, and cut Medicaid and food stamp programs, among other things. It’s really the bulk of Trump’s agenda wrapped into a single legislative wrapper.&nbsp;



The proposed legislation also covers state and local tax (SALT) deductions. The current draft raises the cap on deductions to $30,000 for individuals earning less than $400,000. It’s a point some Republicans have been concerned about, but negotiations are apparently underway.&nbsp;



The House Rules Committee is slated to vote on an updated version of the bill tomorrow morning. The new draft cuts federal funding to states providing Medicaid and other government coverage to immigrant children and pregnant people, according to the <a href="https://www.washingtonpost.com/politics/2025/05/20/trump-presidency-news/">Washington Post</a>.&nbsp;



Trump has said he hopes to get the bill over the finish line by Memorial Day, so we’ll be keeping an eye out. Expect market volatility to pick up should further signs of disagreements within the party surface.



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congress

Trump heads to House to push “big, beautiful” tax bill

Ben Strack

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



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May has brought more crypto M&amp;A, long-awaited US public listings, a milestone S&amp;P 500 entrance and a bitcoin price surge. And we’re only two-thirds through the month.



In this environment, <a href="https://blockworks.co/news/vaneck-crypto-equity-etf-entrant">crypto equity diversification</a> is the name of the game. That’s according to Matthew Sigel, who is managing VanEck’s new Onchain Economy ETF (NODE).



“Thanks to tailwinds from the bitcoin price and the financial deregulation [from the] Trump administration and SEC, equity capital markets are wide open right now for anything crypto related,” Sigel told me. “That includes SPACs, IPOs and M&amp;A. Expect much more capital formation in the space over the next month if bitcoin holds up.”



Though BTC has not yet reached the peak of ~$109,000 it hit in January, its level above $106,000 was the asset’s highest weekly close. BTC hovered around $105,800 at 2:30 p.m. ET.&nbsp;



All’s to say, BTC is holding up fine for now. So too is Coinbase stock (up +2% over the past five days), despite news of a security exploit and an SEC investigation — countering more bullish updates of its <a href="https://blockworks.co/news/coinbase-deribit-deal-focus-derivatives">pending Deribit acquisition</a> and inclusion in the S&amp;P 500.&nbsp;



Various Wall Street analysts called COIN’s initial dip on the breach news a tad overblown, with Oppenheimer and Cantor Fitzgerald reaffirming buy ratings. An IMD report, which measures companies’ <a href="https://www.imd.org/news/future-readiness/future-readiness-indicator-2025/">readiness</a> for long-term trends, ranked Coinbase fifth in financial services — behind JPMorgan Chase and ahead of insurance giant Progressive.



The crypto exchange’s leapfrogging of financial players like HSBC and UBS is “because tokenized asset custody counts toward both growth expectations and innovation yield, two factors where many universal banks lag,” the report notes.



On the diversification point, Sigel is putting investor money where his mouth is. NODE invested in about 70 securities out of the gate — above its guidance of 30-60 and with a bunch of ~1% positions.



After VanEck’s spot bitcoin ETF, top holdings include COIN, Robinhood (just acquired Canada-based WonderFi), Galaxy Digital (<a href="https://blockworks.co/news/galaxy-defi-technologies-nasdaq-us-listings">listed on the Nasdaq</a> last week), Mercado Libre and Strategy.



Speaking of MSTR, the Michael Saylor-led firm bought 7,390 more bitcoin last week (and now holds 576,230 BTC in total). Other companies continue doing the same.&nbsp;



Metaplanet has accelerated its bitcoin buys, revealing its latest purchase of 1,004 BTC on Monday. The company has nearly doubled its BTC stack over the last seven weeks (from 4,046 on March 31 to 7,800 BTC).



Nasdaq-listed DigiAsia indicated in a Monday news release that its board of directors approved a plan to create a bitcoin treasury reserve. It’s seeking a $100 million capital raise to build a BTC position and execute “crypto-based yield strategies to optimize treasury performance.”



Many of the newly-forming “bitcoin balance sheet companies” are too small for institutional equity investors and will need to do follow-on deals to grow, Sigel said.&nbsp;



“It will be interesting to see how many of these deals can get done if bitcoin takes a pause for any reason,” he added. “What a super high volatility part of the market.”



As for bitcoin’s outlook, YouHodler markets chief Ruslan Lienkha noted that BTC’s latest price action — holding above $100,000 for 11 days and counting — “appears to be a consolidation phase, marked by accumulation, potentially setting the stage for another leg higher that could lead to a new all-time high.”



Bitcoin ETF <a href="https://farside.co.uk/btc/">inflows</a> remain strong, with $667 million entering the US products yesterday. Lienkha views the $90k-$110k as “a psychologically and technically important price corridor” that BTC would be supported at, even following a retreat from a possible new peak.



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Equity capital markets ‘wide open’ for crypto as BTC hits $106k

Donovan Choy

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/0xresearch" target="_blank" rel="noreferrer noopener">subscribe</a>.



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How should blockchains be valued?



In crypto’s very short history, there have been many attempts to definitively answer that question.



One <a href="https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/Bitcoin-Ringing-The-Bell-For-A-New-Asset-Class.pdf">early approach</a> drew from monetarist economic theory, applying the MV = PQ equation. That idea has largely fallen out of fashion as hundreds of chains have come onto the market with their own “money.”



Then there was the Bitcoiners’ stock-to-flow ratio, based on the assumption that scarcity — measured by the ratio of existing supply to annual issuance — directly drives value. This framework too has lost credibility due to Bitcoin’s volatility and the model’s repeated breakdowns post-2021.&nbsp;



When smart contract platforms blew up in 2020, some investors turned to total value locked (TVL) to market cap ratios, a rough analog to price-to-book in traditional finance. But TVL was too easily gamed, offering little in the way of reliable fundamentals.



Staking yields on proof-of-stake chains introduced a new narrative: L1 tokens could be valued like yield-bearing assets using discounted cash flow (DCF) analysis. While attractive in theory, this framework, too, cannot account for the sky-high valuations of L1 tokens.



As far as I can tell, most of these valuation theories have pretty much fallen out of favor with professional crypto investors today.



<h2 class="wp-block-heading">REV (real economic value)</h2>



Today, a growing class of investors are grappling onto REV (real economic value) to explain the value of blockchains.



What is REV?



REV is the total economic demand to transact on a given L1.&nbsp;



REV = Transaction fees + maximal-extractable-value (MEV) tips



Or <a href="https://www.blockworksresearch.com">Blockworks Research</a>’s technical definition:&nbsp;



“Network REV (Real Economic Value) is a standardized metric that tracks blockchain value accrual generated by user activity. REV consists of both in-protocol transaction fees and out-of-protocol tips that users pay for transaction execution, so it measures the monetary demand to transact onchain.”



REV notably does not include “issuance,” the inflationary emissions with which every blockchain pays its validators.



(That metric is <a href="https://dba.xyz/l1-l2-token-value-capture/">TEV</a> i.e. “total economic value.”)



As such, REV rejects the <a href="https://blockworks-research.beehiiv.com/p/3-blockchain-metrics-that-suck">thinking</a> that blockchains should be treated as traditional businesses with formal “revenue and cost” income statements.



<h2 class="wp-block-heading">REV today</h2>



The below chart is what REV looks like today for the major chains. Ethereum dominated REV in 2020-2021 (remember $100 gas fees?), but Solana is in the lead today.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd_rGG94_dsGmWat7pDSXrALdwCM15a8rcAGCihFql6LZ8wJlUJ5Q-5lq4hswN3mtb7cZkLJ9EIIWNoGqWkO4bmXJ9o-Ufm9V52a27oHtIcAL6zHV9owPGW0OBO8SEH40oZ6IGq?key=q8A3jW_-tutcDD5c855TEw" alt=""/></figure>



The core idea behind REV is that investors can apply a price ratio to it, enabling a comparable apples-to-apples price multiple across blockchains for forward-looking earnings.



Here’s what it looks like in practice when applied to the all-time-highs fully diluted valuations of the major L1 tokens:&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXepF1YGNehUJgfMxeCDtczvtjAg84lPDbG-mGebYqdPY8lozRPEwbKjfclgR8gNz7dh802NP4Z7ZISvfdOS7oioQZZKQrvM-MfimC_4ua20VAAqAgrS7t51s1PI0FOqroP-NZy99g?key=q8A3jW_-tutcDD5c855TEw" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://x.com/0xBreadguy/status/1923792248099176922">0xBreadGuy</a></figcaption></figure>



Based on the above chart, REV partially explains the valuations of chains like Ethereum and Solana, whose REV-to-ATH multiples of ~26 remain within a plausible range relative to fees paid by users onchain.



However, newer chains like Aptos with a 6,368.8x multiple, likely driven by speculative momentum, still seemingly defies fundamental valuation.



I asked Blockworks Research’s <a href="https://x.com/smyyguy">Dan Smith</a> about this.&nbsp;



“Aptos is a two-year-old startup with a similar TAM to every other chain, so even if investors attribute a 1% of winning its vertical, its valuation on a probability-adjusted basis remains high. This is similar to suggesting a&nbsp; pre-revenue startup cannot have a valuation since there is no revenue. It’s all about your future REV,” he said.



<h2 class="wp-block-heading">REV criticisms</h2>



REV is not without its critics.&nbsp;



Criticisms have tended to fixate on the “MEV” component of REV, questioning the assumption that blockchains have an equal ability to capture MEV.



As DefiLlama’s 0xngmi points out, blockchains differ in their protocol architectures and transaction ordering policies, which means MEV is not captured similarly.



<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">imo the issue with REV (chain fees + mev bribes) as a metric is when it&#39;s used to compare very diff chains: &#8211; FCFS rollups have no MEV bribes &#8211; Ethereum has widespread usage of MEV-protected RPCs and swaps (cowswap, 1inch fusion&#8230;) &#8211; Solana has bribes + low MEV protection So if…&mdash; 0xngmi (@0xngmi) <a href="https://twitter.com/0xngmi/status/1891211415769231784?ref_src=twsrc%5Etfw">February 16, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



For example, <a href="https://blockworks.co/tag/arbitrum">Arbitrum</a> ordered its transactions on a first-come-first-serve (FCFS) basis up until a month ago, when a market-ordering mechanism was introduced with <a href="https://blockworks.co/news/arbitrum-timeboost-live-dao-revenue">Timeboost</a>. Under the old FCFS policy, Arbitrum’s REV would be lower than in a post-Timeboost era. From a REV perspective, Arbitrum was “leaving money on the table.”



Secondly, REV fails to explain bitcoin’s $2.1 trillion valuation, as Block Analitica’s monetsupply points out.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeSwq7hUngajPNfGqoG9FECncpF9_OsB48tJ2-_TX5vk1edIgwamQdMOYZ1Is34Kn_mu_2aDSFEozXFh-I4itGRVURsI5xpss3CsTnXNvv8-CoFF5UZ-LyYHpvvBKvkiP8ar1TK?key=q8A3jW_-tutcDD5c855TEw" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://x.com/MonetSupply/status/1923898388140966113">X</a></figcaption></figure>



The all-time high price to REV multiple for bitcoin would be a staggeringly high 10,096 (annualizing bitcoin&#8217;s Q1 2025 REV of $208 million), far above the same for SOL or ETH at ~26.



Paradigm’s Matt Huang, however, sees this as an exception for BTC, mainly because bitcoin never wanted to be a smart contract platform and is largely seen as a monetary store-of-value asset today.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeZSg9vfPtXwmgVQYGjubGX7fCzWmjAdyiu33fN25TnHOI8-JGq4uInST2Rzpt2KR6yD3rQEVazKc86amDnI760ai6zuANWszkdDAfVopvm1mnZaduWjhW5XXnxjQmk-H4iOaJK2w?key=q8A3jW_-tutcDD5c855TEw" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://x.com/matthuang/status/1923785692553138338">X</a></figcaption></figure>



What I think <a href="https://x.com/ryanberckmans/status/1924316558651789323">REV critics</a> have largely pushed back against is not the usefulness of REV as a metric per se, but a perceived overemphasis on REV as a way to value blockchains.



Blockworks Research’s Dan Smith <a href="https://x.com/smyyguy/status/1924444236239290756">acknowledges</a> that while chains should maximize for REV, that is not the same as optimizing for MEV extraction.



“The intent of REV is to track the amount of dollars paid for transaction execution, as that is not currently being done properly. For instance, Token Terminal or DefiLlama counts only the burn, which is objectively incorrect,” Smith said.



“It’s all about future REV, not today’s REV.”



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0xResearch Newsletter

Valuing blockchains: The great REV debate

Kate Irwin

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



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The foundation behind The Open Network (TON), which <a href="https://blockworks.co/news/ton-telegram-relationship">uses Telegram</a> but operates independently from it, has hired a new head of growth. Martin Masser is now trying to bring more awareness to the chain that saw a “tap-to-earn” run last year.



He told me in an interview that even in crypto circles, most know what Telegram is, but far fewer know about TON. Masser’s focused on expanding TON’s presence and awareness in the US and Europe. US residents can’t yet use TON Space (a self-custodial browser wallet inside Telegram), but Masser confirmed expanding TON Space to the US is part of the plan. That said, no live date for US access has yet been announced.



“I love the American market, especially. There’s so much that comes out of America, a lot of the narratives as well. We haven’t even had that to touch,” Masser said, adding: “I love going to America. There’s an energy. There’s a buzz, you know.”



Masser hopes that US builders will increasingly look to TON and Telegram as viable options for crypto projects like games, payments and remittance tools, DeFi miniapps, and other apps within the app that provide just about any service you could think of.&nbsp;



“My role as head of growth isn’t to give narratives. I don’t want to tell people you have to do stickers, you have to do gifts, you have to do DeFi, you have to do all of this stuff. I do see foundations try to do that, try and force this narrative,” Masser said.&nbsp;



“I love the fact, because people use Telegram, they have their ideas already, and then you’re giving them a lot more tools. I want to be there a) to support them, give them feedback, and also connect, because there’s lots of teams I’m already now connecting,” he added. “You can add so many more things.”



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crypto apps

TON Foundation’s new head of growth pushes for US expansion

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



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Axie Infinity and Sky Mavis cofounder Alexander Larsen is calling out Sui-powered game <a href="https://playseedgo.com/">Seed</a>, also known as Seed Go, alleging copyright infringement.&nbsp;



“This infringes on our Axie Infinity IP, and it’s not okay,” Larsen said in response to a tweet about the project.



He also tagged two Mysten Labs cofounders, plus Sui and Mysten Labs, asking them to address the issue “so we can all save money and time.”



A spokesperson for Sky Mavis separately confirmed to me that the company has informed the Sui team of the alleged infringement and is looking to resolve the issue outside of court.



<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">Imitation is the sincerest form of flattery that mediocrity can pay to greatness. That said, this infringes on our <a href="https://twitter.com/AxieInfinity?ref_src=twsrc%5Etfw">@AxieInfinity</a> IP, and it&#39;s not okay. <a href="https://twitter.com/EvanWeb3?ref_src=twsrc%5Etfw">@EvanWeb3</a> <a href="https://twitter.com/EmanAbio?ref_src=twsrc%5Etfw">@EmanAbio</a> <a href="https://twitter.com/SuiNetwork?ref_src=twsrc%5Etfw">@SuiNetwork</a> <a href="https://twitter.com/Mysten_Labs?ref_src=twsrc%5Etfw">@Mysten_Labs</a>, can you deal with this so we can all save money and time. <a href="https://t.co/to6ZQVOUw0">https://t.co/to6ZQVOUw0</a>&mdash; Psycheout.ron (@Psycheout86) <a href="https://twitter.com/Psycheout86/status/1924353059976597570?ref_src=twsrc%5Etfw">May 19, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Seed Go is tied to the “Seed Combinator” gaming platform and uses pastel blob-like “Seedmon” NFT characters that players can “breed.” It also has a token, SLOVE, and the SEED token. Seed Go is a Telegram mini-app.



Axie Infinity, which was launched back in 2018, made a name for itself as one of the earliest players in crypto gaming with its blob-like pastel “Axies,” NFT creatures that players can “breed” and use to battle each other. It has had a token called Smooth Love Potion token (SLP) since 2019, as well as the Axie Infinity (AXS) token.



Larsen recently <a href="https://x.com/Psycheout86/status/1924404688255918220">shared</a> that Axie Infinity has made over $1.3 billion in total revenue since its launch.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="962" height="461" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedvaxie.png" alt="" class="wp-image-102703" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedvaxie.png?w=962 962w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedvaxie.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedvaxie.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedvaxie.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedvaxie.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedvaxie.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedvaxie.png?w=80 80w" sizes="auto, (max-width: 962px) 100vw, 962px" /><figcaption class="wp-element-caption">Seed versus Axie Infinity</figcaption></figure>



Jeffrey “Jiho” Zirlin, another Ronin and Sky Mavis cofounder, <a href="https://x.com/Jihoz_Axie/status/1924456523003994592">called</a> Seed Go “Axie at home,” referencing the “<a href="https://knowyourmeme.com/memes/we-have-food-at-home">food at home</a>” memes. Such memes refer to an experience where a child asks their parents for takeout or to go to a restaurant. But the parents say there’s food at home — and that food is bland, gross, or just not as good as the preferred option. (The “at home” memes have spawned loads of spinoff references for years now, sometimes about movies or other forms of entertainment).



Seed Combinator, which appears to be run by SeedDAO, has the support of Sui developer Mysten Labs, according to a <a href="https://chainwire.org/2025/04/01/seed-opens-a-new-chapter-for-gamefi-narrative-after-hitting-top-1-nft-collection-on-sui/">press release</a> from the game project. Another <a href="https://chainwire.org/2025/01/10/seed-secures-investment-from-sui-foundation-to-build-a-100m-user-web3-gaming-ecosystem-on-sui/">press release</a> states that Seed was “inspired” by Pokemon Go and Axie Infinity, and notes that the Sui Foundation invested in its project.



<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" width="672" height="660" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedgo.png" alt="" class="wp-image-102704" style="width:629px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedgo.png?w=672 672w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedgo.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedgo.png?w=262 262w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedgo.png?w=266 266w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedgo.png?w=223 223w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedgo.png?w=80 80w" sizes="auto, (max-width: 672px) 100vw, 672px" /><figcaption class="wp-element-caption">A quick look at Seed Go via Telegram</figcaption></figure>



Reached for comment, the Sui Foundation distanced itself and Mysten Labs from the Seed project. A Sui Foundation spokesperson confirmed to me that a small investment was made in Seed, but did not specify an amount.&nbsp;



They noted that Mysten Labs was not involved in Seed’s game development, but it did help the game set up Sui smart contracts to connect the Telegram game to Sui.&nbsp;



The spokesperson emphasized that the Sui Foundation has very high standards for the projects it endorses, and it does not currently support Seed.&nbsp;&nbsp;



SeedDAO did not respond to my request for comment.



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Gaming

Sky Mavis alleges Seed Go infringes on Axie Infinity IP

David Canellis

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



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Bitcoin Pizza Day is meant to celebrate the first-ever bitcoin payment for a physical good: Papa John’s pizza in 2010.



But here’s a palate cleanser: Three days earlier, the founder of early MMORPG A Tale in the Desert adopted bitcoin for monthly subscriptions, apparently becoming the first commercial video game to do so.



<h2 class="wp-block-heading">On This Day</h2>



We’re cheating a little bit: Bitcoin MMO Day was actually yesterday, on May 19.



At least, that was when Andrew “teppy” Tepper first announced he had opened his Ancient Egypt-themed online roleplaying game to bitcoin.



“I run the MMO <a href="https://www.desert-nomad.com/">A Tale in the Desert</a>. We charge $13.95/month for the game, and pay about $0.74 in merchant and gateway fees,” teppy <a href="https://bitcointalk.org/index.php?topic=30.msg1159#msg1159">wrote</a> on Bitcointalk.



“We’ll now accept Bitcoins as an alternate payment method. The price per month is 2,000 BTC, which according to the exchange is a discount right now.”&nbsp;



He was right: Bitcoins traded for less than half a cent at the time, pricing one month worth of game time at only $9.20 if paid in BTC — a 33% discount.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe90FVRbG8cVb2RnfyVOHnfIfP57q7ngzZ61VNyVO4M5ignuZ3IOiEBs38mrVG65W21gXVeXuj5JjRObNRqZNicX8hZndhXHQfA8fo8QpM7Ij64-gqd6LxGN_NnWnrTPegyYCIj5A?key=tyl1-0TKTUZTU4F69tqd8A" alt=""/><figcaption class="wp-element-caption">A screenshot from A Tale in the Desert circa 2010 shows a new frontier, just as Bitcoin was.</figcaption></figure>



Tepper had initially hoped to match in-game usernames with messages attached to each bitcoin transaction. Laszlo Hayncez, the Bitcoin Pizza Guy, quickly pointed out that messages could only be included when sending coins to IP addresses, a feature that was eventually removed in 2012 due to security concerns.



“Hmm &#8211; is there any text field associated with an address based transaction? It does make accepting Bitcoins a bit more cumbersome. Would including such a text field as part of the protocol compromise anonymity somehow?” Tepper replied.



Tepper’s quest spawned a discussion about encrypted messaging via transaction outputs that roped in Satoshi himself: “Bitcoin uses EC-DSA, which can only do digital signing, not encryption. RSA can do both, but I didn&#8217;t use it because it&#8217;s an order of magnitude bigger and would have been impractical.”



Laszlo continued to help Tepper in engineering a secure solution to accept bitcoins, one that would generate a new bitcoin address for receiving each separate payment.



It’s unclear whether such a system was ever implemented, but the address Tepper originally supplied for subscriptions <a href="https://mempool.space/address/17CJvRrNdqSPN3Zs2dWfNY6GoCiMRfNG2T">received</a> an eye-watering 42,100 BTC across 27 separate transactions in two months, worth around $3,600 back then but $4.4 billion today.



Tepper went on to <a href="https://www.theguardian.com/technology/gamesblog/2013/jul/08/dragons-tale-mmorpg-gambling-bitcoin">launch</a> another MMORPG, Dragon’s Tale, three years later, based entirely around online gambling.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd097dHtPG3kqTDJn0obQxhZD9MVFFf2Py0Ih8WsCdfTHaqR-T9dc1Fzog0TgJKuWPYBeWeceeOz-FUkqRNuVe64N9be_O202c1whQR_6eWicmEw3gZO-o2um-lOA5Lhabjg8G7Uw?key=tyl1-0TKTUZTU4F69tqd8A" alt=""/><figcaption class="wp-element-caption">Y&#8217;all got any more of those soldier statues?</figcaption></figure>



Of course, Dragon’s Tale accepted bitcoins (and credit cards), and even featured <a href="https://bitcointalk.org/index.php?topic=1591143.msg15978685#msg15978685">faucet-like mini-games</a> that gave out free BTC as late as 2016, when coins were trading at nearly $600 apiece.



We’ve got a line out to Tepper to see if he’s up for a chat, but in the meantime…



Happy Bitcoin MMO Day!



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Bitcoin

Happy Bitcoin MMO Day to those who celebrate

Katherine Ross

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



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As crypto continues to shift to a more fundamental focus, it makes sense that new metrics will be introduced — such as net new assets (NNAs).&nbsp;



Blockworks Research <a href="https://app.blockworksresearch.com/research/consumer-crypto-and-net-new-assets">defines them</a> as “assets that didn’t previously exist and/or couldn’t exist without crypto rails.” And, to be fair, it’s not a new metric to track, according to my colleague Ryan Connor.



Connor penned a report on NNAs and how they play into the rise of consumer crypto, something I’m keenly interested in.



Basically, Connor makes the case that crypto is becoming more mainstream and rolling out the red carpet for the consumer apps. These now have the opportunity to build up their user bases and, hopefully, become profitable. UXs have improved, the SEC’s no longer out to get US-based crypto projects, and <a href="https://blockworks.co/tag/meme-coins">memecoins</a> have found a niche.&nbsp;



There are three examples for Connor: <a href="https://blockworks.co/tag/pump-fun">Pump[dot]fun</a>, <a href="https://blockworks.co/news/permissionless-capital-markets">Time[dot]fun</a> and Believe. Pump[dot]fun is perhaps the most obvious, being the go-to memecoin hub for everyone. For reference, the chart below shows the tokens launched.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf9p9R5rI8YS_oWlOdTMx92JTac-aNwPis9V-4NtgqLPVeFLGtxMdM-eiHkFDLHj6agiKG8m8MeSaeJAY5jDzlC7VH1Cb4nFBdsV362SaMSQ8raZRbcV211AOyrB-mKDfCGEdNnpw?key=0o_wAyLiexIHyqxofZECZQ" alt=""/></figure>



“Importantly, Pump[dot]fun didn’t invent anything new. It simply addressed latent demand. For years, crypto natives have bent over backwards to issue arbitrary assets with funny names, trade them, and find the next 1000x,” Connor wrote. Pump[dot]fun just simply took advantage of the narrative.



I mean, just take a look at Pump[dot]fun’s total volume.&nbsp;



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="978" height="562" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/punpfun-volue.png" alt="" class="wp-image-102688" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/punpfun-volue.png?w=978 978w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/punpfun-volue.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/punpfun-volue.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/punpfun-volue.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/punpfun-volue.png?w=454 454w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/punpfun-volue.png?w=381 381w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/punpfun-volue.png?w=80 80w" sizes="auto, (max-width: 978px) 100vw, 978px" /><figcaption class="wp-element-caption">The dark purple is the volume of Pump[dot]fun’s AMM, Pumpswap, which <a href="https://blockworks.co/news/pumpswap-large-amm-solana">launched back in March</a>.</figcaption></figure>



But the effects go further than just the platform, Connor told me. It’s also sparked a rise in overall memecoins.



“A handful of crypto native funds are telling us they believe Pump[dot]fun style memecoin trading has staying power. We think the market is starting to wake up to this reality, as builders are leaning harder into the category,” he wrote.&nbsp;



Stemming from similar roots, Blockworks Research thinks that social tokens, too, have their own staying power…but they’ll need to somehow sustain value. Time[dot]fun’s sought to solve that issue by allowing creators to both earn trading fees when minutes are sold or bought, and allowing them to earn fees on volume and the redemption of minutes by fans.&nbsp;



For a non-crypto comparison, think <a href="https://www.cameo.com">Cameo’s</a> playbook.&nbsp;



But Time and Believe each have a ways to go to prove that they can maintain Pump[dot]fun level traction.



Candidly, I’ve had multiple discussions with Connor on Believe and, initially, I was lukewarm to it. But he has a compelling case. And the chart does speak for itself.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdzrbBFbFy2Y_y6HPeJkiuco7ErjP2l7FTdXjSM2NNyVfACYt7ZGC3ASqKkJzTDpKqQPYrJLT33NyyzIVtTk6NjaHYtPdJJuazJqJ-a1Ycb-vVPDvl-ON8XOK27JqxMAgKmMMkStA?key=0o_wAyLiexIHyqxofZECZQ" alt=""/><figcaption class="wp-element-caption">Look at that volume go. </figcaption></figure>



Believe is different from either Pump[dot]fun or Time[dot]fun in that it seeks to give traders and developers access to a market where the two can directly interact. The goal is to remove venture capital from the picture and let traders invest in smaller projects aiming to build apps.



“The potential equity valuation of a few million dollars of free cash flow would be low, but let’s say, best case, may be valued at 20M USD via its forward [free cash flow], plus some premium for growth via a large installed base of a few [hundred] thousand or million downloads,” Connor explained.&nbsp;



“While this is a fantastic outcome for the founder, this outcome is too small for a VC portfolio. By targeting this underserved cohort on the supply side, Believe brings venture-like upside to a growing cohort of retail crypto capital,” he said.



If successful, a market for crypto opens up, similar to one giving TradFi traders access to private companies like SpaceX. Undoubtedly, there’s demand, but for how long?&nbsp;



Even with Pump[dot]fun’s record, you can see in the charts that there have been times when activity has dipped due to decreased appetite.&nbsp;



It’s hard to deny the data, though, and for now it looks like these three act as a way to not only get retail investors in the door but keep them active in the space.



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Empire Newsletter

How 3 projects show the rise of consumer crypto

The Republican-sponsored GENIUS Act, which seeks to establish regulatory guidelines for stablecoins, has passed a key procedural vote in the US Senate.&nbsp;



The legislation is now clear to advance to a full floor vote. The cloture vote passed  66-32 on Monday evening.



The passage comes after a cloture vote on the GENIUS Act <a href="https://x.com/Blockworks_/status/1920552806135538057">failed</a> earlier this month in a 48-49 vote.&nbsp;



Senators have been negotiating elements of the bill over the past few weeks, people familiar with the matter told Blockworks.



The latest draft of the bill states that foreign stablecoin issuers not predominantly engaged in financial services activities must be unanimously approved by the Stablecoin Certification Review Committee, according to a copy of the draft obtained by Blockworks.&nbsp;



The new draft also updates some of the language around data sharing, stating that stablecoin issuers are permitted to share consumer information only when needed to comply with existing laws or legal requirements.&nbsp;



Some Democrats, however, are still unsatisfied with the new language, which has not been released publicly. Sen. Elizabeth Warren, a longtime critic of crypto-friendly legislation, told Senators ahead of the vote that the GENIUS Act, as it currently stands, is “worse than no bill at all.”&nbsp;



“It is fitting that we are voting on the GENIUS Act just a few days before President Trump hosts a ‘private, intimate dinner and a VIP White House tour’ for the top investors in his memecoin,” Warren added.&nbsp;



While a floor vote on the GENIUS Act has not yet been scheduled, it could be on the calendar as soon as this week.



This story has been updated with finalized vote tally figures. 



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Senate advances stablecoin bill in cloture vote redo

This is a segment from The Breakdown newsletter. To read full editions,&nbsp;<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">
“Public service is my motto. Ninety-nine percent of the people in Chicago drink and gamble. I’ve tried to serve them decent liquor and square games. But I’m not appreciated.”&nbsp;



— Al Capone
</blockquote>



<h2 class="wp-block-heading">Breaking the law can be productive (for everyone)</h2>



Here are two things I believe: Tipping in cash so your server doesn’t owe taxes is good — but officially making income earned from tips tax-free is bad.



Let me explain.



Paying tips in cash is good because it helps low-margin businesses like restaurants hire staff they might not otherwise be able to afford.



More broadly, cash payments for off-the-books work enable quick hiring and firing, which benefits both high-risk businesses and workers in informal or gig-style jobs.



This makes the economy more efficient, to everyone’s benefit.



But officially making tips tax-free is bad because it would unfairly favor one industry over others and distort incentives by making income earned in tips more valuable than income earned in salary.



Also, it’s regressive.



Consider the case of the exotic dancer in Miami who made <a href="https://x.com/baldridgecpa/status/1922386539218194813?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1922386539218194813%7Ctwgr%5Ed50b8cf2378b2c2fd06884a66e56e9ea6b1ddcb2%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fwww.totalprosports.com%2Fgeneral%2Fsocial-media-is-freaking-out-over-mind-blowing-video-of-exotic-dancer-explaining-how-she-does-her-taxes%2F">$710,635 last year</a>, including $297,385 of “self-reported cash.”&nbsp;



(That’s 14,869 $20 bills, in case you’re wondering.)



As detailed in her very revealing TikTok video, she chose to report that cash to the IRS only because she wouldn’t otherwise be able to explain where her substantial investment income comes from.



But if that cash income was made tax free, high-income dancers in Miami would pay a lower marginal tax rate than, say, medium-income newsletter writers in Chapel Hill.



I know what you’re thinking, and, in this particular example, it’s hard to argue — some professions contribute more to society than others, so maybe her tips should be tax free.



But the tax code shouldn’t be making judgment calls like that.



Ideally, the IRS would treat all forms of earned income equally — if the goal is to help low-income workers, then just lower taxes for all low-income workers, not just for those who get tips.



But tax-free tips is good politics and politics is what has turned the tax code into an incomprehensible labyrinth of counterproductivity.&nbsp;&nbsp;&nbsp;



To escape that labyrinth, you sometimes have to do something “productively illegal” — like tipping your waiter in cash, paying someone to clean your house without reporting it on your taxes, or hiring an undocumented migrant to harvest crops that would otherwise wither in the fields.



This is one of the benefits of physical cash: “You want to have ways you can evade the law up to a point,” Ken Rogoff, an otherwise law-abiding economist, recently <a href="https://www.youtube.com/watch?v=u1bqpyqLn0A">told</a> Tyler Cowen.



Cowen agreed: &#8220;You’re lowering output by not enabling them to pay the nanny with cash.”&nbsp;



In other words, people probably wouldn’t bother hiring a nanny if it meant complying with the full suite of employment bureaucracy, so the economy would be less productive if physical cash didn’t enable them to break a few laws.



But what about breaking laws with crypto?



Stablecoins, for example, enable people to hold and send money without being KYC’d in the same way physical cash does.



But cash allows people to evade the law “up to a point.” With stablecoins, there is no stopping point — cash enables law evasion at a small scale and crypto enables it on a large scale.



That might still be a net positive, though, assuming there are some forms of socially desirable economic activity that are precluded by KYC — like using stablecoins to avoid banking rules in countries with hyperinflating currencies or autocratic governments, for example.



The places where stablecoins have most caught on are also the places most likely to benefit from the “productive illegality” of informal economies, as scholars like <a href="https://hir.harvard.edu/an-economists-view-of-the-informal-economy-interview-with-friedrich-schneider/">Friedrich Schneider</a> and <a href="https://www.elibrary.imf.org/view/journals/023/0029/021/article-A005-en.xml">Hernando de Soto</a> have documented.&nbsp;



In the relatively sensible US economy, by contrast, stablecoins have so far mostly been used to trade crypto tokens, many of which are functionally equivalent to equity, but with no investor protection, no rights, and no rules.&nbsp;



I’d argue that makes them illegal under current US law.



But that, too, may be productive.



If unregulated crypto equity is used to fund useful new services that would not have been funded otherwise, then it could well be a net positive that regulators are currently leaving crypto unregulated.



Not for much longer, of course — both stablecoins and equity-like crypto tokens are on the verge of being legally recognized in the US.&nbsp;



But if they go on to be truly productive, their few years of illegality will be equally to thank.



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regulation

Breaking the law can be productive (for everyone)

Jeff Albus

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



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If you want to build in Web3, you&#8217;ve pretty much always needed to know how to code. Not necessarily at an elite level, but at least a baseline understanding. That plus lots of late nights, semicolon-heavy syntax, compiler errors, and a burly stack of ever-open documentation tabs.



The technical barrier was part of the “chewing glass” culture.



Gatekeeping, maybe, but also a necessary filter in an ecosystem where one misplaced line in a smart contract could drain a treasury.&nbsp;



That filter is eroding fast these days, however.



Brace yourselves, friends. We&#8217;ve now entered the era of vibe coding. The term, coined by computer scientist Andrej Karpathy, refers to a novel AI-native coding style where developers (and perhaps more importantly, non-developers) describe what they want and, at the click of a button, an LLM generates a working iteration of their request.



Tools like Cursor, Dev.fun and Poof.new are already lowering the floor, turning ideas into dApps with a few lines of stumbling prose. A Poof co-founder told Lightspeed that vibe coders have created over 2,000 apps on the platform since its open beta started on Thursday.



But, of course, there&#8217;s a dark side to every moon. Because if it&#8217;s easier than ever to build something legitimate, it&#8217;s also easier than ever to build something that only has the appearance of legitimacy.



The ICO boom of 2017 gave us a glimpse of this dynamic. Once the profit motive was clear, hundreds of anonymous teams emerged from the woodwork to spin up faux white papers and (usually crap) landing pages. They promised revolutionary tech, launched tokens, raised millions&#8230;and vanished into vapor.



Now imagine that, but times infinity. 



Imagine some clown throwing up an LLM-generated codebase, a slick AI-generated branding package, wholly-believable GitHub activity, a world-class website UI with Web3 login, and then getting his fake chatbot founders to do some live AMAs.



Honeypot contracts with backdoors phishing sites that buoy authentic functionality as an indicator of legitimacy…Mint buttons that seed approvals you don&#8217;t notice ‘til your wallet is drained…The potential for bad actors runs deep.



Once things really get going, reputation systems and persistent identities will likely be the only hope we have of ever trusting another product. Proof-of-humanity systems, social graphs and third-party attestations will form the backbone of trust in an AI-coded world in Web3 and beyond.



We&#8217;ll need open auditing tools built for non-coders, and sandbox environments that simulate contract behavior before anything hits mainnet. Smart contract registries could begin to mirror app store models, with verified publishers, community ratings, and AI-generated trust scores.



The responsibility won&#8217;t just fall on users — it&#8217;ll sit with platforms, protocols, and indeed, the vibe coders themselves.



But even with those risks, even with the inevitable rough edges, something big is happening here. We&#8217;ve spent years saying Web3 is about empowering creators. Now it actually can be. Not just for the technically-minded or the crypto-native.



The poet, the game designer, the high school kid with a better idea for an auction format or voting platform — they can actually build. And if we establish proper protection early enough, the best ideas may finally have a chance to win. Not because they raise the most capital but because they exist — functional, forkable, live.



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The rise of vibe coding on Solana

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



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Assets whipsawed to start the week as investors weighed growing concerns over US debt, a new budget that looks poised to pass and, of course, ongoing trade war updates.



US equities were on the recovery path after a rocky start Monday morning. The S&amp;P 500 was trading virtually flat at 2 p.m. ET after opening almost 1% lower. The Nasdaq Composite similarly had rebounded to Friday’s closing level after starting off 1.3% in the red.&nbsp;



Bitcoin dipped this morning, but it had recovered some losses by the early afternoon. The largest cryptocurrency was trading just above $105,000 — around 1% lower than its Sunday high.



After the close on Friday, Moody’s downgraded the US government’s triple-A credit rating to Aa1. That’s one notch lower, representing a slightly higher risk; the change is likely what had indexes in the red and Treasury yields on the rise this morning.&nbsp;



Moody’s analysts attribute the downgrade to the growing fiscal deficit in the US. The move follows downgrades from others: S&amp;P Global Ratings in 2011 and Fitch Ratings in 2023.&nbsp;



All three groups have similarly cited a growing deficit and debt-interest costs.&nbsp;



While the updated Moody’s rating is likely driving the increase in Treasury yields we’re seeing today, DataTrek Research co-founder Nicholas Colas warns not to put too much weight on it.&nbsp;



“While the Moody’s downgrade may cause a bit of near-term equity market volatility, history shows it does not portend structurally higher interest rates, an imminent recession or declining stock prices,” Colas said.&nbsp;&nbsp;



“Rating agencies play a critical role in capital markets, but their decisions about US sovereign debt have never signaled anything useful about future asset prices,” he added.&nbsp;



The Trump administration was also unfazed, with Treasury Secretary Scott Bessent calling Moody’s a “lagging indicator” during an NBC <a href="https://www.nbcnews.com/politics/trump-administration/scott-bessent-calls-moodys-lagging-indicator-us-credit-downgrade-rcna207535">appearance</a> this morning.&nbsp;



Meanwhile, Trump’s “big, beautiful” tax bill — which experts on both sides of the aisle <a href="https://www.wsj.com/politics/policy/tax-plan-budget-national-debt-analysis-e9822072">agree</a> will increase the deficit over the next decade — advanced through a key House committee over the weekend in a rare Sunday night vote.&nbsp;



Speaker Mike Johnson said that “some minor modifications” have been made to appease the more budget-conscious members of the Republican Party. The bill is still under negotiation, House Budget Committee Chair Jodey Arrington told reporters last night.&nbsp;



We’ll be watching this play out, but Republican leadership has said the bill could pass as soon as Thursday.&nbsp;



Over in the Senate, the stablecoin-focused GENIUS Act is headed to a key procedural vote this afternoon. The bill narrowly missed passing cloture (which ends debate and allows legislation to advance) earlier this month, but Hill insiders tell us today is expected to have a different outcome.&nbsp;



And, of course we’d be remiss not to mention tariffs. We didn’t see any major updates on the trade war (or any negotiations that will end it) over the weekend, but Trump is still going after Walmart for their decision to pass on higher prices to consumers. Unfortunately, it’s a move we think other retailers will soon follow should rates not come down.&nbsp;



The European Commission today lowered its growth forecast for the year, citing lower exports due to US levies. Not surprising, but still disappointing for investors. 



That’s what’s going on around the market. Keep an eye on <a href="http://blockworks.co">Blockworks.co</a> tonight for an update on the GENIUS Act vote.



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US equities, bitcoin par losses while yields rise on deficit fears

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



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Pengu Clash has kicked off its launch today by letting in a portion of its waitlist ahead of a full public release.



The new Telegram game featuring the Pudgy Penguins NFT collection’s cutesy seabirds is a 1v1 multiplayer battler. Players can dress up their penguins and fight each other at different types of minigames, whether it’s curling, darts, football or something else.&nbsp;



Pengu Clash isn’t a pay-to-win game but instead rewards skill, Michal Dabrowski, CEO and founder of crypto gaming protocol Elympics, told me in an interview.



Elympics built Pengu Clash for Pudgy Penguins with the goal of starting a trend around skill-first crypto social games.&nbsp;



“Pengu Clash is created with great care for actual gameplay,” Dabrowski said, emphasizing that it’s different from other Telegram-based crypto “clickers.” Such clicker games have short lifespans because they revolve around users farming for an airdrop, he added.



“I have mixed opinions about some games that have been out there on Telegram. But this…this connects to the trend and to the topic [of] why crypto gaming has not, you know, fulfilled its promise to bring a lot of users to crypto up until now. I think that a lot of the games created were very superficial, let’s say.”



Dabrowski continued: “So ‘crypto’ was just to have some kind of trading, or have some kind of crypto component, and not really focusing on the gameplay. And I deeply believe that it should be the other way around.”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdgC3QpUf5Dn1VlGVVYYkQ8U9i6GWmsBUi4Vh7E_zSsTTpHlXigF7taVf8S7OG_nj5pRIfTpBTt5EULXImiOAhn1mbg1LH05z-9fR6KFKve0inzkBk0ED3ahG22T7RaCiw7WhqatA?key=J0xDdw6PHTElYzdsP9UReA" alt=""/></figure>



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd4unvUnKkOTJfmpgjok1JDeKLr-_fokV35VYg5fHVJhMSjsJvvHMfkpj2rBqD8uWul8nWUon3rF24fSehnXNLnlUBmhGGdFCNujkzQdAa3B-oDxDGt5DlUtAuDS-zU4Ws-mTqWtQ?key=J0xDdw6PHTElYzdsP9UReA" alt=""/><figcaption class="wp-element-caption">A look at Pengu Clash’s shop and curling minigame.</figcaption></figure>



The game offers quickplay matches, a “PVP arena,” and a shop tab as of right now, with quests coming soon. The waitlist currently consists of more than 1.1 million Telegram accounts.&nbsp;



Like other crypto Telegram games, Pengu Clash is using TON for its in-game NFTs and optional wagering component (the original Pudgy NFTs are on Ethereum and the Pudgy memecoin is on Solana).&nbsp;



Players can enjoy Pengu Clash without logging in or creating a wallet, but those who want to buy cosmetic items can connect the Telegram built-in wallet (that’s <a href="https://wallet.helpscoutdocs.com/article/113-wallet-where-to-start#Wallet-doesnt-work-on-my-device-what-is-the-issue-y8T1u">not yet available</a> in the US, UK, and some other countries), or connect an external TON wallet to the game.



Pudgy Penguins has also recently made broader consumer plays toward younger audiences, like <a href="https://www.penguinrandomhouse.com/books/807250/pudgy-penguins-worst-birthday-gift-ever-by-michael-leviton-illustrated-by-kuma-labs-and-pudgy-penguins/">releasing</a> a children’s picture book and a kid-friendly animated series on YouTube.



When asked why Pudgy Penguins chose to build a Telegram-based game using TON — instead of its own Ethereum L2 <a href="https://blockworks.co/news/rekt-abstract-apple-seltzer-nfts">Abstract</a> — CEO Luca Netz told me in a message that their goal is “to become the face of crypto” and the world’s “most popular penguin.”



“That vision is chain-agnostic,” Netz said, adding that a desktop version of Pengu Clash using Abstract is also part of the plan.



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The Drop newsletter

Pudgy Penguins’ Telegram game Pengu Clash begins launch

Macauley Peterson

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/0xresearch" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Fluid’s flagship ETH-USDC pool has recorded more than $8.5 million in cumulative losses since launch, <a href="https://x.com/danrobinson/status/1923194745095905588">according to</a> a Dune dashboard by Paradigm researcher Dan Robinson. The issue: a rebalancing mechanism that not only underperformed during volatility, but appears to be systematically unprofitable, even outside of rebalance windows.



The pool, launched in December 2024, was designed to auto-rebalance liquidity once ETH’s price moved beyond ±10%. That design worked well during periods of modest volatility, but as ETH dropped from around $3,800 to $1,560 and then rebounded to $2,400, rebalancing dragged down liquidity provider (LP) capital. CEX-DEX arbitrage opportunities swamped any trading fee income LPs received.



The <a href="https://dune.com/queries/5142347/8473747?markout_minutes_t6c1ea=15">markout data</a> paints a grim picture. As the chart shows, LP PnL has been consistently negative, not just during rebalances. This contradicts the assumption that fee income from the concentrated liquidity <a href="https://blockworks.co/news/understanding-automatic-market-makers">AMM</a> model would offset rebalancing-related losses. Instead, it appears the entire design structure allowed MEV-extractive trades to bleed LP value, even under normal conditions.



Since the May 11 <a href="https://gov.fluid.io/t/current-issues-with-eth-usdc-pool/1606">governance post</a> detailing the problem, Fluid co-founder Samyak Jain has been playing defense.



As Sorella Labs CEO, who goes by @0xvanbeethoven, <a href="https://x.com/0xvanbeethoven/status/1923147878148735100">noted</a>, LPs lost millions in rebalancing-driven losses — effectively subsidizing arbitrage with no meaningful upside.



Critics argue the problem isn’t simply rebalance frequency, but the fact that arbitrageurs are able to consistently extract value, while LPs are structurally disadvantaged.&nbsp;



Fluid’s team has responded to the criticism, drawing parallels to the early days of Uniswap v3. Referencing a similar debate around using markouts as a proxy for LP returns, they point to <a href="https://x.com/xin__wan/status/1589321975767666688">prior commentary</a> from Uniswap researchers, such as Xin Wan, who argued that short-interval markouts can be misleading and don’t fully account for fee accrual or LP lifecycle behavior.



The planned Fluid v2 upgrade — targeted for June or July — will introduce dynamic fees, permissionless pools, and custom LP ranges. It may also work out the LP issues in other ways.



“There are multiple things that can be added including adding them via hooks on v2,” chief operating officer DMH told Blockworks. “I actually like [the] <a href="https://x.com/0xvanbeethoven/status/1923147944926249398">Angstrom solution</a> but have to study it more,” he added.



As proposed interim relief, the Fluid team suggests distributing 500,000 FLUID tokens (0.5% of supply) over a year to affected ETH-USDC LPs, plus $400,000/month in rewards until DEX v2 launches.



Rather than widening the rebalance band to reduce loss frequency, Fluid also proposes narrowing the range from ±10% to ±7.5%, increasing fee accrual per unit of liquidity, although that would also increase rebalancing events and potential losses.



This short-term fix has raised eyebrows. “If your pool is losing money on average, increasing concentration will increase both losses and variance,” wrote Dan Robinson. “So concentrating liquidity more would be a double whammy.”



Even if DEX v2 gives LPs more control, it assumes users will be able to model volatility risk and pick defensible ranges, a challenge even protocol governance struggled to get right in v1.



It’s to Fluid’s credit that the team has acknowledged the issue publicly, citing their own $1 million LP position as evidence of skin in the game. They also emphasize that correlated pairs (like cbBTC–WBTC) have performed well, and so the ETH-USDC pool’s struggles are not representative of the broader DEX performance.



Still, the damage to LP trust is real. Whether DEX v2 can reverse that dynamic will be the true test of Fluid’s unified architecture.



For now, the ETH-USDC pool stands as a cautionary tale: capital efficiency can cut both ways, especially when market volatility meets rigid strategy design.



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Swimming in red: Fluid’s ETH-USDC pool springs a leak

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



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Stacking sats?



Chances are you’d be buying alongside any one of the dozen or so companies that are actively accumulating right now.



An estimate of the number of bitcoins held by corporate treasuries, both private and publicly-listed, has today reached a new all-time high: 1,082,164 BTC ($110.8 billion), according to <a href="https://bitcointreasuries.net/">BitcoinTreasuries</a>.



It’s equivalent to almost 5.5% of the current circulating supply. And if we don’t include Satoshi’s million or so coins, or the <a href="https://river.com/learn/what-happens-to-lost-bitcoin/">estimated</a> 1.57 million BTC believed to be lost forever, corporate treasuries are actually holding 6.25%.



That’s four times more bitcoins on corporate balance sheets than three years ago, as Terra/Luna was driving a wrecking ball through crypto markets.&nbsp;



Most of that growth is coming from public companies, led by Strategy of course, but Metaplanet, Semler Scientific and Tether are proving to be as ravenous as Saylor’s firm was in 2020.&nbsp;



The Jack Mallers-led XXI is on track to do the same, starting off with 31,500 BTC ($3.2 billion) disclosed late last month.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="862" height="648" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png" alt="" class="wp-image-102630" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=862 862w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=342 342w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=347 347w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=291 291w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=80 80w" sizes="auto, (max-width: 862px) 100vw, 862px" /><figcaption class="wp-element-caption">This morning, Strategy disclosed buying another 7,390 coins, bringing its running total to 576,230 BTC ($59 billion). Purple bubbles point to Strategy’s bitcoin acquisition.</figcaption></figure>



Tether now holds over 25% more bitcoin than it did last October: 100,521 BTC ($10.3 billion) as of its latest disclosure.&nbsp;



Metaplanet holds 700% more coins across the same period, today reaching 7,800 BTC ($800 million). Semler has meanwhile tripled its stack to 3,808 BTC ($390.1 million).



Some of the data on BitcoinTreasuries may be a little screwy (does Block. one really still have 164,000 BTC, worth $16.8 billion?), but that’s besides the point.



The rate at which businesses are adopting bitcoin to reinforce treasuries (and copy the Strategy acquisition playbook) has, in turn, advanced Bitcoin to its intermediate phase.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="860" height="647" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png" alt="" class="wp-image-102628" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=860 860w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=342 342w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=347 347w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=291 291w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=80 80w" sizes="auto, (max-width: 860px) 100vw, 860px" /><figcaption class="wp-element-caption">Every bubble is more bitcoin added to corporate balance sheets. Not shown: Strategy’s buys.</figcaption></figure>



And just like the internet, mobile phones and social media, businesses were significantly slower to adopt Bitcoin than the public. It was now a decade ago, in 2015, that individuals in Venezuela and Argentina adopted bitcoin to protect their wealth from hyperinflation.



A handful of governments have clearly developed a keen understanding of the technology adoption curve and acted accordingly. We all know what comes next.



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