Fractal Bitcoin

Felix Jauvin

Ben Strack

Casey Wagner

Today, enjoy the Forward Guidance newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. <a href="https://blockworks.co/newsletter/forwardguidance">Subscribe to the Forward Guidance newsletter</a>.



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



<h2 class="wp-block-heading">Structural sticky inflation is here&nbsp;</h2>



Today’s inflation data tells a story of sticky prices that are going to have a lot of trouble coming down and getting us back to the 2% target.&nbsp;



Off the top, the key data points vs. expectations:



<ul class="wp-block-list">
<li>Core CPI MoM: 0.3% actual, 0.2% expected</li>



<li>Core CPI YoY: 3.3% actual, 3.2% expected</li>



<li>Headline CPI MoM: 0.2% actual, 0.1% expected</li>



<li>Headline CPI YoY: 2.4% actual, 2.3% expected</li>
</ul>



As we can see, the CPI print was hot. Not smoking hot, and also not because any major outliers drove it higher. What we’re seeing is really just a broad-based inability for inflation data points to meaningfully move lower.



Before digging into the hot points, let’s quickly run through what accounts for 55% of this month’s inflation: shelter.



Following a rebound last month, owner-equivalent-rent and primary rents both continued their trajectory lower, leading to shelter inflation coming in at 0.22% MoM vs. expected 0.46%. By all accounts, this was a positive outcome for disinflation.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdt7ccAM23USZ7WS3MDujDSesbV1kt6R84kh93rvFctWoErOd42OGkBLB1saG5cU6CPKWNGVcK0Hl9C7Lm7FIDyu5pCQu3Jz7OL5kuQknS9XW_Pl2sYnWcMm9a8mS1x5SCypfBbL9P-DcAwCVLN-3d1Xqvw?key=0JUZeaMwPbST8WRCQEVVkA" alt=""/></figure>



That’s about as far as we can go in terms of positive data points in today’s print.



The big red flag is that core goods rebounded higher at 0.17% vs. the anticipated 0.02%. Goods MoM deflation has been the core driver of the disinflation story we’ve seen this year and which has allowed the Fed to cut with confidence. So if we’re beginning to see a rebound in goods inflation, that will be a concern.



Overall, today’s CPI print paints a picture of sticky inflation, but not re-acceleration. I think this print will still allow the Fed to cut by 25 basis points in November, but 50bps is surely off the table at this point.



— Felix Jauvin



<h3 class="wp-block-heading">$24&nbsp;</h3>



The price target (in CAD) for Galaxy Digital, according to a Thursday note from HC Wainwright &amp; Co., which started covering the stock. The company’s share price closed at $17.73 CAD on Wednesday.&nbsp;



Galaxy is one of just two diversified crypto-focused public companies (outside of the bitcoin miners) with a market cap of more than $1 billion, the analysts wrote. And an expected sharp crypto rally starting in Q4 could be the single biggest driver of a Galaxy stock price increase.



The HC Wainwright &amp; Co pros added: “Further, institutional understanding and adoption of digital assets has never <a href="https://blockworks.co/news/on-the-margin-newsletter-inevitable-institutional-digital-assets-involvement">been greater</a>, and we see a wave of incremental <a href="https://blockworks.co/news/forward-guidance-newsletter-vaneck-vc-fund">institutional capital </a>pouring into the space in the coming years, further amplifying the upcoming bull market.”&nbsp;



<h2 class="wp-block-heading">On the ground at Permissionless&nbsp;</h2>



Day two of Blockworks’ Permissionless was in progress when this newsletter went out, but let’s take a look at some of what people were talking about on day one.&nbsp;



There seems to be a calm before the storm. And we’re not talking about Hurricane Milton (our thoughts are with everyone in the affected areas and their loved ones), but rather the seeming holding pattern as we await the Nov. 5 <a href="https://blockworks.co/news/political-candidates-cannot-ignore-crypto-voters">presidential election</a>.&nbsp;



The need for regulatory clarity was mentioned a lot. That’s not really new, but it is even more highlighted given we’re now just 26 days from the big day.&nbsp;



Casey <a href="https://blockworks.co/news/forward-guidance-newsletter-vaneck-vc-fund">mentioned</a> some of House Majority Whip Tom Emmer’s thoughts yesterday about how the presidential election could impact the crypto industry’s trajectory.



Coinbase CLO Paul Grewal said during the same panel that he’s looking beyond just the Donald Trump-Kamala Harris match-up. “Congress is going to matter a lot here, regardless of who’s elected as president,” he said.&nbsp;&nbsp;&nbsp;



During a session later in the day, Lumida CEO Ram Ahluwalia argued that Harris — who he called the “presumptive leader of the Democratic party today” — could terminate SEC Chair Gary Gensler before the election if she wanted to.&nbsp;



But he expects to see “status quo” if Harris is elected, implying no quick change in SEC leadership would be made.



While Donald Trump has vowed to <a href="https://blockworks.co/news/donald-trump-speaks-bitcoin-2024">fire Gensler</a>, Harris has shared some <a href="https://blockworks.co/news/kamala-harris-crypto-policy-reset-outlook">pro-crypto comments </a>without noting how she might address the agency’s current leadership.&nbsp;



Clearing out the leaders with negative views of the industry should be positive for an agency that overall realizes the crypto industry’s value to capital markets and American innovation, said Bitwise’s Juan Leon.



But, he added in a panel alongside Ahluwalia: “I don’t think it’s as black and white as people in this industry seem to be thinking. Really what matters is the <a href="https://blockworks.co/news/house-passes-act-fit21-with-bipartisan-support">bipartisan support</a>, which is there.”



While regulation was mentioned in some shape or form in nearly every panel I listened in on, some other points worth noting strayed from strict policy.



In a panel on the future of bitcoin mining, Marathon Digital CEO Fred Thiel seemed to question the strategy of industry rival Core Scientific, which this year has <a href="https://investors.corescientific.com/news-events/press-releases/detail/78/core-scientific-announces-new-contract-with-coreweave-for-delivery-of-approximately-70-mw-of-additional-infrastructure-to-host-high-performance-computing-operations">inked</a> high-performance computing (HPC) <a href="https://blockworks.co/news/post-bitcoin-halving-mining-strategies">hosting contracts</a> with cloud-computing firm CoreWeave.



Core Scientific has said it projects more than $4.7 billion in cumulative revenue over the 12-year timeline of the CoreWeave contracts.



But Thiel argued: “That’s a race to zero,” noting that competition in the arena of renting rack space will ultimately hurt margins.&nbsp;



And we can’t not mention the world’s largest asset manager being in the building.&nbsp;



Samara Cohen, BlackRock’s CIO of ETF and index investments, said we are in “act one” in terms of institutional crypto adoption. This theater analogy came in lieu of the baseball-focused “early innings” line you typically hear (though Let’s Go Mets, am I right?).&nbsp;



While hedge funds and other asset managers have been jumping in, there remains “a fair amount of plumbing” needed to unlock others’ ability to buy bitcoin (namely pensions and endowments).&nbsp;



Outside of regulation, investment guidelines consideration and board approval are other hurdles to clear for those asset allocators.&nbsp;&nbsp;



“These things take a longer period of time…and this is a process that is underway,” Cohen said.



— Ben Strack&nbsp;



<h2 class="wp-block-heading">Bulletin Board&nbsp;</h2>



<ul class="wp-block-list">
<li>The SEC on Thursday charged crypto market maker Cumberland DRW with acting as an <a href="https://blockworks.co/news/sec-charges-cumberland-unregistered-dealer">unregistered dealer</a>. Regulators <a href="https://www.sec.gov/files/litigation/complaints/2024/comp-pr2024-168.pdf">allege</a> the Chicago-based firm has been “operating as an unregistered dealer in more than $2 billion of crypto assets offered and sold as securities.” In a statement posted on X, Cumberland expressed frustration with being the SEC’s “latest target” and pledged to defend itself “against overzealous regulators.” </li>



<li>Initial jobless <a href="https://www.dol.gov/ui/data.pdf">claims</a> released Thursday showed 258,000 first-time filers for the week ended Oct. 5, marking the highest weekly initial claims since August 2023. Analysts had expected 230,000. </li>



<li>Permissionless III continues! Check out the day one recap from Blockworks editor Katherine Ross <a href="https://blockworks.co/news/permissionless-3-day-one-vibes">here</a>, and keep an eye on Blockworks.co for the latest updates. </li>
</ul>



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Latest inflation data comes in hotter than expected, led by housing costs

Michael McSweeney

The US Securities and Exchange Commission has charged the crypto market-maker Cumberland DRW with acting as an unregistered dealer.



The agency, which revealed the charges Thursday, alleged that the Chicago-based firm has been “operating as an unregistered dealer in more than $2 billion of crypto assets offered and sold as securities.”



“Despite frequent protestations by the industry that sales of crypto assets are all akin to sales of commodities, our complaint alleges that Cumberland, the respective issuers, and objective investors treated the offer and sale of the crypto assets at issue in this case as investments in securities, and Cumberland profited from its dealer activity in these assets without providing investors and the market with the important protections afforded by registration,” Jorge G. Tenreiro, acting chief of the agency&#8217;s crypto assets and cyber unit, said in a <a href="https://www.sec.gov/newsroom/press-releases/2024-169">statement</a>.&nbsp;



In the <a href="https://www.sec.gov/files/litigation/complaints/2024/comp-pr2024-168.pdf">complaint</a>, the SEC alleged that the firm “has made available for trading many crypto assets offered or sold as investment contracts and, therefore, as securities.” The agency cited POL (formerly MATIC), SOL, FIL, ALGO and ATOM.&nbsp;



Read more: <a href="https://blockworks.co/news/lightspeed-newsletter-mango-markets-sol">SEC’s Mango settlement reiterates its case that SOL is a security</a>



Such inclusions are likely to spur further criticism of the agency, given the SEC’s <a href="https://blockworks.co/news/sec-wrong-about-crypto-asset-securities">recent step back</a> from the use of the term “crypto asset securities” in some of its more high-profile court cases. The SEC’s critics have accused the agency of specifically targeting the crypto sector.



Cumberland echoed those complaints in a <a href="https://x.com/CumberlandSays/status/1844424478660624806">statement</a> published Thursday, in which the market maker pledged to defend itself. The firm said it had become “the latest target of the <a href="https://blockworks.co/tag/sec">SEC</a>’s <a href="https://blockworks.co/news/sec-crippling-digital-assets">enforcement-first approach</a> to stifling innovation and preventing legitimate companies from engaging in digital assets.”



“We are not making any changes to our business operations or the assets in which we provide liquidity as a result of this action by the SEC,” Cumberland said. “We are confident in our strong compliance framework and disciplined adherence to all known rules and regulations — even as they have been a moving target (it wasn’t long ago ETH was <a href="https://blockworks.co/news/consensys-files-lawsuit-against-sec">claimed to be a security</a>).”



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SEC files lawsuit against crypto market-maker Cumberland DRW

<a href="https://trondao.org/">TRON DAO</a> was proud to host the TRON Builder Tour at Columbia University with <a href="https://blockchainatcolumbia.org/">Blockchain at Columbia</a> and <a href="https://www.bublockchain.xyz/">Boston University Blockchain</a> on October 5. The TRON Builder Tour merges hands-on workshops with enriching discussions, connecting students, developers and mentors. Previously, TRON DAO has organized successful TRON Builder Tour events at prestigious institutions like MIT, Cornell, Princeton, and Harvard, fostering deeper connections and advancing blockchain knowledge within academic communities. 



<h3 class="wp-block-heading">TRON Builder Tour: Columbia Stop</h3>



The TRON Builder Tour hosted a hackathon at Columbia University on October 5, co-hosted by <a href="https://blockchainatcolumbia.org/">Blockchain at Columbia</a> and <a href="https://www.bublockchain.xyz/">Boston University Blockchain</a>. The 12-hour event attracted over 120 sign-ups from students all eager to build on the TRON blockchain. Attendees included individuals from prestigious institutions such as Harvard, Boston University, NYU, Berkeley, Columbia, University of Waterloo, and Princeton. Longtime developers and early builders in the TRON community flew in from all over the U.S. to help students with their projects. Among the mentors were Dwayne Gordon, founder of a TRON community project, Eder Teixeira, a TRON Super Representative and Wes Jorgensen from Boston University Blockchain.Their collective experience provided students with invaluable insights and guidance, reinforcing TRON&#8217;s commitment to fostering innovation and education within the blockchain space. Throughout the hackathon, students developed decentralized applications (dApps) across four tracks: DeFi, Artistry, Integration, and Web3. The top three projects from each track were awarded their respective share of the grand prize pool.



<h3 class="wp-block-heading">Judge-Selected Winners</h3>



DeFi Track Showcasing projects that transform finance through decentralization, empowering individuals with transparent, accessible, and inclusive protocols for asset management. The winners of the DeFi track are as follows: 1. <a href="https://forum.trondao.org/t/stakecess-learn2earn/27716">Stakecess</a> by Stakecess 



2. <a href="https://forum.trondao.org/t/teamdr-by-team-d-pok-it-starts-with-an-idea/27718">TEAMDR</a> by Team D-POK 



3. <a href="https://forum.trondao.org/t/prisoncoin-by-teampc/27858">PrisonCoin</a> by TeamPC&nbsp;



Artistry Track Where entertainment meets blockchain technology. The artistry track spotlights creative prowess in visual projects that embrace GameFi, NFTs, assets, and ventures related to the Metaverse. The winners of the Artistry track are as follows: 1. <a href="https://forum.trondao.org/t/monkey-lotto-buy-lottery-tickets-and-win-as-quick-as-popping-a-balloon/27720">Monkey Lotto</a> by Monkey Lotto 



2. <a href="https://forum.trondao.org/t/nocapmaps-earn-nfts-by-exploring-national-parks-in-us/27738">NoCapMaps</a> by NoCapMaps&nbsp;



3. <a href="https://forum.trondao.org/t/metaforge-unlocking-creative-power-in-the-artistry-metaverse/27725">MetaForge</a> by MetaForge Team&nbsp;



Integration Track 



The Integration track prompts participants to integrate advanced protocols into the TRON ecosystem, urging them to incorporate existing protocols, dapps, or services on TRON/BTTC into their applications. Participants create impactful features/tools for enhancing applications within the TRON/BTTC ecosystems. The winners of the Integration track are as follows: 1. <a href="https://forum.trondao.org/t/tronfundyou-fund-me-fund-you/27715">TRONFundYou</a> by NYBO 



2. <a href="https://forum.trondao.org/t/swap-squad-decentralized-marketplace/27737">Swap Squad</a> by BU Blockchain RKJ 



Web3 Track The Web3 category aims to honor teams that usher along the transition of Web 2.0 to Web 3.0 by introducing next-gen DAO tools, SocialFi, blockchain/web infrastructure, SDKs, and other dapps. The winner of the Web3 track is below: 1. <a href="https://forum.trondao.org/t/tron-support-ai/27717">AI Bot</a> by TRON Support AI



<h3 class="wp-block-heading">HackaTRON Season 7</h3>



In tandem with the TRON Builder Tour, TRON DAO continues to push the envelope with HackaTRON Season 7, a competition that challenges innovators across multiple tracks to create solutions that leverage the TRON blockchain.



Stay updated and get involved by following TRON DAO on <a href="https://x.com/trondao">X</a> and visiting the<a href="https://trondao.org/hackatron/"> HackaTRON official page</a> for the latest news and participation opportunities!



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TRON DAO hosted the TRON Builder Tour at Columbia University with Blockchain at Columbia and Boston University Blockchain

Jack Kubinec

Following <a href="https://blockworks.co/news/stripe-to-bring-back-crypto-payments">months of build-up</a>, the fintech giant Stripe officially brought back crypto payments in the US, a product lead announced yesterday via X.&nbsp;



Customers can pay merchants in USDC or USDP on Ethereum, Solana, and Polygon, while US-based merchants are paid in dollars. Stripe takes 1.5% of the transaction amount, which is lower than the 2.9% plus $0.30 fee it typically <a href="https://stripe.com/pricing">charges</a> on card payments. The move comes nearly seven years after Stripe <a href="https://stripe.com/blog/ending-Bitcoin-support">discontinued</a> its first crypto experiment amid the growing realization that bitcoin would not become a blockchain optimized for payments. Stripe <a href="https://stripe.com/blog/bitcoin-the-stripe-perspective">began</a> its foray into crypto in 2014.&nbsp;



The check-out flow, which you can mess around with <a href="https://t.co/g1ryr2ZvZv">here</a>, involves connecting a crypto wallet and signing a transaction from Stripe before paying with your stablecoin of choice. Interestingly, fees appear to be abstracted away from the user, so Solana isn’t really given a chance to flex its cheap fees relative to Ethereum’s.



On one hand, it’s a big deal for crypto adoption that Stripe is dipping its toes back into crypto. Most of anyone who has paid for things on the internet has interacted with Stripe’s payment flows.&nbsp;



Stripe’s stablecoin usage can make it easier for US merchants to sell to international customers, since the fintech firm <a href="https://stripe.com/pricing">charges</a> an extra 150 bips for international cards. In its first 24 hours of crypto reintegration, customers from more than 70 countries paid with stablecoins on Stripe, <a href="https://x.com/BackseatVC/status/1844074052576821445">according</a> to another Stripe employee.&nbsp;



But still, cards are certain to account for a large majority of US internet payments for the foreseeable future. Crypto payments solutions like Stripe’s (<a href="https://blockworks.co/news/helio-upgrades-solana-pay-plugin-for-shopify">and Shopify’s before it</a>) have a bit of a discoverability problem: a minority of people use crypto wallets, and there’s no central repository of merchants for crypto users to find crypto-friendly merchants. (I learned this firsthand while <a href="https://blockworks.co/news/lightspeed-newsletter-solana-stablecoin-purchases">trying to pay for things</a> with stablecoins this summer).



There may also be structural forces getting in the way of Stripe’s crypto payment solution catching on as currently conceived. In a blog <a href="https://substack.com/home/post/p-150031096?source=queue">post</a>, Nico Pei from Sky Lab characterized Stripe’s payment solution — which relies on wallets and their sometimes-onerous requirements — as “useful for crypto-natives” but “unintuitive” for everyone else.&nbsp;



Pei also characterized the 1.5% fee, which is already 50% cheaper than current alternatives, as “predatory” given how little crypto payments actually cost Stripe.&nbsp;



And for crypto payments to actually compete with the credit card giants, Pei says, they’ll need to compete with the sprawling ecosystem of cash back, travel points, and loyalty rewards that incentivize customers to make use of credit cards.&nbsp;



Stripe reintegrating crypto is certainly an encouraging sign for the uptake of crypto payments — something I’m always intrigued by for Lightspeed, given Solana’s focus on payments use cases.



But for the time being, I tend to agree with Pei that this current iteration is likely to tickle a small group of crypto enthusiasts, and leave much of the rest of the payments world untouched.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



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Stripe reintegrates crypto payments in the US

Donovan Choy

Today, enjoy the 0xResearch newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. <a href="https://blockworks.co/newsletter/research">Subscribe to the 0xResearch newsletter</a>. 



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Uniswap Labs is launching its own L2 chain, Unichain.



Unichain will be built on Optimism’s interconnected network of rollups, <a href="https://blockworks.co/news/optimism-interoperability-layer-superchain">dubbed the Superchain</a>.



Why Unichain? Uniswap Labs claims block times will see an initial speed of one second, after which they will fall to 200-250 millisecond block times — a vast improvement over the 12-second block time on Ethereum mainnet.



As part of the Optimism Superchain, users on the new Unichain will also enjoy native cross-chain interoperability of assets across the Superchain’s network of blockchains.



For L2s outside of Optimism’s Superchain, Uniswap Labs plans to leverage <a href="https://www.erc7683.org/">ERC-7683</a>, a cross-chain intent standard co-developed with <a href="https://app.blockworksresearch.com/unlocked/across-protocol-based-on-intents">Across Protocol</a>, that will effectively enable users’ trading orders to be fulfilled by intermediary relayers/solvers regardless of what chain they’re on.



This potentially obviates the need for Uniswap to “port” its massive pool of liquidity it enjoys on the Ethereum L1 to Unichain, and thereby abstract away the hurdles of moving its existing user base to a different chain.



Hayden Adams, CEO of Uniswap Labs, said of the launch: “Unichain will deliver the speed and cost savings already enabled by L2s, but with better access to liquidity across chains and more decentralization.”



Unichain will also leverage new technical innovations, like a trusted execution environment (TEE) for block building, and a “community validation network.” Both features are developed with Flashbots.



Unichain’s validation network will be open to any node operators staking UNI, but only a “limited number of validators with the highest UNI stake-weight will be considered the active set,” according to the Unichain <a href="https://docs.unichain.org/whitepaper.pdf">white paper</a>. It suggests that the largest UNI token holders, such as the Uniswap Foundation and early investors, will likely be the only initial validators on the network.



Ethereum’s largest DEX moving to an L2 can be taken as a great or terrible piece of news, depending on whether you <a href="https://blockworks.co/news/0xresearch-newsletter-eip-7977">approve of Ethereum’s roadmap</a>.



For Ethereum-aligned users who are onboard with its rollup-centric roadmap, Unichain makes perfect sense. From Uniswap’s perspective, this is a win-win for both the protocol and its users: Uniswap retains its MEV, and users enjoy cheaper gas fees.



From Ethereum’s perspective, that was obviously always part of the plan.



On the flip side, this looks to accelerate the ongoing <a href="https://blockworks.co/podcast/bellcurve/60051c06-6bd0-11ef-bcc2-e76505f9d524">complaints</a> about Ethereum L2s being “parasitic” to the L1, and the lack of value accrual to ETH (the asset).



Uniswap is the largest gas guzzler on the Ethereum L1 today (see below), which means that ETH spent as gas fees on the L1 is contributing to a non-trivial portion of ETH burn and value accrual to ETH, thanks to <a href="https://consensys.io/blog/what-is-eip-1559-how-will-it-change-ethereum">EIP-1559</a>. 



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcFBbb0qGww9D7HnE7ZAZrgoRfvLcEpfJwOz0ldW0grQK_jF3bPrCAgNtLP9Cgwgz_IPaGuzPkMtA_jj1F82UIGoRivSoInKGf7sGd8GooP0ITK7wRZLmphBJq3Ki1-dNdPxPa0AH5998weqbiNEGnGVOY?key=CnMrFVTVSBnOOas2r63roA" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://etherscan.io/gastracker">Etherscan</a></figcaption></figure>



Additionally, MEV that’s accruing to the Ethereum L1 will now be “leaked” to the Unichain L2 in the form of sequencer revenues —&nbsp;further reducing ETH’s value accrual.



A reversal of fortune for Ethereum largely depends on the “<a href="https://www.youtube.com/watch?v=yvP39-EOADU">induced demand</a>” its core developers believe would eventually emerge from having a multitude of cheaper L2 execution environments. The idea is that faster blockchain speeds would significantly drive more transactions on L2s, which in turn would increase settlement fees paid to the L1. So far, that hasn’t happened yet.



The UNI token has rallied 11.9% in the last 24 hours, according to <a href="https://www.coingecko.com/en/coins/uniswap">CoinGecko</a>.



<h2 class="wp-block-heading">Chart of the Day</h2>



There’s a tsuinami coming:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcNNW7MQjRPX1WgLZfuzADo6ZYhmsVx78fv3zNRUFRroszlu5hRvWhC-WCsA12Iv7Uq7LWBc0yDo9xuVzjHyGaT1a42sVgBkKSV7MHkBTfWo5GzRAukjSweJJIn5OQmI95egRTxc_2YGO1bMxurU7wgrzk?key=CnMrFVTVSBnOOas2r63roA" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://app.artemisanalytics.com/chains">Artemis</a></figcaption></figure>



The MoveVM-based L1 blockchain Sui briefly flipped Solana in daily transactions earlier this week. Sui saw 41.8 million transactions against Solana’s 40.1 million on Monday, though it has since fallen back down. Just as Solana once posed itself as an “ETH killer,” Sui looks to do the same to Solana.



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Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



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Uniswap announces Unichain L2

Amanda Tuminelli

The Securities and Exchange Commission has finally admitted what we’ve known all along: “Crypto asset security” was a made-up term with no legal basis. After years of misleading the courts and the public, the agency’s quiet abandonment of the term signals a major retreat in its regulation by enforcement campaign against the digital asset industry.



Rather than putting out proactive or helpful guidance in recent years, the SEC has been suing industry participants in a thinly veiled attempt to kill crypto. So far, it isn’t going well. If there was any doubt that the SEC’s approach is destined for failure, the recent shattering of the myth behind “crypto asset security” should put it to rest.



Read more: <a href="https://blockworks.co/news/lawmakers-frustrated-with-sec-crypto-approach">Rep. Torres: SEC invented ‘crypto asset security’ out of thin air</a>



Last year, the SEC filed enforcement actions against many of the major centralized exchanges, and is currently fighting in different courts against Binance, Coinbase and Kraken. Two weeks ago, the SEC <a href="https://storage.courtlistener.com/recap/gov.uscourts.dcd.256060/gov.uscourts.dcd.256060.273.1.pdf">moved to amend its complaint</a> in the Binance case. Buried in a footnote on page 24 of the motion, the SEC gave a stunning apology:



“As this Court noted and as the SEC reiterates, with its use of the term ‘crypto asset securities,’ the SEC is not referring to the crypto asset itself as the security; rather, as the SEC has consistently maintained since [Telegram], the term is a shorthand…. Nevertheless, to avoid any confusion, the [amended complaint] no longer uses the shorthand term, and the SEC regrets any confusion it may have invited in this regard.”



Rarely in history has a single footnote scrambled the minds of so many expert lawyers at once. Coinbase Chief Legal Officer Paul Grewal <a href="https://x.com/iampaulgrewal/status/1834455724631736428">described it</a> as “shameless.” Uniswap Labs CLO Katherine Minarik <a href="https://x.com/MinarikLaw/status/1834630275008963022">said</a> “no government agency should work this way.” Ripple Labs CLO Stuart Alderoty <a href="https://x.com/s_alderoty/status/1834464168399044842">suggested</a> the SEC “admit it has become a twisted pretzel of contradictions.”



Why react so strongly? There are at least three reasons.



First, the footnote is demonstrably false. Far from having “consistently maintained” that it “is not referring to the crypto asset itself as the security,” the SEC has relentlessly propagated the myth that tokens themselves are securities.



The SEC declared that view as early as 2017 in its <a href="https://www.sec.gov/files/litigation/admin/2017/33-10445.pdf">settlement with Munchee</a>, where it said that “digital assets may be securities” and that “MUN tokens were securities…because they were investment contracts.” The SEC has consistently reiterated that view in the years since. For example, in its 2018 <a href="https://www.sec.gov/files/dlt-framework.pdf">ICO framework</a>, the SEC analyzed “whether a digital asset is offered or sold as an investment contract and, therefore, is a security.” In its 2020 <a href="https://www.courtlistener.com/docket/19857399/4/securities-and-exchange-commission-v-ripple-labs-inc/">complaint against Ripple Labs</a>, the SEC alleged that “XRP was an investment contract and therefore a security[.]” And in its 2023 <a href="https://storage.courtlistener.com/recap/gov.uscourts.nysd.599908/gov.uscourts.nysd.599908.1.0_1.pdf">complaint against Coinbase</a>, the SEC accused Coinbase of making “available for trading crypto assets that are investment contracts under the Howey test[.]”



Even the SEC’s reference to Telegram in its footnote seems insincere. The SEC cites the Telegram case as if to show through its own statements that it has a history of “consistently maintaining” that tokens themselves are not securities. But the citation itself doesn’t reference a statement by the SEC — it quotes the court holding that tokens are “little more than alphanumeric cryptographic sequence[.]” In reality, the SEC alleged in its 2019 <a href="https://storage.courtlistener.com/recap/gov.uscourts.nysd.524448/gov.uscourts.nysd.524448.1.0_3.pdf">complaint against Telegram</a> that “Grams are securities” because “Grams are investment contracts.”



This isn’t even the first time the SEC has made misrepresentations to the court this year. In an enforcement action against Debt Box, where the SEC lied to the court in order to get the relief it was seeking against defendants, the court took the rare step of imposing <a href="https://assets.ctfassets.net/c5bd0wqjc7v0/1u6cDaFa3REg8wHUc6onZ8/e1257f64a80ca440d887f67821f872fe/Debt_Box_Order.pdf">sanctions</a> against the SEC because its “pervasive misconduct…demonstrate[d] a pattern of organizational bad faith and broadly implicate[d] the Commission itself—not just isolated individuals.” In an 80-page opinion using the term “bad faith” 46 times, the court stated that the SEC’s conduct “constitute[d] a gross abuse of the power entrusted to it by Congress and substantially undermined the integrity of [the] proceedings and the judicial process.”



Read more: <a href="https://blockworks.co/news/sec-commissioner-hearing-debt-box">Gensler says DEBT Box case ‘not well handled’ by SEC</a>



Second, the footnote signals an SEC in disarray. As a federal agency with extraordinary power to regulate the US economy, we expect — and administrative law requires — that the SEC will maintain consistent positions within and across its divisions. In other words, the left hand ought to know what the right hand is doing.



Yet, on the exact same day that the enforcement division half-heartedly apologized in the Binance case for the confusion it caused by using the term “crypto asset securities,” the same division used that term eight times in its <a href="https://www.sec.gov/files/litigation/admin/2024/34-101001.pdf">settlement with eToro</a>, and the SEC’s X account posted an <a href="https://x.com/SECGov/status/1834340017897979934">investor alert</a> from the Office of Investor Education and Advocacy using the term five times. These blatant inconsistencies call into question how entrepreneurs and investors are supposed to understand the law, or the SEC’s interpretation of the law, when the agency itself can’t even decide what language to use in describing it.



Third, the footnote betrays the SEC knowing its view of the law is wrong and how it’s taking different advocacy positions simply to win its enforcement cases. The argument that tokens themselves are securities is central to the SEC’s enforcement actions against centralized exchanges — the SEC hung its hat on that argument in the Binance case, claiming that tokens are “the embodiment of the investment contract” and therefore subject to the securities laws as they trade in secondary markets. The court explicitly called out the SEC’s inconsistency in its use of the term “crypto asset securities” and <a href="https://www.courtlistener.com/docket/67474542/248/securities-and-exchange-commission-v-binance-holdings-limited/">rejected that argument</a>, holding that it “is not enough, standing alone, to bring secondary sales” of specific tokens under the SEC’s jurisdiction.



As a neutral regulator meant to serve the interests of justice, the SEC isn’t supposed to take different positions in different cases just because it wants to win them. Instead, the SEC should be presenting a consistent view of the law — assuming it has one. This footnote proves it does not. And that means defendants will have a renewed opportunity to assert a fair notice defense against SEC enforcement, arguing that the law is so vague, a person of “common intelligence” can’t determine its meaning.



The SEC’s sudden abandonment of the term “crypto asset securities” isn’t just semantics, much as they would like to handwave and say so. If the SEC can’t characterize tokens as securities, it will have a hard time convincing courts that it has authority over secondary markets for digital assets. The crux of the securities laws is a registration regime for securities — but if the tokens themselves aren’t securities, then it’s unclear what exactly should be registered in the first place.



Crypto lawyers aren’t the only ones to notice the SEC’s retreat from the term “crypto asset securities.” In recent Congress hearings, members on both sides of the aisle — from <a href="https://x.com/RepRitchie/status/1836814099394764934">Ritchie Torres</a> to <a href="https://x.com/GOPMajorityWhip/status/1838616037945716999">Tom Emmer</a> — remarked on how the SEC made up the term despite having no basis in federal law, only to later retract it and apologize for its use. Now that the myth of “crypto asset security” has been exposed, the SEC will have to confront the reality of its weakness in both the courts and Congress.



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The SEC has been wrong about ‘crypto asset securities’ all along

Katherine Ross

David Canellis

Today, enjoy the Empire newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. Subscribe to the Empire newsletter.



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Happy day two of Permissionless!



Catch Katherine’s colorful writeup of day one below. And those not in Salt Lake City can soon find recordings of panels, firesides and <a href="https://blockworks.co/event/permissionless-iii/recordings">other discussions here</a>, once they’ve been uploaded over the next week or so.



<h2 class="wp-block-heading">The kids are alright&nbsp;</h2>



There are three words I need you to keep in mind: axes, wizards and climbing.



All three of which are present at Permissionless III this year. If you’re around Salt Lake City, you can test your axe-throwing skills and then immediately try to climb a wall. Then, after a restful break, you can find yourself watching a wizard go off about bitcoin.&nbsp;



Crypto really is magic sometimes.&nbsp;



Anyway, there truly is excitement in the air as folks sit in on sessions focused on a variety of topics, from investing in private markets to a fireside chat with BlackRock’s Samara Cohen (we’ll get to that in a bit).&nbsp;



But despite the fun oddities, people seem pretty pumped to descend on Salt Lake City.&nbsp;



Though — while many attendees noted that the overall vibes were good — Lumida Wealth CEO <a href="https://x.com/ramahluwalia">Ram Ahluwalia</a> remarked that he felt the vibes were “malaise.”&nbsp;



For Ahluwalia, one question lingered above his head like a rainy cloud: Will the latecomers — who bought in as prices rose — HODL or dip once we carve out a new all-time high?



Blockworks Chief Operating Officer Sid Viswanath noted he’d received a lot of positive feedback, with some even remarking that they prefer the quality of the event, which is smaller than last year.&nbsp;



As for the panels themselves, there was a lot of positive chatter amongst attendees as they flitted in between talks.



A16z crypto’s Chris Dixon was one of the first to speak on the main stage.



Dixon pushed for bipartisan legislation, noting that there’s a current “chill” on crypto due to the overall environment.&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">“An erratic regulatory regime is holding back founders from building what they want. There’s a political movement trying to shut down crypto by targeting good actors like Coinbase while letting bad actors like FTX off the hook. It’s a deliberate strategy to chill the space, which… <a href="https://t.co/La3rCzBlJy">pic.twitter.com/La3rCzBlJy</a>&mdash; rahilla (@rahilla) <a href="https://twitter.com/rahilla/status/1844041737595240705?ref_src=twsrc%5Etfw">October 9, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The regulatory environment — a very popular topic for crypto — was mentioned heavily throughout many of the panels, especially the ones that took place on the main stage.&nbsp;



But there’s an undertone of bullishness rippling through the attendees and the speakers at this year’s event. Or perhaps it’s just a lot of optimism. Either way, I’m not just writing that as a Blockworks staffer.&nbsp;



<a href="https://blockworks.co/tag/blackrock">BlackRock</a>’s Samara Cohen gave some insight into IBIT’s investors and the appetite that the world’s largest asset manager has seen since launching its bitcoin ETF in January of this year.&nbsp;



Cohen said that roughly 75% of buyers of IBIT were first-time iShare buyers, showing that the majority of the investors were crypto natives.&nbsp;



Looking at 13F filings, she noted roughly 85% of the investors were direct buyers.&nbsp;



“What we have actually seen is an appetite” for <a href="https://blockworks.co/tag/bitcoin-etf">bitcoin ETFs</a>, Cohen said.&nbsp;



After her talk, one attendee commented that Cohen was “badass.”



Other talks had some more…well, eccentric…vibes.



For example, a wizard — Taproots Wizard co-founder Eric Wall — sat next to Galaxy’s Alex Thorn as the two discussed bitcoin with Bankless co-founder David Hoffman.&nbsp;



And, mind you, that’s the same Hoffman who’ll enter the ring on Friday to take on Kain Warwick in a Karate Combat match.



So, yeah, Permissionless might look a little different from last year but it still embodies that tenacious yet positive spirit that we all know and love.



— Katherine Ross



<h2 class="wp-block-heading">The Works</h2>



<ul class="wp-block-list">
<li>Stripe has enabled USDC payments for US businesses on Ethereum, Solana and Polygon, The Block <a href="https://www.theblock.co/post/320404/stripe-crypto-payments">reports</a>. The payments giant stopped supporting bitcoin payments in 2018.</li>



<li><a href="https://blockworks.co/news/on-the-margin-newsletter-trump-family-defi-venture">Trump-linked</a> DeFi project World Liberty Financial <a href="https://x.com/lemiscate/status/1844121149934010857">wants</a> to work with Aave.</li>



<li>BTC fell below $60,300 for the first time in a week overnight. It has since rebounded to $61,000, down 1.7% in the past day. ETH is still working on holding $2,400.</li>



<li>A historic first: the FBI <a href="https://www.justice.gov/usao-ma/pr/eighteen-individuals-and-entities-charged-international-operation-targeting-widespread">created</a> its own cryptocurrency to bust dodgy “market makers” for wash trading and market manipulation.</li>



<li>Total SOL staked in Solana DeFi is at its highest <a href="https://defillama.com/chain/Solana?currency=USD">point</a> since July 2022: 46.25 million SOL ($6.4 billion). By US dollar value, Solana’s TVL is still slightly under where it was in March.</li>
</ul>



<h2 class="wp-block-heading">The Riff</h2>



Q: What doesn’t Joe Rogan get about crypto?



If you’re after a temp check on mass mainstream adoption, check this recent <a href="https://youtu.be/oXMQQbmrBvM?feature=shared&amp;t=8273">exchange</a> between Rogan and jungle keeper Paul Rosolie about crypto, the rat race and giving back once you make a certain amount of cash.



Even someone who finally makes their first $5 million, for example, might not be willing to give back to their community: inflation might devalue that net worth, or the hedge fund they piled the cash into might go under.



“Or, you’re an idiot and you invest in NFTs or bitcoin,” Rogan said. “Like you get nutty, you think it&#8217;s free money — no. It&#8217;s some kind of crazy thing, that&#8217;s still going on, where you got fake money, some weird, created money, and you just spent a lot of real money to buy some of this weird fucking imaginary money.”



Rosolie, a conservationist who lives in and helps protect parts of the Amazon, added that he’d almost “got got” by “the NFT people,” who’d suggested that he sell NFTs to help raise money for the rainforest.&nbsp;



Rogan had similar experiences but could never commit. He didn’t get how NFTs work — similar to Warren Buffett’s advice about not investing in anything that you don’t understand.



“Jamie [Rogan’s producer] has tried to explain it to me like six or seven times and I was like, ok, but you have it [the NFT] on your phone, right? So I can take a screenshot and I have it on my phone too.”



“No, but you don&#8217;t own it.”



“Ok. What does that mean?”



Jamie then tries for the eighth time. He does a decent job: you can replicate the NFT by taking a screenshot, but that doesn’t give the same experience as actually owning it — just like how owning the Mona Lisa would offer a different feeling than just looking at it in the Louvre.



“You don’t just own it on your phone, is the thought… the phone is the access point to where you do own it. That’s like saying your bank account [exists] only on your phone,” Jamie said.



Rogan and Rosolie then drift to unpacking how difficult it must have been for ancient humans to craft arrowheads and arrow shafts — little pieces of history that have real value, unlike Bored Apes.



At least Beeple’s NFTs get a pass, per Rogan. “When he has a gallery and you go there and there’s this giant digital art. Those kinds of NFTs make sense. This thing [a Bored Ape] is like a shit cartoon.”



The deeper you are in crypto, the louder the echo chamber, which can make it quite hard to gauge what parts of crypto have bled through to the normies.



Turns out, digital art NFTs might be just about the only thing that has, going by the state of this yapping heard millions of times this week.



— David Canellis



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

A16z’s Chris Dixon pushes for bipartisan legislation at Permissionless III

Wizards on stage. Rock climbing. And don’t forget the axe throwing.&nbsp;



These things and more helped set the tone during Permissionless III’s first day as thousands of crypto denizens descended on Salt Lake City.&nbsp;



There’s excitement in the air as folks sit in on sessions focused on a variety of topics, from investing in private markets to a fireside chat with BlackRock’s Samara Cohen (we’ll get to that in a bit).&nbsp;



One attendee remarked that they preferred Permissionless over other popular crypto events, remarking that it was “less of a zoo.”


<div class="wp-block-image">
<figure class="alignright size-medium is-resized"><img loading="lazy" decoding="async" width="1200" height="800" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_862.jpg?w=300&amp;h=300" alt="" class="wp-image-92914" style="width:461px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_862.jpg?w=1200 1200w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_862.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_862.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_862.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_862.jpg?w=386 386w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_862.jpg?w=392 392w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_862.jpg?w=329 329w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_862.jpg?w=80 80w" sizes="(max-width: 1200px) 100vw, 1200px" /><figcaption class="wp-element-caption">Source: Mike Lawrence for Blockworks</figcaption></figure></div>


While many attendees noted that the overall vibes were good, Ram Ahluwalia told me that he felt the vibes were “malaise.”&nbsp;



For Ahluwalia, one question lingered above his head like a rainy cloud: Will the latecomers — who bought in as prices rose — HODL or dip once we carve out a new all-time high?



Blockworks Chief Operating Officer Sid Viswanath noted he’d received a lot of positive feedback from attendees, with some even remarking that they prefer the quality of the event, which is smaller than last year.&nbsp;



As for the main stage, a16z crypto’s Chris Dixon was one of the first folks to speak at the conference on Wednesday.&nbsp;



Dixon, appearing on the main stage, pushed for bipartisan legislation, noting that there’s a current “chill” on crypto due to the overall environment.&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">“An erratic regulatory regime is holding back founders from building what they want. There’s a political movement trying to shut down crypto by targeting good actors like Coinbase while letting bad actors like FTX off the hook. It’s a deliberate strategy to chill the space, which… <a href="https://t.co/La3rCzBlJy">pic.twitter.com/La3rCzBlJy</a>&mdash; rahilla (@rahilla) <a href="https://twitter.com/rahilla/status/1844041737595240705?ref_src=twsrc%5Etfw">October 9, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The regulatory environment — which has become one of the most popular topics for crypto — was mentioned heavily throughout many of the panels, especially the ones that took place on the main stage.&nbsp;



But there’s an undertone of bullishness rippling through the attendees and the speakers at this year’s event. And I’m not just writing that as a Blockworks staffer.&nbsp;



Read more from our opinion section: <a href="https://blockworks.co/news/political-candidates-cannot-ignore-crypto-voters">Political candidates can no longer ignore crypto voters</a>



<a href="https://blockworks.co/tag/blackrock">BlackRock</a>’s Samara Cohen gave some insight into IBIT’s investors and the appetite that the world’s largest asset manager has seen since launching its bitcoin ETF in January of this year.&nbsp;



Cohen said that roughly 75% of buyers of IBIT were first-time iShare buyers, showing that the majority of the investors were crypto natives.&nbsp;



Looking at 13F filings, she noted roughly 85% of the investors were direct buyers.&nbsp;



“What we have actually seen is an appetite” for <a href="https://blockworks.co/tag/bitcoin-etf">bitcoin ETFs</a>, Cohen said.&nbsp;



After her talk, one attendee commented that Cohen was “badass.”



Off the main stage, attendees filled up the so-called breakout tracks, or smaller panels, which began in the afternoon.&nbsp;


<div class="wp-block-image">
<figure class="alignright size-large is-resized"><img loading="lazy" decoding="async" width="1200" height="800" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_1044-3.jpg?w=1024&amp;h=1024" alt="" class="wp-image-92922" style="width:532px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_1044-3.jpg?w=1200 1200w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_1044-3.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_1044-3.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_1044-3.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_1044-3.jpg?w=386 386w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_1044-3.jpg?w=392 392w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_1044-3.jpg?w=329 329w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/20241009_Permissionless_1044-3.jpg?w=80 80w" sizes="(max-width: 1200px) 100vw, 1200px" /><figcaption class="wp-element-caption">Source: Mike Lawrence for Blockworks</figcaption></figure></div>


In one such panel, a wizard — Taproots Wizard co-founder Eric Wall — sat next to Galaxy’s Alex Thorn as the two discussed bitcoin with Bankless co-founder David Hoffman.&nbsp;



Hoffman will not only take the stage at Permissionless but will also be in the ring on Friday to take on Kain Warwick in a Karate Combat match.



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Axe throws and crypto wizards: Permissionless III is underway

Today, enjoy the Forward Guidance newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. <a href="https://blockworks.co/newsletter/forwardguidance">Subscribe to the Forward Guidance newsletter</a>.



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



<h2 class="wp-block-heading">VanEck goes into venture</h2>



An asset manager with a crypto bent is doubling/tripling/quadrupling down — whatever you want to call it — on the sector.&nbsp;



VanEck brought to market a bitcoin futures ETF in late 2021, following that up with a similar ETH offering in October 2023. It later chose to <a href="https://blockworks.co/news/vaneck-closing-ether-futures-etf">shutter both those funds</a> once the SEC approved products that would hold BTC and ETH directly.



To that point, it was among the firms that debuted spot bitcoin and ether ETFs in the US in January and July, respectively.



VanEck (managing about $108 billion in assets) said today that it will now try its hand at venture capital via a $30 million fund focused on crypto, fintech and AI startups.&nbsp;



Known for its interaction with other X users and its witty one-liners, the VanEck account got real with us:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdwFFLjlc0dvhctBtdM1EMTdKYruCZbNBNTDfKL32a7UIThRHNB-YVJ2XRC_hw4KdjRMC6QiyOY_DXX5MS2-YIxUI47WoV8gVQXg2NDku3vPEes01bSvGgctQEW3ykrmuxiTrUHo2LejrNVl3tNNyUncx_-?key=5uwD7y2AfBzqD_ucUUgfYw" alt=""/></figure>



It’s worth mentioning that leading the fund will be Wyatt Lonergan and Juan Lopez, who formerly led the venture division of USDC issuer Circle.



Stablecoins could be “the ChatGPT moment” for crypto and act as the so-called killer app that brings blockchain to the masses, Lonergan told me in an email. Put another way, he added, the innovations spurred by stablecoins could lead to a “Cambrian explosion” of onchain fintech products across payments and capital markets.



“The infrastructure is battle-tested and ready — as an example, stablecoins will settle $24 trillion in volume this year,” Lonergan said. “And therefore we want to invest in the middleware and applications that enable that volume and capture the most value in the long term.”



Then there are tokenized asset platforms proliferating, noted Lopez.&nbsp;



Just look at <a href="https://blockworks.co/news/visa-to-help-banks-test-tokenized-assets-smart-contracts">Visa’s recent bid to help institutions</a> issue fiat-backed tokens and test out their use cases. Spain-based BBVA has been working with the payments giant to do just that (on a testnet blockchain) and looks to launch a pilot with select customers on Ethereum in 2025.



“These types of applications and marketplaces will enable new demand for blockchain technology and capture the most value over the next five to 10 years,” Lopez said.



From ETFs to venture funding, VanEck will no doubt be a firm to watch as the segment evolves. It wouldn’t be surprising to see other similar firms widen the ways they get involved in crypto and adjacent industries. 



— Ben Strack



<h3 class="wp-block-heading">75%</h3>



The percentage of buyers of BlackRock’s iShares Bitcoin Trust (IBIT) that never owned an iShares ETF before.



Samara Cohen, BlackRock’s CIO of ETF and index investments, shared this figure during a Wednesday panel at Blockworks’ <a href="https://blockworks.co/event/permissionless-iii">Permissionless</a> conference in Salt Lake City.&nbsp;



“We went into this journey with the expectation that we needed to educate ETF investors on crypto, and on bitcoin specifically,” Cohen said. “As it turns out, we’ve done a lot of education for crypto investors on the benefits of the ETP wrapper.”



Roughly $21.7 billion of <a href="https://farside.co.uk/bitcoin-etf-flow-all-data/">net flows</a> have entered IBIT since the fund’s January launch — more than double the second-best inflow-gatherer in the segment (Fidelity, at $9.9 billion).



<h2 class="wp-block-heading">Hello from Permissionless III!&nbsp;</h2>



Casey sat down with House Majority Whip Tom Emmer to discuss what’s next in crypto policy, why the rep says it’s not too late to see meaningful progress this session, and what things could look like under the next presidential administration.&nbsp;



Emmer said he’s been encouraged by the recent bipartisan support crypto policy has received. <a href="https://blockworks.co/news/house-passes-act-fit21-with-bipartisan-support">Seventy-one House Dems voted to pass FIT21</a>, the market structure bill that advanced to the Senate last spring.&nbsp;



“The dam started to break,” Emmer said, referring to the hold Maxine Waters (ranking member of the House Financial Services Committee) has historically had on the party.&nbsp;



He also said he’s confident crypto will remain part of the discussion through the end of the year. <a href="https://blockworks.co/news/political-candidates-cannot-ignore-crypto-voters">Once the election is over</a>, Emmer said it will take a few weeks for “the dust to settle.” But once we know who’s in control of each Chamber and the White House, lawmakers will have a better <a href="https://blockworks.co/news/forward-guidance-newsletter-crypto-survey-data">understanding</a> of their “negotiating leverage” and can get to work.&nbsp;



Another thing he’s confident in? A second term for Donald Trump.&nbsp;



“He’s <a href="https://blockworks.co/news/world-liberty-financial-kyc-starts">evolved on this issue</a> to the point where he’s going to advocate for it,” Emmer said of Trump’s crypto stance and the <a href="https://blockworks.co/news/donald-trump-talks-bitcoin">about-face he’s done</a> in recent months.&nbsp;



As for Kamala Harris? “She doesn’t know what she’s talking about,” he said.&nbsp;



Keep an eye on Blockworks.co for a full recap of our conversation with Emmer.&nbsp;



Tune in <a href="https://blockworks.co/event/permissionless-iii/recordings">here</a> to watch our livestream of Permissionless content. It’s not too late to buy a ticket either, come see us at registration. 



— Casey Wagner



<h2 class="wp-block-heading">Bulletin Board&nbsp;</h2>



<ul class="wp-block-list">
<li>Fed <a href="https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20240918.pdf">minutes</a> released today <a href="https://blockworks.co/news/on-the-margin-newsletter-fomc-meeting-takeaways">from last month’s meeting</a> showed that all committee members supported an interest rate cut. A “substantial majority” were in favor of a 50-basis point cut while some voted for 25bps. </li>



<li>The Atlanta Fed’s <a href="https://www.atlantafed.org/cqer/research/gdpnow?item=12610244-da58-4a4a-9762-36045adb4a3e">GDPNow</a> report showed that it expects a 3.2% increase in GDP for the third quarter. </li>



<li>We’re on the ground in Salt Lake City at Permissionless! If you’re here, be sure to say hi to Ben, Casey and Felix.</li>
</ul>



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From crypto ETFs to VC: VanEck unveils $30M fund

Jason Yanowitz

Since launching Blockworks Research two years ago, we’ve become the leading provider of crypto intelligence, research, and data. As this happened, we learned valuable lessons about what it takes to build and scale a crypto company and protocol.



Protocols asked us to share these lessons with them. Since then, we’ve been lucky enough to work with some of the best teams in the industry designing incentives, scaling governance, improving their analytics, giving guidance on treasury management, and more.&nbsp;



Today, we’re thrilled to formalize these services with the launch of Blockworks Advisory – a comprehensive suite of services designed to hypercharge growth for crypto projects from inception to maturity.



One of our core beliefs at Blockworks is that every year, more and more value will move onchain. As this happens protocols will become the new institutions. They’ll be bigger than any software business. They’ll be bigger than any bank.



Blockworks Advisory is here to support these protocols as they scale from their infancy to an entire ecosystem with diverse stakeholders.



<h2 class="wp-block-heading">Built Different: The Blockworks Approach</h2>



Blockworks Advisory stands apart with its depth-focused, authentic, and transparent approach. Our core offering includes:



<ul class="wp-block-list">
<li>Foundation Launch Partner: Creating a comprehensive solution to coordinate project Foundation launches through personalized service</li>



<li>Go-to-Market Strategy: Leveraging Blockworks&#8217; extensive network to drive brand awareness and identify optimal distribution channels</li>



<li>Economic Design: Applying quantitative techniques to forge sustainable growth paths, from incentive design to risk parameter definition.</li>



<li>DAO Operations: Advising on structure, co-authoring proposals, and administering grant programs to allow projects to focus on product development.</li>
</ul>



<h2 class="wp-block-heading">Charting the Future of Crypto Projects</h2>



Blockworks Advisory doesn&#8217;t just study trends — it defines them:



<ul class="wp-block-list">
<li>Protocol Dashboards: Building custom data dashboards to showcase in-depth adoption metrics on dedicated landing pages</li>



<li>DAO Research Partner: Providing objective, data-driven analysis for informed community decision-making</li>



<li>Finance &amp; Treasury Management: Outsourcing Foundation or DAO finance functions and offering treasury management guidance</li>



<li>Community Engagement: Hosting community calls and driving active discussions among key stakeholders</li>
</ul>



<h2 class="wp-block-heading">What Drives Blockworks Advisory</h2>



Our beliefs are as profound as the minds that champion them:



<ol class="wp-block-list">
<li>Depth over breadth: We deliver deep insights</li>



<li>Authenticity rules: Our genuine understanding of crypto&#8217;s nuanced ecosystem sets us apart</li>



<li>Transparency builds trust: We earn trust through clear, conflict-free analysis and data</li>



<li>Experience is everything: Our user-centric approach ensures seamless interaction with complex data</li>
</ol>



Blockworks Advisory aims to redefine how crypto projects launch, grow, and thrive. By focusing on Foundations and communities, we enable projects to concentrate on core product development.



As David Rodriguez, our Head of Advisory says: “At Blockworks Advisory, we believe that every project deserves a tailored approach to navigate the complexities of the crypto landscape. Our mission is to empower teams with the insights and support they need to not just launch, but thrive in this dynamic environment. We’re here to ensure that your vision becomes a reality, enabling you to focus on innovation while we handle the intricacies of launching a decentralized protocol.&#8221;



For more information, visit blockworksresearch.com/advisory or email us at advisory@blockworks.co



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Blockworks launches protocol advisory services

Solana’s march into mobile continued yesterday when the popular DeFi platform Jupiter released its mobile app.&nbsp;



Jupiter’s pseudonymous founder meow said on X that the team built and dropped many features while developing the app, but the final version sticks pretty closely to Jupiter’s hit feature, which is swaps. Interestingly, Jupiter doesn’t appear to be making money from fees on the app, so the initiative is purely a play at growing Jupiter’s distribution for now.&nbsp;



The app has just two tabs, one for making swaps and one for viewing your wallet balance. Jupiter partnered with MoonPay to offer fiat onramps, and I was able to fund a wallet with SOL via Apple Pay in under ten minutes. The process wasn’t completely seamless — I could only pay with my debit card rather than with a credit card, which I only learned by trial and error — but it felt smooth overall.&nbsp;



Once Moonpay is set up and you have a wallet connected, it takes four taps to buy more SOL, which is a pretty frictionless experience akin to something like Robinhood.&nbsp;



Candidly, it’s not the best-designed crypto app I’ve used. Even in the memecoin world, Moonshot has a sleeker UX with features like live price charts which Jupiter lacks.&nbsp;



“[C]urrent onboarding for the app is still 2/10 &#8211; we are no where near ready for mainstream adoption,” meow told me in a text.



But it seems like for now, Jupiter may be betting that users want the best prices above all else — and taking aim at Phantom in the process. Jupiter is a swap aggregator that algorithmically routes trades across multiple decentralized exchanges to achieve the best possible price for users. It also doesn’t charge fees on swaps, making the prices even better. As I’ve written before, even as Jupiter releases other popular DeFi features like perpetual swaps and a token launchpad, <a href="https://blockworks.co/news/lightspeed-newsletter-solana-top-swap-venue">swaps remain the moat</a> that make Jupiter a force in Solana DeFi.



Phantom — which has a lot of distribution by dint of being arguably the most popular Solana wallet — also offers swaps through a mobile wallet, but its swap prices are consistently worse than Jupiter’s. Jupiter’s fee-generating products aren’t currently live on the mobile app, meaning this is currently a pure play for distribution — and Phantom is the most likely target for disruption.



As the Solana Seeker <a href="https://blockworks.co/news/lightspeed-newsletter-solana-second-phone">gears up for release</a>, it’s becoming clearer that the Solana world thinks the crypto market of the future will be won and lost on mobile devices. With Jupiter’s launch, a pretty venerable competitor just entered that arena.



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Solana’s top swap venue Jupiter just released a mobile app

Today, enjoy the 0xResearch newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. <a href="https://blockworks.co/newsletter/research">Subscribe to the 0xResearch newsletter</a>. 



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



<h2 class="wp-block-heading">Babylon sees $1.4 billion in deposits</h2>



Babylon is a restaking protocol on the CometBFT consensus that saw a mainnet launch in August.&nbsp;



As of today, the Babylon chain has racked up an impressive 23,000 bitcoin ($1.4 billion) staked from 25.3k stakers. That puts it in the TVL ballpark of major restaking protocols like Symbiotic ($1.5 billion) and EigenLayer ($10.7 billion).



<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">🎉 Cap-2 Completed! 🎉 Today, Babylon reached an incredible milestone—almost 23,000 bitcoins staked in Cap-2! A big thank you to all of our stakers for being part of this journey&mdash; Babylon (@babylonlabs_io) <a href="https://twitter.com/babylonlabs_io/status/1843795314282770869?ref_src=twsrc%5Etfw">October 8, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Unlike previous sidechain attempts at bridging bitcoin to smart contract chains, Babylon offers a trustless coordination layer to do so <a href="https://docs.babylonchain.io/docs/faq/overview">without technically</a> bridging bitcoin.



This is achieved through the use of Cosmos’s Inter-Blockchain Communication (IBC) protocol to communicate messages between networks, and a mix of cryptography methods like “covenants” to lock bitcoin in a time-locked self-custodial vault until conditions are fulfilled. Additionally, <a href="https://docs.babylonchain.io/docs/introduction/btc-timestamping">timestamping</a> is used to synchronize a record of transactions on PoS chains.



To get around the lack of smart contract compatibility on the Bitcoin chain, Babylon’s design requires stakers to use their private keys to lock and unlock their stake, which is then delegated to a trusted validator for a fee.



In the event of malicious behavior, the validator’s private key is revealed and slashed with extractable one-time signatures (EOTS) — a concept that builds on Bitcoin’s Schnorr signatures algorithm.



This architecture allows bitcoin stakers to “bridge” their bitcoin into a PoS chain, and receive a yield that is paid out in the destination PoS chain’s tokens, a future feature to be implemented.



Presently, the two <a href="https://btcstaking.babylonlabs.io/">largest stakers</a> are liquid restaking protocols Lombard, and Solv Protocol, which have a total delegated 7166 and 6009 bitcoin, respectively.



Solv Protocol also <a href="https://x.com/SolvProtocol/status/1843607388181672008">announced</a> yesterday the Staking Abstraction Layer (SAL), a framework to standardize token standards across the growing number of bitcoin derivative tokens.



Due to its lack of smart contract capabilities, Bitcoin DeFi must go cross-chain. This in turn creates a need for such common standard frameworks.&nbsp;



Various cross-chain <a href="https://li.fi/knowledge-hub/comparing-token-frameworks/">token standards</a> have been used in Ethereum DeFi to create standardization, such as LayerZero’s OFT (Omnichain Fungible Token) and Axelar’s ITS (Interchain Token Service) standard.



<h2 class="wp-block-heading">Chart of the Day</h2>



Most Polymarket users lose money:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc0FRZL63MUzQ5-bUaZ-hXPMXC29YE-AEY0cSJdYidgo_l5TUuQSaRhNP_jXlzE_xauj8ZLbFm4tlPS-GcJyQs7e8XL6snro_nAu1lr9fCDdSFgR9DxR9hNW_-HcjaMsbzt2pizvd5OQlwG-2VvN7xQxaXi?key=W4Q8IbtOgbPiDJVVY9bCnQ" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://layerhub.xyz/protocols/polymarket">Layerhub</a></figcaption></figure>



As with most casino-based businesses, most Polymarket users are unsurprisingly in the red. Based on Layerhub’s data, 86.7% of users have made losing bets on the prediction market. Only about 2,148 (1.2%) of Polymarket users have made profits of upwards of $1k.



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Bitcoin-staking protocol Babylon attracts $1.4B in deposits

Macauley Peterson

Delta, a new layer-1 platform challenging the status quo for building high-throughput decentralized applications, has raised $11 million in funding.&nbsp;



The platform positions itself as a &#8220;network of networks&#8221; that seeks to break the traditional trade-off between blockchain sovereignty and interoperability, a nagging problem that many developers face today.



Delta’s pre-seed funding round was led by Figment Capital and Maven 11, with Variant and DBA leading the seed. (Blockworks co-founder Michael Ippolito is also an angel investor.)



The functional goals of Delta’s architecture are similar to those of the major rollup “clusters” — OP Superchain, the AggLayer or ZKsync Elastic Chain frameworks — all of which face interoperability challenges born from Ethereum’s rollup-centric roadmap.&nbsp;



Read more: <a href="https://blockworks.co/news/bitcoin-rollups-closer-than-expected">Bitcoin rollups may be closer than we think</a>



Dapp developers often have to choose between two approaches: building within the confines of a single framework or creating an independent appchain that must retrofit interoperability solutions.



The new approach aims to combine the best of both worlds by offering developers local control over their environment while still maintaining global connectivity through the base layer, according to Ole Spjeldnaes, CEO of Repyh Labs, which is building Delta.



“Originally we thought that this is what Ethereum was going to be like — you wouldn&#8217;t need to have these local clusters,” Spjeldnaes told Blockworks.



Delta&#8217;s architecture separates execution and transaction ordering from data availability and settlement, offering theoretical advantages over both appchains and <a href="https://blockworks.co/tag/rollups">rollups</a>, which typically require complex bridging solutions. In Delta, execution occurs within individual &#8220;domains,&#8221; which are akin to app-specific rollups or execution shards.



The key difference from, say, a <a href="https://blockworks.co/news/zk-sync-elastic-chain-rebrand-seeks-to-carve-out-scaling-niche">ZKsync Elastic Chain</a>, is that these domains retain complete power over their blockspace and can use any existing virtual machine or develop custom programs. However, Delta eschews Ethereum, and all its domains settle on a new decentralized base layer, which ensures shared global state and interoperability.



Read more: <a href="https://blockworks.co/news/funding-zero-knowledge-in-spotlight">Funding Wrap: Zero-knowledge is back in the spotlight</a>



“Delta is a more bottoms up approach to achieving, first of all, stronger properties than what something like the ZK Elastic Chain can provide because it&#8217;s a single state machine,” Spjeldnaes said. “If Ethereum did not have to think about being backwards compatible and had had the foresight, this might have been what it would have ultimately looked like.”



Unlike Ethereum rollups, all assets within Delta’s network stay on the base layer, notes Myles O’Neil, Repyh’s chief product officer.



“There&#8217;s no real equivalent for this in rollup terminology,” O’Neil told Blockworks.



That has consequences for asset issuance and liquidity — for instance, a stablecoin gets issued once on the base layer and is automatically available for use in all domains.



Another standout feature of Delta is its use of zero-knowledge proof-based settlement integrated directly into the base layer, allowing domains to interoperate without any external coordination or intermediary bridges.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf79gO1U8CAmrX9e6V40fCA8UYxTjbEavfzo6IYkjwjZjtVlZGYjxpYRokSix1HjbpniDJ45uA3JUOmepVy2ySks0b5F3N4DycQ44zABLvmsSLg_16TW1WK0gUflW89-xDeneAxAthpqo32OPJVmD1BOp7Q?key=mk3rPL2w0isHLHhpmNvX0w" alt=""/><figcaption class="wp-element-caption">Source: Repyh Labs</figcaption></figure>



“There are a minimal number of things that need to be proven by all domains,” Spjeldnaes explained, but so long as they are following this set of what are called Delta’s “global laws,” they retain the flexibility to use whatever execution, sequencing or permissions model they want.



Domains generate a State Diff List (SDL), a compressed standardized format for state changes based on their own transaction ordering, and submit it to the base layer, along with proofs that the SDL doesn’t violate any global laws (or the domains own “local laws”). The state model prevents conflicts between each domain&#8217;s subset of state.



“We let the domains be opinionated about how much else they want to prove,” O’Neil said. “So if they want to be completely trustless, just like a zk rollup, they can choose to prove their entire execution path.”



All domains will need to use a shared prover, which should be “the most efficient one for all” Spjeldnaes said. “The goal is really to maximize strong interop without infringing on the sovereignty of each domain,” he added.



Delta’s proof-of-stake validator set uses a leaderless and orderless consensus mechanism, known as Byzantine Reliable Broadcast (BRB), which Spjeldnaes compares to Sui’s <a href="https://blog.sui.io/mysticeti-consensus-reduce-latency/">Narwhal-Bullshark</a> consensus algorithm.



“I think Sui is very elegant,” Spjeldnaes said. “They are able to just do ordering for those transactions that need ordering [but] that adds a ton of overhead — which you can tell by their benchmarks — you have Narwhal and then you have to add consensus on top of Narwhal, and that is really the bottleneck.”



BRB avoids this overhead, and Spjeldnaes noted the computation requirements for validators will be very low, because their main task is verifying proofs. By foregoing the need for global transaction ordering, the network scales linearly as more machines are added, Spjeldnaes said.



“We see this as being also a protocol which would scale quite well in terms of the number of validators, but we haven&#8217;t tested this yet, so we cannot really make a strong claim about it.”



Delta’s biggest problem will be how to bootstrap usage and bring in assets to yet another new layer-1 network. With the mainnet launch still over a year away, O’Neil said they’ll be going after both crypto natives and non-crypto developers from the fintech and Web2 world.&nbsp;



By taking on the shortcomings of current leading ecosystems like Ethereum and Solana, the team hopes to demonstrate the merits of a new paradigm.&nbsp;



“What a system would look like if you were to rebuild things from scratch,” O’Neil said.



Updated to clarify which firms led the pre-seed and seed rounds.



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Start your day with top crypto insights from David Canellis and Katherine Ross.&nbsp;<a href="https://blockworks.co/newsletter/empire" rel="noreferrer noopener" target="_blank">Subscribe to the Empire newsletter</a>.



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Starting from scratch: A new architecture looks to challenge incumbents

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<a href="https://blockworks.co/event/permissionless-iii">Permissionless III</a> kicks off in Salt Lake City today!&nbsp;



Whether you’re on or off the ground, follow <a href="https://x.com/Permissionless">@Permissionless</a> for all the latest updates. And be sure to check the <a href="https://x.com/search?q=%23permissionless&amp;src=typed_query">hashtag</a> for more cool stuff.



<h2 class="wp-block-heading">Grasping at straws</h2>



Despite slick marketing leading up to the release of HBO documentary Money Electric, we’re no closer to finding out the identity of Satoshi Nakamoto.



What filmmaker Cullen Hoback, whose most recent work chronicled QAnon and 8chan with Q: Into The Storm, has given us is more of a creative retelling of Bitcoin lore.&nbsp;



The early efforts of the Cypherpunks, the formation of Blockstream and its victory in the Blocksize War, into the corporatization/industrialization of bitcoin mining and El Salvador adopting it as legal tender.



All that’s squeezed into 90 minutes, including cutaways to incessant negging from Nouriel Roubini and the mainstream media — solid comedic relief.



That side of the film makes for a great primer on the discourse. It even features a decent, albeit small, roster of legitimate insiders, including, among others: Blockstream co-founder Adam Back, veteran hacktivist Amir Taaki, a prominent early Bitcoiner now working on anonymous protocol DarkFi, as well as cryptography consultant and former Bitcoin core dev Peter Todd. 



Hoback later suggests Todd could be Nakamoto, hiding in plain sight all these years.



The bulk of Electric Money’s baseline reality, however, is woven with clips of Hoback following Back around the streets of Malta, to see if he’s Satoshi.&nbsp;



If Back was the progenitor, then the surrealness of Bitcoin Miami and nation state adoption were expressions of his genealogy.&nbsp;



It would also technically make Back a trillionaire, if bitcoin were to hit $1 million per coin, a factoid the film repeats over and over. That’s based on prior analysis that found Nakamoto had mined over 1 million BTC, although there is some <a href="https://blog.bitmex.com/satoshis-1-million-bitcoin/">dispute</a> about the real number.



Other scenes shadow former Blockstream marketing chief Samson Mow — who advised El Salvador president Nayib Bukele on his bitcoin adoption plan — on a world trip as a self-styled Bitcoin ambassador. The film also tags along with Todd on urban exploration trips in Latvia, before he’s presented as a real candidate.



Back, who has repeatedly denied that he created Bitcoin, is the only person cited by name in the body of the white paper for his work on Hashcash. It was an early proof-of-work system built in 1997 for curbing denial of service attacks and email, which Nakamoto tweaked for bitcoin mining.



Hoback looked for holes in Back’s story, the biggest of which was a letdown: Back was actually interested in bitcoin years earlier than he previously claimed, and he’d even edited a Wikipedia entry to include potential identities for Nakamoto that weren’t him, including Nick Szabo, Wei Dei and Hal Finney. Not exactly proof.



It’s only at the 80th minute that Hoback lays his cards on the table: a bluff based on a loose interpretation of BitcoinTalk forum posts.



Todd was supposedly Nakamoto at the age of 15 because he’d:



<ul class="wp-block-list">
<li>Spoken online about building a digital currency based on Hashcash before 2009.</li>



<li>Never officially held a position at Blockstream despite working closely on Bitcoin Core, for decentralization purposes.</li>



<li>Minorly corrected Nakamoto about how a fee market would work in a BitcoinTalk thread, by “finishing his sentence” with a followup post over an hour later.</li>



<li>Perhaps created a sockpuppet, roleplaying as a US intelligence agent who would later publicly assign Todd the task of coding that fee market.</li>



<li>Stopped posting on BitcoinTalk around the same time as Nakamoto.</li>



<li>Cryptically once suggested in an IRC channel that he had physically destroyed the keys to his bitcoin.</li>
</ul>



<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">“The level of reaching here rivals QAnon stuff (which is pretty ironic if you know what Cullen&#39;s previous documentary was about)” Exactly. The truth is pretty simple: there&#39;s hundreds, even thousands of people who could have created Bitcoin. We&#39;re not going to find Satoshi. <a href="https://t.co/TZMtqJhxgU">https://t.co/TZMtqJhxgU</a>&mdash; Peter Todd (@peterktodd) <a href="https://twitter.com/peterktodd/status/1843957196830441766?ref_src=twsrc%5Etfw">October 9, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



It makes for a fun theory, and for a final showdown, Hoback presents it to Todd and Back in an abandoned railway, a have-fun-staying-poor man’s Point Break. They both — rightfully — laugh it off, which has continued on X following the film’s release.



Whether we should or shouldn’t know who Nakamoto is or was is a tired conversation at this point.&nbsp;



Still, it’s obvious that for many normal folk, the question indeed presents a Rubicon that they can’t cross. That itself would hinder adoption, I guess, but as far as shedding light on the way through that mess goes, Money Electric ain’t it.



— David Canellis



<h2 class="wp-block-heading">The Works</h2>



<ul class="wp-block-list">
<li>Canary Capital is joining the <a href="https://www.theblock.co/post/320158/canary-capital-files-for-a-spot-xrp-exchange-traded-fund-with-the-sec?utm_source=rss&amp;utm_medium=rss">race</a> for an XRP ETF, filing its registration statement with the SEC on Tuesday.</li>



<li>BTC and ETH are where they were yesterday: bouncing off $62,000 and $2,400 apiece.</li>



<li>Solana is “richly valued” against the rest of the market, Standard Chartered <a href="https://www.coindesk.com/markets/2024/10/08/solana-is-richly-valued-versus-ether-but-could-still-outperform-if-trump-gets-elected-standard-chartered/?_gl=1*qyu0a7*_up*MQ..*_ga*MTE2NzM2OTIwMC4xNzI4NDQ5MjM2*_ga_VM3STRYVN8*MTcyODQ0OTIzNi4xLjAuMTcyODQ0OTIzNi4wLjAuMTE5NzAxNDY2NQ..">said</a>.</li>



<li>Ex-Alameda Research CEO Caroline Ellison <a href="https://www.theblock.co/post/320198/former-alameda-ceo-caroline-ellison-agrees-to-hand-over-bulk-of-her-assets-to-settle-ftx-lawsuit?utm_source=rss&amp;utm_medium=rss">agreed</a> to turn over assets to FTX debtors to settle a lawsuit, per The Block.&nbsp;</li>



<li>$168.4 million has flowed into Ethereum mainnet bridges in the past <a href="https://defillama.com/bridges/chains">week</a>, while $215.8 million has flowed out of Arbitrum’s.</li>
</ul>



<h2 class="wp-block-heading">The Riff</h2>



Q: What are Crypto.com’s chances against the SEC?



To put it simply: Crypto.com faces an uphill battle.&nbsp;



The firm filed a lawsuit against the Securities and Exchange Commission after it received a Wells notice from the agency.



The case, in some ways, mirrors what we saw from Consensys earlier this year. The firm receives the notice from the SEC — which threatens, but doesn’t promise legal action on the SEC’s behalf — and then responds by filing a lawsuit.&nbsp;



Earlier this year, Consensys filed suit against the SEC — also disclosing a Wells notice — as the firm took the fight to the regulator. The two cases are clearly a bit different despite some similarities, such as the fact that they both were filed in Texas courts.&nbsp;



While Consensys was really focused on ETH, the SEC seems to be taking a different approach with Crypto.com.



“The SEC has refused to provide Crypto.com a complete list of network tokens sold on the platform that it plans to allege are crypto asset securities. Instead, it has referred Crypto.com to other enforcement actions in which the SEC has asserted claims based on secondary-market sales of various network tokens, including the Targeted Network Tokens,” the complaint said.



Those targeted network tokens include BNB, SOL, ADA, FIL, ATOM and ALGO.&nbsp;



A Texas court recently dismissed the claims from Consensys. Now we’ll just have to see how Crypto.com fares.&nbsp;



— Katherine Ross



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We’re no closer to finding Satoshi Nakamoto

Despite slick marketing leading up to the release of HBO documentary Money Electric, we’re no closer to finding out the identity of Satoshi Nakamoto.



What filmmaker Cullen Hoback, whose most recent work chronicled QAnon and 8chan with “Q: Into The Storm,” has given us is more of a creative retelling of Bitcoin lore.&nbsp;



The early efforts of the Cypherpunks, the formation of Blockstream and its victory in the <a href="https://blog.bitmex.com/the-blocksize-war-chapter-1-first-strike/">Blocksize War</a>, into the corporatization/industrialization of bitcoin mining and El Salvador adopting it as legal tender.



All that’s squeezed into 90 minutes, including cutaways to incessant negging from <a href="https://blockworks.co/news/nouriel-roubini-crypto-bitcoin-atlast">Nouriel Roubini</a> and the mainstream media — solid comedic relief.



That side of the film makes for a great primer on the discourse. It even features a decent, albeit small, roster of legitimate insiders, including (among others): Adam Back, co-founder of Blockstream, veteran hacktivist Amir Taaki, a prominent early Bitcoiner now working on anonymous protocol DarkFi, as well as cryptography consultant and former Bitcoin core dev Peter Todd. 



Hoback later suggests Todd could be Nakamoto, hiding in plain sight all these years.



Read more: <a href="https://blockworks.co/news/craig-wright-is-not-satoshi-nakamoto">Craig Wright is not Bitcoin creator Satoshi Nakamoto, UK judge says</a>



The bulk of Electric Money’s baseline reality, however, is woven with clips of Hoback following Back around the streets of Malta, to see if he’s Satoshi.&nbsp;



If Back was the progenitor, then the surrealness of <a href="https://www.coindesk.com/markets/2017/04/18/miami-2014-the-last-days-of-bitcoins-wild-west/">Bitcoin Miami</a> and nation state adoption were expressions of his genealogy.&nbsp;



It would also technically make Back a trillionaire, if bitcoin were to hit $1 million per coin, a factoid the film repeats over and over. That’s based on prior analysis that found Nakamoto had mined over 1 million BTC, although there is some <a href="https://blog.bitmex.com/satoshis-1-million-bitcoin/">dispute</a> about the real number.



Other scenes shadow former Blockstream marketing chief Samson Mow — who advised El Salvador president Nayib Bukele on his <a href="https://blockworks.co/news/el-salvador-timed-bitcoin-bottom-empire-newsletter">bitcoin adoption plan</a> — on a world trip as a self-styled Bitcoin ambassador. The film also tags along with Todd on urban exploration trips in Latvia, before he’s presented as a real candidate.



Read more from our opinion section: <a href="https://blockworks.co/news/philosophers-bitcoin-resistance-money">Why we need philosophers to explain bitcoin: A review of ‘Resistance Money’</a>



Back, who has repeatedly denied that he created <a href="https://blockworks.co/tag/bitcoin">Bitcoin</a>, is the only person cited by name in the body of the white paper for his work on Hashcash. It was an early proof-of-work system built in 1997 for curbing denial-of-service attacks and email, which <a href="https://blockworks.co/tag/satoshi-nakamoto">Nakamoto</a> tweaked for bitcoin mining.



Hoback looked for holes in Back’s story, the biggest of which was a letdown: Back was actually interested in Bitcoin years earlier than he previously claimed, and he’d even edited a Wikipedia entry to include potential identities for Nakamoto that weren’t him, including Nick Szabo, Wei Dei and the late Hal Finney. Not exactly proof.



Read more: <a href="https://blockworks.co/news/hal-finney-bitcoin-satoshi-nakamoto-zk-proofs">25-year old video shows Bitcoin pioneer Hal Finney talking zero-knowledge proofs</a>



It’s only at the 80th minute that Hoback lays his cards on the table: a bluff based on a loose interpretation of BitcoinTalk forum posts.



Todd was supposedly Nakamoto at the age of 15 because he’d:



<ul class="wp-block-list">
<li>Spoken online about building a digital currency based on Hashcash before 2009.</li>



<li>Never officially held a position at Blockstream despite working closely on Bitcoin Core, for decentralization purposes.</li>



<li>Minorly corrected Nakamoto about how a fee market would work in a BitcoinTalk thread, by “finishing his sentence” with a followup post over an hour later.</li>



<li>Perhaps created a sockpuppet, roleplaying as a US intelligence agent who would later publicly assign Todd the task of coding that fee market.</li>



<li>Stopped posting on BitcoinTalk around the same time as Nakamoto.</li>



<li>Cryptically once suggested in an IRC channel that he had physically destroyed the keys to his bitcoin.</li>
</ul>



<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">“The level of reaching here rivals QAnon stuff (which is pretty ironic if you know what Cullen&#39;s previous documentary was about)” Exactly. The truth is pretty simple: there&#39;s hundreds, even thousands of people who could have created Bitcoin. We&#39;re not going to find Satoshi. <a href="https://t.co/TZMtqJhxgU">https://t.co/TZMtqJhxgU</a>&mdash; Peter Todd (@peterktodd) <a href="https://twitter.com/peterktodd/status/1843957196830441766?ref_src=twsrc%5Etfw">October 9, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



It makes for a fun theory. For a final showdown, Hoback presents it to Todd and Back in an abandoned railway, a have-fun-staying-poor man’s Point Break. They both — rightfully — laugh it off, which has continued on X following the film’s release.



Whether we should or shouldn’t know who Nakamoto is or was is a tired conversation at this point.&nbsp;



Still, it’s obvious that for many normal folk, the question indeed presents a Rubicon that they can’t cross. That itself would hinder adoption, I guess, but as far as shedding light on the way through that mess goes, Money Electric ain’t it.



A version of this article first appeared in the daily Empire newsletter. Subscribe <a href="https://blockworks.co/newsletter/empire">here</a> so you don’t miss tomorrow’s edition.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



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We are all Satoshi Nakamoto — except Peter Todd

Today, enjoy the Forward Guidance newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. <a href="https://blockworks.co/newsletter/forwardguidance">Subscribe to the Forward Guidance newsletter</a>.



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



<h2 class="wp-block-heading">SEC strikes again</h2>



In an exciting start to the SEC’s 2024-2025 fiscal year, Singapore-based Crypto.com has been served a <a href="https://blockworks.co/news/crypto-dot-com-sec-wells">Wells notice</a>, and, in response, filed a suit against the securities regulator.&nbsp;



In its complaint, the exchange says the SEC is “unlawfully expanding its jurisdiction to cover secondary-market sales” of certain cryptocurrencies. These certain tokens are, according to Crypto.com: SOL, ADA, BNB, FIL, FLOW, ICP, ATOM, ALGO, NEAR and DASH.&nbsp;



There are some familiar names here. In its lawsuit <a href="https://blockworks.co/news/coinbase-sec-rulemaking-appeals-court">against Coinbase</a>, the SEC also named SOL, ADA, FLOW, NEAR, DASH and ICP as securities. When the agency sued Binance, SOL, ADA, FIL, ATOM and ALGO made the SEC’s list. So there’s clearly a trend.&nbsp;



Wells notices, which precede formal enforcement actions, have been a dime a dozen lately. <a href="https://blockworks.co/news/consensys-files-lawsuit-against-sec">Consensys</a> sued the agency in June after receiving a Wells. <a href="https://blockworks.co/news/uniswap-responds-to-sec-wells-notice">Uniswap</a> got its notice in May. <a href="https://blockworks.co/news/sec-issues-wells-notice-opensea-nfts">OpenSea</a> was served in August. You get the picture.&nbsp;



These “counter-suits,” if you will — when a company preemptively takes a legal action before the SEC does the same — don’t tend to go very well for the filer. Consensys’s suit against the SEC was <a href="https://blockworks.co/news/consensys-lawsuit-against-sec-dismissed">dismissed</a> last month, although the ruling was fairly procedural (the SEC <a href="https://blockworks.co/news/sec-drops-ethereum-consensys-investigation">stopped</a> its investigation into Ethereum, so the court said Consensys’s complaint was now moot).&nbsp;



We’ll be watching how the Crypto.com suit plays out. The SEC has declined to comment, on both this matter and the Wells notice, but we will be keeping an eye out for an enforcement action as well.&nbsp;



— Casey Wagner



<h3 class="wp-block-heading">+52%&nbsp;</h3>



This is the 10-year average for bitcoin’s fourth quarter returns, as noted by Galaxy Research in a new report. Bitcoin gained 3% in the third quarter of this year after losing almost 13% during the second quarter.&nbsp; If history repeats itself, these final months of the year could be lucrative. But as always, this is not investment advice.



<h2 class="wp-block-heading">An FTX reminder before the election&nbsp;&nbsp;</h2>



Those infamous three letters have hit the news cycle again, and the timing could prove impactful. Then again, maybe not.&nbsp;



You know the FTX story by now. Its founder is <a href="https://blockworks.co/news/sam-bankman-fried-sentenced">in jail</a> because of it. But there was a bit of closure yesterday when a bankruptcy judge <a href="https://blockworks.co/news/ftx-bankruptcy-plan-approved">greenlit a plan</a> to pay back investors.&nbsp;



The plan, as laid out in previous filings, called for 98% of non-government creditors to <a href="https://blockworks.co/news/empire-newsletter-ftx-bankruptcy-finish-line">get “at least”</a> 118% of the value in their accounts (at the time of the exchange&#8217;s <a href="https://blockworks.co/news/ftx-meltdown-timeline">implosion</a> in November 2022) within two months of the plan’s approval.



It will be paid in cash, meaning investors are <a href="https://blockworks.co/news/ftx-former-customers-oppose-bankruptcy-plan">not getting back</a> any tokens they held on FTX. That isn’t exactly ideal for them, given most assets have <a href="https://blockworks.co/news/sam-bankman-fried-crypto-portfolio">increased substantially</a>. Bitcoin’s price back then was about one-quarter of what it is today.&nbsp;&nbsp;



Still, a portion of this story is being put to rest. Where are we still needing closure? Crypto regulation in the US (and other jurisdictions).



And oh, by the way, the US presidential election is 28 days away.&nbsp;



Mark Cuban, who has thrown vocal support behind VP Kamala Harris, recently reiterated what plenty have said over the last two years: The FTX pain could have been avoided. And <a href="https://decrypt.co/284737/mark-cuban-harris-ftx-sec-gary-gensler">he apparently told</a> one of Harris’s advisors as much over lunch.&nbsp;



The billionaire <a href="https://www.youtube.com/watch?v=tMvufQQbGJo">criticized</a> the SEC’s regulation-by-litigation approach and lack of clear guidelines (instead lauding efforts by Japan, for example). He put at least some of the blame on SEC Chair Gary Gensler — a man that Donald Trump in July said he would <a href="https://blockworks.co/news/donald-trump-speaks-bitcoin-2024">fire</a>, if elected.



An SEC spokesperson did not immediately return a request for comment.&nbsp;



While Trump has been <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-crypto-promises">vocal</a> about being a pro-crypto president, Harris now too has made it known she wants to <a href="https://blockworks.co/news/on-the-margin-newsletter-china-stimulus-stagnation">support</a> the industry. Specifics have been elusive.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



We know politicians read the news, and maybe some even scroll through Crypto Twitter (or X, whatever). The FTX repayment plan making headlines again so close to Nov. 5 might help highlight the need for comprehensive regulation strides.&nbsp;&nbsp;



Alex Saleh, head of partnerships at Coincover, said in a Tuesday email that more jurisdictions need to begin “moving the dial” on regulatory frameworks.&nbsp;&nbsp;



“It’s clear that regulation will play a central role in preventing future crises like FTX,” Saleh added. “The EU’s MiCA legislation, for example, introduces specific rules around fraud protection and capital reserve requirements which will help foster a safer and more secure ecosystem.”&nbsp;



— Ben Strack



<h2 class="wp-block-heading">Bulletin Board</h2>



<ul class="wp-block-list">
<li>Economists are now <a href="https://www.reuters.com/sustainability/sustainable-finance-reporting/ecb-cut-rates-by-25bps-both-oct-dec-euro-zone-economy-wobbles-2024-10-08/?utm_source=Sailthru&amp;utm_medium=Newsletter&amp;utm_campaign=Reuters-Business&amp;utm_term=100824&amp;user_email=fa79e40e809c025fd4827946d76a7c6be663b35e69ebda4628a3ff9f08f02c28&amp;lctg=6217b5e4e61dc90bfd6de99d">calling</a> for two 25 basis point interest rate cuts from the European Central Bank in October and December. The updated forecasts come after September data showed that eurozone inflation is now below 2%.</li>



<li>Officials from China’s National Development and Reform Commission on Tuesday failed to promise more robust stimulus plans, disappointing investors. The CSI 300 index — a cap-weighted index tracking the top 300 stocks on the Shanghai Stock Exchange and the Shenzhen Stock Exchange — closed 5.9% higher after initially surging 11%.</li>



<li>Tomorrow is the day! <a href="https://blockworks.co/event/permissionless-iii">Permissionless III</a> kicks off in Salt Lake City. Casey, Ben and Felix will all be taking the stage to talk about the biggest trends in macro and crypto. You don’t want to miss it.</li>
</ul>



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