Gold

Byron Gilliam

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“A pin lies in wait for every bubble. And when the two eventually meet, a new wave of investors learns some very old lessons.”



— Warren Buffett
</blockquote>



Markets were down this week, possibly because GPUs are starting to go dark.



In Oregon, for example, three of Amazon’s new data centers are sitting idle because the local utility company <a href="https://www.bloomberg.com/news/articles/2025-11-04/amazon-says-berkshire-utility-failing-to-power-data-centers">refuses</a> to connect them to the power grid.&nbsp;



That leaves thousands of cutting-edge GPUs, likely costing hundreds of millions, sitting idle as well — aging in place without making any return on the giant investment they represent.



Microsoft is having the same problem.&nbsp;



Satya Nadella <a href="https://datacentremagazine.com/news/microsofts-power-problem-ai-chips-are-sitting-in-inventory?utm_campaign=Weekly+Briefing&amp;utm_source=hs_email&amp;utm_medium=email&amp;utm_content=2&amp;_hsenc=p2ANqtz-8VdfAdcq-ct7d0ENROqJaeaC3SmOvexqkq9p9qLdMzpbsROUqJBNSpVLOFlqeSXCkYY_uN8gqVimh8DxylgiwnCuImCA&amp;_hsmi=2">says</a> the “biggest issue” that Microsoft is now facing in AI is “a bunch of chips sitting in inventory that I can&#8217;t plug in.”&nbsp;



“It&#8217;s not a supply issue of chips,” he adds. “It&#8217;s actually the fact that I don&#8217;t have warm shells to plug into.”



The “shells” Nadella’s referring to are data centers and they’re not warm because they’re not connected to a source of power.&nbsp;



There are many such cases.



“The infrastructure has now been outpaced by the construction of facilities,” Kristin Hammond of CBRE <a href="https://djcoregon.com/news/2025/09/12/data-center-construction-slows-us-power-grid/">explains</a>. “There’s no use to having the facility if you don’t have the power poles to service it.”



But we’re still constructing the facilities.



Spending on data centers is on pace to <a href="https://news.constructconnect.com/november-data-center-report-spending-surges-92.8-as-southern-states-dominate-construction">double</a> this year vs. last, and the pipeline of <a href="https://www.wsj.com/tech/ai/when-ai-hype-meets-ai-reality-a-reckoning-in-6-charts-bf8043b4?mod=djem10point">proposed projects</a> is growing even faster than that.



This might be starting to sound familiar.&nbsp;



For stock market investors, data centers going unused for want of power should evoke memories of 1999, when an estimated 97% of fiber optic cables that investors were frantically funding remained “dark,” or unused.&nbsp;



The analogy is not exact: It was a demand problem then, and it’s a supply problem now. But the end effect might rhyme to the effect of many billions of dollars of stranded infrastructure.



For credit investors, the current infrastructure frenzy is evoking memories of 2008.



Data centers are increasingly being <a href="https://www.wsj.com/tech/ai/three-ai-megadeals-are-breaking-new-ground-on-wall-street-896e0023?mod=djemfoe">funded with debt</a>, often in special purpose vehicles that keep the debt off-balance sheets, and sometimes by selling asset-backed securities in various risk tranches to investors indifferent to the underlying assets.



Does that sound familiar? Here’s a <a href="https://www.youtube.com/watch?v=1Rhs3PVAP4o">refresher</a> on credit markets from Margot Robbie, if not.



For one veteran investor, the data center boom is evoking 1999 and 2008 — and all the other ones, too.



&#8220;For the first time,” Paul Kedrosky <a href="https://www.bloomberg.com/news/audio/2025-11-14/odd-lots-ai-is-like-every-bubble-all-rolled-into-one-podcast?srnd=phx-oddlots">says</a>, “we&#8217;ve combined all the major ingredients of every historical bubble into a single bubble.&#8221;



Fun!



Kedrosky sees these ingredients as a compelling technology story, a speculative real estate boom, increasingly loose credit and a form of government backstop.



He sees this as a toxic brew for both markets and the economy: “The notion we can land this thing safely is nonsense.”



In short, the risk is that the current power shortage causing GPUs to go dark will cause data centers to build their own power plants — with borrowed money — in the out-of-the-way places where AI data centers are built, but hardly anyone lives.



These new power plants will become “stranded assets,” Kedrosky warns, when efficiency gains in AI training radically reduce the number of chips required: “We&#8217;re completely mis-forecasting arc of demand for compute.&#8221;



It’s the classic pattern: “The system is running at full throttle on forward expectations,” Kedrosky <a href="https://paulkedrosky.com/on-ai-capex-apologists/">writes</a>, “perceived shortage-now/glut-later is exactly how bubbles form.”



On the other hand, there’s no telling how long this process might take.



Kedrosky says it may be “four or five years” until the credit instruments underwriting the data center boom run into trouble.&nbsp;



Five years of booming markets in return for a bust?&nbsp;



I’d take that trade, for sure.



In the meantime, let’s check the charts.



We have big plans:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1064" height="624" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-89.png?w=1024&amp;h=1024" alt="" class="wp-image-109978" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-89.png?w=1064 1064w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-89.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-89.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-89.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-89.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-89.png?w=445 445w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-89.png?w=373 373w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-89.png?w=80 80w" sizes="auto, (max-width: 1064px) 100vw, 1064px" /></figure>



The number of announced plans to build data centers has exploded. But they’re increasingly hard and ever-more expensive to build. Perhaps more worryingly, the number of stalled projects is growing. What this chart will look like next year is probably the key to nearly all asset markets.&nbsp;



The plan for revenue:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1122" height="599" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-90.png?w=1024&amp;h=1024" alt="" class="wp-image-109979" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-90.png?w=1122 1122w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-90.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-90.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-90.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-90.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-90.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-90.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-90.png?w=80 80w" sizes="auto, (max-width: 1122px) 100vw, 1122px" /></figure>



If the data centers do get built, will we use them all? JPMorgan <a href="https://www.wsj.com/tech/ai/when-ai-hype-meets-ai-reality-a-reckoning-in-6-charts-bf8043b4?mod=djem10point">projects</a> that “AI products would have to create an additional $650 billion a year, indefinitely, to give investors a reasonable 10% annual return” on their AI investments. The Raymond James forecasts above suggest we might fall well short of that.



Electricity prices:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1087" height="650" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-94.png?w=1024&amp;h=1024" alt="" class="wp-image-109983" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-94.png?w=1087 1087w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-94.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-94.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-94.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-94.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-94.png?w=436 436w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-94.png?w=366 366w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-94.png?w=80 80w" sizes="auto, (max-width: 1087px) 100vw, 1087px" /></figure>



People worry that data centers will raise the cost of electricity, but, per the above, that has not been the case so far — electricity prices have risen slower than inflation for years. There’s also <a href="https://www.washingtonpost.com/climate-environment/2025/10/25/data-centers-electricity-prices-rise/">evidence</a> that data center demand might even lower electricity prices — likely because higher demand allows fixed costs to be spread over more customers.



It’s mostly a US story, for now:



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="840" height="449" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-93.png" alt="" class="wp-image-109982" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-93.png?w=840 840w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-93.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-93.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-93.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-93.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-93.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-93.png?w=80 80w" sizes="auto, (max-width: 840px) 100vw, 840px" /></figure>



The US continues to lead the world in data centers, with 4,189 vs. just 381 in China. Tellingly, in <a href="https://www.anthropic.com/news/anthropic-invests-50-billion-in-american-ai-infrastructure">announcing</a> its data center plans this week, Anthropic was careful to say it’s investing in “American AI infrastructure.”&nbsp;



Chinese exporters seem to be thriving without the US:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1421" height="752" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-96.png?w=1024&amp;h=1024" alt="" class="wp-image-109985" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-96.png?w=1421 1421w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-96.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-96.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-96.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-96.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-96.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-96.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-96.png?w=80 80w" sizes="auto, (max-width: 1421px) 100vw, 1421px" /></figure>



Torsten Slok notes that while China has exported $75 billion less to the US so far this year, it’s exported $150 billion more to Asia.



Worst US sentiment ever:



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="859" height="539" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-91.png" alt="" class="wp-image-109980" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-91.png?w=859 859w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-91.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-91.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-91.png?w=410 410w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-91.png?w=416 416w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-91.png?w=349 349w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-91.png?w=80 80w" sizes="auto, (max-width: 859px) 100vw, 859px" /></figure>



The University of Michigan’s November survey of consumer sentiment returned its lowest reading on record, going all the way back to 1960. And the bubble hasn’t even popped yet!



Bearish sentiment, bullish returns:



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="789" height="486" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-92.png" alt="" class="wp-image-109981" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-92.png?w=789 789w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-92.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-92.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-92.png?w=417 417w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-92.png?w=424 424w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-92.png?w=356 356w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-92.png?w=80 80w" sizes="auto, (max-width: 789px) 100vw, 789px" /></figure>



The best returns happen when people are most bearish.



You don’t have to be bullish on AI:



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="966" height="615" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-97.png" alt="" class="wp-image-109986" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-97.png?w=966 966w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-97.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-97.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-97.png?w=404 404w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-97.png?w=410 410w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-97.png?w=344 344w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-97.png?w=80 80w" sizes="auto, (max-width: 966px) 100vw, 966px" /></figure>



David Hay <a href="https://haymaker.substack.com/p/haymaker-daily-aa9?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F74361197-9a8b-4d9d-8683-b5db821c2a40_868x554.png&amp;open=false">notes</a> that stocks dropped from the S&amp;P 500 (the black line above) outperformed the index by 5% a year in the 32 years from 1990 to 2022 — a cumulative excess return of 400%.



Do call it a comeback:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="1059" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-95.png?w=1024&amp;h=1024" alt="" class="wp-image-109984" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-95.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-95.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-95.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-95.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-95.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-95.png?w=388 388w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-95.png?w=394 394w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-95.png?w=331 331w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-95.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



CSCO stock — left for dead in 2000 and long forgotten — is now 50% above its dotcom peak in total return (dividends reinvested).



A reminder that, if this bubble is soon over, there will be others to look forward to.



Have a great weekend, everything readers.



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The everything bubble?

Carlos

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Crypto markets are ending the week in the red, with BTC falling below $95,000 after one of the worst days ever for bitcoin ETF flows. 



Risk assets sold off as doubts loom over a December rate cut, with BTC down -1.87% yesterday and tumbling briefly below $95,000 this morning, extending its losses. US equities also saw investors de-risk, with the Nasdaq and S&amp;P 500 down -1.74% and -1.37%, respectively. Meanwhile, gold’s relative strength was notable, closing the day almost flat.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-87.png?w=1024&amp;h=1024" alt="" class="wp-image-109970" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-87.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-87.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-87.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-87.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-87.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-87.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-87.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-87.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-87.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Expanding on the macro side, Fed members are pushing back against a December cut, especially given the lack of new data on the jobs and inflation fronts due to the government shutdown. Minneapolis Fed President Neel Kashkari said yesterday he didn’t support the last interest rate cut, noting he’s undecided on the best course of action for next month’s policy meeting. The chart below effectively illustrates the sudden shift in market expectations. As of Nov. 13, the CME FedWatch Tool was pricing a 25 bps rate cut at just a 51% probability, compared to 63% the day before and over 95% a month ago.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-88.png?w=1024&amp;h=1024" alt="" class="wp-image-109971" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-88.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-88.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-88.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-88.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-88.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-88.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-88.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-88.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-88.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Bitcoin has been hit especially hard by recent macro uncertainty, with bitcoin ETFs experiencing their second-worst day ever, in terms of net flows, yesterday. Bitcoin ETFs saw almost $870 million in outflows, suggesting that we’ll close the third consecutive week with negative flows. The last time bitcoin ETFs experienced three or more consecutive weeks of outflows was between February and March of this year, with BTC dropping below $80,000. The chart below shows bitcoin’s weekly ETF flows by product, with this week still pending inclusion.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="889" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-85.png?w=1024&amp;h=1024" alt="" class="wp-image-109968" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-85.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-85.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-85.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-85.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-85.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-85.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-85.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-85.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-85.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Speaking of ETFs, one of the largest issuers (Grayscale) <a href="https://www.globenewswire.com/news-release/2025/11/13/3187426/0/en/Grayscale-Investments-Announces-Public-Filing-of-Registration-Statement-for-Proposed-Initial-Public-Offering.html">filed</a> for an IPO yesterday. The filing revealed declining financials, with a 20% year-over-year decline in revenue for the first nine months of the year. Notably, AUM was also lower on Sept. 30 than a year prior, despite BTC rising 80% during the same period. Since bitcoin ETFs began trading in 2024, Grayscale’s GBTC has seen almost $25 billion in cumulative net outflows.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="889" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-86.png?w=1024&amp;h=1024" alt="" class="wp-image-109969" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-86.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-86.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-86.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-86.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-86.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-86.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-86.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-86.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-86.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Finally, regarding cross-sector performance, every crypto index we track was negative on the day, with the sole exception of RWA (+1.2%). The worst-performing indices were Crypto Miners (-6.6%), Solana Eco (-5.9%), and Crypto Equities (-5.8%). The fact that two of the worst-performing indices were equities is a further indication of broader risk-off sentiment driven by macro concerns.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="902" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-84.png?w=1024&amp;h=1024" alt="" class="wp-image-109967" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-84.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-84.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-84.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-84.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-84.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-84.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-84.png?w=463 463w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-84.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-84.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



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0xResearch Newsletter

Markets tumble as doubts grow over December rate cut

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“If you can’t make money, you may want to consider being quiet. Maybe the market knows more than you do.”



— Jeff Yass
</blockquote>



Today, The Breakdown looks at developing stories and links from around the cryptoverse.



<h2 class="wp-block-heading"><a href="https://open.substack.com/pub/moontower/p/spooky-jeff-yass-on-prediction-markets?utm_source=share&amp;utm_medium=android&amp;r=3qcul">Jeff Yass says prediction markets will stop wars</a></h2>



After Jeff Yass brought his math and poker skills onto trading floors in the 1980s, global options markets stopped looking like a casino and started looking like a science.



Yass thinks prediction markets could do the same for the world.



First and foremost, he says, “It will stop wars.”



Yass cites the second Iraq War, which President Bush said would cost the US $20 billion but is now thought to have cost at least $2 trillion, and maybe as much as $6 trillion.



It’s unlikely prediction markets would have settled on such an astronomical number, but Yass believes they might have predicted something like $500 billion, in which case “people might have said, ‘Look, we don’t want this war.’”



That would have saved many, many lives, as well: “If people know how expensive it’s going to be and how disastrous it’s going to be, they’ll try to come up with other solutions.”



Prediction markets, he says, “can really slow down the lies that politicians are constantly telling us.”



He also cites applications in insurance, technology and even dating.



Asked by the 16-year-old podcast host what advice he’d give young people, Yass suggested they could avoid relationship mistakes by creating an anonymous prediction market for their friends to bet on.



“I believe in markets,” he concluded.



<h2 class="wp-block-heading"><a href="https://nodumbideas.com/p/does-momentum-exist-in-prediction">Do prediction markets trend?</a>&nbsp;</h2>



It sounds like a dumb idea: Unlike stocks with their open-ended valuations, prediction markets should converge toward the single fixed probability of a binary outcome.



But the author of No Dumb Ideas crunched the numbers and found that prices in political prediction markets do, in fact, trend: A market that trades up one day is more likely than otherwise to trade up the next day, too.



“Momentum seems to be real, at least for a day or two.”



The author speculatively attributes this to prediction markets making news, the dynamics of political campaigns and/or because momentum trading is fun.



I’d also cite Cliff Asness’s <a href="https://youtu.be/e1Iok2wyoCw?si=EFtXXTKtKE66hgs8">observation</a> that stocks exhibit momentum in part because they tend to underreact to news — so maybe prediction markets do, too.&nbsp;



Whatever the reason, the study by No Dumb Ideas suggests that prediction markets are subject to many of the same behavioral finance drivers as stock markets.



So there should be something in them for everyone: momentum traders, swing traders, quants…most of whom, I suspect, will lose money.



That would be good news, if so, because it will create a stronger profit motive for experts to participate — giving us better information on subjects like how much a war is likely to cost.&nbsp;



<h2 class="wp-block-heading"><a href="https://finance.yahoo.com/news/cohen-co-inc-cohn-q3-110037508.html?guccounter=1&amp;guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&amp;guce_referrer_sig=AQAAAHrSRTmsAd6lSyvfTxRqPzte0umEmVDKNnADyPHwr54NKAQ4WbFoz-zVgj36EUv3GH-Tm6yHRdBnPcglpxzKJrr7HW8A8pV-KJzerF8rJf86v9KznGkfmFGeAvdZxtzyZ4kUIoO00KcT4RQq3Sdzp8YBxgnFNLGVmFEzxr1L1eEm">Cohen cashes in on DATs</a></h2>



The boutique investment bank Cohen &amp; Co. booked $179 million of revenue for its advisory work on a single DAT merger, Nakamoto Kindly MD.&nbsp;&nbsp;



That’s an astonishing haul given that the company currently holds just $594 million of bitcoin, per data from <a href="https://blockworks.com/analytics/treasury-companies">Blockworks Research</a>.



Even worse, Kindly MD now has a market capitalization of $267 million.



Cohen unfortunately took much of its compensation in shares, which have fallen 90% from the merger announcement. As a result, it booked a $146 million non-cash loss for the quarter, reducing its profit on the deal to only $33 million.



That’s still 5.5% of the company’s NAV and 12% of its market cap.



Nice work if you can get it.



<h2 class="wp-block-heading"><a href="https://x.com/haydenzadams/status/1987990314997739625?t=e9VD7PIDjoziGT5ONb8LCA&amp;s=19">Uniswap flips the switch</a></h2>



Uniswap Labs has made a financially underwhelming but symbolically significant proposal for the Uniswap Protocol to collect fees and return them to token holders.



The <a href="https://www.uniswapfoundation.org/blog/unification?utm_source=blockworks-research.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=unification&amp;_bhlid=26d5152c813ec755cdd95b31c94dbd1712ab5600">proposal</a> would retroactively burn 100 million tokens held in its treasury, “representing the protocol fees that could have been burned if fees were turned on at token launch.”



That amounts to a 16% buyback over five years, which is…not a lot?



<a href="https://x.com/0xSharples?s=20">0xSharples</a> of Blockworks Research <a href="https://x.com/0xSharples/status/1988256449806372906?s=20">estimates</a> that, excluding wash trading, Uniswap would have generated about $6 million of fees over the past month, which annualizes to just 1.5% of UNI’s $4.8 billion market capitalization — also not a lot for what looks like an ex-growth business.&nbsp;



More importantly, though, the proposal states that “Labs will stop collecting fees on its interface, wallet, and API to supercharge distribution and adoption of the Uniswap protocol.”



Beyond the fees that will reroute to token holders, this carries <a href="https://x.com/TheiaResearch/status/1988241585834734001?s=20">symbolic weight</a>: It unwinds crypto’s most prominent dual equity-token structure, which has been so fraught with conflicts of interest.



I’d argue this comes at a cost, though.



When the UNI token was launched in 2020 as a pure governance token, it became Exhibit A for why tokens were not stocks and protocols were not companies.&nbsp;



Anecdotally, it felt like most UNI holders did not view themselves as owners of the Uniswap protocol — a protocol, it was thought, could not be owned in the same way a company could.



Token holders were only stewards of the protocol, and the best thing for the protocol was to either keep whatever fees it earned in its treasury or not charge fees at all.&nbsp;



Now, though, once the protocol starts collecting revenue and returning it to token holders, how is it not just a company?&nbsp;



Jake Chervinsky says the proposal will “<a href="https://x.com/jchervinsky/status/1988333836611011037?s=20">minimize governance, maximize ownership</a>” for UNI token holders — which makes Uniswap look a lot more like a company and UNI a lot more like equity.&nbsp;



This is probably for the best: The industry needs investors and investors need a profit motive to invest.&nbsp;



But minimizing governance and maximizing ownership also makes crypto less special.



<h2 class="wp-block-heading"><a href="https://www.sec.gov/newsroom/speeches-statements/atkins-111225-securities-exchange-commissions-approach-digital-assets-inside-project-crypto">Project Crypto</a></h2>



If tokens are less special, do they risk being securities?



SEC Chair and crypto enthusiast Paul Atkins warns that calling something a token does not make it exempt from securities laws “if it in substance represents a claim on the profits of an enterprise and is offered with the sorts of promises based on the essential efforts of others.”



UNI now represents a claim on the profits of the Uniswap enterprise, so, to avoid being security, it will have to argue that it’s not making any promises on the efforts of others.



Chair Atkins promises to tread lightly, but warns that Project Crypto “is not a promise of lax enforcement at the SEC. Fraud is fraud.”



But he’s not asking a lot: “If you raise money by promising to build a network, and then take the proceeds and disappear, you will be hearing from us.”



That’s a pretty low bar for crypto projects to clear, although plenty would not have in recent years.



Nevertheless, Atkins will do everything he can to be sympathetic: “We will not forget that behind every token debate, there are real people.”



Sounds like he’s not on Crypto Twitter much.



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predictions market

Prediction markets, DATs, the fee switch, and Project Crypto

Kunal Doshi

Shaunda Devens

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



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Lido rolled out a buyback plan worth ~$4 million/year at current run-rates and paired it with a roadmap that pushes the protocol beyond staking. At the same time, Strategy (MSTR) slipped below mNAV of 1 and other BTC treasury names are trading at 0.4-0.8x, putting renewed focus on the model. In today’s edition of 0xResearch, we break down the data, the market reaction, and what stood out across sectors.



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



Markets slid again despite the optimism that started the week, with the S&amp;P 500 down -0.27%, the Nasdaq down -0.55%, and BTC lower by -1.54%. The flight to safety trend continued, with Gold climbing 1.08% on the day.



Weakness in Big Tech stocks has been the main drag on the tech-heavy indices, while capital continues to rotate into other sectors of the market that have lagged in the recent rallies. The Dow Jones Industrial Average stood out, rising 0.68% on the day and 2.5% for the week.



Concerns around an AI bubble remain in focus after SoftBank <a href="https://www.reuters.com/business/media-telecom/softbanks-58-billion-nvidia-stake-sale-stirs-fresh-ai-bubble-fears-2025-11-11/">sold</a> its entire $5.8 billion stake in Nvidia. Even though CoreWeave <a href="https://www.barrons.com/articles/coreweave-earnings-stock-price-339d49cf">beat</a> Q3 sales estimates, its shares slipped on a lower revenue outlook due to data center delays. However, on the earnings call, the company <a href="https://www.barrons.com/articles/coreweave-earnings-stock-price-339d49cf">reaffirmed</a> that AI demand still far exceeds available capacity and that it remains supply-constrained.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="846" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-79.png?w=1024&amp;h=1024" alt="" class="wp-image-109949" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-79.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-79.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-79.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-79.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-79.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-79.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-79.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-79.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-79.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



In crypto, most indices ended the day in the red, dragged down by BTC and broader equity weakness. The standouts were L2s and Memecoins, which gained 0.57% and 0.45%, respectively. L2s were boosted by MNT, up 2.24%, likely driven by excitement around <a href="https://x.com/UR_global">Mantle UR</a> and its positioning in the growing Neobank narrative. The Meme index got a lift from MemeCore, which rose 1.44% on the day.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="831" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-81.png?w=1024&amp;h=1024" alt="" class="wp-image-109953" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-81.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-81.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-81.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-81.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-81.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-81.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-81.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-81.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-81.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Laggard categories included Crypto Miners and RWAs, which dropped -4.44% and -7.94%, respectively. The pullback in AI-linked equities spilled into mining stocks, many of which have pivoted toward AI data centers. After a YTD rally of 105.5%, some profit taking in the sector is also to be expected.



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



Doubts are starting to build around the sustainability of treasury companies now that the original pioneer of this playbook, Strategy (formerly MicroStrategy), is trading below an mNAV of 1 for the first time since early 2024. The company’s mNAV multiple has steadily bled lower from a peak of 2.4 following Trump’s election win.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="783" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-78.png?w=1024&amp;h=1024" alt="" class="wp-image-109951" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-78.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-78.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-78.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-78.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-78.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-78.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-78.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-78.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-78.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The picture looks even worse for other BTC treasury names, which now trade at mNAV multiples between 0.4 and 0.8. Investors are increasingly skeptical of the model’s long-term viability. Relying on constant equity issuance to buy more BTC has become harder to justify as share dilution begins to outpace BTC accumulation. Many now see these companies as leveraged proxies for bitcoin, rather than efficient ways to gain exposure.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="787" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-80.png?w=1024&amp;h=1024" alt="" class="wp-image-109952" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-80.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-80.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-80.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-80.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-80.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-80.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-80.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-80.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-80.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



That skepticism is showing up in the data. BTC purchases by treasury companies have slowed dramatically, down from billion-dollar waves every few weeks to more modest weekly buys of $25 million-$50 million recently.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="782" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-76.png?w=1024&amp;h=1024" alt="" class="wp-image-109948" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-76.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-76.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-76.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-76.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-76.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-76.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-76.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-76.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-76.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Sometimes simplicity wins. While BTC is up just 0.2% over the past six months, MSTR has fallen -46.7%, and the newer BTC treasury names are down between -30% and -60%. Brutal, to say the least.



Still, it may be too early to write off the trade entirely. If these discounts persist, a <a href="https://www.reuters.com/technology/hedge-funds-cash-grayscale-bitcoin-etf-conversion-sources-2024-01-26/#:~:text=Hedge%20fund%20Fir%20Tree%20Partners,ETF's%20assets%20to%20$20.4%20billion.">GBTC-style opportunity</a> could emerge where investors can acquire BTC exposure at a meaningful discount through public equities. And if there is one company that knows how to survive and adapt through cycles of expansion and contraction, my bet would be on Strategy.



<h2 class="wp-block-heading">Lido DAO</h2>



Following Uniswap&#8217;s move to align the Uniswap Foundation and Labs entity and <a href="https://blockworks.co/news/uniswap-fee-switch">implement a fee switch</a>, Lido is also moving from pure governance into explicit value return for LDO holders.&nbsp;



<a href="https://research.lido.fi/t/liquid-buybacks-nest-execution-with-ldo-wsteth-liquidity/10894">A new Liquid Buybacks proposal</a> would route a slice of staking revenue into automated LDO buybacks, executed via NEST auctions and deposited into an LDO/wstETH LP fully controlled by the DAO. The mechanic is straightforward: Once ETH passed $3,000 and annualized revenue over $40 million, 50% of incremental staking inflows above that threshold are used to buy LDO, capped at $10 million per rolling year. At today’s run rate, this translates to roughly $4 million/year in buybacks.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-77.png?w=1024&amp;h=1024" alt="" class="wp-image-109950" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-77.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-77.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-77.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-77.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-77.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-77.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-77.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-77.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-77.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



At first glance, this amount looks low. Aave runs a $50 million/year buyback program; Uniswap’s fee switch would have burned $26 million in the last month alone (not adjusted for wash trading). Secondly, the design also buys only when conditions are strong (high ETH price and high revenue) meaning Lido accumulates LDO when it is relatively expensive, while offering no counter-cyclical support during weaker market periods when the token likely suffers most.



However, Lido also outlined where the protocol is heading over the next 18 months, from a single-product staking business to a multi-product liquidity platform anchored by stETH.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="897" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-83.png?w=1024&amp;h=1024" alt="" class="wp-image-109955" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-83.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-83.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-83.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-83.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-83.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-83.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-83.png?w=466 466w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-83.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-83.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



This sets the stage for Expanding Beyond Staking, where Lido evolves from a single-product stETH protocol in 2025 into a multi-product organization in 2026. Lido’s stVaults become the configurable chassis for institutional staking and yield strategies, Earn expands as the <a href="https://blockworks.co/news/lido-earn-tab">simple “default yield” front door</a> for retail and exchanges, and a new tier of structured and automated products sits on top as Lido moves both closer to users (distribution) and rightward into new asset classes.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="899" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-82.png?w=1024&amp;h=1024" alt="" class="wp-image-109954" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-82.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-82.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-82.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-82.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-82.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-82.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-82.png?w=465 465w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-82.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-82.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Ultimately, Lido appears to be converging on the same insight that other LST protocols have already internalized: LSTs are structurally low-margin, and the real opportunity lies in the products and financial rails built on top of them. We see this clearly with Jito’s BAM (block-based auction markets) and <a href="https://blockworks.co/news/etherfi-launches-defibank-us-crypto">EtherFi’s Cash</a>, both of which extend beyond pure staking yield. Lido’s roadmap is a necessary step in that direction.



 <img loading="lazy" decoding="async" width="624" height="351" src="blob:https://cms.blockworks.co/1c47da1d-9f13-4533-af8a-40db2bb09303">



However, when it comes to buybacks, the P&amp;L dynamics we highlighted previously still apply. The DAO remains unprofitable (Q3 income was -$200,000), raising questions about how impactful these changes truly are today — or if it&#8217;s too little, too late for Lido.



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Lido’s buybacks won’t fix the bigger problem

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As recently as a couple of years ago, investing was in a pessimistic place.



Techno-optimist Kevin Kelly <a href="https://youtu.be/5XCjWLJcUG4?si=WPklIiztOoNS8COu">worried</a> that “we’ve stopped making big things.”



Big Tech was pilloried for using immense profits to buy their own shares instead of building new things.&nbsp;



Ben Thompson’s Stratechery sounded more like a legal blog than a tech one, with his daily commentary dominated by the latest in anti-trust news.



Happily, that seems like ancient history now.&nbsp;



Ben Thompson seems to have some new, wildly ambitious tech venture to write about nearly every day: data centers in space, x-ray lithography, thermodynamic computing.



Big Tech has gone from returning cash to shareholders because it didn’t know what to do with it, to borrowing billions to build everything at once: OpenAI, for example, expects to make $100 billion of revenue in 2028 — and post a loss of $74 billion.



We’ve started making big things again: xAI’s million-square-foot data center in Memphis, a TSMC chip-fab occupying 1,100 acres of Arizona desert, a 400-foot-tall SpaceX rocket with 5,000 metric tons of liftoff mass.



People typically put a cynical spin on this: They see big corporations being greedy, or small investors being misled.



Kevin Kelly, however, sees a profound act of optimism.



Optimists, he <a href="https://www.ted.com/talks/kevin_kelly_the_future_will_be_shaped_by_optimists">says</a>, “are willing to sacrifice immediate gains in order to postpone more gains into the future — that’s investment.”



You might be thinking, Yes, I own Nvidia shares now, so I can enjoy “more gains” next week, next month or next year.&nbsp;



But that’s just trading.



Kelly is talking about investing, which postpones the benefits of consumption not just years into the future, but generations.



“Right now,” he points out, “we’re benefiting from the work of previous generations, who have undertaken to create infrastructure — roads, canals, skyscrapers, telephone networks — that we are now enjoying.”



We should try not to take that for granted: People we don’t know took the risk of investing and did the hard work of building, and we get the benefits for free.



“By moving benefits to future generations,” Kelly says, the investors and builders of previous generations “have been acting as good ancestors for us.”



We, too, should aspire to be good ancestors, which we can do by moving some of our benefits into the future.&nbsp;



But that requires us to be optimistic about the future. “The deep history of new ideas,” Kelly explains, “makes it very clear that the optimistic stance of believing something is possible is a requirement to make anything new.”



Kelly is particularly optimistic about the new things that AI investors will make.



“The three chief consequences of AI,” he <a href="https://www.warpnews.org/premium-content/kevin-kelly-the-case-for-optimism/">predicts</a>, “will be the liberation of humans from their unwanted jobs, the explosion of new services and formerly impossible products that are co-created with AIs, and new occupations and desirable tasks for humans.”&nbsp;



Less drudgery, more stuff, better jobs — this is the future being created by today’s most optimistic investors.&nbsp;



Kelly is no utopian; he recognizes the ever-growing scale of the world’s challenges: “We have a planetary economy, we have planetary problems.”



But that just means we have to think bigger: “We have to do planetary solutions.” And he thinks we will: “They’re gonna be big.”



Bigger solutions will require bigger belief: “If we can become more optimistic,” Kelly <a href="https://youtu.be/5XCjWLJcUG4?si=BTR_AwW8elvZ_JaS&amp;t=803">said</a> in 2023, “we can imagine some big things, and then believe they can be made, and that will help make them come true.”



At the time, he worried that “we have an allergy to bigness right now.”



“Lots of people say they’re anti-capitalist,” he added, “but I think they’re anti-big.”



He encouraged people to rethink that: “We should be optimistic not because our problems are smaller than we thought, but because our capacity to solve them is larger than we thought.”



In 2025, it seems clear that AI has the potential to radically expand our capacity to solve even the biggest problems.&nbsp;



If so, it’s the optimistic act of investing in space-based data centers, x-ray lithography and giant chip fabs that will make it happen — eventually.



“In the long run,” Kelly concludes, “optimists shape the future.”



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Financial optimism is winning

Marc Arjoon

Sam Schubert

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While crypto markets cooled this week under renewed macro pressure, Ika launched a multi-party computation design that enables trustless cross-chain signatures. With less than 1% of BTC currently productive in DeFi, Ika’s design could unlock tens of billions in dormant liquidity. ETFs continue to show outflows, though there are signs this may be ending.



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



Markets turned sharply risk-off, with nearly all crypto sectors in the red while traditional assets held steady. Gold (+0.6%) and the S&amp;P 500 (+0.1%) eked out small gains, contrasting with broad crypto weakness as BTC (-2.8%) and the broader crypto equities index (-1.8%) retreated. The Nasdaq 100 (-0.4%) mirrored muted tech sentiment, underscoring a modest flight to safety after recent volatility.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="839" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-73.png?w=1024&amp;h=1024" alt="" class="wp-image-109933" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-73.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-73.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-73.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-73.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-73.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-73.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-73.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-73.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-73.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Crypto sector performance painted a stark picture of risk aversion. AI (-6.4%), L2 (-6.5%), and Launchpads (-6.6%) extended their declines, while DeFi (-8.1%) and Modular (-8.3%) led losses among infrastructure plays. Solana Ecosystem (-9.3%) and Ethereum Ecosystem (-9.2%) were the day’s biggest laggards, with onchain activity tapering and liquidity thinning across DEX volumes.



The Solana Eco Index was weighed down by weakness in key components like Jito, Drift and Metaplex. Early-week strength, particularly from BONK and DRIFT, faded by the weekend as profit-taking and liquidity unwinds hit DeFi and meme-adjacent plays hardest. ORCA and RAY showed relative resilience, stabilizing above weekly lows but still closing red. The sharp dispersion between protocols highlights rotation away from higher-beta SOL DeFi names toward liquidity hubs and yield platforms.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="843" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-74.png?w=1024&amp;h=1024" alt="" class="wp-image-109937" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-74.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-74.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-74.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-74.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-74.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-74.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-74.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-74.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-74.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Macro headwinds are reasserting themselves as US yields climb, traders reassess the timing of 2026 rate cuts, and a firmer dollar and slowing ETF inflows dampen crypto momentum. Leverage has begun to unwind, tightening liquidity across derivatives markets. With BTC consolidating near six figures and volatility creeping higher, attention now shifts to the inflation print and the Fed’s final meeting of 2025. The broader tone is cooling exuberance, not panic — but for the first time in months, crypto looks vulnerable to macro gravity.



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



Flows across major spot ETFs flipped green last week, led by BlackRock’s IBIT and Fidelity’s FBTC. The reversal follows a choppy stretch through late October when nearly all issuers saw redemptions. Outflows from Grayscale’s GBTC have eased, helping net flows move back above zero.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1124" height="624" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-71.png?w=1024&amp;h=1024" alt="" class="wp-image-109934" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-71.png?w=1124 1124w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-71.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-71.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-71.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-71.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-71.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-71.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-71.png?w=80 80w" sizes="auto, (max-width: 1124px) 100vw, 1124px" /></figure>



The shift suggests investors are nibbling again after BTC’s brief dip to $100,000. Derivative markets tell a similar story as funding rates have leveled off, and futures basis has started to recover, pointing to stabilizing sentiment rather than aggressive risk-taking.



Meanwhile, ETH ETFs remain under pressure, with intermittent inflows failing to offset steady redemptions from major issuers. The latest data show ETH ETF flows leaning negative into mid-November. The result is a choppy flow profile that underscores weaker conviction in the ETH trade relative to BTC. ETH’s muted price performance hasn’t helped either; it continues to trail BTC both in spot and derivative markets. Funding rates remain flat, and the futures curve is showing less optimism compared to earlier in Q4, suggesting limited appetite for leveraged exposure.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1124" height="624" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-70.png?w=1024&amp;h=1024" alt="" class="wp-image-109935" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-70.png?w=1124 1124w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-70.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-70.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-70.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-70.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-70.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-70.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-70.png?w=80 80w" sizes="auto, (max-width: 1124px) 100vw, 1124px" /></figure>



Until ETH ETF inflows turn consistent, ETH is likely to keep trading in BTC’s shadow rather than setting its own pace.



<h2 class="wp-block-heading">Redefining decentralized multi-party computation</h2>



Bitcoin remains underutilized in DeFi, with less than 1% of circulating supply currently tokenized and generating yield. Capturing even an additional couple percent of native BTC would inject tens of billions in fresh collateral into DeFi ecosystems, creating step-function improvements in most areas. <a href="https://ika.xyz/">Ika</a>&#8216;s trustless architecture, utilizing Sui’s object-based blockchain, presents a path to leapfrog incumbent solutions and capture this underserved market.&nbsp;



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="900" height="500" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-72.png" alt="" class="wp-image-109936" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-72.png?w=900 900w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-72.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-72.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-72.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-72.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-72.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-72.png?w=80 80w" sizes="auto, (max-width: 900px) 100vw, 900px" /></figure>



The protocol&#8217;s novel 2PC-MPC architecture enables distributed networks to generate signatures with cryptographic guarantees that require user participation, solving a critical limitation in existing threshold signature schemes. While competitors like Lit Protocol, NEAR and ICP offer threshold signatures controlled by permissioned validator sets, Ika can ensure no transaction can execute without explicit user authorization, eliminating risks from compromised validators or rogue employees.&nbsp;



The strategic implications extend far beyond custody. Ika eliminates traditional bridge honeypots and wrapped token risks by enabling trustless cross-chain operations at Sui&#8217;s native speed, effectively making wallets on all chains programmable objects within Sui&#8217;s ecosystem. This architecture should allow Sui-based applications to access users and liquidity from any chain without wrapped intermediaries, while enabling projects on other chains to leverage Sui Move smart contracts as their backend without user-facing changes. As this technology matures, Ika could position Sui as a global coordination layer sitting above individual blockchains, capturing value from cross-chain activity while driving institutional integrations seeking compliant, trustless infrastructure.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="897" height="456" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-75.png" alt="" class="wp-image-109938" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-75.png?w=897 897w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-75.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-75.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-75.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-75.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-75.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-75.png?w=80 80w" sizes="auto, (max-width: 897px) 100vw, 897px" /><figcaption class="wp-element-caption">Source: <a href="https://cdn.prod.website-files.com/67161f6a7534fbf38021d666/673dc7f1f9c5ef2fe161d8a6_Ika%20Whitepaper.pdf">Ika white paper</a></figcaption></figure>



 The Ika mainnet launched earlier this year, with developers like Human Tech and Native expected to launch products using Ika later this year.



<a href="https://human.tech/blog/our-wallet-as-a-protocol-is-now-secured-by-ika-s-2pc-mpc">Human Tech</a> leverages Ika to create a single interface controlling native assets across multiple chains through user-network co-signing, eliminating wrapped tokens and bridge risks while maintaining unified policies for recovery, limits and approvals.



<a href="https://www.gonative.cc/">Native</a> aims to leverage Ika&#8217;s 2PC-MPC architecture to enable Sui contracts to control actual bitcoin on Sui, delivering one-click, noncustodial BTC deposits and yield generation without bridges or wrapped intermediaries.



<a href="https://www.nativerse.xyz/">Nativerse</a> plans to employ Ika&#8217;s native signature capabilities to collateralize stablecoins with real bitcoin holdings, allowing Sui contracts to mint and manage BTC-backed dollars while maintaining dWallet policies for security limits and programmatic redemptions.



Following the mainnet launch, Ika’s token has sold off sharply, though meaningful onchain activity will take time to develop as the first production apps begin driving signature demand. The Ika token powers the network’s economy: Users and apps pay Ika for MPC operations like wallet creation and signing, while node operators earn those fees and staking rewards for securing the protocol. Ika also enables governance, with MPC nodes voting on protocol and economic parameters.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1521" height="822" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-69.png?w=1024&amp;h=1024" alt="" class="wp-image-109932" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-69.png?w=1521 1521w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-69.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-69.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-69.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-69.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-69.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-69.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-69.png?w=80 80w" sizes="auto, (max-width: 1521px) 100vw, 1521px" /></figure>







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</ul>

Ika could redefine trustless cross-chain DeFi

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“If this all seems like a wild idea, that means you understand it.” 



— Ted Nelson
</blockquote>



If internet-native money existed in the 1970s, today&#8217;s newsletter would cost $0.001 to read.&nbsp;



Instead, it&#8217;s free.



Ted Nelson thinks that&#8217;s a world-changing disaster.



Nelson is the philosopher, media theorist and tech-visionary who, in 1960, first conceptualized a global “docuverse”: a vast, interconnected library of information made available by networked computers that did not yet exist.



Incredibly, that was nine years before the first computer-to-computer message was sent over the ARPANET.&nbsp;



Nelson prophetically explained that we’d soon access our information via computer screens, which seems intuitive enough — but he was explaining it at a time when hardly anyone had seen one.&nbsp;



He had to make cardboard and celluloid mockups of computer terminals to try to make his “Project Xanadu” comprehensible to people:



<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" width="466" height="282" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-68.png" alt="" class="wp-image-109925" style="width:575px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-68.png?w=466 466w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-68.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-68.png?w=425 425w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-68.png?w=431 431w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-68.png?w=362 362w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-68.png?w=80 80w" sizes="auto, (max-width: 466px) 100vw, 466px" /></figure>



Nelson imagined those screens displaying “visible connections” between every piece of information: a universal system of permanent, unbreakable, two-way links between all the world’s documents, stored on networked servers that anyone could access.



That was 29 years before Tim Berners-Lee invented the World Wide Web — which Nelson is still unhappy about.



“I don’t want to talk about the Web,” he told an interviewer in 2021. “I hate it.”



Nelson dismisses today’s Web as a dumbed-down version of Xanadu, stripped of its most important parts: visible connection and micro-payments.



“The World Wide Web was my idea in the 1960s,” he later groused. “That other system caught on. The great disappointment of my life.”



Nelson is particularly disgusted by Berners-Lee’s now-ubiquitous hyperlinks, which he derisively calls “jump links” — a blind, one-way leap into an ocean of disconnected digital documents that simply “imitate paper.”&nbsp;



(In Nelson’s honor — and possibly to your confusion — I’ve refrained from including any hyperlinks in today’s article.)



To Nelson, building the Web in imitation of paper was no more imaginative than building cars in the shape of horses.



Project Xanadu promised instead a revolutionary version of the Web with “visible connections between pages,” two-way hyperlinks and “micro paywalls.”



This, he promised, would reflect the “nonlinear” nature of human thought, and thereby advance human creativity and progress — all while fairly compensating the world’s inventors, thinkers and content creators, one micro-payment at a time.



In short, Nelson wanted computers to be organized the way people think, and what we got instead is the opposite: a World Wide Web that makes people think the way computers are organized.



“Calling a hierarchical director a ‘folder,’” he characteristically argued, “doesn&#8217;t change its nature any more than calling a prison guard a ‘counselor.’”



He wasn’t speaking in metaphor: He really does think computers are a prison for the mind.&nbsp;&nbsp;



“I&#8217;m very unhappy about the Web,” he added in 2021, “but now we’re stuck with it.”



But maybe not for too much longer?



One reason you’re not paying $0.001 to read this newsletter on Xanadu is that Nelson’s lofty ideas were conceived decades ahead of the technology needed to realize them.



Even after the internet and the Web were invented, Project Xanadu would have required far more computing power, storage capacity, and networking sophistication than anyone thought possible.



Berners-Lee’s “dumbed down” version of the Web won out for one simple reason: It was possible.



Nelson’s vision of attributing all content to its original source, for example, was unfeasible because of the power and storage it would have required was unavailable.&nbsp;



His vision of compensating every idea with micropayments of royalties and sub-royalties was unfeasible because there was nothing to make micro-payments with.&nbsp;



But in 1989, Berners-Lee at least nodded at Nelson’s vision by including the status code “402: Payment Required” in his world-changing HTTP protocol. &nbsp;



402, as it’s known, would have allowed web servers to demand payment from a visiting browser before granting access to a document, video, song or idea.



Unfortunately, browsers, not being allowed bank accounts, had nothing to pay with — and even if they had, the process would have been too slow and too expensive to be useful.



Things have since changed, of course: Internet-native money was invented in 2009; onchain dollars were invented in 2014; and in 2025, high-throughput blockchains have reduced transaction times to a fraction of a second and transaction fees to a fraction of a cent.&nbsp;



In other words, everything is finally in place to realize Nelson’s “system of commerce that would create viable ways for people to be paid with a sensible and completely fair method.”



It won’t happen quickly.



For one thing, we’ve gotten thoroughly accustomed to internet content being mostly free, so ads are unlikely to be replaced by micropayments anytime soon.



Nor is online shopping likely to change: Credit cards work just fine for occasional purchases (also, we love our air miles).



But Ted Nelson’s original vision anticipated a problem that’s only now become evident, 60 years later: language models scraping the entirety of human knowledge from the internet and reproducing it without attribution.



This is exactly the future that Nelson was trying to prevent: a world where ideas were brutally detached from their creators and copied endlessly without context, credit or compensation.



I’m not sure anyone other than Nelson has even suggested a solution.



Project Xanadu — started in 1960, never a working project and long dismissed — somehow remains a futuristic vision.



To finally realize that vision, the Web might have to be reorganized along Nelson’s principles: with visible connections that allow all the world’s information to be properly attributed, and micro-paywalls so they can be properly compensated.



“I believe the original dream is still possible for everyone,” Nelson said in 2021. “ But not with today&#8217;s systems.”



With today’s systems, however, it might be.







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The Breakdown Newsletter

Project Xanadu: The “original dream” of a freer, fairer internet

Luke Leasure

Uniswap finally turns the fee switch

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Some cried. Many have not slept.”



— Jury note to the judge in United States v. Peraire-Bueno
</blockquote>



<h2 class="wp-block-heading">No honor among bots?</h2>



Throwing a pitch in the dirt — even deliberately — is not a crime.&nbsp;



Nor is choosing to throw a pitch above or below 94.5 miles per hour, as prosecutors in the Eastern District of New York have also accused Emmanuel Clase and Luis Ortiz of doing.



Instead, the two Cleveland Guardians are charged with crimes that happened off the field: wire fraud, money laundering and bribery.&nbsp;



It shouldn’t be difficult to prove.&nbsp;



Evidence includes text messages the accused sent to co-conspirators letting them know their next pitch would be in the dirt — and, yes, the texts were sent during games.



To convict, prosecutors need only show that the defendants and their co-conspirators placed bets on these pitches.



Any jury will understand that as fraud: Betting on an event you know is fixed defrauds the person on the other side of the wager.



Jurors therefore only have to be shown two things: that the event was rigged, and that the bets were placed.



By contrast, the jury weighing the same charges — wire fraud and money laundering — in the Ethereum-exploit case United States v. Peraire-Bueno faced a much harder task.



Unlike the MLB case, what happened was not in dispute: The brothers Peraire-Bueno made $25 million by tricking Ethereum sandwich bots into being sandwiched themselves.



But why would that amount to wire fraud or money laundering?



Prosecutors said the brothers “stole” the money — but theft was not among the crimes they were charged with.



Like the MLB pitchers, the brothers were charged with actions (wire fraud and money laundering) that can only happen off the field and off-chain, respectively.



In the pitch-rigging case, what happened off the field was the betting.&nbsp;



In the crypto case, what happened off-chain was simply the profits being moved around — partly, the brothers said, to pay taxes on their hard-earned capital gains.



For that to be a crime, prosecutors had to show that someone, somewhere was defrauded by the Peraire-Bueno brothers’ exploit.



This is what the jury had to decide: not what had happened, but who, if anyone, was defrauded.



After lengthy deliberations, the jury ultimately decided not to decide: On Friday, United States v. Peraire-Bueno ended in a mistrial.



Based on a <a href="https://www.amazon.com/Crypto-Bros-Mistrial-Code-Lives-ebook/dp/B0G1FDLT15/ref=sr_1_2?crid=7NCPU2I2Q8XT&amp;dib=eyJ2IjoiMSJ9.Cdc5Zfkalds8XUHRh-TQjxzZHLU9tazqeuPK_hR9XjAVi4HDVQfowwJKmjOEu4hXYcbuTOUJcm9JkQo8sBU3_CiCQZtPfo7UbmXUgViqd0w0N44LF5RqQTV-MyXKlEi_sLTF7T9H05efhOTxxJjWu_BIba_VaS_dIc0NlHq-gi7YlS7YCNo8vszb5AwhIwy5EXDiHBOmtihJQq3O1QeuZFp3AIA1EBW_H5eGrfNMvQY.yR_dOLohPQ-HnBiZbymRDfeB3k-6HpLwBpJR-WHJ6A8&amp;dib_tag=se&amp;keywords=crypto+bros&amp;qid=1762808762&amp;sprefix=crypto+bros%2Caps%2C149&amp;sr=8-2">transcript of the trial</a>, I’d say they made the correct decision.



<h2 class="wp-block-heading">If the analogies don’t fit, you must acquit&nbsp;</h2>



Prosecutors argued that the operators of the MEV bots who lost money to the Peraire-Bueno brothers’ MEV bots were the victims of fraud.



The brothers, they said, “engaged in false pretenses by holding themselves out as an honest validator,” which fraudulently duped MEV-sandwich bots into trading with them.



In that telling, the bots are like the unsuspecting sports bettors wagering that Emmanuel Clase would throw a strike against people who knew for sure he’d throw a ball.



No one thinks that’s fair.



The defense, however, countered that “posing as an honest Ethereum validator is a nonsensical allegation.”&nbsp;



Validators are just code, they reasoned, and it’s impossible for code to “pose” as honest or dishonest, or anything at all.



“When did this posing happen?” the defense asked, adding that everything happened in code and the code was there for anyone to read.



This, in effect, was what the jury was asked to determine: Can code be dishonest?



Unfortunately, the Ethereum code in question is impossibly complex.



Peter Van Valkenburgh seems to speak for the few who understand both Ethereum code and the law when he <a href="https://x.com/valkenburgh/status/1985374963201626603?s=20">concludes</a> that the Peraire-Bueno brothers “profit maxed up to the limit of Ethereum&#8217;s consensus rules.”



Playing by the rules is never a crime — but in the case of Ethereum, what jury would understand them? The defense repeatedly tried to make Valkenburgh’s line of reasoning more accessible with references to the far-simpler world of sports:



“This is not Charlie Brown’s football.”



“In football, you take a knee and get penalized.”



“In NFL football, you decide to take a delay of game penalty.”



“This is crypto, not college basketball.”



“This is like stealing a base in baseball.”



I doubt any of that got the jury any closer to understanding the rules of Ethereum consensus.&nbsp;



But the prosecution responded with its own, less-flattering analogy, comparing the brothers’ exploit to “walking into a casino with a device that allows you to game the system.”



It might have helped if either side explained how that system worked, but neither did.



The prosecution also added the term “shitcoin” to the legal lexicon, perhaps to make the whole operation seem even more disreputable than a casino.&nbsp;



In cross-examinations, the defense invoked O.J. Simpson and The Sopranos Season 1, to no obvious purpose.



Predictably, the cumulative effect of all this for the jury was confusion.



“We are under stress,” the jury wrote to the judge late in their deliberations. “Yesterday, some cried. Many have not slept.”



Judge Clarke, having endured the same parade of analogies, was sympathetic to their plight: “This is their 11th note,” she told the attorneys. “No progress. I’m going to declare a mistrial.”



It was the only decent thing to do.



Afterward, an exhausted juror told <a href="https://x.com/innercitypress?s=20">Inner City Press</a> that the case “was just too complicated.”



Of course it was.&nbsp;



The rules of Ethereum are infinitely more complex than the rules of baseball, and jurors were given nowhere near enough information to understand them.



Can one MEV bot truly deceive another?



Can what happens on the playing fields of Ethereum warrant a conviction on real-world crimes?



It will take more than sports analogies to decide.&nbsp;



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DeFi

Crypto trials need clearer explanations of DeFi and its rules

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Risk assets caught a bid as the Senate advanced a bipartisan funding package to end the record-long shutdown and Trump floated a $2,000 tariff dividend, lifting BTC from its $100,000 bottom. Polymarket now prices 87% odds of resolution by Nov. 15, which would restore critical data flow after two months of jobs/CPI blackouts. Trump&#8217;s plan faces much slimmer approval odds.



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



Risk assets caught a bid after the Senate advanced a bipartisan funding package to end the record-long government shutdown. Polymarket odds now show an 87% chance the shutdown ends by Nov. 15, which would restore critical data flow after two straight months of jobs and CPI blackouts. The news was particularly welcome for BTC, which had been struggling around the $100,000 mark all week and was down -10% before bouncing on the headlines. While the bill still needs House approval and Trump’s signature, markets are taking the procedural progress as the main risk-on catalyst, lifting global equities and futures.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="850" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=1024&amp;h=1024" alt="" class="wp-image-109899" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-58.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Simultaneously, President Trump floated a $2,000 “tariff dividend” funded by tariff revenues, though Polymarket traders price just a<a href="https://polymarket.com/event/will-trump-create-a-tariff-dividend-in-2025?tid=1762773394387"> 21% probability</a> the Supreme Court ultimately upholds his tariff authority — making the stimulus plan’s funding source legally precarious. Markets nonetheless cheered the twin stimuli: The reopening lessens tail risks around air travel, SNAP benefits, and federal payrolls for a few months, while any direct payments would be pro-consumption.



Fed policy remains the other key variable: Polymarket now shows 72% odds of a 25 bps December cut and <a href="https://polymarket.com/event/fed-decision-in-december?tid=1762773591343">27% odds of no change</a>, slightly more dovish than the <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">60-65% priced into rates markets</a>. Still, Friday’s consumer sentiment <a href="https://www.sca.isr.umich.edu/">slumped to 50.3, near three-and-a-half‑year lows</a>, with the shutdown cited as a key driver.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="1015" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=1024&amp;h=1024" alt="" class="wp-image-109886" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=405 405w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=411 411w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=345 345w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-51.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



In crypto, Revenue tokens led gains yesterday (+5.48%), driven by strength in Ethereum Eco (+4.8%) and DeFi (+4.3%), while L1s (+4.8%) also posted solid advances. BTC bounced +2.2% after testing the $100,000 level, providing a tailwind across sectors. The only laggards were Gaming (-2.7%) and Modular Infrastructure (-2.6%), which saw profit-taking after recent outperformance.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="810" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=1024&amp;h=1024" alt="" class="wp-image-109887" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-52.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



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



Plasma DeFi continues to struggle with outflows. The week of Nov. 3-7 saw -$2.5 billion exit the ecosystem, slightly higher than the previous week&#8217;s -$2.3 billion.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="889" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=1024&amp;h=1024" alt="" class="wp-image-109890" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-55.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



As a result, stablecoin supply on Plasma has collapsed from a $6.35 billion peak to just $1.63 billion (74% decline). The fact this is happening despite ongoing incentive spend of 977,000 XPL per day (18% annual inflation on circulating supply) makes the trend even more concerning. Despite these incentives going toward platforms like Aave to subsidize USDT lending rates to 8.5% (3.54% reward + 4.99% intrinsic), Plasma&#8217;s headline USDT lending rates have fallen roughly inline with the broader stablecoin landscape (SyrupUSDC, USDe, etc).



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="889" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=1024&amp;h=1024" alt="" class="wp-image-109888" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-53.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



On Solana, Meteora continued to post robust revenue numbers, generating $10.4 million in October. While memecoin infrastructure is considered highly cyclical by investors, therefore deserving of discounted valuations, Meteora&#8217;s non-memecoin revenue hit an all-time high of $1.38 million in October, nearly doubling September&#8217;s $751,000. Memecoins still dominate overall revenue due to their high take rate: Meteora earns 0.16% on memecoin swaps vs. 0.005% on stablecoin swaps, meaning the protocol needs $32 of volume from majors to match $1 of memecoin revenue.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="889" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=1024&amp;h=1024" alt="" class="wp-image-109889" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-54.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



This creates a strong financial profile: At $173 million circulating market cap and $360 million FDV, the protocol trades at roughly 1.5x P/S on circulating supply and 3x on FDV. However, the lack of token utility and upcoming unlocks remain key overhangs for investor appetite. Investors should mark Dec. 10 on their calendars, as this is <a href="https://luma.com/metdhabi">Meteora&#8217;s landmark event</a> that might announce some utility for the token.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1580" height="938" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=1024&amp;h=1024" alt="" class="wp-image-109891" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=1580 1580w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=440 440w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=369 369w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-56.png?w=80 80w" sizes="auto, (max-width: 1580px) 100vw, 1580px" /></figure>



Finally, when looking at ETF flows, Solana stands out as the only asset with consistent inflows in the previous week. While volumes decreased from the standout Oct. 27 to Nov. 2 period ($199 million), Solana showed significant strength when adjusting for market cap: ETF flows through October have accumulated 0.263% of supply, vs. BTC&#8217;s 0.133% and ETH&#8217;s 0.0818%.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="889" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=1024&amp;h=1024" alt="" class="wp-image-109892" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-57.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



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Bitcoin is up as shutdown clouds begin to clear

Macauley Peterson

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Most cross-chain protocols want you to trust a validator set. Rift wants you to trust a chip — and only for 20 minutes.



The startup is launching a peer-to-peer bitcoin-to-EVM trading protocol that runs full nodes for Bitcoin and Ethereum inside a trusted execution environment (TEE). The idea is simple: If the enclave can see that both legs of the trade landed, it lets go of the funds. If not, it doesn’t.



“We use [TEEs] to match orders as well as validate that someone got paid,” CEO Samee Siddiqui told me. The TEE acts as an escrow for the funds until sufficient block confirmations indicate it’s safe to release.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="548" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-49.png?w=1024&amp;h=1024" alt="" class="wp-image-109880" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-49.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-49.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-49.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-49.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-49.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-49.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-49.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-49.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-49.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



That shifts the core trust model, compared to what’s available today. There are no multisigs or distinct proof-of-stake chains involved, or the need to mint a synthetic BTC somewhere. Just native bitcoin, held in a hardware enclave, for a time-boxed window while the other leg of the trade settles.



Yes, that window is a risk. “If the machine blows up, then anything in those 20 minutes is potentially lost,” Siddiqui admitted. But that’s the design tradeoff: minimal trust and minimal attack surface for a minimal duration.



Why do this? To make swaps faster, cheaper and less reliant on staked capital.



“Most people don’t honestly care that much about security,” Siddiqui said. (That’s a pity, but clearly true.) “The pitch is actually [that] this is the most capital-efficient solution,” he said.



The fee math backs that up: Rift charges 10 bps taker, 0 maker fees. That’s a big drop from the 40-60 bps you’ll find on Coinbase, of course. But it’s also cheaper than THORChain’s RUNE-bonded AMM model and avoids the economic security game theory with no governance token overhead.



Instead, market makers provide the liquidity and handle their own rebalancing — often using cbBTC as the ETH-side routing asset. That’s for “liquidity efficiency” at the get-go, Siddiqui said, but noted that USDT and other pairs are coming.



It’s not the first time someone’s tried to make BTC↔ETH swaps trustless. RenBTC had its moment (<a href="https://blockworks.co/news/alameda-backed-ren-warns-crypto-could-be-lost-as-platform-shuts-down">until it didn’t</a>). Threshold Network is <a href="https://blockworks.co/news/acre-btc-yield-ethereum">still going strong</a>. Aside from THORChain, there’s also <a href="https://blockworks.co/news/near-protocol-chain-signatures-multichain-defi">Near Intents</a> as an option.



Rift tried other paths first, including a zero-knowledge BTC light client. “But we ended up going with [TEEs] because it’s a lot more flexible,” Siddiqui said. He also pointed out zk stack complexity: “Auditing that a zero-knowledge proof is correct is actually much more difficult than auditing a TEE is correct.”



The go-to market isn’t consumer-first — it’s API-first. Rift wants to plug into <a href="https://blockworks.co/tag/wallet">wallets</a> and swap interfaces that already have volume. The more flows they can sit behind, the stickier they get. Think <a href="https://blockworks.com/analytics/dex-volume">DEX aggregators</a>, not a dedicated frontend.



The bet is that onchain bitcoin trading doesn’t need a new L1 or a wrapped token. It just needs a swap protocol with the right capital efficiency, UX and trust profile.



In Siddiqui’s mind: “If we don’t have DEXs flip CEXs, then the entire space, basically, is a failure.”



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Rift wants to make swapping bitcoin crosschain not suck

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Bubbles are the key to realizing a future that is radically different from the present.”



— Byrne Hobart and Tobias Huber
</blockquote>



A modern day Mechanical Turk made waves this week: <a href="https://www.1x.tech/order">Neo</a>, the $20,000 humanoid robot now available for pre-order, can fold your laundry, feed your dog and clean your house — but only with the help of a human to guide it remotely.



Unlike the original Mechanical Turk, however, this is not a hoax.



Instead, the human behind the curtain is there to guide the robot while it collects the data it needs to become genuinely autonomous.&nbsp;



This first human-guided version is necessary because you can’t scrape the kind of data it needs from Reddit or Wikipedia.



To learn how to navigate the physical world, robots need visual data. Neo is one way to collect it.



So, too, are Tesla’s electric vehicles, Google’s Waymo and Meta’s AI Ray Bans — not just cars and glasses, but machines built to turn photons into data.



“The race for photons has begun,” Adam Jones said in a <a href="https://www.morganstanley.com/insights/videos/humanoid-robots-adam-jonas">video</a> that explains why the photons will be so valuable: &#8220;embodied AI,” he believes, has a “deca-trillion TAM.”



In other words, the market for robots that can autonomously navigate the physical world will be worth many trillions of dollars; far bigger than the market for AI that remains pitifully confined to computers.



The problem, though, is that AIs cannot learn from experience, they can only be trained with data.&nbsp;



So even with practice, your first Neo won’t get better at cleaning your house, but cleaning your house allows it to collect the data that will make the next version better at it.



Repeating that process over the entire physical world will require so much visual data it might soon be measured in “yottabytes” — a yottabyte being one septillion bytes, or enough bytes to fill a data center the size of Delaware.



(Jones says yottaflops in the video, but AI tells me that’s a measure of processing power, so I think he means yottabytes, a measure of data.)



Where all these data centers should go is unclear because Delawareans (I looked it up) probably don’t want to leave their beachfront homes to make way for GPUs.



But that, too, might become an issue of photons: also this week, Google <a href="https://research.google/blog/exploring-a-space-based-scalable-ai-infrastructure-system-design/">announced</a> that it&#8217;s developing solar-powered data centers that will orbit the Earth.



It makes sense. If embodied AI will need yottabytes of data, requiring yottaflops of power generation, how better to process it than with the giant fusion reactor at the center of the Solar System?



The Sun emits 100 trillion times more power than the electricity generated on Earth, Google Research noted, so “space may be the best place to scale AI compute.”



Google calls its ambition a “moonshot,” in recognition of the many engineering challenges involved in building communicating constellations of space-based, solar-powered data centers.



But many others are working on it, too, including giants like Nvidia and SpaceX, and startups like <a href="https://www.starcloud.com/">StarCloud</a>.



Only a bona fide investing bubble could get so many people working on such a crazy, long-shot idea (and also make us learn what a yottabyte is).



Which is why investing bubbles are good.



I’m doubtful Google will ever turn a profit on moonshot investments like data centers in space, but Earth is already reaping returns on investors’ enthusiasm for AI.



AI is contributing to <a href="https://x.com/sundarpichai/status/1978507110477332582?t=QLcKtZV7FyUoICh_L-_s6A&amp;s=19">cancer research</a>, accelerating <a href="https://x.com/demishassabis/status/1978863261521998027?t=dG4FqXf6_lW4f3fV5Gai3Q&amp;s=19">fusion research</a> (maybe we won’t need the Sun after all?) and designing <a href="https://www.perplexity.ai/page/ai-designs-antibodies-from-scr-NCYirBzATsuiXjcjyzP_PA">novel antibodies</a>, for example.



And that’s before we’ve even trained the robots to help.



Imagine what Neo will do for you when it’s been trained on yottabytes of photon-generated data, running in a data center in space that’s being effortlessly powered by the Sun.&nbsp;



I can’t wait to find out.



In the meantime, let’s check the charts.



Not enough:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1266" height="682" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=1024&amp;h=1024" alt="" class="wp-image-109866" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=1266 1266w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=80 80w" sizes="auto, (max-width: 1266px) 100vw, 1266px" /></figure>



US electricity generation has stagnated over the past 15 years, with gains in natural gas (in blue) and renewables (green) only offsetting the decline in coal (brown).



Paying in cash — so far:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1131" height="704" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-44.png?w=1024&amp;h=1024" alt="" class="wp-image-109867" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-44.png?w=1131 1131w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-44.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-44.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-44.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-44.png?w=413 413w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-44.png?w=419 419w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-44.png?w=352 352w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-44.png?w=80 80w" sizes="auto, (max-width: 1131px) 100vw, 1131px" /></figure>



The five big hyperscalers have so far funded their AI capex boom with cash, but that is starting to change: Meta, Google and Oracle have collectively borrowed nearly $100 billion from the bond market over the past eight days.



Tapping the brakes?



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1425" height="717" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-46.png?w=1024&amp;h=1024" alt="" class="wp-image-109869" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-46.png?w=1425 1425w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-46.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-46.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-46.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-46.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-46.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-46.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-46.png?w=80 80w" sizes="auto, (max-width: 1425px) 100vw, 1425px" /></figure>



Torsten Slok <a href="https://www.apolloacademy.com/data-center-growth-rates-peaked-two-years-ago/?utm_medium=email&amp;utm_source=pardot&amp;utm_id=310f66842710d1fe33beb80a7eaf3f0b&amp;utm_campaign=EXT_Daily+Spark">notes</a> that investment in data centers is still growing (rapidly), it’s growing at a slower rate. My guess is they can’t build the power generation fast enough to keep up. (There would be no such issue in space.)



Rate cuts incoming?



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1266" height="682" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=1024&amp;h=1024" alt="" class="wp-image-109865" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=1266 1266w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-43.png?w=80 80w" sizes="auto, (max-width: 1266px) 100vw, 1266px" /></figure>



<a href="https://polymarket.com/event/will-the-supreme-court-rule-in-favor-of-trumps-tariffs?tid=1762298567090">Polymarket</a> betting suggests there’s an 80% chance the president’s IEEPA tariffs will be deemed unconstitutional. If the tariffs are revoked, inflation would presumably fall, giving the Fed room to cut interest rates. Tariff payers might even get the $90 billion they paid refunded. What happens if we get rate cuts, bigger deficits and an AI capex boom? The bubble might only just be getting started.



Job cuts:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1080" height="668" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-42.png?w=1024&amp;h=1024" alt="" class="wp-image-109864" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-42.png?w=1080 1080w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-42.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-42.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-42.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-42.png?w=416 416w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-42.png?w=422 422w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-42.png?w=354 354w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-42.png?w=80 80w" sizes="auto, (max-width: 1080px) 100vw, 1080px" /></figure>



Younger workers could use some help from the Fed. The last time the BLS collected data (way back in August) the unemployment rate for 20-24 year-olds had risen to 9.2%.



Not AI’s fault?



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="893" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-45.png?w=1024&amp;h=1024" alt="" class="wp-image-109868" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-45.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-45.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-45.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-45.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-45.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-45.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-45.png?w=468 468w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-45.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-45.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



AI typically gets the blame for companies hiring fewer recent graduates, but layoffs in the most directly impacted industry are expected to be lower this year than last.



Bubble watch:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1325" height="906" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-47.png?w=1024&amp;h=1024" alt="" class="wp-image-109870" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-47.png?w=1325 1325w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-47.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-47.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-47.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-47.png?w=376 376w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-47.png?w=382 382w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-47.png?w=320 320w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-47.png?w=80 80w" sizes="auto, (max-width: 1325px) 100vw, 1325px" /></figure>



Nvidia is <a href="https://x.com/HayekAndKeynes/status/1985472077961334793?s=20">calculated</a> to have a higher weighting in Morgan Stanley’s benchmarked world index than the entire country of Japan.



The scariest chart?



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="1016" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-48.png?w=1024&amp;h=1024" alt="" class="wp-image-109871" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-48.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-48.png?w=300 300w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The <a href="https://www.ft.com/content/e577411e-3bf2-4fb4-872a-8b7d5e9139d3">FT</a> that the West is losing its “culture of progress,” with worrying implications for public policy: The 2025 Nobel Prize for Economics was awarded to three economists whose work suggests that believing in progress is essential to making it.



Rookie numbers?



<img loading="lazy" decoding="async" src="blob:https://cms.blockworks.co/9a5a354a-233e-42ac-820f-b81e12bd963a" width="624" height="349">Tomasz Tunguz <a href="https://x.com/ttunguz/status/1986594426580574324?s=20">notes</a> that AI infrastructure is only the sixth-biggest infrastructure project in US history (if wars count).



For the sake of progress, let’s hope it gets much bigger.



Have a great weekend, space-based readers.



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Friday charts: The photon economy

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Happy Friday. It was another rough week for crypto markets, with nearly every sector registering negative returns and a handful of long-tail “stablecoins” losing their peg.



Weakness prevails across the board, with all of our tracked indices posting negative returns over the past week, except for DePIN. This weakness comes as the majors BTC, ETH and SOL have established a daily and weekly downtrend, while equity indices have reversed ~3%-5% off their highs, adding risk back to the market. The selloff in equities has elevated the VIX to a level of 20.



Within crypto, DePIN was the one sector of strength, up 2% on the week, while the Launchpad and <a href="https://app.blockworksresearch.com/analytics/solana">Solana Ecosystem</a> sectors were the hardest hit, down 15% and 27.6%, respectively.



<img loading="lazy" decoding="async" width="624" height="348" src="blob:https://cms.blockworks.co/94ba79b5-3c44-4961-afe6-60a3b45372fa">  



Looking at the top winners within DePIN, AR and FIL account for a majority of the sector’s strength, trading up 60% and 31%, respectively.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1483" height="832" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-41.png?w=1024&amp;h=1024" alt="" class="wp-image-109858" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-41.png?w=1483 1483w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-41.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-41.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-41.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-41.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-41.png?w=465 465w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-41.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-41.png?w=80 80w" sizes="auto, (max-width: 1483px) 100vw, 1483px" /></figure>



The Solana Ecosystem names are among the hardest hit, with MPLX (-24%), RAY (-21%), and JTO (-19%) making the largest downside moves. JTO’s underperformance comes amid a recent $6 million Paradigm-led seed round for <a href="https://www.theblock.co/post/377791/paradigm-harmonic-funding-solana-nasdaq-speed">Harmonic</a>, a team building a new block-building engine on Solana which may seek to compete with Jito’s established integrations. Interestingly, KMNO is the one name in the sector to hold positive, albeit slightly, at only +0.24% on the week.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1478" height="824" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-40.png?w=1024&amp;h=1024" alt="" class="wp-image-109857" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-40.png?w=1478 1478w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-40.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-40.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-40.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-40.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-40.png?w=468 468w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-40.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-40.png?w=80 80w" sizes="auto, (max-width: 1478px) 100vw, 1478px" /></figure>



In a bearish trend, it will be increasingly important to focus on the sectors of relative strength, or hold patient for oversold and discounted levels on fundamentally strong names with a clear growth path.



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Downtrends in BTC, ETH and SOL as risk returns to market

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Use this time wisely.”



— Hester Peirce
</blockquote>



<h2 class="wp-block-heading"><a href="https://youtu.be/yNvcwZov6Jg?si=_zlLR0eysdVP_7OK">Neal Stephenson is still interested in crypto</a></h2>



Neal Stepheson, famous for predicting the Metaverse in his 1992 novel Snow Crash, also predicted crypto.



In The Diamond Age (1995), he imagined a network &#8220;designed from the ground up to provide privacy and security so that people could use it to transfer money.&#8221; (The Diamond Age also predicted large language models.)



In Cryptonomicon (1999), he described a digital currency based on public-key cryptography and backed by physical gold.



In Reamde (2011), the plot revolves around a highly valuable, in-game virtual currency, and all the problems it causes when people try to convert it into real-world currency.



These novels were so prescient because they were steeped in the cypherpunk ideas Stephenson was following at the time — which makes it encouraging that he still finds today’s crypto scene cypherpunk enough to be interesting.



“You see a mix today of people who are genuinely driven by the belief that they&#8217;re doing something socially constructive for society by getting us away from centralized financial institutions and centralized information brokers,” <a href="https://youtu.be/yNvcwZov6Jg?si=_zlLR0eysdVP_7OK">he told Epicenter</a>, “mixed in with a lot of other attempts to commercialize this that I think are often driven by less idealistic considerations.”



That mix has been shifting in favor of the “less idealistic” recently — and, after listening to Stephenson, I wonder if that might be why the crypto industry is struggling to create things that people outside of crypto find valuable.



“It’s impossible to architect a compelling experience backwards from a desired financial outcome,” Stephenson says. “If you start with the goal of ‘let&#8217;s make a lot of money’ and then try to reverse-engineer a creative project from that motive, it&#8217;s not going to work.”



He advises people to “resist that temptation to just immediately financialize everything and concentrate instead on the intangible value of what people are creating.”



To that end, Stephenson is the co-founder of <a href="https://lamina1.com/home">Lamina1</a>, a blockchain platform that hopes to provide the “economic rails” for a Snow Crash–like metaverse, in which creators set their own terms.



Whatever the project&#8217;s merits, I find that encouraging, because if Neal Stephenson still thinks crypto is worth working on, I do, too.



<h2 class="wp-block-heading"><a href="https://southpark.cc.com/video-clips/q9i0dy/south-park-our-crypto-advisor">South Park is still interested in crypto, too&nbsp;</a></h2>



The writers of South Park sum up the state of crypto in just a few lines of dialogue:



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1236" height="244" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-38.png?w=1024&amp;h=1024" alt="" class="wp-image-109852" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-38.png?w=1236 1236w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-38.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-38.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-38.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-38.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-38.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-38.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-38.png?w=80 80w" sizes="auto, (max-width: 1236px) 100vw, 1236px" /></figure>
</blockquote>



Most of us are Stan, I think, trying to make a little money while also pointing out what’s wrong with finance and the world.



But sometimes we forget why we’re here.



Later, when Stan and his crypto advisor are brainstorming how to “create FOMO” for a South Park memecoin, they mistake Kyle’s moral rebuke for a marketing pitch:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1242" height="170" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-39.png?w=1024&amp;h=1024" alt="" class="wp-image-109853" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-39.png?w=1242 1242w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-39.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-39.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-39.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-39.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-39.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-39.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-39.png?w=80 80w" sizes="auto, (max-width: 1242px) 100vw, 1242px" /></figure>



The difference between Kyle and the crypto advisor — between cypherpunk principles and crypto opportunism — can get muddled at times.&nbsp;



The trick, as Neal Stephenson reminds us, is keeping your wits about you and knowing how to distinguish between those things.



<h2 class="wp-block-heading"><a href="https://stratechery.com/2025/the-benefits-of-bubbles/">The benefits of cognitive bubbles</a></h2>



Ben Thompson says there’s a “quasi-spiritual element” to the current AI bubble.



“There are people working at these labs that believe they are building God,” he writes. “That is how they justify the massive investment in leading edge models that never have the chance to earn back their costs.”



This should, in theory, be a good thing.



Bubbles are productive when they leave behind physical infrastructure, like railroads and fiber optic cables (the Carlota Perez thesis).



But they can also be productive by creating “cognitive capacity” — the surge of innovation and invention that occurs when everyone is inspired to pull in the same direction (the Byrne Hobart thesis).



AI is unusually inspiring, so it should, with luck, have unusually high returns from the cognitive capacity it’s creating.&nbsp;



“There are benefits from bubbles that pay out for decades,” Thompson concludes, “and the best we can do now is pray that the mania results in infrastructure and innovation that make this bubble worth it.”



This might be applicable to crypto, too, which is sadly not in a bubble — perhaps because it’s lost some of the “belief and motivation” it once had from a shared faith in cypherpunk values.



<h2 class="wp-block-heading"><a href="https://visserlabs.substack.com/p/bitcoins-silent-ipo-why-this-consolidation">Bitcoin’s IPO</a></h2>



Jordi Visser attributes bitcoin’s current weakness to selling by the first generation of believers: “Addresses that accumulated when Bitcoin was a cypherpunk experiment are finally moving their holdings.”



The original cypherpunks, he says, “are passing the torch [to] entities who care less about ideology and more about returns.”



(Or, in South Park terms: from Kyle to Stan.)



As a result, Visser says, “Bitcoin will probably never again have the radical energy it had in its early years.”



But he sees this as a positive development: “From a market structure perspective, this distribution is enormously bullish long-term.”



Visser equates this to an IPO where ownership of a company passes from a handful of private investors to a broad base of public ones.



That can depress prices for a while, he says, but is long-term bullish because “concentration is fragile [and] distribution is antifragile.”



Each bitcoin that moves from concentrated hands to distributed hands makes the network more resilient.&nbsp;



“The OG whales are having their liquidity event,” he writes — including one “Satoshi-era holder that recently sold <a href="https://investor.galaxy.com/news/news-details/2025/Galaxy-Executes-One-of-the-Largest-Notional-Bitcoin-Transactions-Ever/default.aspx">$9 billion of bitcoin</a> through Galaxy.&nbsp;



“And what they’re leaving behind,” he concludes, “is a Bitcoin that’s stronger, more distributed and more resilient than the one they accumulated.”



<h2 class="wp-block-heading"><a href="https://www.youtube.com/watch?v=2OFzH92_DwI">Crypto Mom advice</a></h2>



This week’s “blue wave” of election results is a reminder that the free pass the crypto industry is currently enjoying might expire in approximately three years.



&#8220;Use this time to build things that are valuable, that are good, that meet the needs of your fellow Americans, people across the world,” Crypto Mom Hester Peirce has advised.&nbsp;



In addition to, you know, just being the right thing to do, it’s also how the industry can insulate itself from politics.



“Build real things with real value for society,&#8221; Peirce concludes, “because that’s the best way to make sure that good crypto regulation will last from administration to administration.”



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Links: Snow Crash, South Park, Bitcoin’s IPO and bubbles

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Markets caught a much needed bid yesterday, snapping a multi-day losing streak. The rebound stretched across both equities and crypto, fueled by optimism that Trump-era tariffs could be rolled back. We look at which sectors led the charge, how subnet tokens continue to defy gravity post-crash, and the debate heating up over Hyperliquid’s HIP-5 proposal.



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



After several days in the red, markets found relief yesterday as all major benchmarks posted gains. The rebound was led by BTC and the tech-heavy Nasdaq, which rose 2.36% and 1.15%, respectively.



Optimism was partly fueled by the Supreme Court hearing on the legality of Trump’s tariffs, which <a href="https://www.cnbc.com/2025/11/05/traders-on-prediction-markets-see-a-30percent-chance-supreme-court-backs-trumps-tariffs-.html">raised expectations</a> that some may be rolled back. <a href="https://kalshi.com/markets/kxdjtvostariffs/tariffs-case/kxdjtvostariffs">Odds</a> of the court upholding the tariffs fell from 45% to 29% on Kalshi, lifting sentiment across risk assets.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1165" height="614" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-34.png?w=1024&amp;h=1024" alt="" class="wp-image-109841" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-34.png?w=1165 1165w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-34.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-34.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-34.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-34.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-34.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-34.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-34.png?w=80 80w" sizes="auto, (max-width: 1165px) 100vw, 1165px" /></figure>



Within crypto, DePIN and DeFi led the recovery, climbing 6.7% and 6.1%, on the day. The DePIN index was boosted by HNT and Render, up 11.1% and 8.7%, respectively, together accounting for roughly a quarter of the index.&nbsp;



In DeFi, AERO, PUMP, and ASTER all advanced more than 10%. Aerodrome’s strength comes on the back of the launch of Slipstream v2 this week that aims to optimize efficiency and build on its dynamic fees design.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1169" height="624" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-32.png?w=1024&amp;h=1024" alt="" class="wp-image-109839" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-32.png?w=1169 1169w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-32.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-32.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-32.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-32.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-32.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-32.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-32.png?w=80 80w" sizes="auto, (max-width: 1169px) 100vw, 1169px" /></figure>



The AI sector was the weakest performer, declining 4% despite strong gains over the past month. The pullback likely reflects a rotation toward sectors that had become oversold during the recent correction. Within the AI index, performance was mixed. ICP surged 14.6% on the day, while IP and TAO were the only constituents in negative territory, each down around -4%.&nbsp;



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



In just a few days, we will hit the one-month mark since the brutal Oct. 10 crypto crash that wiped out nearly $390 billion from the market. While most of us would rather forget that day, it is worth looking back to see which sectors and tokens have bounced back stronger. That is often where the next wave of strength begins.



One clear standout has been the AI sector, which is up 7.3% — not just since the Oct. 10 correction but through the recent market weakness as well. Gains from tokens like ICP, up 31.8%, and VIRTUALS, up 18.5%, have helped, but much of the sector’s momentum continues to come from TAO, which makes up a third of the index and is up 10.8% this month.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1169" height="619" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-35.png?w=1024&amp;h=1024" alt="" class="wp-image-109842" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-35.png?w=1169 1169w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-35.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-35.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-35.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-35.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-35.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-35.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-35.png?w=80 80w" sizes="auto, (max-width: 1169px) 100vw, 1169px" /></figure>



When scanning the top 500 tokens by MC, it’s worth noting that subnet tokens are among the few still trading above their pre-crash levels. These include Chutes (SN-64), Ridges (SN-62), lium.io (SN-51) and Targon (SN-4). These are four out of the top five Bittensor subnets by MC.



The amount of TAO staked in Alpha continues to climb, signaling rising demand for subnet tokens.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-37.png?w=1024&amp;h=1024" alt="" class="wp-image-109844" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-37.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-37.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-37.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-37.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-37.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-37.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-37.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-37.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-37.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The stake split between Alpha and Root subnets continues to grow as well, from 13.2% in July to 21.1% today, showing growing interest in Bittensor Subnets.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-36.png?w=1024&amp;h=1024" alt="" class="wp-image-109843" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-36.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-36.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-36.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-36.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-36.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-36.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-36.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-36.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-36.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Despite their low float and inflationary early stages, many subnets are beginning to generate real revenue, a sign of genuine utility rather than hype. Targon, Lium and Chutes are <a href="https://x.com/bloomberg_seth/status/1970913602375655838">estimated</a> to have a combined $20 million in annual recurring revenue, a notable milestone for such young networks.



With the TAO halving approaching in December, the recent emission structure <a href="https://x.com/markjeffrey/status/1985821692346974484">changes</a> and a wave of <a href="https://x.com/Defi0xJeff/status/1986276037437837573">potential catalysts</a> ahead, the Bittensor ecosystem looks well-positioned to capture the next wave of market flows when sentiment turns.



<h2 class="wp-block-heading">HIP-5: Assistance Fund 2</h2>



HIP-5: Staker-Governed Assistance Fund 2, authored by Hyperliquid community members, proposes to divert 1% of Hyperliquid fees (ramping to 5%) into a staker-voted buyback fund for Strict List tokens such as PURR and HFUN.



Under this system, fees would accrue in USDC to AF-2, with HYPE stakers setting weights through real-time gauge voting. Execution would occur via continuous TWAP, votes would persist until changed, and a seven-day initialization window would precede any flow. Eligibility would be limited to the Strict List, with LSDs excluded from voting unless they implement verifiable holder-level passthrough. At September 2025&#8217;s run rate of $91 million/month, a full 5% allocation would equate to $55 million/year in targeted buybacks, while AF-1 would retain 94% of total fees.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="980" height="830" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-33.png" alt="" class="wp-image-109840" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-33.png?w=980 980w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-33.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-33.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-33.png?w=303 303w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-33.png?w=308 308w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-33.png?w=259 259w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-33.png?w=80 80w" sizes="auto, (max-width: 980px) 100vw, 980px" /></figure>



There are multiple reasons behind this decision, and I strongly encourage people to read the full proposal <a href="https://docs.google.com/document/d/1Nf7UmWptLZnCXaPhDnEBAPsyL5n2d-9Qat4v35CKepI/edit?tab=t.0#heading=h.vrzaefgtgwrb">here</a>. Below, I will walk through these reasons cited in the proposal and provide both sides of the argument.



<ol class="wp-block-list">
<li>“Bootstrap ecosystem projects: Provide buy-pressure to existing strict spot Hypercore tokens, giving teams already staking HYPE more incentive to deploy their tokens in Hypercore. At the same time, new projects launching on Hypercore are encouraged to stake HYPE (or incentivize stakers) in order to compete for votes and buybacks.”</li>
</ol>



This is the primary case for implementing this proposal, reminiscent of when the Hyperliquid Foundation did a <a href="https://x.com/HyperliquidX/status/1880988778757820721">buyback of PURR with AF-1</a>. $55 million would indeed be a very significant TWAP given the current state of Hyperliquid ecosystem projects: PURR (~$65 million) and HFUN (~$35 million) sit at very low market caps. Even Kinetiq, arguably one of the most hyped LST projects on Hyperliquid, is projected by <a href="https://polymarket.com/event/kinetiq-fdv-above-one-day-after-launch?tid=1762417112280">Polymarket to launch between $250 million and $500 million.</a> It seems obvious that a $55 million stimulus package would greatly re-rate these tokens. However, the argument against is also very strong:



<ul class="wp-block-list">
<li>Hyperliquid should support strong projects. While buybacks would attract more projects, these are unlikely to be the high quality projects needed.</li>



<li>Forces projects to launch tokens (e.g., Unit, Liminal).</li>



<li>Asymmetrically benefits investors and team members. For example, Kinetiq’s core contributor supply (23%) is equivalent to the supply distributed to Kpoints holders (24%). While this is fair for projects that capture the value they create, it is unfair when HYPE buybacks are redirected to these tokens.</li>



<li>Hyperliquid differentiated itself from pure value capture and revenue generation; subsidizing other projects could dilute the quality of projects building on the HyperEVM (similar to projects on other chains propped up with incentives).</li>
</ul>



Along with this, I would argue that directing revenue in the form of buybacks does little to bootstrap projects beyond a short-term price boost. Finally, this would do little to incentivize projects to buy and stake HYPE, as the notional amount of HYPE needed to materially influence a vote is far too high.



<ol start="2" class="wp-block-list">
<li>“Enhance HYPE Resilience: Diversify value accrual beyond pure exchange revenue”</li>
</ol>



This is a point I am inclined to disagree with completely. The thesis is that Convex-style vote aggregators could provide alternative revenue streams. First, the idea is strange: projects bribing the AF-2 fund for buy-pressure on their token. If this were the case, AF-2 would likely adversely select projects to buy, as the projects most likely to give out tokens aggressively are unlikely to do well long-term.



As noted in the original proposal, “Traditional bribes pay LPs to deepen pools, which often leads recipients to sell the rewards to realize profit, creating sell pressure.” We would likely see projects bribe AF-2 to buy their token, and users then dump on AF-2 with the tokens they received as a bribe.



<ol start="3" class="wp-block-list">
<li>“Preserve Competitiveness: A 5% diversion is negligible (~$150K daily reduction in HYPE buys) compared to the ~$3 million baseline.”</li>
</ol>



Strictly speaking, this is true: The notional value of HYPE is unlikely to materially affect HYPE’s price. However, I believe this does affect HYPE negatively, as it undermines HYPE as a pristine asset that buys back with all its revenues, a value proposition that is easy to understand in a market with complex Ve tokens and lockup periods. It also raises questions about conflicts of interest from voters.



Overall, while HIP-5 would materially improve the price of Hyperliquid ecosystem projects, it creates a negative dynamic where Hyperliquid uses HYPE revenues to support potentially unaligned projects (asymmetrically benefiting founders and private investors). These flows are unlikely to have positive ROI and could allow for manipulation (e.g. voter manipulation, frontrunning, conflicts of interest) and, while not material in notional terms, could dilute HYPE’s role as a pristine asset.



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Buybacks get pushback, and markets rebound

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“In the courtroom, the facts are often less important than how the story is told.”



— Alan Dershowitz
</blockquote>
</blockquote>



Any moment now, 12 jurors in the Southern District of New York will tell us whether blockchain code is law in America.



Anton and James Peraire-Bueno were arrested in May of last year on accusations of “stealing” $25 million in ETH by exploiting Ethereum’s intricate system of building blocks.



Closing arguments in their trial ended yesterday.&nbsp;



Southern District prosecutors told the court the Peraire-Bueno brothers used “tricks and deception” to execute a “bait and switch” exploit that lured a group of lovable, unsuspecting MEV sandwich bots into being sandwiched themselves.



The defense says the brothers were simply playing by Ethereum’s rules: “This is like stealing a base in baseball,” they told the jury.



Technically, the jury will return a verdict on charges of wire fraud and money laundering. But both sides have framed the case as a judgment on whether code is law in the world of decentralized blockchains.&nbsp;



Coin Center persuasively argues that it should be: “Validators compete under a mathematically explicit and self-executing rule set,” it wrote in an amicus brief. “Those rules alone define both the boundaries of permissible conduct and the penalties for deviation.”



The prosecution fundamentally disagrees: “Just because something is possible doesn’t make it legal,” they told the court.



Both sides did their best to translate the arcane art of Ethereum block-building into something a jury could follow well enough to pass judgment on the defendants’ actions.



The defense thinks that’s to their advantage: “If you understand how Ethereum works,” they told the jury, “Anton and James are innocent.”



But anyone who’s read Presumed Innocent or watched 12 Angry Men will know that nothing as complicated as Ethereum should be decided by a jury of normal people.



As recorded by <a href="https://play.google.com/store/books/details/Matthew_Russell_Lee_Crypto_Bros_SDNY_v_Peraire_Bue?id=fBCSEQAAQBAJ">Inner City Press</a>, defense attorney Katherine Trefz tried to make Ethereum block-building relatable to jurors with a cooking analogy:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1850" height="348" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-31.png?w=1024&amp;h=1024" alt="" class="wp-image-109834" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-31.png?w=1850 1850w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-31.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-31.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-31.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-31.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-31.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-31.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-31.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-31.png?w=80 80w" sizes="auto, (max-width: 1850px) 100vw, 1850px" /></figure>



That’s a pretty good start, for sure, and probably good tactics.



As a defendant, I’m not sure I’d want my actions judged with food analogies, but what’s the alternative?



In a case this bewilderingly technical, the best that lawyers can probably do is tell a story.&nbsp;&nbsp;



An expert witness asked to explain MEV arbitrage also resorted to analogy, again with food:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1842" height="260" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-30.png?w=1024&amp;h=1024" alt="" class="wp-image-109833" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-30.png?w=1842 1842w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-30.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-30.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-30.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-30.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-30.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-30.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-30.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-30.png?w=80 80w" sizes="auto, (max-width: 1842px) 100vw, 1842px" /></figure>



Next time you trade on Ethereum, remember: You’re the salami.



Cleverly, the prosecution tried to make the food analogies less appetizing:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1848" height="266" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-29.png?w=1024&amp;h=1024" alt="" class="wp-image-109832" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-29.png?w=1848 1848w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-29.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-29.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-29.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-29.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-29.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-29.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-29.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-29.png?w=80 80w" sizes="auto, (max-width: 1848px) 100vw, 1848px" /></figure>



“Salmonella” is a kind of “poisoned” crypto token used to trap sandwich bots on Ethereum, so a mini-trial might have helped the jury understand the larger trap the defendants had set.



Some highly technical things were explained; some pretty obvious things were not:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1852" height="328" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-28.png?w=1024&amp;h=1024" alt="" class="wp-image-109831" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-28.png?w=1852 1852w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-28.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-28.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-28.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-28.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-28.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-28.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-28.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-28.png?w=80 80w" sizes="auto, (max-width: 1852px) 100vw, 1852px" /></figure>



Anyone who needs a definition of “bot” would presumably need one for “atomic arbitrage,” too; but the defense quickly moved on.



Judge Jessica Clarke seemed similarly eager to move on from technical details:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1958" height="290" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-27.png?w=1024&amp;h=1024" alt="" class="wp-image-109830" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-27.png?w=1958 1958w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-27.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-27.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-27.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-27.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-27.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-27.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-27.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-27.png?w=80 80w" sizes="auto, (max-width: 1958px) 100vw, 1958px" /></figure>



There were a lot of breaks — way more than in the movies.



More importantly, there was much technical substance in between.&nbsp;



The prosecution seemed to recognize that in their <a href="https://x.com/innercitypress/status/1985726633198678111">closing argument</a>, which resorted once again to analogy: “If you go overweight with your bag on Jet Blue, you pay a penalty, you don&#8217;t go to jail. That&#8217;s not the way rules work in our world.”



I don’t know what that means — is Jet Blue Ethereum? Are the defendants passengers? Who’s flying the plane? Block-builders?



Hopefully someone on the jury puzzled it out, because there’s a lot riding on the outcome of The United States of America v. Anton Peraire-Bueno and James Peraire-Bueno — for crypto as well as for the defendants.



For crypto, a guilty verdict would make it look like Ethereum’s code is so unable to keep things orderly that it needs the US courts to come in and police what happens on its network.



Or, since we’re doing analogies: like a kid on a playground who needs his big brother to keep him safe from bullies.&nbsp;



In this case, literally Big Brother: The plaintiff here is not the MEV sandwicher who got sandwiched, but the United States of America.



More importantly, a guilty verdict would likely mean many years in prison for the two defendants.



“This is a hugely consequential decision in the lives of two young men,” the defense concluded. “Not guilty. Thank you.”



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