Gearbox

Jack Kubinec

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



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Solana is $200! Wait, no it’s not. Wait, yes it is. Wait, no it’s not.



We’re more than halfway into what may prove to be Solana’s most memorable year to date. And my, how fast the year is going by! 



Before it slips away altogether, here are my five biggest Solana moments of 2025 thus far:



<h2 class="wp-block-heading">5. Raydium spins up its own launchpad</h2>



In February, news slowly trickled out that the Solana memecoin cash cow pump.fun was going to be ending its unofficial partnership with Raydium and <a href="https://blockworks.co/news/pumpdotfun-ditching-raydium-rumor">launching an AMM</a> of its own.



This closed what had been a very lucrative pairing for Raydium, which had made tens of millions of dollars from pump.fun tokens to that point.



So, Raydium swung back and <a href="https://blockworks.co/news/raydium-launching-pumpfun-version">created a memecoin launchpad</a> of its own. After a slow start, the gambit seems to be working: Raydium-supported letsbonk.fun <a href="https://app.blockworksresearch.com/analytics/solana/?dashboard=339">raced</a> to over 50% of launchpad market share two weeks ago.



<h2 class="wp-block-heading">4. Pump.fun announces a token</h2>



When I started hearing pump.fun wanted to raise $1 billion by selling a token, first I went “What?”, and then I went, “Huh?”



Sure enough, <a href="https://blockworks.co/news/pumpdotfun-token-sale">we first reported</a> that the ICO would be carried out at a $4 billion valuation. Many complained that the action was extractive from a business that has already generated nearly a billion dollars in trading fees.&nbsp;



But the market didn’t mind too much: pump.fun exceeded $1 billion in private and public sales for PUMP when all was said and done.



<h2 class="wp-block-heading">3. SIMD-228 defeated</h2>



In January, Multicoin Capital’s Tushar Jain <a href="https://www.youtube.com/watch?v=Oyb7I-Ptayw">came on Lightspeed</a> to pitch SIMD-0228, a proposal to cut Solana’s token inflation rate and introduce a market-based inflation mechanism.&nbsp;



This was the most voted-on Solana proposal ever, and a number of smaller validators were concerned about tighter margins stemming from fewer inflation rewards. Others expressed worries about uncertain outcomes the proposal may have created.



In the end, somewhat surprisingly, the proposal — which had support from several key figures in Solana — <a href="https://blockworks.co/news/what-simd-0228-failing-means-for-solana">failed to pass</a>.



<h2 class="wp-block-heading">2. Trump launches a memecoin</h2>



It’s tough to top this one. On Friday night before his inauguration, the incoming POTUS <a href="https://blockworks.co/news/trump-memecoins-rock-solana">launched a memecoin</a> on Solana.



Solana experienced severe congestion as traders raced to buy the coin, and SOL climbed to an all-time high. The token had interesting downstream effects, like <a href="https://blockworks.co/news/solana-stablecoin-supply-soars">suddenly spiking</a> Solana’s USDC supply.&nbsp;



Solana folks generally take pride in the fact that although many of us wish he had not launched a memecoin at all, at least Donald Trump launched his memecoin on Solana.



<h2 class="wp-block-heading">1. Alpenglow</h2>



At the Solana Accelerate conference in May, Anza announced Solana’s biggest upgrade ever: Alpenglow.



Interestingly, this project <a href="https://www.youtube.com/watch?v=KN5Novxjybs">got started</a> when researchers wrote a paper exploring some problems with Solana consensus, and Anza hired them to come fix it.



The end result <a href="https://blockworks.co/news/solana-alpenglow-next-gen-consensus-layer-speed">claims to be</a> a 100x <a href="https://www.helius.dev/blog/alpenglow">reduction</a> in block finality and the end of <a href="https://blockworks.co/news/solana-proof-of-history">proof-of-history</a> as we know it. It could be live as soon as December, making Solana run ever faster. 



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History

5 biggest Solana moments of 2025 (so far)

Felix Jauvin

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



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This morning, I had the good fortune of interviewing Jens Nordvig.



The interview will be <a href="https://www.youtube.com/@ForwardGuidanceBW/videos">out tomorrow</a>, but I wanted to give a teaser around something incredibly important: Fed independence.



Nordvig is the founder of Exante Data and was previously managing director at Goldman Sachs, senior investment associate at Bridgewater, and head of fixed income research at Nomura.&nbsp;



At this point, everyone knows that President Trump <a href="https://blockworks.co/news/trump-criticizes-fed-chair-powell">doesn’t like</a> Jerome Powell very much and thinks interest rates should be <a href="https://blockworks.co/news/inflation-data-trump-tariffs-july">meaningfully lower</a>.&nbsp;



Specifically, the lens of criticism has shifted from the traditional dual mandate of the Fed — stable prices and maximum employment — toward what fiscal authorities view as a more relevant mandate, managing the debt load of the US government. One of the key arguments being made is that the Fed should lower interest rates so that interest payments on US debt come lower, thereby lowering the fiscal deficit.&nbsp;



This subordination of monetary policy to fiscal priorities of debt load management is what I view as the more correct definition of fiscal dominance.&nbsp;



Fiscal authorities set policy, and monetary authorities are there simply to make it the least painful. Nothing more, nothing less.



The last time that this happened was in the 1940s, when the Fed formally employed yield-curve control to cap rates at certain levels and its primary purpose was to buy US debt and manage the debt load. This regime ended in earnest with the Fed Treasury accord of 1951, which reinstilled Fed independence. Ever since those accords, we’ve been in an era of monetary dominance.&nbsp;



We are now in the early innings of this transition.



The primary risk associated with <a href="https://blockworks.co/news/fed-independence-in-question">dwindling Fed independence</a> is the potential for inflation expectations to become unanchored. In simple words, this looks like inflation concerns being instilled in society and a common realization that the Fed cannot get a meaningful handle on those inflation expectations.&nbsp;



In practice, the traditional goal of central banks having a 2% target for inflation serves as a codified intention to prevent inflation expectations becoming unanchored.



Unfortunately, this slow but steady erosion of Fed independence by the Trump administration is already beginning to percolate into inflation expectations, and the risk of these becoming unanchored is increasing meaningfully.&nbsp;



Jens brought a fascinating chart to our discussion that highlights this emerging dynamic.&nbsp;



The chart below shows the cumulative and predicted changes in five-year US breakeven rates, both as predicted by changes in oil and independent variables:



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXesmf-ygloOZuq3KuyehPt-4RyrujDC5xiAuKLpbd7cc5KU_Yebh1W4kEuk_RE2hMaUKRDzCZNLA58f2O0_P-Re2LvB-W_tAj_LII3UBcJj3aQN9_pFghBpfC1sMR3UkbzquQcZ?key=b5MFdWxy17gqX0PVMAkv4g" alt="" style="width:649px;height:auto"/></figure>



Typically, breakevens track the price of oil since it’s the largest driver of inflation. What’s concerning right now is that breakevens are surging while oil is hardly moving and, if anything, is declining.&nbsp;



In Jens’ view, this is a distillation of the market beginning to price-in, and become concerned with, inflation expectations becoming unanchored as Fed independence erodes. 



With <a href="https://blockworks.co/news/fomc-june-powell-term-end">Powell’s term ending</a> in the winter of 2026, keep an eye on this market and whether this concern accelerates. The bedrock of the financial system depends on these expectations remaining well-anchored.



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Federal Reserve

How inflation breakevens signal eroding Fed independence

Macauley Peterson

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



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Ethereum’s validator exit queue surged past 475,000 validators this week, pushing the unstaking wait time to nine days — the second-longest in Ethereum’s post-Merge history. Galaxy Digital Research <a href="https://www.galaxy.com/insights/research/why-eth-unstaking-queue-swelled">attributes</a> the spike to a cascading unwind in liquid staking token (LST) leverage. Its report traces the stress to one trader’s large capital rotation: “This volatility was driven by a sharp reduction in ETH supply on Aave, initiated by large withdrawals from the platform by a wallet tagged to the HTX exchange [formerly Huobi].”



That liquidity removal sent Aave’s ETH borrow rates <a href="https://x.com/JackMandin/status/1947799861308625353">soaring</a> from ~3% to over 18%. The result? Negative carry for stETH loopers — users who recursively borrow ETH to buy more stETH.



Galaxy notes that when rates jumped over 10%, leveraged positions became unprofitable, prompting a mass unwind.



This unwind played out through two channels. Some loopers sold stETH on AMMs, pushing the peg down by 30-60 basis points. Others opted for validator redemption, leading to the massive queue buildup. Although May’s <a href="https://blockworks.co/news/ethereum-pectra-fork-live">Pectra upgrade</a> lifted the fixed churn cap — raising today’s allowance to roughly 12 exits per epoch — the wave of withdrawal requests still overwhelmed that higher limit, pushing the queue out to more than nine days.



That delay created a feedback loop: With redemption time rising, arbitrageurs now require higher yields to justify holding depegged stETH. As Cork Protocol’s Robdog.eth <a href="https://x.com/robdogeth/status/1948033585404878957">explained</a>, “the annualized yield of [buying stETH at a discount and redeeming] with a nine-day delay is 25%, which…is fairly profitable. If the queue becomes 18 days instead of nine, the arbitrage take rate becomes 100-110 bps.”



Importantly, the unwind hasn’t tanked ETH itself. ETH spot ETF flows <a href="https://farside.co.uk/eth/">remained strong</a>, with $300 to $600 million in daily inflows over the past week. That demand absorbed much of the selling pressure.&nbsp;



“Investor appetite for the two biggest blockchains is undeniable,” Dom Harz, co-founder of hybrid L2 BOB, told Blockworks. “ETH is outperforming the original blockchain so far this month.”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfivuARuM424RwyJgUamU2U68uPF9STzHaJ57yzzDRZdc389VL40PgeyvrNmRhqrZRNmM8eOFkCnG4Jilgb8jRV-FLgNl2SBk58QSTENvX1O8Q8C_O9tOIgO4tpCkD9m_KqtjDOYQ?key=B-5jFzKQMHOXbOEGFSWq6A" alt=""/></figure>



Source: <a href="https://blockworks.co/analytics/crypto-etfs">Blockworks Research</a>



Some traders have speculated that the depeg may also reflect spot ETH scarcity at OTC desks as institutional <a href="https://blockworks.co/news/year-old-us-ether-etfs">demand via ETFs intensifies</a>. Wintermute’s CEO <a href="https://x.com/EvgenyGaevoy/status/1945596541193818187">noted</a> a week ago that its books were “virtually out of ETH,” prompting concerns that funds are sourcing ETH by dumping stETH. While plausible at the margin, onchain flows and redemption patterns suggest leveraged stETH loop unwinds remain the dominant driver, with OTC demand playing, at most, a secondary role.



Still, the event underscores a chronic weak point in Ethereum’s liquid staking stack. The <a href="https://dune.com/oasisapp/steth-eth-peg-history">stETH/ETH peg</a> remains around 0.995, while onchain AMM liquidity for stETH dropped from $280 million to $180 million. Most major lending protocols (like Aave and Maker) use stETH’s redemption oracle, not market price — shielding users from immediate liquidations. But if the queue stretches further, slow-burning interest accrual could start forcing more severe deleveraging.



Galaxy Research frames this episode as a warning shot. “[T]his episode highlights the continued fragility of the ETH liquid staking and restaking ecosystem,” the report notes. It calls for design improvements like peer-to-peer exit markets, rate smoothing and fixed-term vaults to reduce reliance on redemption queues.



The loopers, meanwhile, are caught in what one analyst called a “trilemma”: Accept a 5-6% loss by selling at a discount, wait nine-plus days while paying high interest, or hold and pray rates fall.&nbsp;



Said Robdog.eth: “These guys thought the stETH looping trade was free money and now they are stuck between a rock and a hard place.”



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0xResearch Newsletter

Ethereum stakers face 9-day wait as stETH loops fall into the red

Ben Strack

The US government expects to rest its case against Tornado Cash co-founder Roman Storm on Thursday following yesterday’s anticipated testimony from an expert witness.



The defense is set to counter the prosecution’s efforts to show Storm could have better guarded against “bad actors” using Tornado Cash — the crypto mixer used for transaction privacy around which this case centers.



IRS Criminal Investigation special agent Stephan George took the stand to share findings that appeared to link a portion of the funds stolen from Hanfeng Lin to Tornado Cash.&nbsp;



Lin testified last week that a fraud recovery service told her to contact Tornado Cash about retrieving her funds. The defense was <a href="https://www.therage.co/tornado-cash-mistrial-hangfeng-lin/">reportedly</a> considering a mistrial motion after a subsequent witness, FBI Special Agent Joel DeCapua, didn’t link Lin’s funds to Tornado Cash — putting the relevance of Lin’s testimony in question.



But George said Wednesday he used public blockchain data — along with Chainalysis Reactor and TRM Labs — to find that a portion of Lin’s stolen funds that left Crypto.com ultimately went to Tornado Cash in November of 2021. 



He used an accounting method known as Last In, First Out (LIFO) — which assumes the disposal of crypto acquired most recently. When defense attorney Keri Axel challenged LIFO during cross-examination, George defended the method as a generally accepted accounting principle that the IRS “respects.”



Axel’s cross-examination of George was set to continue Thursday morning.&nbsp;&nbsp;



While the possibility of a mistrial was briefly mentioned in court Tuesday, the defense did not immediately comment about whether that’s still being considered.&nbsp;



&#8220;It&#8217;s usually not the situation that a trial is declared a mistrial merely because a witness&#8217;s testimony is not entirely germane,” Patrick Gruhn, a former partner at Crypto Lawyers LLC and FTX’s ex-head of Europe, told Blockworks. “Courts generally expect a lot more — egregious misconduct or prejudicial facts against the jury — before they suspend a trial.”



Though George linking Lin’s funds to Tornado Cash was an attempt by prosecutors to clear up a point of contention that arose, the charges against Storm go well beyond that.&nbsp;



At the heart of this case is whether Storm essentially helped criminals — such as North Korean state-sponsored hackers, The Lazarus Group — hide stolen funds, as the government alleges. He is charged with conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money transmitting business.



Key questions of the case, as shared in opening statements last week, include whether Tornado Cash was immutable and if the developer is responsible for how software is used.



Defense attorney Keri Axel said in her opening statement: “It’s not a crime to make a useful thing that is misused.”



Read more: <a href="https://blockworks.co/news/roman-storm-trial-opening-statements">‘He lied’: US government makes opening plea to jury in Roman Storm trial</a>



After the jury left the courtroom on Wednesday afternoon, the prosecution told Judge Katherine Polk Failla that it had two witnesses remaining and could wrap up by Thursday morning.&nbsp;



Though the defense had not finalized its slate of witnesses before the court let out on Wednesday, Storm’s attorneys said they could rest their case as soon as Monday. Storm has not yet decided whether he will take the stand, they added.



“I assume you don’t have a hacker testifying,” Failla quipped. “That would be interesting.”&nbsp;



<h2 class="wp-block-heading">Hacker takes the stand</h2>



The prosecution did put a hacker on the stand on Tuesday. That was Shakeeb Ahmed, who is currently serving a three-year sentence after <a href="https://www.justice.gov/usao-sdny/pr/former-security-engineer-sentenced-three-years-prison-hacking-two-decentralized">pleading</a> guilty to computer fraud last year. Ahmed, a former technical lead in Amazon’s bug-bounty program, detailed how he stole $12 million worth of crypto from exchanges Crema and Nirvana in 2022.



He put his own funds into a Tornado Cash pool to “anonymize” them before using a third party — known as a relayer — to withdraw them. He then went on to hack the Crema exchange. He did not use Tornado Cash at any point leading up to, or after, he hacked the Nirvana exchange.



The defense, during cross-examination, made clear to the jury that Ahmed never put stolen funds into Tornado Cash.&nbsp;



“You didn’t use Tornado Cash for the [hack] proceeds?” defense attorney David Patton asked.&nbsp;



“Correct,” Ahmed said.



Patton also asked whether Ahmed ever communicated with Storm and the other Tornado Cash founders, or conspired with them to commit crimes.



“I did not,” Ahmed noted.



<h2 class="wp-block-heading">Questioning Tornado Cash’s design choice</h2>



The prosecution sought to establish, through another witness, that Storm — along with Tornado Cash co-founders Roman Semenov and Alexey Pertsev — could have made changes to the protocol to guard against bad actors using it.&nbsp;



The Office of Foreign Assets Control (OFAC) deemed the Lazarus Group responsible for the $625 million Ronin Bridge hack in March 2022 and sanctioned the entity. Tornado Cash <a href="https://x.com/TornadoCash/status/1514904975037669386">said</a> the following month that it was using a Chainalysis oracle contract “to block OFAC-sanctioned addresses from accessing the dapp.”



Philip Werlau, an investigator at AnChain.AI, testified that — while that blocked sanctioned entities from using Tornado Cash’s web application — founders did not implement this control for deposits made via its Command Line Interface (CLI).&nbsp;



“If there are two doors to a building and you only close one, you’re not preventing access,” Werlau said.



Werlau also explained how Tornado Cash could have maintained an offchain registry with users’ personal info collected through a username-password system.



Anticipating this testimony, defense attorneys noted to the judge earlier that day that while Tornado Cash could have been designed differently, that doesn’t mean what Storm built was illegal.



This sentiment came out during the cross-examination, when defense attorney Brian Klein raised his voice — asking Werlau if one reason to make pools immutable would be to make them less subject to hacks. That could reduce the ways a pool could be attacked, Werlau acknowledged.&nbsp;



Klein then asked Werlau if he provides personal info when he uses the Ethereum blockchain.



As Werlau paused to think, Klein rephrased, almost shouting: “There’s nothing like the registry you proposed, is there?”&nbsp;



“That is correct.”



Werlau, seemingly uncomfortable with the confrontation, looked up at the clock. A break for lunch was not far off.&nbsp;



<h2 class="wp-block-heading">The scene and the stakes</h2>



This writer sat 20 or so feet from Storm over the last two days, even passing him during breaks en route to the bathroom and elsewhere. The Tornado Cash founder appears calm, but walks with pace.



Sitting next to Axel on the courtroom’s left side, Storm often gazes toward the judge, stand and jury, stone-faced, blinking infrequently behind his glasses. Occasionally, he will scribble something on a Post-It and hand it to a member of his defense team. This writer did not once see Storm roll his eyes or shake his head.&nbsp;



Trial attendance ranged from roughly a dozen to two dozen people on Tuesday and Wednesday — meaning there are plenty of empty seats.&nbsp;



While not as high-profile a case as the Sam Bankman-Fried trial, Blockchain Association legal head Marisa Coppel noted its outcome will shape how developers, regulators and policymakers navigate the future of crypto innovation.



“A conviction could set a dangerous precedent by criminalizing the act of writing and publishing open-source code, amplifying fears among US developers and pushing innovation offshore,” she told Blockworks. “An acquittal, by contrast, may reaffirm that software creation alone isn’t a crime and could help restore confidence in building decentralized tools.”



Keep an eye on Blockworks for more <a href="https://blockworks.co/tag/roman-storm">Roman Storm trial updates</a>. 



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Cybersecurity

Hacker, IRS agent take Storm trial stand as government winds down case

Byron Gilliam

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Anything that won&#8217;t sell, I don&#8217;t want to invent. Its sale is proof of utility.”



— Thomas Edison
</blockquote>



The first idea that put Helium co-founders Amir Haleem and Shawn Fanning (of Napster fame) on the long road to building a decentralized, crypto-powered mobile network had nothing to do with decentralization, crypto or mobile networks.



Instead, they were looking for a way to keep track of the very expensive drones they kept losing over windy San Francisco.



It’s not surprising that it turned into something else — the tech industry has a rich history of unintended consequences resulting from such brainstorming.



YouTube was launched on Valentine’s Day, 2005, as a video-based dating site: “Tune in, hook up.”&nbsp;



Shopify began as a website selling snowboards.



Instagram was originally a location check-in app called Burbn.



This is why it’s commonplace for VCs to say that they invest in founders, not ideas.



They have no alternative, really.&nbsp;



“In the beginning of a startup,” Marc Andreessen notes, “you know a lot more about the team than you do the product, which hasn’t been built yet.”



The job of early-stage funding is to give founders room to wander their way to a product.



In the case of Helium, that wandering process was funded by crypto enthusiasts.



Founded way back in 2012, Helium has long been one of the few examples crypto enthusiasts could cite as evidence the industry might produce something other than yet more ways to trade crypto.



For most of that time, it remained an aspirational example.&nbsp;



Helium’s original business plan (inspired by those lost drones) was to use crypto tokens to crowdsource the buildout of a wireless network for sensors, trackers and other “internet of things” gadgets.



It succeeded: The network is up and running. 



But it hasn’t generated the kind of revenue that Thomas Edison would say proves its utility.&nbsp;



Also, the internet of things isn’t much of a topic anymore.



Helium’s pivot to mobile services, however, is becoming more and more of one — and recent sales are proof that the network which has been built has utility.



In a recent <a href="https://app.blockworksresearch.com/flashnotes/helium-halving-tailwinds#forward-outlook">report</a> for Blockworks Research, <a href="https://x.com/0xMetaLight">Nick Carpinito</a> cites the “explosive growth in Data Credit (DC) burn” as a reason to be optimistic about both Helium and its token, HNT.



Data credits are how users pay to access the Helium network, so their “burn” is one measure of how useful they think the network is.



They appear to be finding it more and more useful: “The monthly DC burn rate attributed to mobile usage recently surged from ~$189,000 in early March 2025 to ~$361,000 in June 2025,” Carpinito wrote.



Most of that comes from carriers like AT&amp;T and T-Mobile which pay to route traffic through Helium hotspots when their customers lose signal indoors.



This is a cheaper, more effective way for the carriers to provide coverage in buildings that their cell towers struggle to penetrate. It’s a rare example of real-world companies paying to use something built with crypto-based incentives.



But it’s not just about token incentives.&nbsp;



When a customer of, say, AT&amp;T connects to the Helium network, a Solana-based smart contract keeps a record of how much data is transferred and then facilitates payment (in the HNT token), between two crypto wallets.



Sometimes this is facilitated by Nova Labs, the company that developed the Helium network, but the smart contracts are open to anyone who wants to integrate directly with the network, as I’m told Telefonica is now doing in Mexico.



This, I think, is crypto at its best: enabling all-new economic activity, incentivized with tokens, that’s managed on a blockchain and accessible to anyone.



<h2 class="wp-block-heading">You can’t beat free</h2>



In his note for Blockworks, Carpinito focuses mostly on carrier offload as a source of growth for Helium.



But Frank Mong of Nova Labs, the company that developed the Helium network, seems more excited about the plans that Helium Mobile offers to individuals.



In a recent conversation, Mong (who also related the above drone anecdote to me) highlighted that Helium Mobile has recently been adding as many as 2,000 subscribers a day.



Importantly, the cost to Helium Mobile of acquiring these customers has been unusually low: just $10 to $15 per customer, according to Mong — vs. the $100+ that it costs its traditional competitors.



“There’s magic here,” Mong told me.



It’s not hard to figure out the trick, though: Helium offers a free mobile plan.



(It might even be less than free, after earning rewards for data sharing.)



I assume that’s a loss leader for Nova Labs, which runs Helium Mobile, but those are all customers who can be upsold on paid plans or monetized in other ways.



Mong’s near-term ambition is to get to a million such customers using the Helium-branded network, and also a million gateways providing the WiFi they connect to.



That would still be small, relative to telco giants like AT&amp;T and T-Mobile, but huge by crypto standards.



Mong is not measuring Helium as a crypto business, however.



“I think we can dominate the telco industry,” he told me.



And maybe other things too.



“Our aspirations are bigger than providing internet access,” Mong told me.



He wouldn’t be pressed on specifics, which is wise: The history of tech startups demonstrates that they rarely go where their founders expect them to.



Also, this is crypto: You can just build a network and see what people do with it.



Helium has invented something that sells (to paraphrase Edison), and that is much needed proof that crypto can have real utility.



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The Breakdown Newsletter

How Helium demonstrates crypto’s utility

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



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Ether ETFs <a href="http://v">launched in the US</a> one year ago today. Time flies.&nbsp;



While these products (unlike bitcoin ETFs) struggled to find consistent inflows out of the gate, this month has been a different story.&nbsp;



The ETH funds have attracted $3.6 billion of net capital from July 1 to July 22, Farside Investors <a href="https://farside.co.uk/ethereum-etf-flow-all-data/">data</a> shows.&nbsp;



The segment’s $2.1 billion of inflows last week was nearly double its previous record of $1.2 billion. As CoinShares’ James Butterfill pointed out in a Monday <a href="https://blog.coinshares.com/volume-243-digital-asset-fund-flows-weekly-report-391af81ba1ba">report</a>, the past 13 weeks of inflows represent 23% of the ETH products’ AUM.&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">2/ The daily flow data reveals sustained demand. The peak was reached on July 16 with a record $726.6 million single-day inflow. This momentum was maintained with multiple days exceeding $400M, showcasing consistent institutional accumulation throughout the month. <a href="https://t.co/lONtGlgrDh">pic.twitter.com/lONtGlgrDh</a>&mdash; Blockworks Research (@blockworksres) <a href="https://twitter.com/blockworksres/status/1947340860397596978?ref_src=twsrc%5Etfw">July 21, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Institutional demand — rather than just speculative trading — has helped fuel the latest inflows. Corporate treasuries have added more than 600,000 ETH to their balance sheets this month alone, according to Blockworks Research.



Perhaps you remember that Nasdaq-listed SharpLink Gaming in May revealed its <a href="https://blockworks.co/news/bitcoin-treasury-strategies-sharplink-eth">ether treasury strategy</a> (and named Ethereum co-founder Joseph Lubin its board chair). The company’s ether holdings were 360,807 ETH as of July 20 — up 29% from a week prior.&nbsp;



BitMine last week said it held roughly $1 billion of ether and has a goal of acquiring and staking 5% of the overall ETH supply.



Globe 3 Capital CIO Matt Lason previously told me that ETH’s combination of scarcity, deflation and yield makes it an ideal asset for a treasury strategy. SharpLink’s ETH staking rewards rose to 567 ETH since it launched the strategy on June 2.



Bitwise CIO Matt Hougan highlighted in a Tuesday <a href="https://experts.bitwiseinvestments.com/cio-memos/the-ethereum-demand-shock">memo</a> that ETPs and public companies have combined to buy 2.83 million ETH (worth ~$10 billion today) since mid-May. That’s 32x the increase in ETH’s supply over that span, he said.



So it’s not surprising that ETH’s price has jumped about 60% over the last month.&nbsp;



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXevEo7hM-FXkZlPcC2j3WZ7m2Jiw0dvDGLxU-tlbIAjgMmuIp58kfBiqm1R2_bfPhf6d-sieoJJuxwlZJqEhi0kUgi_dHRzSYhIGmpwZ6ZtYBSa-1S3W7HiPMj2vpydkUfNwFqr4A?key=O5qHqyCJouBz0zEbfzJuRA" alt="" style="width:558px;height:auto"/></figure>



Because we mentioned staking before, we should note that various asset managers have filed with the SEC to allow their ether ETFs to stake a portion of the underlying holdings. BlackRock joined that movement last week, and the world’s largest asset manager typically gets what it wants from the SEC — perhaps because of clout, or knowing when the regulator is ready to approve its proposals. Maybe both.



SEC Commissioner Hester Peirce <a href="https://blockworks.co/news/hester-peirce-on-sec-priorities">asked for patience</a> in the SEC greenlighting modifications such as staking and in-kind creations and redemptions. Still, a number of segment observers expect those approvals are imminent.



Investors remain underweight ether ETFs, Hougan wrote in his memo. While ETH has a market cap that’s roughly 20% of bitcoin’s, ETH ETPs have just 12% of the assets that BTC products do.&nbsp;



“With all the excitement surrounding stablecoins and tokenization — which are primarily built on Ethereum — we think that will change, and that we’ll see billions in flows in the next few months,” Hougan added.



As for the next crypto ETFs <a href="https://blockworks.co/news/crypto-etf-launch-timelines-sec">we expect to see</a>, there was movement yesterday. Sort of.&nbsp;



The SEC approved Bitwise’s crypto index fund proposal. But like it did with the Grayscale Digital Large Cap Fund (GDLC), the order was stayed. This perhaps <a href="https://x.com/JSeyff/status/1947781219372175471">signals</a> the regulator will wait to roll out a comprehensive framework — about including digital assets in the ETF wrapper — before letting these convert to ETFs and list.



Oh, and also: 21Shares <a href="https://www.sec.gov/Archives/edgar/data/2061627/000121390025066691/ea0248711-s1_21shares.htm">filed</a> for an Ondo ETF yesterday. The Ondo name should ring a bell, as we’ve talked about them getting set to launch a tokenization platform (here’s my <a href="https://blockworks.co/news/stablecoins-iceberg-rwas-mature-ondo">Q&amp;A</a> with Ondo CEO Nathan Allman from last month).



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ETFs

Now 1 year old, US ether ETFs hit their stride

Casey Wagner

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



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With days to go before the new trade policy deadline takes effect, the US struck a deal with Japan.



President Trump announced the deal — a 15% tariff rate on Japanese exports to the US — late last night via a Truth Social post. The rate is lower than the previously proposed 25% levy and also applies to cars and auto parts.&nbsp;



A <a href="https://x.com/Scavino47/status/1947838342285996172">photo</a> shared on X by Dan Scavino, Trump’s deputy chief of staff, suggests officials were making changes to the policy up until the last minute. The document in the picture had been edited by hand, with $400 billion crossed out and replaced with “500.”&nbsp;



The new figure appears in-line with the message both sides are touting: The agreement includes $550 billion in investments and loans from Japan to the US. Trump added in his Tuesday post that the deal will result in hundreds of thousands of jobs.&nbsp;



Domestic auto manufacturers may not be as happy with the deal, though.&nbsp;



With Japan auto exports now taxed at 15%, it’s more expensive for US makers like Ford and GM to import vehicles and parts from countries such as Mexico (25% levy) than it is for Japanese automakers to send vehicles to the US. Check out <a href="https://blockworks.co/news/automakers-impact-tariffs-july-2025">yesterday</a>’s edition for a recap on how tariffs are already hitting car makers’ bottom lines. 



The White House has not yet commented specifically on how the new Japanese deal will impact cars, nor has it shared any information about the status of other negotiations. We’ll be listening, though.



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automakers

Japan, US strike trade deal that leaves US car makers out

David Canellis

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



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Crypto comes in waves. And like surfing, it’s entirely possible to paddle too early and miss out altogether.



Some of the biggest phenomena in crypto have caught their respective waves with precision.



<h2 class="wp-block-heading">Markets change&#8230;</h2>



Yuga Labs rolled out Bored Apes in April 2021, as bitcoin and ether were headed to their first major peak of that bull market cycle.



More recently, pump.fun nailed it when it deployed in January 2024 — just as SOL was about to double in price in two months on the back of bitcoin ETFs.



Both companies are now case studies in capturing and monetizing the attention of mass-market crypto consumers, even if it’s difficult to say how many individuals were directly involved with either one.



Only around 5,500 addresses have ever <a href="https://opensea.io/collection/boredapeyachtclub">owned</a> a Bored Ape NFT, and less than 12,000 have <a href="https://opensea.io/collection/mutant-ape-yacht-club">held</a> the cheaper Mutant Apes. ApeCoin, the token meant to tie the room together, is found in many more wallets — more than 182,000 at current <a href="https://etherscan.io/token/0x4d224452801aced8b2f0aebe155379bb5d594381">count</a>, and that’s not including an untold number of exchange accounts containing APE.



Pump.fun’s active daily address count is nearly double that, ranging between 260,000 and about 500,000 trading addresses right now, per <a href="https://app.blockworksresearch.com/analytics/pumpfun?dashboard=125">Blockworks Research data</a>. Although, again, it’s unlikely that individual users map one-to-one with active addresses, so the true number is likely smaller.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcmWB1sHXqcE5YosTVf1N4yqsPQBz9FrajJSm54XisaT9DNbG5Z1IFl7ca9_KRUOoMpODPex98nHq5ckFRwhBKFaZw_EHH5KfrC-SgInUJYpuR69Wnd-WEDvHaMlXy_NYxTCKqiPg?key=tCochVUj4dML2tZ1qIVRrA" alt=""/><figcaption class="wp-element-caption">Pump.fun has, so far, made it through 15 months of bull market.</figcaption></figure>



In any case, this is about the maximum size of the playing field on which any consumer crypto app vies to compete, fielding around half a million active addresses per day at best. That’s excluding traditional crypto exchanges, whose active userbases stretch into the millions.&nbsp;



(Coinbase <a href="https://s27.q4cdn.com/397450999/files/doc_financials/2024/q4/Coinbase-Global-Inc-2024-10K-for-IR.pdf">reports</a> about 10 million active users per month, which averaged out over 30 days is actually quite similar to the lower end of pump.fun’s daily active address count, although the two aren’t directly comparable.)



Best case scenario: the playing field grows between the waves of the crypto market. It would be good news for the VCs and other investors who’ve bet that the world has enough blockchains and could now do with more useful apps running on top of them.



Until then, timing will be everything, and the ecosystem may be limited to serving niche communities of early crypto adopters. In such an environment, the consumer apps that make it will capture the attention of crypto’s <a href="https://www.youtube.com/watch?v=hMrlrbAACeM">hot ball of money</a> and maintain it long enough to make stake holders comfortable (and, perhaps more preferably, profitable). Will they persist between cycles? Has Bored Apes?



<h2 class="wp-block-heading">&#8230;but Blockchains are forever</h2>



Blockchains and cryptocurrency can do more. I’ve previously subjected you to <a href="https://thedrop.beehiiv.com/p/universal-based-income?utm_source=thedrop.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=universal-based-income&amp;_bhlid=34e159e0ef9c7077a65f0e9cef709023ba1b8826">some thoughts on tokenomics</a> within the context of World, and the role that well-designed, hyper-utilized token experiments could play in humanity’s future.



Zoom out. By their very nature, properly decentralized blockchain networks are intended to be immortal, lasting much longer than bull and bear markets.&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">Ubisoft CEO responds to the Stop Killing Games petition, stating the publisher is &#39;working on&#39; improving its approach to end-of-life support, but that &#39;nothing is eternal&#39; <a href="https://t.co/jJUzFQOnZB">https://t.co/jJUzFQOnZB</a>&mdash; PC Gamer (@pcgamer) <a href="https://twitter.com/pcgamer/status/1946946266484941205?ref_src=twsrc%5Etfw">July 20, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Nothing is eternal, maybe, but it can still be a goal.



Blockchains will be online for as long as there are people interested in running the machines that serve as validating nodes on the network, and the modern-day blockchain space is built on incentivizing those people to continue doing so with valuable tokens.



It could be that the current narrative bent towards consumer apps over infrastructure is missing the forest for the trees, particularly when it comes to gaming.&nbsp;



<h2 class="wp-block-heading">Potential gaming applications</h2>



<a href="https://www.stopkillinggames.com/">Stop Killing Games</a> is a consumer movement that hopes to sway studios and publishers from snuffing out games from their back catalogue, most of which tend to be online-only these days. Games are routinely made unavailable for good when the company responsible decides the overhead costs of the relevant server is, economically, not worth the squeeze.



Blockchain fixes this. While blockchains themselves are not exactly suitable to host online games in their entirety, there could be a future where gaming communities band together to operate servers on their own, paying for the upkeep through token rewards in the same way that Ethereum or Bitcoin validators are sustained by token emissions.



Of course, it’s debatable whether it’s possible in practice, especially when dealing with modest userbases. But in a world where crypto is still a universe of niche apps mostly populated with relatively small active communities, there are few other use-cases that make sense with longevity in mind.&nbsp;



Perhaps killer consumer crypto apps are already here — they just don’t know it yet.



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blockchain

The case for how crypto can Stop Killing Games

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



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A few years back at Bitcoin Amsterdam, I <a href="https://www.youtube.com/live/SSVajSFE14Q?feature=shared&amp;t=14160">watched</a> Core contributor Sjors Provoost make a point about the right to financial privacy in today’s digital world.



“I go to the bathroom at the train station right now. If I pay with my debit card, these records are kept for at least a decade. So the bank can actually look up, 10 years from now, exactly at what time I went to the bathroom. I think that is ridiculous, and I think everybody would agree that&#8217;s ridiculous.



“I think we should change the financial system to [stop doing] that.”



The panel featuring Provoost was about how the Financial Action Task Force (FATF) threatens Bitcoin privacy.



Which, to be fair, is something the intergovernmental agency has absolutely done over the past decade or so. FATF’s anti-money-laundering policies directly influence how worldwide regulators treat Bitcoin mixers and other privacy protocols built around more trustless implementations like CoinJoin.&nbsp;



Surprise, they really don’t like them.



It was on this day in 2017 that BitMixer, then considered the largest Bitcoin mixer by volume, bowed out altogether amid rolling raids on darknet marketplaces across the world.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcmYMqecVq-gcQkiSW0YZahYx_Gt2YobG_RNx1M8va3ZzvqYnsdzXMR0ETxK9DYvZef7Tab2myFecHTrkx3me3Dv236R8mFAUZDh8-YQIMOWuAc0SjKkXgBMCnU44hZYBUtiRUP?key=5Mb2084A0KY4WJoOqHZcdQ" alt=""/><figcaption class="wp-element-caption">In the comments, the OP was adamant that they were not shutting down due to any interaction with authorities.</figcaption></figure>







BitMixer was the quintessential centralized mixing service. Users would enter some parameters onto a website and send bitcoin to an address, after which they would receive the same amount of coins back, minus a fee. The bitcoin received was made of entirely different UXTOs, which helped to break any blockchain analysis that might link them to the original sender.



All standard for most Bitcoin mixers, including its predecessor <a href="https://blockworks.co/news/bitcoin-fog-founder-convicted-by-jury">Bitcoin Fog</a>. Where BitMixer stood out was its reliability and speed, particularly for large orders, having accepted up to 2,000 BTC at a time ($5.4 million when it shut down and almost $236 million today), with operations backed by a larger liquidity pool than its competitors.&nbsp;



In November 2015, BitMixer had <a href="https://themerkle.com/interview-with-the-owner-of-bitmixer-io-a-high-volume-bitcoin-mixer/">reported</a> processing around 65,000 BTC in one month (around $44 million back then).



BitMixer’s owner also promised that the servers were out of reach of regulators. (“Our servers are located in a country where US authorities can’t get access to the server without a local court order. Bitcoin is not considered as money here, so we can’t be a money-laundering service.”)



They added that they use encrypted disks and delete all order data after 24 hours, including erasing used bitcoin addresses from the official wallet after mixed coins were distributed. “Even if the server is seized, they will find nothing,” the owner was <a href="https://themerkle.com/interview-with-the-owner-of-bitmixer-io-a-high-volume-bitcoin-mixer/">quoted</a> as saying.&nbsp;



Users could additionally generate a letter of guarantee signed by BitMixer’s PGP key that would represent an obligation to send the mixed coins, so that any shortchanging could be cryptographically verified.



It was no <a href="https://static.googleusercontent.com/media/research.google.com/en//pubs/archive/46785.pdf#:~:text=five%20ransomware%20families%2C%20the%20top,given%20family%20Cerber%20CryptXXX%20CryptoDefense">secret</a> that BitMixer was relied upon by users of darknet marketplaces and ransomware hackers. And the service’s retirement post came only days after a multi-national sting on AlphaBay, which ran outgoing user transactions through unnamed tumbling and mixing services to provide users with privacy.



Over the following years and until today, a number of high-profile mixing services would either shut down voluntarily or be forced to close by authorities, including Helix (with the owner later indicted and sentenced), BitBlender, Bestmixer, Blender.io, ChipMixer, Sinbad.io and Bitcoin Fog. Darknet markets followed a similar trend.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdFRRPWqN6DfQvbvDE_IJZ3oErO-tgZLelSHnwTd88ZlRACW9Fu4HZKiwIB2PqKMAHoH2VW81EQ1c7wPkTcH1-vIodpW-GC4pZi8xPItocfq2EQYOOSBWn8uO-7QeElJIDeE2BpOw?key=5Mb2084A0KY4WJoOqHZcdQ" alt=""/><figcaption class="wp-element-caption">A helpful explainer on the philosophy behind BitMixer was <a href="https://web.archive.org/web/20150314222329/https://bitmixer.io/why.html">posted</a> to its website. (NB: Take caution in interacting with any service using the same domain or name today.)</figcaption></figure>







Of course, regulators eventually came for decentralized alternatives through the <a href="https://blockworks.co/news/samourai-wallet-matters-memecoins-privacy">case against Samourai Wallet</a>, which is still pending pre-trial motions set for later this year.&nbsp;



Meanwhile on Ethereum, smart contracts and their developers have been under fire via the <a href="https://blockworks.co/news/roman-storm-trial-opening-statements">Tornado Cash case</a>, which has seen one co-founder given a 64-month prison sentence, now under appeal, while the other continues to face up to 45 years in prison.&nbsp;



So, where does that leave Sjors’ quest to keep our bathroom trips at European train stations private?&nbsp;



Frustrating as it may be, while these cases shake out, it might be safer to simply hold it until you get home.



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Bitcoin

Why Bitcoin’s biggest mixer walked away from ‘huge profits’

Katherine Ross

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



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



84% of general partners and limited partners are feeling pretty good about crypto, a <a href="https://btlaw.com/en/investment-funds-outlook-report?utm_source=vuture&amp;utm_medium=email&amp;utm_campaign=pfam%20report%202025">survey</a> from Barnes &amp; Thornburg found.&nbsp;



It’s also one of three areas highlighted by general and limited partners as being a part of the market that thrives in volatility.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfA_r_S1MUpklYhD5yWFkDDBTJc8842B2CNqW00Xsy80ON_GqGpp3UPSePGzJP5bzBX7QLmoByXLDCEW3gnazMzWpsrCpTzXs9OySYisJvZYm8W8rvykmP-d8-5WDCkKtx_ArbifA?key=TJg8wOJzl-lanIp5Wmso_Q" alt=""/><figcaption class="wp-element-caption">Source: Barnes &amp; Thornburg</figcaption></figure>



In a similar vein, a whopping 85% of respondents said that they’re looking to invest in crypto this year, many of whom — 61% — noted that it’s thanks to the regulatory clarity. Woo-hoo!



But both the market growth and the innovative investment products offered are big draws for them as well.&nbsp;



Compared to this time last year, are you more or less likely to invest in cryptocurrency funds?



<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="1224" height="820" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=1024&amp;h=1024" alt="" class="wp-image-105458" style="width:648px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=1224 1224w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=384 384w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=390 390w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=327 327w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=80 80w" sizes="auto, (max-width: 1224px) 100vw, 1224px" /></figure>



Here’s a chart comparing 2024&#8217;s responses to 2025&#8217;s, just in case you need to see the year-over-year change for yourself. I know we’ve become slightly desensitized to the growth that this industry’s experienced in the last year, but these numbers are pretty wild. 



[Asked to those who are more likely to invest in crypto funds] What level of importance do you place on the following when deciding whether to invest in a cryptocurrency fund?&nbsp;



<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="1368" height="1058" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=1024&amp;h=1024" alt="" class="wp-image-105459" style="width:704px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=1368 1368w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=332 332w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=337 337w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=283 283w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=80 80w" sizes="auto, (max-width: 1368px) 100vw, 1368px" /></figure>



This gives you a better idea of what’s driving investments. Outside the top three motivators, institutional adoption is relatively high, which is understandable, given that general economic conditions are not as significant a driver.&nbsp;



Unfortunately, there’s not a clear reason given as to why investment professionals don’t see economic conditions as a big factor driving interest here. However, across the larger landscape, “nearly 75% of respondents say that the current economic outlook presents an investment opportunity.”



I’m going to put on my guessing hat here and say that I think this is probably tied to the fact that crypto has not proven that it’s a safe haven play in times of market uncertainty. If you need a solid example, take a look at the leg down bitcoin took in February after we started receiving the tariff headlines.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdzMvxyFs_urG2JvlSHRwiWojqiFg_mJwyJLg4KGgpSsy9EGhaDnAGQLkceAfrlh1zUMIAxWedl2H3iMiZqk8cowBUu-b_C-IXxKMGq4UI6Zofzvn-ooa2p1_2PJVpk8b-Hr18m?key=TJg8wOJzl-lanIp5Wmso_Q" alt=""/><figcaption class="wp-element-caption">A look at the last six months, courtesy of Blockworks Research</figcaption></figure>



Mind you, that’s not to say that bitcoin hasn’t shown its resilience, especially since, according to Coinbase, it’s up 81% at the time I’m writing this newsletter.&nbsp;



If we zoom out, Barnes &amp; Thornburg noted that the survey finds “ample room for optimism” across a number of sectors — from crypto to hedge funds. All of this is based on survey data collected in April and March from investment professionals, including GPs and LPs.&nbsp;



All in all, I think the data shows a pretty decent appetite for crypto, especially since a lot of the momentum for the industry is tied to regulatory clarity and the overall crypto market growth. Those are both big positives for the space.



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Empire Newsletter

84% of GPs and LPs are ‘optimistic’ about crypto markets: Survey

Bill Gross, the “Bond King” and co-founder of PIMCO, was one of the main characters in finance for nearly two decades.&nbsp;



He was also quite the character.&nbsp;



Gross, who oversaw $1.9 trillion in assets under management at PIMCO’s peak, wrote a <a href="https://williamhgross.com/investment-outlook-archive/">monthly investment letter</a> that touched on topics as diverse as his disdain for self-flushing toilets, how his cat liked to watch him on CNBC, the “half-erotic” pleasure of sneezing, how his youngest son was conceived, how his oldest son was a disappointment, and how he once gave a waitress a “negative tip” for poor service.



The letters often got philosophical, too: “Sand forms the foundation of my being,” he wrote in 2014, “and its porosity is at once my greatest strength and deepest wound.”



He liked to reason by analogy: Bond investors were “vampires of the investment world,” central bankers were monkeys throwing darts, financial markets were “hooked on a morphine drip,” credit markets were a supernova beginning to suffer from entropy.



His investing style was similarly unorthodox: He pioneered the “total return” investing strategy in bond markets, actively trading for capital gains instead of just passively collecting yield.



In short, he was the Warren Buffett of bonds, but quirkier.



In the 1990s, Gross’ monthly musings became a must-read in finance circles, where his quirky metaphors were widely shared and his macro trades were widely copied.



The quirkiness added to his mystique as an investing savant — Gross was not just the Bond King, but something of a philosopher king, too.



That attention helped make him the first bond investor that anyone outside of finance had ever heard of.



It also helped that he really was good at bond investing: In his 27 years at PIMCO, Gross <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3345604">achieved</a> an annual return of 7.52% a year, well in excess of the benchmark index at 6.44%.



Both institutional and retail investors started to take notice in the early 1990s, pouring billions into PIMCO’s flagship Total Return Fund.



Retail investors also rushed into the closed-end funds that Gross managed, causing the funds to trade at unprecedented premiums above their net asset value (NAV).



This was odd behavior: The PIMCO Total Return Fund was open-ended, so anyone could invest with Bill Gross exactly at NAV.



But retail investors were drawn to the closed-end funds because they seemed to promise more scope for Gross to outperform markets (by using leverage and more aggressive strategies).



Unfortunately, they paid prices that no feasible amount of outperformance could possibly justify.



The PIMCO High Income Fund (PHK), for example, traded 72% above NAV in 2011.



Even for a Bond King, that was a bar too high: 10 years later, the fund’s NAV was up a respectable 63%, but the price of the fund was up only 19% (both in terms of total return).&nbsp;



The difference was that the 72% premium to NAV that investors insisted on paying had slowly eroded to 0%.



Investors who thought they were betting on Bill Gross to outperform learned they were also betting on him maintaining his aura of investing invincibility.



That is hard, if not impossible, to do over an extended period of time.&nbsp;



Even Berkshire Hathaway, still run by the Oracle of Omaha, has long traded at a discount to the <a href="https://static.fmgsuite.com/media/documents/05891b95-b1aa-426b-af7e-525b971905f7.pdf">intrinsic value</a> of the assets it owns.



Could crypto markets prove different?



Investors in the mushrooming number of crypto treasury companies seem to think their respective Oracles and Crypto Kings will do better.



The companies themselves would argue that investors are betting on their unique ability to accumulate crypto faster than investors can on their own.



But there’s nothing unique about their strategies: They all do that primarily by selling shares at a multiple of their NAV (or mNAV, for short).



The example of Bill Gross suggests that mNAV is a function of investors’ belief in a person, and I don’t think it’s any different in crypto.



How else, for example, should investors differentiate between the bitcoin treasury companies BSTR Holdings and Twenty One Capital?



Both were created by merging with a SPAC, both of which were sponsored by Cantor Fitzgerald.



The press releases announcing their formations are effectively interchangeable, with both companies stressing their mission “to maximize bitcoin per share,” which they both acknowledge copying from MicroStrategy.



The primary way to do that is to sell shares at a high, perhaps irrational multiple of NAV — and the only way to do that is with a charismatic frontman who can inspire investors to pay it.



The premiums to NAV that BSTR Holdings and Twenty One Capital command will be a measure of investors’ belief in Adam Back and Jack Mallers.



It might be a little different for treasury companies holding Solana and Ethereum, where executives can promise to maximize the native yield that those assets offer.



The latest Ethereum treasury company, for example, claims to be differentiated by the skill of its executive team.



Announcing the launch of Ether Machine yesterday, co-founder Andrew Keys emphasized the company’s ability to maximize yield: &#8220;We have assembled a team of &#8216;Ethereum Avengers&#8217; to actively manage and unlock yields to levels we believe will be market-leading for investors.&#8221;&nbsp;



I have no doubt that these impressively credentialed executives are all Tony Stark-level geniuses.&nbsp;



But how much extra yield can even superheroes squeeze out of Ethereum?&nbsp;



Will it be enough to cover the salaries of a chai, CEO, vice chair, CTO, CFO and head of DeFi and still leave something for shareholders?&nbsp;



Bill Gross, the greatest bond investor of all time, heroically outperformed the index by one percentage point per year.



But that was nowhere near enough to justify that 1.7x multiple of NAV that his retail investor acolytes insisted on paying for his closed-end funds.



I imagine he’d be skeptical of crypto treasury companies doing much better.



“Picture perfection or fairy tale endings,” he wrote in 2014, “do not describe the global economy or even its financial markets.”



With crypto treasury companies, investors seem to be betting on a picture-perfect, fairy tale ending.



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Can belief be a business model?

Jeff Albus

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



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DeFi Development Corp is now just one token shy of a million Solana.



The Florida-based firm <a href="https://x.com/defidevcorp/status/1947266409421234461">announced</a> on Monday that it acquired 141,383 SOL between July 14-20 at an average price of $133.53, <a href="https://x.com/0xGumshoe/status/1947700641729810929">bringing</a> its treasury to 999,999 SOL and equivalents.



The value of those holdings <a href="https://blockworks.co/price/sol">sits</a> just north of $200 million at the time of publication.



The haul <a href="https://x.com/defidevcorp/status/1947266422218088688">included</a> spot purchases, discounted locked tokens, as well as 867 SOL earned through staking, validator operations, and other onchain activity.



It staked all newly acquired SOL immediately, <a href="https://x.com/defidevcorp/status/1947266453415313770">the company said</a>, which earns revenue by running its own validator infrastructure that accepts third-party delegation.



The model is part of a new class of public-market strategies focused on treasury compounding. The idea is that more volatility equals more opportunity to issue shares, buy tokens and boost per-share value.



So far, it&#8217;s a strategy that <a href="https://x.com/defidevcorp/status/1946199391670276104">appears</a> to be working.



DeFi Dev Corp has issued 740,000 shares this month, raising $19.2 million, with the majority of the proceeds allocated to SOL. Another $5 million in dry powder remains available, enough to purchase roughly 24,000 more tokens at current prices.&nbsp;



The firm&#8217;s SOL-per-share metric <a href="https://x.com/defidevcorp/status/1947266440673010025">increased</a> 13% last week to 0.0514, equivalent to $10.39 in SOL value per share. Whether that number continues to rise depends not just on SOL&#8217;s price action, but on DeFi Dev Corp&#8217;s ability to keep stacking without spooking equity markets.



Meanwhile, Upexi, another aggressive entrant in the Solana treasury race, <a href="https://x.com/cryptodotnews/status/1947359003735966175">announced</a> it <a href="https://x.com/UpexiTreasury/status/1947273485404770495">purchased</a> an additional 100,000 SOL for $17.7 million on July 17. That brings Upexi&#8217;s total holdings to 1,818,809 SOL, <a href="https://x.com/UpexiAllan/status/1947279656559731099">valued</a> at approximately $367 million — making it the largest SOL-holding public company to date.



Over half of these tokens were reportedly acquired at a discount in locked form, helping secure an unrealized gain of around $94.7 million over the last quarter.



Teams like this represent a rising breed of publicly-traded treasury builders who seem less interested in diversification than in weaponizing volatility to grow <a href="https://blockworks.co/news/2025-h1-bitcoin-treasury-altcoins">crypto-denominated reserves </a>and per-share value at scale.



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corporate reserves

Equity-fueled firms weaponize volatility to amass SOL

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



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The Aug. 1 tariff deadline is quickly approaching, but automakers have already started to report they’re feeling the impact of higher levies.&nbsp;



To recap the current state of auto tariffs: Foreign-made vehicles and car parts were hit with a <a href="https://blockworks.co/news/market-reactions-to-trump-tariff-plans">25% levy</a> on Liberation Day. Then, earlier this month, President Trump slapped a <a href="https://blockworks.co/news/tariff-reversal-sends-stocks-higher">50% tariff </a>(for most countries) on steel and aluminum.&nbsp;



On Aug. 1, the tariff on foreign cars will increase to 30%.&nbsp;



The status of negotiations with the European Union is a bit unclear. White House Press Secretary Karoline Leavitt said last week that the EU is “very eager” to pen a deal. She added that Trump is not open to moving back the Aug. 1 deadline. The comments come after the White House has continued to issue a series of delays and postponements when it comes to new trade policies.&nbsp;



Okay, back to the impact current levies are having on automakers.&nbsp;



Stellantis said on Monday that tariffs will contribute to an expected $2.7 billion loss. Direct tariff payments and loss on planned production resulted in an almost $350 million loss during the first six months of 2025.&nbsp;



Stellantis — the parent company of Jeep, Chrysler and Fiat, among others — suspended financial guidance on April 30 in the wake of tariff announcements.&nbsp;



The automaker giant’s announcement came via a preliminary and unaudited <a href="https://www.stellantis.com/en/news/press-releases/2025/july/stellantis-publishes-preliminary-and-unaudited-key-figures-for-first-half-2025">H1 preview report</a>. Stellantis said it released the figures because analysts’ consensus forecasts and actual performance for the first six months of the year were so different.&nbsp;



Stellantis’s final H1 report will be released next week.&nbsp;



On the domestic front, General Motors this morning reported better-than-expected Q2 earnings, but added that tariffs had a $1.1 billion impact on Q2. This was in-line with expectations executives released earlier this year and the team still expects tariffs will cost the company $4 billion to $5 billion in 2025.&nbsp;



GM said it’s hoping to mitigate at least 30% of its expected cost increases through manufacturing adjustments and other initiatives. Execs on Tuesday’s call said they were optimistic about this plan.&nbsp;



We’ll be watching to see if a trade deal emerges, or if we’ll see another round of TACO-ing. (The acronym, which stands for “Trump always chickens out,” went mildly viral after the president once again walked back various trade policies throughout the spring.)



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Donald Trump

Automakers report feeling impact from tariffs

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



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Poseidon has raised a $15 million seed round led by a16z crypto to solve one of AI’s bottlenecks: access to high-quality, IP-cleared training data. Incubated by <a href="https://blockworks.co/news/story-protocol-intellectual-property-token">Story Protocol</a>, Poseidon offers a full-stack decentralized data layer tailored for AI systems that operate in the real world.



Meta’s recent <a href="https://www.forbes.com/sites/janakirammsv/2025/06/23/meta-invests-14-billion-in-scale-ai-to-strengthen-model-training/">acquisition</a> of Scale AI for $14 billion has left a competitive opening in this arena, according to Sandeep Chinchali, Poseidon co-founder and chief AI officer at Story.



“Major AI labs and enterprises have pulled their contracts,” Chinchali told Blockworks. “But the need for high-quality, rights-cleared data hasn’t gone away. It’s only intensified.”



Chinchali, a Stanford-trained AI researcher, brings over a decade of experience in edge intelligence and robotics. His team’s approach combines auto-labeling with human-in-the-loop refinement to scale data acquisition without sacrificing quality.&nbsp;



“We prioritize targeted data collection based on real-world failure modes,” he explained, “and validate every dataset using metadata checks and Story’s programmable IP licensing.”



Applications include robotics, autonomous vehicles, wearables and embodied agents, for which synthetic training data or sources scraped from the internet are insufficient.



Poseidon addresses this gap by coordinating a global network of data contributors through onchain incentives, real-time USDC payments and Story’s licensing infrastructure. The protocol treats data as composable intellectual property, allowing contributors to receive attribution and royalties — not just for raw data, but for derivative works like annotations or synthetic augmentations.



“Poseidon ensures that all contributors in this chain, from original collectors to labelers, receive onchain attribution and participation in downstream value when the data is used to train AI models,” said Chinchali.



Early customers include a top robotics firm and an audio foundation model team sourcing dialect-rich speech data, although Chinchali declined to name them specifically. Poseidon is also partnering with universities and Fortune 500 companies building AI capabilities, he said.



With the seed funding, Poseidon will roll out contributor modules, SDKs and integrated licensing tools. “We’re validating the thesis that Web3 can unlock large-scale, equitable data collection for the long-tail datasets physical AI depends on,” Chinchali said.



Early access is expected before the end of summer. As Poseidon builds out its infrastructure, the bet is clear: In the race to real-world AI, data — not models — will be the moat.



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Story-backed Poseidon raises $15M to build AI’s data layer

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I had a chance to catch up with Smokey the Bera, and there’s a few things I want to chat about this morning. 



The first is the tokenomics upgrade that just happened with BERA, which Smokey explained is designed to make BERA “more, I&#8217;d say, easy to use for people in terms of just thinking, ‘Okay, I&#8217;m someone who is not deep in the weeds, how do I take BERA and do something productive with it?’”



But let me back up — the upgrade basically takes BERA from a token simply used for both staking and gas, and gives it the ability to potentially become a revenue-generating asset.&nbsp;



Right now: Berachain has BERA and BGT.&nbsp;



“The underlying change that we&#8217;ve put forward…is that now a portion of those incentives that were typically flowing towards BGT from the ecosystem projects will actually go towards buying back BERA, and people who choose to stake their BERA will effectively be able to earn their yield from those buybacks effectively. So right now, 100% of all the incentives in the network flow towards BGT, and it will actually be sort of a 33% split flow towards people who are staking their BERA,” he noted. 



“It&#8217;s somewhere between value redistribution and approachability of the asset as a whole. And I think that what that also means is that there are many more applications within the ecosystem that can now do everything — from stockpiling BERA for their treasuries, to sort of building yield loops around BERA to basically using that as the base asset.”



Berachain launched its <a href="https://blockworks.co/news/berachain-mainnet-debuts">mainnet earlier this year</a>, and its token hit a $1 billion market cap. However, the BERA chart in the past three months is on a downtrend.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXczXDTTfLYcog1tcDKy1f4Awz612LOokO4ERI592TCXwX6Bbp8vs7o5AicXksiCCTHx97Iy4ymgUf4sq--duvlsaND0uhwr7GBr6rkpYihO77ojGSOUkfE-Z_mm7G_2oo9wSYWkKg?key=y9Os1WI5YWYnwY9hqjORwA" alt=""/><figcaption class="wp-element-caption">Source: Blockworks Research</figcaption></figure>



In February, after the mainnet launch, <a href="https://app.blockworksresearch.com/flashnotes/berachain-launch">Blockworks Research’s Boccaccio noted</a> that “the market has evolved this cycle, moving away from complex DeFi and TVL-focused protocols in favor of trading functionality and fast chains.”



I asked Smokey about how Berachain in general fits into what crypto investors seemingly want at this point.&nbsp;



“We&#8217;re definitely seeing that the worlds of Web2 and Web3 are smashing together, whether that&#8217;s Treasury vehicles or simply more sophisticated capital allocators looking at the space,” he noted. “I think as we increasingly look at blockchains as businesses, that&#8217;s where what we&#8217;ve been focusing on with proof of liquidity becomes a little bit more interesting.”



For Berachain, it’s about finding how it can increase activity by properly investing its resources.&nbsp;



“The chain itself is sort of generating revenue — slash generating real yields — from the applications building on top of it. The applications themselves are also effectively getting a money multiplier on what they&#8217;re spending in that an application will typically say, ‘Okay, I&#8217;m willing to spend $1 worth of my token…in order to receive…emissions from the chain for the use case within my app that I&#8217;d like to support,’” Smokey said.



“And we think that gets really interesting when it comes to the ecosystem as a whole, because what it really means is that, at the end of the day, the chain is putting its money where its mouth is.”



Smokey sees the tokenomics upgrade as a “foundational” step towards ramping up network activity.&nbsp;



He added that Berachain had a lot of hype going into launch, but faced a different landscape post-TGE now that we’re starting to see more attention paid to businesses that either generate revenue or have onchain sustainability.&nbsp;



With fundamentals in play, Smokey added that Berachain plans to “double down on what we’re good at,” while also leaning into what the “market is currently validating.”



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Berachain

How Berachain’s leaning into ‘what the market is currently validating’

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



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



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“The value of a business is the present value of its cash flows from today to judgement day, discounted at a proper discount rate. Period.”



— Warren Buffett
</blockquote>



The world&#8217;s first publicly traded company tried to rug its shareholders.



When the Dutch East India Company sold shares to investors in 1602, it promised to liquidate the entire concern and return all capital to shareholders in 1612.



That was standard practice at the time: Shareholders invested for a set amount of time, after which they expected to have their capital returned, plus some additional yield.



By 1609, however, it was clear that the company — known locally by its Dutch initials, VOC — had no intention of returning investors’ money, mostly because they didn’t have it.



In addition to trading in spices, the company acted as a de facto navy for the Dutch Republic, tasked with projecting power in the Far East.



But building forts and projecting naval power abroad required long-term investments; so rather than return investors’ money as promised, the company simply kept it.



Shareholders, accustomed to financing single ships for a single voyage, were understandably unhappy.



Protests against the decision to unilaterally convert temporary capital into permanent capital were led by Isaac Le Maire, a former director of the VOC, who publicly campaigned against company management and petitioned the government to force the company’s liquidation in 1612, as scheduled.



It was a long shot: The government was never likely to compel the company building its navy to liquidate.&nbsp;



But the company recognized that Le Maire’s campaign would impede its ability to raise capital in the future.



To placate investors, it offered dividends.



This was not easily done, because while the VOC was doing a brisk trade in spices, its high investment needs meant that it was chronically short of cash.



So it paid the dividends in spices instead.



Between 1610 and 1612, the VOC awarded dividends totaling 163% of equity, according to <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2116137">one study</a>, but mostly in spices like mace and nutmeg.



Shareholders were skeptical.&nbsp;



Many refused these in-kind dividends, holding out for cash instead — spices were hard to sell and impossible to sell at anything like what the company said they were worth.



But, if nothing else, it was a gesture to reassure shareholders that they had a claim on the company’s earnings.



It was a long while before shareholders were convinced.



In 1616, some of the company’s unpaid dividends were converted into interest-bearing loans.&nbsp;



In 1620, the company was flush enough to pay a 37.5% dividend in cash.



But in 1623, short of money again, the company paid a 25% dividend in cloves.



Dividends continued to be paid partly in spices until at least 1643, after which they were paid in cash and, when the company was short of cash, bonds.



Shareholders continued to grumble, but it did work out for them in the long run: One historian <a href="https://www.businessinsider.com/rise-and-fall-of-united-east-india-2013-11">estimates</a> that the VOC’s annual dividends averaged out to 18% of its paid-in capital over 200 years.



200 years!&nbsp;



VOC’s original investors did not value the shares as a function of 200-year cash flows; they thought they’d have their money back in 10 years.



But the company’s early dividends — paid while it was still a money-losing venture — helped convince investors that shares can have value even if the paid-in capital is never intended to be paid back.



On this point, crypto still has some convincing to do.



<h2 class="wp-block-heading">Spicy buybacks</h2>



In the debate over what percentage of revenue, if any, crypto projects should pay out to token holders, Tom Towbridge, co-founder of <a href="https://www.fluence.network">Fluence</a>, takes an extreme view: 100%.



Towbridge <a href="https://youtu.be/6hRqrJjePRo?si=85XBcsvpC4lrmfL3">reasons</a> that the portion of revenue used for buybacks is a measure of a team’s trust and alignment with token holders, so a team that pays out 100% of revenue is perfectly aligned and presumably trustworthy. 



80% of revenue is still pretty good: “Not a lot of misalignment, but there might be some.”&nbsp;



But when a team pays only, say, 20% of revenue to token holders, “now trust and alignment is very different because management is taking 80% of revenue to do something else with it.”



By that logic, there should be a lot of distrust and misalignment between the owners of pump.fun and the owners of its new token, PUMP.&nbsp;



Unlike in equities, these two groups are not the same because PUMP holders have no legal claim on pump.fun’s earnings or assets.



Still, investors value the token at $4 billion, presumably because pump.fun’s owners have <a href="https://blockworks.co/news/pump-ico-dex-blockworks-research">promised</a> to use 25% of the platform’s revenue to buy PUMP.



It’s possible, of course, that the 75% of revenue retained by pump.fun’s owners will be invested in a manner that ultimately benefits token holders.&nbsp;



But it might also be invested in a new business line that the owners decide is unrelated to the PUMP token. Or in houses and yachts for the management team.&nbsp;



There’s no telling.&nbsp;



It’s therefore probably best to value the PUMP as a multiple of its current cash return — much like the VOC’s pioneering investors did.



From the VOC in 1602 until about US Steel in 1901, investors tended to value stocks only by the dividends they received, assigning no value to a company’s retained earnings.



Ignoring retained earnings made sense because before US Steel set a new standard of disclosure by releasing full financial statements; investors had no idea what companies were doing with them.



Today, token investors are not much better informed, so it similarly makes sense to value many tokens by the rate of their current buybacks and nothing else.



That’s not exactly what people are doing.&nbsp;



Based on revenue for the month of June, PUMP is trading at 40x its annualized buyback.



That equates to a 2.5% yield at the current token price — not crazy by crypto standards, but also seemingly pricing in something more than the current rate of cash return.



By contrast, VOC’s early shareholders effectively demanded all of the company’s cash flow, because they were rightly suspicious of what management was using them for (self-dealing and empire-building, as it turned out).&nbsp;



Even in those early, money-losing years, the company paid as much as it could possibly manage (albeit in mace, nutmeg and cloves), because it had to prove that VOC shares had value.



It’s since been established that shareholders have a claim on earnings, so valuation is easy: Every stock is worth the discounted value of its future cash flows.



Until that’s established in crypto as well, token holders should probably demand bigger buybacks.



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