HashKey Platform Token

Jack Kubinec

A co-founder of the defunct crypto lending business BlockFi has made her next move.&nbsp;



Flori Gilroy is now the senior vice president of SoFi’s crypto unit.



The new hire was quietly made <a href="https://www.sofi.com/our-leadership/">official</a> via an update to the masthead on SoFi’s website and confirmed by a source familiar with SoFi’s business operations. It’s unclear when Gilroy took on the new role.



Gilroy and SoFi did not immediately return requests for comment.



Gilroy went by Flori Marquez while helping run BlockFi. After the bankrupt lender’s other co-founder Zac Prince was <a href="https://www.coindesk.com/business/2025/02/25/michael-novogratz-s-galaxy-hires-zac-prince-former-ceo-and-co-founder-of-blockfi">scooped</a> up by Galaxy, both of BlockFi’s co-founders have now returned to roles in the crypto industry.



Once a leading crypto lending business with a slew of prominent backers, BlockFi was caught in the fallout from Three Arrows Capital’s bankruptcy in 2022. <a href="https://blockworks.co/news/ftx-reaches-deal-to-acquire-blockfi-for-up-to-240m">FTX acquired the business</a> for $240 million, but following the exchange’s collapse, BlockFi <a href="https://blockworks.co/news/blockfi-bankruptcy-chapter-11-greenlight">filed for bankruptcy</a> itself.&nbsp;



Read more: <a href="https://blockworks.co/news/blockfi-ftx-bankruptcy-comparison">BlockFi’s bankruptcy proceedings ‘golden standard’ compared to FTX: Lawyers</a>



The links between Gilroy and SoFi go back several years. The online bank and fintech company <a href="https://medium.com/blockfi/blockfi-seed-round-funding-announcement-5f7f569f59f3">invested</a> in BlockFi’s seed round in 2018.



SoFi is <a href="https://www.barrons.com/articles/sofi-bitcoin-crypto-blockchain-3ddc4610">revamping</a> its crypto services this year after <a href="https://blockworks.co/news/sofi-shutters-customers-migrate-holdings">suspending crypto trading</a> in 2023 in the wake of new rules set by the Federal Reserve.&nbsp;



In a late June press <a href="https://investors.sofi.com/news/news-details/2025/The-Future-of-Financial-Services-SoFi-to-Offer-Members-New-Crypto-Enabled-Capabilities-to-Get-Their-Money-Right/default.aspx">release</a>, SoFi said global remittances and crypto investing are expected to launch later this year as the “first of many planned crypto and blockchain innovations” at the company.



Last week, the administrator overseeing BlockFi’s bankruptcy <a href="https://news.bloomberglaw.com/bankruptcy-law/blockfi-administrator-doj-agree-to-end-suit-over-crypto-assets">settled</a> a lawsuit with the US Department of Justice involving the proposed transfer of some of BlockFi’s crypto to the government. BlockFi <a href="https://blockfi.com/blockfi-emerges-from-bankruptcy/">emerged</a> from bankruptcy in October 2023.



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BlockFi

BlockFi co-founder Flori Gilroy hired to lead revamped SoFi crypto unit

Donovan Choy

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



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Are we back?



BTC is at a new all-time high of $121k, ETH is back above $3k, and Aave just <a href="https://x.com/aave/status/1944661485973602340">crossed</a> $50 billion in TVL.



But probably most significant of all is the return of initial coin offerings (ICO). This past Saturday saw <a href="https://blockworks.co/news/pump-fun-token-ico-date">Pump’s ICO</a> raising $500 million at a $4 billion FDV. I say “Saturday,” but it was all over in 12 minutes. 125 billion PUMP tokens (12.5% of total token supply) were all sold for $0.004 apiece.



As of this morning, PUMP is trading at 0.017, so that’s a 325% profit if you snagged it in the ICO.



Who were the buyers?



10,145 unique addresses aped in at a remarkably equitable median price of $537.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf0Rc-MXc4w-lNz2rZGhJ-euctZgcL2WRnB5fjs2qkq0KriLOgSwIbFXPr7BldAJyXF_ORGQ0dNaAhhvnSmrEmGVWLiI732v1Z9wigEkt4tG8ac9BDB8gsjG7mN1wBWQsDTuq5YXA?key=qgDYZnpwkyeCXaIYg8xsfQ" alt=""/></figure>



Interestingly, more users came from DEXs than CEXs. About 3,878 Pump investors came from Solana DEXs including Raydium, SolFi and Jupiter — compared to 2,525 investors from CEXs.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdbAy61YRjiaEeTVvxWKahLo2dFBpdpO0gHBG3TDYRxsw7sGXK58bugE4JBmvN5Q2MbOq8Zn3Q0fa8QTRCXCKAeYGLAoEeD0FPP_CPdmu6EV_P514jK7HX7Md997W212Zn2hG_Gfw?key=qgDYZnpwkyeCXaIYg8xsfQ" alt=""/></figure>



A number of Bybit users failed to receive their PUMP allocations due to an “<a href="https://x.com/Bybit_Official/status/1944079461382582274">unexpected API delay</a>,” so they’ll be getting refunds and a sad $20 spot fee coupon instead.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><a href="https://twitter.com/search?q=%24PUMP&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$PUMP</a> Token Sale: Oversubscription and Allocation Updates At 2:00 PM UTC on July 12, 2025, the <a href="https://twitter.com/search?q=%24PUMP&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$PUMP</a> public token sale officially launched with extremely high demand, and the sale was heavily oversubscribed within seconds, resulting in some users successfully receiving…&mdash; Bybit (@Bybit_Official) <a href="https://twitter.com/Bybit_Official/status/1944323460018102768?ref_src=twsrc%5Etfw">July 13, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The key takeaway here, I think, is: Onchain infrastructure has never been more streamlined and effective.



<h2 class="wp-block-heading">Pump’s strategy</h2>



Pump’s $500 million ICO is big, but not that big. Let’s put that into context.



EOS’ (today called Vaulta) ICO in 2017-18 still holds the record for the largest-ever ICO, at a whopping $4.1 billion.&nbsp;



<a href="https://blockworks.co/tag/telegram">Telegram’s</a> 2018 ICO also raised $1.7 billion in two phases. The GRAM tokens sold were <a href="https://blockworks.co/news/telegram-users-can-now-send-receive-crypto-following-2-year-hiatus">eventually refunded</a> due to regulatory troubles, and the app’s backers later <a href="https://blockworks.co/news/ton-standout-in-rocky-crypto-markets">created TON</a>.



Compared to Ethereum, however, Pump’s ICO is big. Ethereum raised ~$18 million in bitcoin across 42 days in 2014.



These are obviously not apples-to-apples comparisons given the differences in time period, market maturation, product type, etc.



But the biggest difference of all is that unlike the industry’s past ICOs, Pump is not a mere proof-of-concept — the memecoin launchpad is a cash cow.



Pump has made $786 million in cumulative revenues since its inception in January 2024. That’s a staggering $377 million in annualized revenues for the two-year-old company.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdqY95K7Kfuzr3np1UhOB0a1xZc34jPlVmb9J54oGd5RVgJMrIAG-vVBjMxzAnDs_I1_U1UnF3FrHfOi98ynWlir1CczXuqrbg6x1-8Bow5yOc0AgVEp9_7j6AzFPFYvfkZFhaeow?key=qgDYZnpwkyeCXaIYg8xsfQ" alt=""/></figure>



Furthermore, Pump is allegedly planning to share 25% of revenues with token holders, my colleagues Katherine and Jack <a href="https://blockworks.co/news/pump-revenue-sharing-token-holders">reported last week</a>.



“There’s a reasonably high probability that the PUMP token will have some value accrual mechanism,” Blockworks Research’s Ryan Connor told me.



Pump wants to go after the social media market. In the team’s <a href="https://x.com/pumpdotfun/status/1942947267436056740">own words</a>: “our plan is to Kill Facebook, TikTok, and Twitch. On Solana.”



The exact details of Pump’s strategy are not yet clear, but it looks to be capitalizing on its livestreaming feature that was brought back in April after a <a href="https://blockworks.co/news/pumpdotfun-call-for-ban-or-regulation">controversial removal</a> last year.



Pump’s livestreamers, like any other token creators, receive 0.05% of all trading fees from their token.



“Pump is interesting in that it’s adjacent to risk markets. Buying creators outright is hard to do because they’re costly. A lot of people undermonetize their internet celebrity, so if you could get paid some modest amount by people passing value back and forth, that’s costless to Pump and perhaps their wedge,” Connor said.



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0xResearch Newsletter

Inside pump.fun’s $500M ICO and its quest to topple Twitch

David Canellis

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



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Bitcoin at $120,000 is a win for everyone on the left and right sides of the infamous bell curve meme.



<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" width="828" height="608" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-2.png" alt="" class="wp-image-105141" style="width:700px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-2.png?w=828 828w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-2.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-2.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-2.png?w=350 350w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-2.png?w=355 355w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-2.png?w=298 298w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-2.png?w=80 80w" sizes="auto, (max-width: 828px) 100vw, 828px" /></figure>



Mid-curving is almost never the optimal strategy. Except for, perhaps, very specific points in a cycle — particularly in deep bear markets, when vibes and narratives are less powerful.



Right now, the extreme ends of the bell curve are both screaming one thing: There’s not enough bitcoin for everyone.



For example, the left-curve take on bitcoin scarcity goes something like this:



Bitcoin is currently only programmed to release 21 million BTC. Most of it has already been mined.



In fact, mining proceeds are now a tiny drop in the bucket compared to the trading activity across Binance and Coinbase, equivalent to less than 1% of their combined daily volume.



Now subtract the coins that are believed to have been lost — up to an <a href="https://fortune.com/crypto/2017/11/25/lost-bitcoins/">estimated</a> 4 million coins, or almost 20% of the entire intended supply.&nbsp;



We’re left with 15.9 million BTC in circulation right now. At the same time, there are more than 58 million USD <a href="https://www.aljazeera.com/news/2024/7/27/where-are-the-worlds-millionaires-and-how-is-wealth-divided-globally">millionaires</a> around the world. That puts the millionaire-to-bitcoin ratio at 3.6-to-1.



If you think the smart money (millionaires) will increasingly want to buy bitcoin over time — at size — then there’s only one way the price can go. Up. It’s simple supply and demand.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcrNs6HoHcp9wGlUtv4WST9OaWZy3R-lqpOz-3x4smL9FjoYaY8g2nowymvQ4qcAaDV0igmGwUPCxqLGjvke5Ake4OdHvyNXsp-HI_NQvKXieyvW0WWc_4A-C5rdFsX4wVU-MfQag?key=0Q_GFmsl9vtW1sltV96VdA" alt=""/><figcaption class="wp-element-caption">The orange line (BTC/USD) has never been higher, unlike the gold line (bitcoin’s gold ratio).</figcaption></figure>



Mid-curvers would point out that bitcoin is divisible by eight decimal places. So while whole bitcoin is scarce, individual satoshis are obviously anything but.&nbsp;



For neatness’ sake, we’ll say the current circulating supply of sats, minus the ones supposedly lost forever, is 1,590,000,000,000,000. That’s one quadrillion, five hundred ninety trillion sats — 190,000x larger than the total human population.&nbsp;



So, an even distribution of the current sat supply to every person on Earth would equate to 190,000 sats.&nbsp;



A common rebuttal to this logic has historically been, fittingly, about pizza. Imagine you have a delicious cheese pizza, and you need to feed a village with it. Except it’s nowhere near big enough.&nbsp;



Does cutting it into infinitely smaller slices help? Of course not, you’re left with the same amount of pizza. 1 pizza = 1 pizza; 1 BTC = 1 BTC.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfprQRJpHYTU4bKk8c42uRNfgejuYpQpyeU7tWegJe5oZQanzlybb0DYKlkpe_qPKU_tFX642RoMnUaR5FDcNHGXyIhgJb5P8cA1vtU0-T1qky0MqFdfwgxdSdL7RmWPmnG4-7rEQ?key=0Q_GFmsl9vtW1sltV96VdA" alt=""/><figcaption class="wp-element-caption">A rare occurrence: BTC dominance is going up alongside its market cap. Usually they’re inversely correlated.</figcaption></figure>



Clearly, the pizza rebuttal has a flaw: Imagine that each one of those tiny slices can grow into a giant pizza, like adding water to one of those toys that rapidly expand when wet. Suddenly, the whole village can be easily fed, and perhaps even the neighbouring villages, too.



Along the same lines, consensus is forming that bitcoin is destined to reach $1 million per coin. Bloomberg Terminal just began <a href="https://x.com/jacqmelinek/status/1943373069063786953?s=46">denominating</a> BTC in millions (current price: $0.122 million).&nbsp;



Now let’s take it to the extreme.&nbsp;



If hyperbitcoinization really happens and bitcoin becomes worth, say, $500 million apiece, then each satoshi would be equal to about $5. At that point, perhaps we would be marveling at the price of individual sats instead of whole bitcoins.&nbsp;&nbsp;



And besides, it’s technically possible to add even more decimal points to bitcoin, somewhere down the line, where whole coins are impossibly expensive. Lightning even tracks so-called “millisatoshis,” miniscule units that are 1/1000 of a sat.



But remember, this is no time for mid-curving. If you fancy yourself on the right-hand side of the curve, then the sentiment is exactly the same as the left: there’s not enough BTC for everyone, as proven by its recent repeated all-time highs.



It’s simple supply and demand.



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Both ends of the curve agree — there’s not enough bitcoin for everyone

Katherine Ross

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



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



Real-world asset tokenization has been quietly growing, topping $25 billion just last week, so let’s check in with Securitize CEO Carlos Domingo, shall we?



Since inking its deal with BlackRock last year, Securitize has managed to really grow its presence in this sector. It started out this year, in January, with $1.1 billion, but that’s grown over 250% to $3.94 billion, per both rwa.xyz and Securitize’s own data.



Then you look at subparts of the RWA market, like tokenized treasuries, which have also seen huge growth this year alone. At the beginning of this year, it sat at $4 billion, but it’s now at $7.5 billion — an increase of 87%.



“Every single asset manager and bank in the US…is now looking at tokenizing something,” Domingo said.&nbsp;



“The concerns in the past [were] about, is this legal or not? Does it have product-market fit? Is there investor demand that has completely disappeared? So now the question is more about, when and what do I tokenize, as opposed to, why should I tokenize? Or is this legal?”&nbsp;



The problem for institutions at this point is that they don’t necessarily understand where the demand is, Domingo said.&nbsp;



“They will come to us and they will ask us, what do you think are good products to do it? There is still a bit of a perception that you should be tokenizing illiquid assets like real estate and private equity. I personally think that&#8217;s a bad place to start, because the fact that you tokenize them is not going to make them liquid,” he noted.



Instead, he’s seeing more of a pickup in tokenizing yield-bearing liquid assets.&nbsp;



Domingo said that one of the biggest unlocks he’s seen has been the integration with DeFi, which not only gives institutions the ability to explore DeFi, but it also has a huge benefit for projects in the space as well.&nbsp;



“All the DeFi companies know that they need to bring institutions into DeFi, for DeFi to continue to grow. So all these companies that didn&#8217;t want to touch institutions now realize that without institutions participating in DeFi, and without high-quality assets to be able to process collateral, etc, [then] DeFi is not going to grow back to where it was [during DeFi summer in 2021],” he explained.&nbsp;



Specifically, we’re going to see a pickup in lending and automated market making as institutions and DeFi projects team up in this space, though Domingo also thinks that there’s very healthy demand for tokenized stocks, which make for a “good combination” with DeFi.



As for outlooks, Domingo told <a href="https://blockworks.co/news/rwa-defi-integration-tokenized-treasurys">Empire back in January</a> that he could see the market growing to $50 billion over the next year. However, he’s pulling back on that slightly. He could see the sector adding another $5 to $10 billion to the current overall figure of $25 billion by year-end. 



As for when we could see the RWA market cap hit $50 billion? That’s going to come when the institutions feel secure and ready to enter, which could take some time. But players like BlackRock and Apollo have helped pave the way.



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Empire Newsletter

RWAs could top $35B by year-end: Securitize

Byron Gilliam

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“The importation of gold and silver is not the principal, much less the sole benefit which a nation derives from its foreign trade.”&nbsp;



— Adam Smith
</blockquote>



Capitalism, it is sometimes said, is how we take care of people we don’t know.



People you don’t know grow the food you eat, build the house you live in and sew the clothes you wear.



For Americans, many of those people live in Vietnam, although we don’t seem very thankful for them — this week, the chair of the White House Council of Economic Advisors, Stephen Miran, <a href="https://thehill.com/blogs/blog-briefing-room/5386853-miran-us-vietnam-deal-fantastic-extremely-one-sided/">said</a> a new trade deal with Vietnam is “fantastic” because it&#8217;s “extremely one-sided.”



This is a Hunger Games worldview that I wish I could talk him out of.



Dear Mr. Miran: Vietnam doesn&#8217;t have to suffer for Americans to prosper!



Just the opposite, in fact. The entire point of free-market capitalism is that exchanging goods and services is a positive-sum activity.



We learned this from Adam Smith, who explained that every voluntary exchange makes both parties better off — or it wouldn’t happen.



People have an innate “propensity to truck, barter and exchange one thing for another,” he wrote, and the more we do it, the wealthier we all are.



Extracting “extremely one-sided” trade deals, by contrast, makes both sides poorer.



The deal Miran touted is so one-sided that it literally has one side; Vietnam hasn’t even agreed to it, Bloomberg <a href="https://www.bloomberg.com/news/articles/2025-07-11/vietnam-surprised-by-trump-tariff-announcement-seeks-lower-rate?cmpid=071125_morningamer&amp;utm_medium=email&amp;utm_source=newsletter&amp;utm_term=250711&amp;utm_campaign=morningamer&amp;embedded-checkout=true">reports</a>.



The president imposed similarly one-sided deals on Japan and Brazil this week, in letters that revive the 18th-century practice of capitalizing random nouns:&nbsp; “We invite you to participate in the extraordinary Economy of the United States, the Number One Market in the World, by far.”



The letter to Japan complained that the relationship between the two countries has been “far from Reciprocal&#8221; (again with the capitalization!), because the US sends more money to Japan than it receives.



But Smith would explain that the primary purpose of trade is not “the importation of gold and silver,” but the increased availability of goods and services for all. To judge trade relationships solely by the flow of money is to assume that trade is a zero-sum activity.



Sadly, this Hunger Games outlook appears to be one of the few areas of bipartisan agreement.



“Zero-sum thinking doesn’t fall neatly along party lines and is not a clearly left-wing or right-wing mindset,” Stefanie Stantcheva <a href="https://www.economist.com/by-invitation/2025/07/07/to-understand-america-today-study-the-zero-sum-mindset-writes-stefanie-stantcheva">wrote</a> for The Economist.



Instead, a <a href="https://scholar.harvard.edu/files/stantcheva/files/zero_sum_political_divides.pdf">study</a> she co-authored found that urban dwellers, PhDs and young people are most likely to have a zero-sum view of the world.



Even PhDs don’t read Adam Smith anymore, I guess.



The stock market doesn’t seem very troubled by this troubling trend. It’s up nearly 7% year to date, as if nothing much has happened.



But I’m sure Adam Smith would tell you that if we insist on making world trade a competition, we’re all going to lose.



Hunger Games had a happy ending, after all, but only because they stopped playing the game.



Let’s check the charts.



Something is happening:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXft1eDSaFN6QJcfQT6ErmiBrwxevq91lVZZ2r7qAfuXfR4kv_737TePe1u4Y9UPzTQp2XIGBIslQ4zcRuAgcsDnG82BjMcnMB7DwGLkp3W9aPGm0KGCL0TKgGRpvj6dRq7p5YS2ig?key=gmQcsukBToMu7GJ4dl8UAQ" alt=""/></figure>



The euro-dollar exchange rate is usually a function of the difference in interest rates between the US and EU. These two things have decoupled since the start of the trade war, which suggests that currency markets (unlike stock markets) think that tariffs do matter.&nbsp;



Try to keep up:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcsp9ibZiTouQ6W2XtCLR7daXbpgBLqfsrESy-AgvMS-I1kcnXkWKJR2wR5gkaDsjyd-ouRUmFny2ns2KKWdHVj9fluC8YxzSDfNiN2AAE6P9YeUjRuRBOBF7kMNVWnAMVFnUUuIA?key=gmQcsukBToMu7GJ4dl8UAQ" alt=""/></figure>



Economists at Yale’s <a href="https://budgetlab.yale.edu/research/state-tariffs-july-11-2025">Budget Lab</a> calculate that the announced tariffs — as of today! — amount to an effective rate of 16.3% (pre-substitution). It’ll probably be different tomorrow. And probably higher.



Tariff cheat sheet:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdTIHGScqHNcock1plmKNZFT3Zn47bwNtTDI07zzW5r3mnYFuCG5CeofW-o37XHfpGndTly2pdK931jQFHpSzWvZYDb4l3tTWcP2_d3WKnEEjbTRbglWziGwX8ojq6X2FHKd3V_Fg?key=gmQcsukBToMu7GJ4dl8UAQ" alt=""/></figure>



Yale also keeps a running calculation of how tariffs will impact GDP, inflation and our purchasing power. It currently estimates that the annual disposable income of American households will fall by an average of $2,480. (It seems to have read its Adam Smith.)



Is inflation due for a trend change?



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcasJPGYu8bmxDP32O1iie8BG3PoinR7WQcmXYyVfMj94eLFc131sgvzbBz0g89BOMyuVfCeiuoY6pZQJpuvcQL6wGpnBBVj5A7P_IQaO3MRNL3bVfLQjROED7meFGbgQPDVfep_g?key=gmQcsukBToMu7GJ4dl8UAQ" alt=""/></figure>



<a href="https://x.com/hashtag/CPI?src=hashtag_click">CPI</a> has surprised to the downside four months in a row, but the Cleveland Fed sees inflation nearly 0.8% higher in Q3 vs. Q2. Next week’s CPI report will be scrutinized for a change in the recent trend.



Shrinking the economy:



<img loading="lazy" decoding="async" width="624" height="321" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcrPgj0Cx-ZnUqWHTuwirKvNiTk8V8Qf37GT-2JKJ5SbW-gpPzCILuzH_YXPgKu4TQ5UWOcLPa0FAmf0vyfCcbNVWUKAbx29lH1qNLMU8yoAu6XuDVENnDmjaE1VctL1dM_jmXrIQ?key=gmQcsukBToMu7GJ4dl8UAQ">



The Budget Lab estimates that tariffs will take about 0.8% off GDP in 2026 and that the US economy, growing from a smaller base, will remain 0.4% smaller than it otherwise would have been, in perpetuity.



Shrinking the economy, part two:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcjO4-zOuwfwfqQpGFYnDxnKZ51fbNa0grwtcwpbKzQFaoWwxdLq9Bkua4EpMzYLHVjumYtUkPJzocjD_uyH22s-maD6L_XzVzIF80smiSB-ANyJIN3Mopx-_G6zl_eDW9tMLYh?key=gmQcsukBToMu7GJ4dl8UAQ" alt=""/></figure>



<a href="https://www.economist.com/graphic-detail/2025/07/01/ten-charts-to-explain-trumps-big-beautiful-bill">The Economist</a> (using Yale data again) charts the effect of the big beautiful bill, which is expected to have made the US economy 2% smaller in 2050 than it otherwise would have been. Two percentage points in 2050 may not sound like much, but it will happen faster than you might think. I did the math and found out 2050 is less than 25 years away. (Weird, but true.)



In case you missed it:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdkws_PS8lCp84KyIVi2VW6DekmKb5AdfmvoUIrXt5U3IYOBB-6h8slGixUhUzj_KBro7iX-Jg7IaUBkloD_SVjzkGOnBD3r7o_mRFzBO2GprLkZWWbK9h7q-FJLWDnITPBYJKd?key=gmQcsukBToMu7GJ4dl8UAQ" alt=""/></figure>



“It” being the stock market. Data from @ryandetrick shows that when stocks are up as much as they are now, they are always higher three, six and 12 months later. That is a mathematical fact…but with a sample size of just four, unfortunately, so maybe don’t bet the house on it.



My favorite chart:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc2ZRnk8J3KAXmnOGfo-fTujAZTKLMgdl1zArgFG1dr0Cp-UJCznsMTsHG606XoTgm9RtlYU-XQh6INRXF32IQ0vgiHBpZUIkPw-V8zmFDTUWZCcEFL1aGPWvKFo-mA_zRxPMGJiA?key=gmQcsukBToMu7GJ4dl8UAQ" alt=""/></figure>



I am excellent at buying high, so I always enjoy seeing the counterintuitive data <a href="https://x.com/MikeZaccardi/status/1940144800902303949">Mike Zaccardi</a> reprises above. Somehow, buying the S&amp;P 500 only at its all-time highs is better than buying randomly. There’s hope for us all.



Doing more with more:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfBTj-jSLXDw2D9NGqKGdgdysjJsYDXNNE1xhh6S3xPn-nOA-Ts3OtpECEEL7ww4xQVOW3nQScizincr1FOgKJFRZ4P7X8fONtv40N5_30qaxAaoKO8m17Apeia2ycdftuTKZPlVA?key=gmQcsukBToMu7GJ4dl8UAQ" alt=""/></figure>



The unsung hero of this longer-than-expected economic expansion has been a surge in productivity, as measured by output per hour. Economists are not yet sure why we’re getting more productive, but Timothy Taylor’s <a href="https://conversableeconomist.com/2025/07/03/the-weird-and-lovely-surge-of-us-productivity-growth/">best guess</a> is that we have the Covid-induced adoption of technology to thank.



They’d all agree, however, that the way to be even more productive is to keep trading with each other.



Have a great weekend, positive-sum readers.



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The Breakdown Newsletter

Friday charts: The rise of zero-sum thinking

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



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When Anza’s lead economist <a href="https://www.youtube.com/watch?v=xjjGq0EoS-o&amp;pp=ygUWbWF4IHJlc25pY2sgbGlnaHRzcGVlZA%3D%3D">Max Resnick came on Lightspeed recently</a>, I asked him a question that frequently gets brought up in conversations about Solana’s economics: What should be done about the sandwich attack problem?



His answer surprised me. “The sandwiching rate [is] way down,” Resnick said.&nbsp;



Solana’s speed makes it an ideal venue for timing games at the expense of unsophisticated users. A sandwich attack happens when a toxic market participant both frontruns and backruns a trade to profit at the expense of the trader.



Sandwiching has historically been a big concern for Solana and its developers. In early 2024, Solana infrastructure shop Jito <a href="https://blockworks.co/news/jito-labs-suspends-mempool-functionality">shut down its mempool</a> over sandwiching concerns. A couple months later, the Solana Foundation <a href="https://blockworks.co/news/lightspeed-newsletter-sandwich-attacks">cut suspected sandwichers</a> from its stake delegation program. Jito’s DAO also <a href="https://forum.jito.network/t/jip-15-authorization-of-new-blacklist-for-malicious-mev-activity/639">voted</a> to blacklist malicious validators from its stake pool.&nbsp;



None of these fixes turned out to be panaceas, however, and the <a href="https://blockworks.co/news/lightspeed-newsletter-solana-sandwich-attacks">sandwich attacks continued</a>.&nbsp;



But the story Resnick tells is that sandwich attacking was blunted not by blacklisting bad actors — who may be able to re-emerge with a different online identity — but by improving Solana’s code.



Basically, sandwich attacks are numbers games for the attackers.



In 2024, when landing transactions on Solana was much more difficult, transactions were sprayed widely to validators in hopes of getting user transactions to the blockchain. This meant toxic validators saw a lot of transactions and had more chances to frontrun them. As Solana’s transaction “targeting” has improved, fewer validators see each transaction on average, so sandwichers have fewer opportunities to mess with transactions, Resnick said.



Now, “a 10% stake that’s sandwiching is able to see only 10% of the transactions, which is what it should be,” Resnick added.



The data seems to bear this point out as well. A report from sandwich attack tracker Ghost <a href="https://sandwiched.me/research/state-of-solana-mev-may-2025-analysis">shows</a> Solana sandwichers profited less in March and April of this year than in the same months last year — despite the fact that the chain’s REV was roughly the <a href="https://app.blockworksresearch.com/analytics/team/323">same</a> during both periods.



Ghost’s report also said Solana stake pool provider Marinade had become the primary staking source for sandwichers. In response, Marinade has <a href="https://marinade.finance/blog/how-marinade-is-making-sandwiching-validators-pay">begun</a> penalizing sandwich attackers using its stake auction marketplace.



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blockchain

Solana sandwich attacks ‘way down’: Anza’s Max Resnick

Ben Strack

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



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Just 11 days into the year’s second half and we’ve already seen bitcoin hit several new all-time highs — most recently eclipsing $118,000.



With a new bitcoin ATH marked on the 2025 second-half crypto bingo card, what more could we see over the next six months?



Before moving on from BTC price, the surge comes as <a href="https://blockworks.co/news/procaps-bitcoin-strategy-listing/">corporate bitcoin buying</a> has <a href="https://x.com/BitwiseInvest/status/1943029893153067193">swelled</a> and segment observers expect more institutional platforms to allow access to the asset.



Remember how Ledn CIO John Glover tries to <a href="https://blockworks.co/news/bitcoin-bull-runs-final-wave/">predict bitcoin moves</a>? Well, he’s still eyeing the $136,000 mark, but now thinks it will come quicker than originally thought (this year).&nbsp;



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcxafE-e7IbZtRp9_qPfp_RCiOhTDtqE_STQomaI8by8djD-7ADlQcP-0WFKK7_7jSbXjfz-jI3P9QIXIgKFPCNLzdR3hmZ20_GljebCP4YtlCIZkIZQDdOygN87PpJzKH26koYEA?key=9Ng9diOA3d_F8dAiQWvjrQ" alt="" style="width:651px;height:auto"/><figcaption class="wp-element-caption">Source: TradingView</figcaption></figure>



From there, Glover said he expects a subsequent correction to between $91,000 and $109,000 over time before ultimately moving higher again.&nbsp;



Benchmark’s Mark Palmer sees the most significant upcoming catalyst for the broader crypto ecosystem as the CLARITY Act — a framework to determine whether crypto tokens are commodities or securities — becoming law. Casey told us about “<a href="https://blockworks.co/news/crypto-bills-in-congress">Crypto Week</a>” approaching.&nbsp;&nbsp;



“With the possibility of a huge regulatory rug-pull removed, institutional investors would have a green light to invest in the space in earnest,” Palmer told me.&nbsp;



When it comes to M&amp;A in the space, an Architect Partners <a href="https://architectpartners.com/q2-2025-crypto-ma-and-financing-report/">report</a> highlights that the 78 crypto M&amp;A transactions in Q2 was by far a record. You might recall us writing about Ripple’s buy of Hidden Road being one of a growing number of <a href="https://blockworks.co/news/crypto-tradfi-intersections-ripple-blackrock">crypto-TradFi intersections</a>. A big crypto-crypto deal was <a href="https://blockworks.co/news/coinbase-deribit-deal-focus-derivatives">Coinbase acquiring</a> derivatives giant Deribit.



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXex-agzmJq5WWqZQlANZotr37yTOFHfEf-cSieyFcEdakcQfnNF4X9BkhAuqHy1LDME-h7mAKNSDTBpm3Sk0H3lqk2tdwxbJ2F0jUGlsNgdtrfZE2otZbL1M-DUE9xPip27PHG5Ow?key=9Ng9diOA3d_F8dAiQWvjrQ" alt="" style="width:660px;height:auto"/><figcaption class="wp-element-caption">Source: Architect Partners</figcaption></figure>



Architect Partners founder Eric Risley believes we’re at the beginning of a long-term uptrend in crypto M&amp;A as the value prop for crypto/blockchain has gained broader acceptance.



“Certainly quarter to quarter will fluctuate, but the fundamental strategic drivers of M&amp;A are now quite clear,” he told me. “Participants will include existing crypto businesses and more importantly, traditional financial services organizations of all stripes — banks, traditional broker-dealers and payment businesses.”



A major open question, Risely added, is what the next generation of dapps look like — beyond those focused on price speculation and payments.



As we chew on that one, the assets under management in crypto investment products hit an all-time peak of $188 billion at the rough halfway point, CoinShares <a href="https://blog.coinshares.com/volume-241-digital-asset-fund-flows-weekly-report-0c44f0a06577">data</a> shows.&nbsp;



And that was before this week. It’s been 18 months (to the day) since spot bitcoin ETFs made their US debut; <a href="https://farside.co.uk/btc/">net inflows</a> stand at $51 billion (after yesterday’s near-record daily mark of ~$1.2 billion). US ether ETFs also saw their second-best daily <a href="https://farside.co.uk/ethereum-etf-flow-all-data/">inflow</a> total yesterday, at $383 million.



More crypto ETFs (single-asset and index) are expected to come this year, but timelines remain<a href="https://blockworks.co/news/crypto-etf-launch-timelines-sec"> up in the air</a>. On that, Grayscale <a href="https://x.com/strack_ben/status/1943662513054265468">shared some feelings</a> with the SEC.



Investors preferring crypto exposure <a href="https://blockworks.co/news/crypto-ipo-boom-etoro-kraken">via equities</a> will be watching for more public listings after <a href="https://blockworks.co/news/circle-shares-nyse-day-one">Circle’s IPO</a>. We’ll keep an eye on companies like <a href="https://blockworks.co/news/gemini-files-confidential-s1-with-sec">Gemini</a> and Kraken.



And continuing <a href="https://blockworks.co/news/franklin-templeton-products-onchain-exec-says">the tokenization conversation</a>, Bitwise and VanEck execs had predicted the tokenized securities market to hit $50 billion in 2025. It’s about <a href="https://app.rwa.xyz">halfway</a> there.&nbsp;



“If Robinhood is rolling out tokenized trading, you can bet that Charles Schwab and others are studying it aggressively,” Bitwise CIO Matt Hougan wrote in a <a href="https://experts.bitwiseinvestments.com/cio-memos/something-s-happening-here">memo</a> this week. “I’d expect a wave of additional announcements this Fall.”



A Schwab spokesperson didn’t have specific plans to share, but told me the company is “actively tracking and exploring a number of opportunities in the digital asset space, including tokenization.”



Crypto journalists (and our readers) are certainly not bored.



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Bitcoin

More crypto milestones expected in 2025 after new BTC high

Kate Irwin

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



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Truth Arts, the company behind the Goblintown NFTs, has plans to continue its <a href="https://blockworks.co/news/goblintown-drivers-license-nfts-game-dmv">gaming push</a> and launched a Solana memecoin this week.&nbsp;



“Memecoins are clearly broken&#8230;so we built a new token design in attempt to fix them and make them more healthy + sustainable,” Truth CEO and cofounder Alexander Taub wrote in a <a href="https://x.com/ajt/status/1942757825333125628">post</a>.



“We spent 6+ months analyzing what made coins succeed and fail. We studied every failure and flaw in memecoins we could possibly find, broke down the root causes, and added mechanisms that are attempting to fix them,” Taub said.



The team <a href="https://blog.trutharts.com/greenpaper/">says</a> they put measures in place to prevent “snipers, MEV bots, misaligned incentives between team and token holders, investor allocation dumps, pump-and-dumps, whale dumps, unchecked supply, lack of reinvestment — you name it.”



The token’s being slowly unlocked over time and allocated to Goblintown NFT holders as well as owners of Illuminati, The187, Big Inc, and Grumpl NFTs.&nbsp;



They’ve also implemented a “token tax” of 2.5% on every GOB transaction.



<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="1222" height="880" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-1.png?w=1024&amp;h=1024" alt="" class="wp-image-105105" style="width:628px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-1.png?w=1222 1222w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-1.png?w=357 357w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-1.png?w=362 362w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-1.png?w=304 304w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-1.png?w=80 80w" sizes="auto, (max-width: 1222px) 100vw, 1222px" /><figcaption class="wp-element-caption">Source: CoinGecko.</figcaption></figure>



Despite this, <a href="https://www.coingecko.com/en/coins/gob">GOB</a> is down roughly 60% in the past two days since its launch and has lost about 18% in the past 24 hours, with its market cap falling from a $30 million high to about $7 million as of Friday morning.



But it’s not over yet — and only about 10% of the total token supply is in circulation, according to the project’s “<a href="https://blog.trutharts.com/greenpaper/">greenpaper</a>.”



“It hasn’t even been 72 hours but that feels like a lifetime in Web3/crypto. Two thoughts about the future,” Taub told me in a DM. “The first is one thing I’ve heard from a few people is that we are trying to be too smart about all this stuff for our own good and should just get back to the goblin vibes. The second is we released a TikTok filter in conjunction with $gob and it feels like it has REAL mainstream potential.”



Regardless of what GOB’s price is doing, I do think the Truth team continues to find creative and funny ways to capture moments in crypto culture. That may continue to have some appeal.&nbsp;



The original NFTs came around a time when some traders were starting to embrace the chaotic degeneracy of the market and the volatility of NFT mints. The “WAGMI” NFT era was waning. Some Goblintown holders took to roleplaying as goblins at the time, posting about their obsessions with urine (yes, really).



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfskF-WrCS2aeLL754CIMBsYm5w9_Kas8biaQRCdvYD5B-6kCbdNiJ_0dn2VxTZQOwZL1ZhpOuCEVJEBDZf9bM8LSogPvsoKgOSiRUwVPPzixHO7GtSM6pwJrlc-OCv29YX_Q_mAg?key=aP8BIrV79ZtGK9V8cHy8yA" alt=""/></figure>



For their Goblintown: Really Hard Driving Game, the team set up a DMV waiting simulator that was quirky and frustrating in equal measure.



If upset about GOB for whatever reason, there’s a hotline that lets callers complain. I called it, and all I’ll say is it’s real, and expect a long wait.



“Feel free to call our $gob Hotline on Telescram at (954) 869-4462(4GOB) and try to reach us,” a <a href="https://blog.trutharts.com/introducing-gob/">blog post</a> reads. “We are open 24/7/365, but good luck getting an employee to pick up.”



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Gaming

Goblintown launches hotline to complain about its memecoin

Macauley Peterson

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



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The race to make Bitcoin programmable without a soft fork has turned into one of the most creative arms races in crypto.&nbsp;



At the center is BitVM, a framework for proving off-chain computation on Bitcoin via fraud proofs. Its first iteration, now known as <a href="https://blockworks.co/news/bitcoin-virtual-machine-smart-contracts-ethereum">BitVM1</a>, used a multi-round interactive protocol. <a href="https://bitvm.org/bitvm2">BitVM2</a> simplified this to a single-round fault proof using a split SNARK verifier, and is already proving practical for early adopters like Build on Bitcoin (BOB), Citrea and Bitlayer.



Now, BitVM3 proposes to go even further by cutting onchain fraud proof costs by ~1000x. But there&#8217;s a catch: It’s still in the research phase, with critical security, complexity and data availability challenges to solve before becoming production-ready.



“The overall design of the BitVM bridge between BitVM2 and BitVM3 remains the same,” BOB co-founder Alexei Zamyatin told Blockworks. “The key difference is swapping the SNARK verifier (BitVM2) with a garbled circuit (BitVM3), he said, adding “we are exploring incorporating elements of the latest BitVM design in our customised hybrid BitVM bridge.”



Garbled circuits are a term for cryptographic gadgets that allow one party to pre-commit to a computation that another can verify without learning the private inputs. In theory, this reduces Bitcoin’s onchain burden to tiny commitments per logic gate. While it holds great promise, it’s far from proven at scale and research is ongoing to address shortcomings before deployment.



Meanwhile, existing bridges are moving ahead on BitVM2. BOB recently launched its latest BitVM2-based bridge testnet with major DeFi partners to enable Bitcoin-backed assets on other chains. BitVM2 is being audited and is expected to be ready for mainnet soon.



“Garbled circuits are an exciting development but they still need quite a bit more research before they could be considered practical to implement,”&nbsp; Zamyatin explained. “It is important to note that the majority of the work to <a href="https://blockworks.co/news/bitcoin-zk-rollups-debate">build a bridge</a> using BitVM stays the same [when] using BitVM2 or BitVM3.”



BitVM2’s current costs aren’t trivial: Zamyatin estimates a worst-case onchain fraud proof at around $16,000 in transaction fees. But even that is cheaper than Ethereum’s OP Stack fault proofs, which require 14 ETH or more (over $40,000 today) for bonds, and can run into hundreds of ETH to actually prove fraud onchain.&nbsp;



Meanwhile, other teams are experimenting with different flavors of garbled circuits, as Robin Linus said in the BitVM Builders Telegram group this week:



“Citrea is exploring a classic approach of <a href="https://en.wikipedia.org/wiki/Garbled_circuit">Yao-style garbling</a> combined with a cut-and-choose method for verifying the circuits&#8217; correctness. That comes at the expense of higher communication and storage cost, but it is nicely simple and relies on very conservative assumptions. In contrast, Alpen [Labs] is exploring a designated-verifier SNARK, which reduces the communication overhead, but comes at the expense of more exotic cryptography, which isn&#8217;t battle-hardened yet and doesn&#8217;t work as well with off-the-shelf tooling.”



In simpler terms, Citrea’s method is like making lots of sealed envelopes (“garbled circuits”) that hide each step, then letting the checker randomly open some of them (“cut and choose”) to confirm you didn’t cheat. It’s straightforward and built on time-tested ideas, but you need to send and store piles of envelopes, which is bulky and slow.



Alpen’s method shrinks everything into a single, tiny postcard (“designated-verifier SNARK”) that the checker can read quickly, saving bandwidth and space. The catch is that this postcard relies on newer, more experimental “cryptographic ink” that hasn’t faced as many real-world stress tests and isn’t yet compatible with the standard stationery most developers keep on their desks.



Ultimately, the entire effort gets <a href="https://blockworks.co/news/bitcoin-rollups-closer-than-expected">dramatically easier</a> if Bitcoin Core can agree on new opcodes in a soft fork — like CTV or TXHASH — that would let these protocols enforce covenant-like spending conditions without relying on elaborate multisig setups. But a periodic glance at the Wiki-style page that tracks <a href="https://en.bitcoin.it/wiki/Covenants_support">stakeholder views</a> on new opcodes shows that consensus building is a painfully slow process.



“One thing that’s looking more and more likely is CTV — but it also depends on the flavor,” Zamyatin told me. For instance, a <a href="https://groups.google.com/g/bitcoindev/c/5wLThgegha4">new proposal</a> just two days ago is not as favorable for BitVM, he said, and therefore unlikely to win support from most L2 builders.



So, BitVM3 remains a highly promising but deeply experimental approach. Meanwhile, BitVM2 bridges and <a href="https://blockworks.co/news/bitcoin-defi-without-upgrades">other approaches</a> look set to be Bitcoin’s next major step toward trust-minimized layer-2 scaling.



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BitVM3 promises cheaper Bitcoin bridges — but not yet

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If you won the lottery, how would you spend it?



A new house, maybe, or a car. A warm summer holiday to a sunny beach, at least.



I’d bet good money, however, that using it to attack Bitcoin would be low on the list.



Well, ten years ago, someone burned good money doing just that.



<h2 class="wp-block-heading">On This Day: 2015</h2>



You would already know that the <a href="https://www.youtube.com/watch?v=ae_V0upRlGk">debate over transaction filtering</a> has been going on for years. More than a decade, even.



It was around this time in 2015 that a mysterious user, or group of users, decided to take matters into their own hands.



An entity going by CoinWallet.eu had begun executing what it <a href="https://bitcointalk.org/index.php?topic=1094865.0;all">described</a> as the “Ultimate Bitcoin Stress Test.” They were going to systematically spam the chain with dust transactions and fill each block to the brim, driving fees sky high in the process while drastically increasing wait times for legitimate users.



CoinWallet.eu hoped to demonstrate that Bitcoin’s 1MB block size limit was too small, and ultimately convince the community to raise it. After all, if spammers could cheaply overload Bitcoin’s blocks as they were, then so could anyone else at any time.



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe3ygB_RZOuzI6CYVbUWaKHsAnM0jY5nm2jQmdkVp1IaPeV3OaJNbq5_NJ-yQPRYFGlntAHzGA_A-d6F3noeqeLHb-j80-4Cl7PPrhR2DZ8BIASTD5qRFoIdloM4C1vgxeVi869?key=i8o9LS5veR-8RvED07BMPg" alt="" style="width:758px;height:auto"/><figcaption class="wp-element-caption">The campaign caused havoc for the network, with the line showing the number of unconfirmed transactions. (<a href="https://damonmccoy.com/papers/bitcoin16-final22.pdf?ref=blog.lopp.net">Source</a>)</figcaption></figure>



In a recent <a href="https://blog.bitmex.com/the-2015-spam-attacks/">blog post</a>, BitMEX Research wrote:



“The logic was that at a fixed fee rate, filling up an 8MB block with spam would cost a lot more than filling up a 1MB block. The small blocker retort to this argument was that the larger blockers had it backwards, if there is spam, letting it all go onchain quickly and cheaply wasn’t stopping the spammer, but letting the spammer win.”



“Besides, if the blocksize limit was increased, fees would decline, making the spam cheaper. However, a key metric to the large blockers was how much money it would cost in fees to fill a block. This number was considered far too low for Bitcoin to be secure and raising the blocksize limit would help increase this value, making Bitcoin more resilient, in their view.”



CoinWallet.eu waged its campaign across four attacks between June and September 2015.



The first actually failed. It was supposed to generate 1MB worth of transaction data every five minutes, causing a backlog of transactions 241 blocks long (1.67 days). The mempool would contain 241MB unconfirmed transactions by that point.&nbsp;



But after spending 2 BTC ($500 then, $235,800 now), their servers began to crash under the weight of a mempool that was just 12MB.



The second came five days later and was more effective, and even managed to seemingly convince one user that the big blockers could have a point.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd9gtmJ1zP2jiPlvDvRkYPB2c4kw5zCwhk9MsBr7vCG6rWTnXfRe9FYqG4iQIVfdjRoYSUz6rFVeFGXp8dsf_yeoJonta0QwcrJA5tkMS-H1T3rkYQDvbD8O_Pfi3Tmo4_4Jr1N?key=i8o9LS5veR-8RvED07BMPg" alt=""/><figcaption class="wp-element-caption">Marecek666 was not happy about the spam campaign.</figcaption></figure>



CoinWallet.eu never explicitly took responsibility for the third wave, but it’s assumed the group was responsible.&nbsp;



The attack, between July 7 and 11, resulted in a backlog of between 27,000 and 80,000 transactions, with many of the dust transactions (0.00001 BTC) sent to well-known wallets like WikiLeaks and Voat, as well as generic public key addresses generated from simple key phrases, like “cat” or “dog.”



Motherboard calculated that the attackers in total spent 30 BTC to flood the network for that third wave, worth $8,000 then but more than $3.5 million right now. Undoing the backlog meant F2Pool would need to consolidate the bulk of the spam outputs with a number of 1MB transactions.



CoinWallet.eu’s fourth attack arrived months later, in September, when it posted thousands of private keys to Bitcointalk, each one lining up with an address containing a slice of 200 BTC.&nbsp;



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdememZQIHnSSfNyK0C365l4WEemdsC5e3YdtTTLUpsNWNVpIcxdYTrs6oWF8GaFf4VvEZeUpKJKZJRrhys8LwGIHa13isrQPxvGrmeEAQO1GDZ3-xRc6UzVr3TIO4kNVRLwVc_eQ?key=i8o9LS5veR-8RvED07BMPg" alt="" style="width:756px;height:auto"/></figure>



Users rushed to collect the free coins, submitting 90,000 transactions. Many of them related to the same bitcoin, so they could easily be discarded by miners, reducing the attack’s effectiveness.&nbsp;



CoinWallet.eu gave up after that, with the actions of miners, pools and key players, including <a href="https://x.com/pete_rizzo_/status/1878079505052413965">Gregory Maxwell</a>, largely mitigating any adverse effects over a short enough time.&nbsp;



As BitMEX pointed out, the situation closely rhymes with the <a href="https://www.youtube.com/watch?v=s4Ckiw4nI_E">modern-day discussion</a> over the role of node runners in filtering out certain types of transactions, with Luke Dashjr at the time pushing for widespread usage of filters to suppress CoinWallet.eu’s spam.&nbsp;



It’s still unknown who was behind CoinWallet.eu, with theories including Gerald Cotten and big blocker Craig Wright. In any case, an academic <a href="https://damonmccoy.com/papers/bitcoin16-final22.pdf?ref=blog.lopp.net">study</a> concluded that a little less than a quarter of transactions across a 10-day period at the peak of the campaign were spam (385,256 out of 1.65 million). It increased fees by 51% (45 to 68 sats/byte) and processing delay by 7x(about 20 minutes to 2 hours and 45 minutes).



“This shows that an adversary who is willing to expand modest amounts of bitcoin (at least $49,000 USD), to pay higher fees, can DoS Bitcoin,” the authors found.



And there’s the kicker. The four attacks indeed cost only about $49,000 worth of bitcoin to execute — in 2015.&nbsp;



Today, with bitcoin at all-time highs, those 201 BTC would fetch almost $24 million, equivalent to a jackpot lottery prize and enough to buy a house, a car and multiple vacations to far-off exotic beaches. Oops.



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How Bitcoin survived a DoS attack now worth $24M

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Coinbase has made its sixth acquisition of the year, we’ve exclusively learned.&nbsp;



This time, the publicly-traded company made an acqui-hire, meaning that they’re specifically acquiring Opyn CEO Andrew Leone and its Head of Research, Joe Clark.&nbsp;



“The Opyn team has been building in DeFi since the early days; they were the first DeFi options protocol, the inventors of Power Perpetuals, and the team behind Squeeth. The team brings a rare combination of deep onchain technical expertise, strong understanding of traditional market structure, and hands-on experience building decentralized products from the ground up,” Coinbase said in a blog post.&nbsp;



Opyn was <a href="https://blockworks.co/news/defi-cftc-crypto-derivatives">one of the DeFi projects charged by the CFTC</a> in 2023 for allegedly operating an unregistered trading platform. The two settled.&nbsp;



A Coinbase spokesperson explained that they made the talent-only acquisition because the company operates with “a build/buy/partner/invest framework. Each path depends on where we see the most leverage — whether that’s through technology, market presence, or talent. In this case, we were especially impressed by [Leone] and [Clark’s] deep experience building in DeFi and their vision for the future of onchain markets. This is something we’re really excited about and putting a lot of energy towards – and that means having the best talent in every seat working on these efforts. Andrew and Joe bring that talent.”



Leone and Clark will now join the Onchain Markets team, which operates in Coinbase’s institutional organization, to concentrate on Verified pools and other development initiatives focused on the onchain markets offerings.



&#8220;From the start, our vision has been to connect the fundamental forces of financial markets. We do this because connected and efficient markets improve the real world by allowing individuals to hedge out things they don’t care about and focus on what they’re good at. That’s what we’re going to do at Coinbase, keep focusing on what we’re good at, building the connective tissue of finance on immutable public ledgers,” Clark told me.



Coinbase’s plans include moving more of its exchange business onchain, something that both Leone and Clark will be aiding.&nbsp;



“It’s a move that aligns with where the market is going, and where we believe it should go,” Coinbase’s Aklil Ibssa, Head of Corporate Development and M&amp;A, said.



As I said above, it’s been a busy year for Coinbase so far. The company acquired browser product Roam and onchain attribution platform Spindl in January, the team behind Iron Fish back in March, <a href="https://blockworks.co/news/coinbase-to-acquire-deribit-in-2-9b-deal">Deribit in May,</a> and most recently, Liquifi.&nbsp;



That’s very nearly an acquisition a month at this rate, and I wouldn’t be surprised if they keep the pace up.



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Coinbase

Exclusive: Coinbase acquires Opyn’s leadership team

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Your future is whatever you make it. So make it a good one.”



— Doc Brown
</blockquote>



<a href="https://open.spotify.com/episode/3fs6Zdaudo5imtc03z0zfE?si=ecd1e486993b4fe1">Capitalism is time travel</a>



In the latest EconTalk podcast, Russ Roberts and Mike Munger ask some basic questions — What are markets? What is capitalism? Why do they matter? — with some surprising results.



Munger defines markets as “a set of institutions for reducing the transactions cost of impersonal exchange.”



To help us understand why that matters, Munger starts with the most basic possible example: If I have a banana and you have an apple, but I like apples better than bananas and you like bananas better than apples, we trade.



This leaves the amount of apples and bananas unchanged, but makes us both better off.&nbsp;



Every voluntary exchange, therefore, makes the world a better place — and markets enable more voluntary exchanges.



But not just that.



The next step in people becoming better off is the division of labor: Instead of everyone trying to grow the food they want, everyone grows only what they’re best at and then trades for everything else.



This “puts the production process on steroids,” creating more apples, bananas and everything else.&nbsp;



The only limit to that process is how many people are involved, and that is why we need markets. The “impersonal exchange” of markets allows people who don’t know each other to participate in the division and specialization of labor.



This is to everyone’s benefit: “We want to find more and more people to exchange with,” Munger explains, “not because it makes them wealthier, but because it makes us wealthier.&#8221;



This first-principles explainer sets up Munger’s unconventional definition of capitalism: “A set of market institutions that allow time travel.”



It’s a surprisingly intuitive thought.



You might, for example, have an idea for a product that you’re sure people will want to buy; but you probably don’t have the money required to build a factory to start making it for them.&nbsp;



“What capitalism does is solve that problem through time travel,” Munger explains. “We’re going to travel forward into the future to a time when this factory is operating and is producing substantial profits. I’m going to take some of those profits and get in my time machine and go back in time and invest it in the resources that create the capital that now allows me to [build the factory].”



Selling equity is the time machine that empowers you to do that.



Buying equity, by that logic, is what enables all new things to come into the world.&nbsp;



To recap, the three functions of markets are exchange (things go where they’re most wanted), specialization (the production of things increases) and time travel (all new things are created).



People tend to think of markets primarily as a place to make money, but that is their real purpose — and their benefits are limited only by their size. “The division of labor,” Adam Smith wrote, “is limited by the extent of the market.”



Crypto did not get a mention in the podcast, but I think it offers a good way to look at it: The highest purpose of permissionless crypto markets, open to everyone, is to make markets better by making them bigger.



<a href="https://www.ft.com/content/475ca245-bd04-4a56-b848-b88ea3b4ef13">Crypto treasury companies are anti-capitalism</a>



The CEO of Metaplanet has an interesting explanation for why it chose to become a bitcoin treasury company: “We’ll get cash that we can use to buy profitable businesses, cash-flowing businesses,” he told the FT.



This is a departure from competitors like MicroStrategy, whose stated purpose is simply to stack crypto as fast as it can.



I think it’s a telling departure, because holding a non-productive asset now so that you can buy productive assets later is the opposite of how capitalism is supposed to work.



Per Mike Munger, capitalism is meant to pull investment out of the future and into the present.



Metaplanet is doing the opposite, hoovering up investment capital now so that it can do something productive with it later.



This is anti-capitalism.



Surprisingly, the capitalist stock market seems happy with this: Metaplanet trades at nearly <a href="https://metaplanet.jp/en/analytics">11x</a> the value of its bitcoin holdings.



<a href="https://vitalik.eth.limo/general/2025/07/07/copyleft.html">Vitalik says Ethereum is important to the world</a>



Listening to Vitalik is always a welcome reminder that crypto can be more than memecoins and treasury companies — it could help make the future a good one, even.&nbsp;



“The Ethereum ecosystem going well is a very important thing to particular parts of the world going in the right direction,” he told Epicenter this week.



Specifically, the Ethereum co-founder cites finance, identity and governance as areas that can benefit from the “neutral layers” only crypto can create.



For that to happen, though, he thinks the industry needs to be more mission-driven: “The thing we need to shift gears on is from saying something is by default worth building because it uses blockchains.”



Instead, he says, the industry should be “properties first,” not &#8220;technology first.”



I’d offer the <a href="https://www.theverge.com/news/701272/jack-dorsey-bitchat-bluetooth-messaging-app">bluetooth messaging app</a> that Jack Dorsey announced this week as a prime example — it hasn’t gotten a lot of attention because there’s no crypto involved, but it embodies crypto’s original cypherpunk values.



Vitalik noted that the Ethereum Foundation has shifted its focus toward applications in order to better promote crypto’s original intentions: “We think that building is a much healthier way of achieving those goals than just complaining.”



Some of that complaining has been about ether’s underperformance vs. Solana’s and he seems to have heard it: “If Ethereum gets sucked into directly playing the HFT game as an L1, to me, that will just fundamentally destroy Ethereum’s soul.” Ethereum’s competitors, he implies, are over-optimizing for the wrong things (like speed of execution), and to illustrate the risk that entails, he asked a rhetorical question: “Should we destroy humanity in exchange for a 1% chance of giving really good lives to 500 trillion shrimp?”



Only a correctly optimized Ethereum can prevent it.



<a href="https://blockworks.co/news/pump-revenue-sharing-token-holders">The pump.fun token launches on Saturday</a>



This weekend, the memecoin launchpad pump.fun will pull $1.3 billion of its future profits into the present with an initial coin offering.



You might, like me, be thinking that the present has quite enough memecoins as is. But pump.fun <a href="https://x.com/pumpdotfun/status/1942947267436056740">says</a> it’s not just about that: “Anyone can use pump to build whatever they want. It’s more than memes.”



What pump says it is building is “a global network of instant money &amp; attention” that will disrupt the big social media platforms: “Our plan is to Kill Facebook, TikTok, and Twitch.”



That is a worthy goal, I guess, although I shudder to think what pump will replace them with.



Whatever the odds of that happening may be, the ICO at $0.004 per token does not appear to be pricing it in.&nbsp;



In a <a href="https://x.com/_ryanrconnor/status/1943348190381543769">note</a> for Blockworks Research, Ryan Connor says the token’s $4 billion valuation is “very reasonable,” based strictly on the outlook for memecoins. “With Pump.fun annualizing at $750m revenue for 2025, and 25% going back to the token, this puts the token valuation at ~5x 2025 annualized revenue and ~20x 2025 annualized token buybacks.”&nbsp;



Valuation is a bit less reasonable in <a href="https://app.hyperliquid.xyz/trade/PUMP">pre-market trading</a> on Hyperliquid, where the token was already changing hands 30% above the ICO price this afternoon.



(It’s also traded an incredible $130 million of volume over the last 24 hours, which might go a long way in explaining the giant valuation of Hyperliquid.)



Connor cites several risks to the investment case, including the risk that it’s not a traditional investment: “Buyers should keep in mind that the equity entity ultimately governs this project’s value flows today.”



Translation: Token holders will just have to hope that pump will choose to share its future profits with them.



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Thursday links: Time travel, anti-capitalism, ETH, pump.fun

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Former Blockchain Association CEO Kristin Smith has spent nearly two months as president of the newly-formed Solana Policy Institute. I caught up with her to get the latest on the Solana and policy front in Washington.



This interview has been edited for brevity and clarity.



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



Jack: Give the US regulatory outlook a report card grade.



Kristin Smith: I would give it an “A” on the report card. If you look at the past six months, there’s been tremendous progress in undoing the bad policies of the last administration. We’ve seen a turnaround on debanking of crypto companies, we’ve seen the end to the litigation, we’ve seen a pullback on different regulations, <a href="https://blockworks.co/news/hester-peirce-reveals-sab-121-rescission">like SAB-121</a>, that were preventing new entrants into the crypto space.



So that in and of itself has been incredibly successful. But the fact that we have a “<a href="https://blockworks.co/news/crypto-bills-in-congress">Crypto Week</a>” in Washington next week … it looks like we’re on track to get a stablecoin regulatory framework actually <a href="https://blockworks.co/news/genius-stablecoin-act-passes-senate-vote">signed into law</a> by President Trump. I think it’s evidence that we’ve come incredibly far in turning around from where we were even just a short six months ago.



Jack: Looking forward into the future, what’s on your wish list on the Solana side of things <a href="https://blockworks.co/news/solana-policy-institute-ceos-political">as you advocate</a> for that ecosystem?



Kristin Smith: One of the things we’ve been doing a lot of thinking on is what changes need to be made, if any, at the regulatory level to ensure that Solana or any other public blockchain can become the home of internet capital markets.



And we’ve gone in to see the SEC and have been submitting some comments on something <a href="https://blockworks.co/news/project-open-sec-proposal-solana">we’re dubbing as “Project Open,”</a> and basically encouraging [the SEC] to issue statements and guidance and potentially exemptive relief, and consider a time-limited sandbox so that we can get more equities issued onchain.



Jack: Solana is very diverse, and there’s a lot of different visions of what people should build. I know that you guys did a DePIN summit and that’s an exciting, kind of tangential thing. What sector of Solana are you spending most of your time on? Or has the most to gain or lose through engagement with policymakers?



Kristin Smith: It’s a little bit of all the above. The issues around tokenized securities are probably where I’m spending the bulk of my time, but when it comes to basic education of Congress…I would say out of all the use cases, the DePIN use cases are the ones that resonate the most.



It depends on the policymaker we’re trying to find the connection with, but I do think that from a policy perspective, I think the work that we’re doing with Project Open and the SEC, and trying to find the best way to help make the internet capital markets a reality, from a regulatory perspective, is probably one of the more meaningful things we could do.



But you know, that’s not a message that really resonates with your rank-and-file member of Congress who’s just trying to understand what a blockchain is. Something like DePIN is better in that context.



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Kristin Smith

Solana Policy Institute wants to see more equities issued onchain

Pump.fun announced its first acquisition on Thursday.&nbsp;



It acquired Kolscan, a wallet tracker that “monitors the activities of top onchain traders. it provides realtime transactions, token PnL, and a leaderboard ranking their performance,” according to a post on X.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">we’re excited to announce that pump fun has acquired <a href="https://twitter.com/kolscan?ref_src=twsrc%5Etfw">@kolscan</a> Kolscan is a wallet tracker that monitors the activities of top onchain traders. it provides realtime transactions, token PnL, and a leaderboard ranking their performance our integration will not only enable better… <a href="https://t.co/V4VDcOwVeG">pic.twitter.com/V4VDcOwVeG</a>&mdash; pump.fun (@pumpdotfun) <a href="https://twitter.com/pumpdotfun/status/1943399910189207851?ref_src=twsrc%5Etfw">July 10, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Kolscan said that the two will be “able to deliver a better experience and work on totally new projects at the intersection of social media and onchain trading.”



Pump.fun said in its ICO announcement that it plans to “kill Facebook, TikTok and Twitch.”



Read more: <a href="https://blockworks.co/news/pumpdotfun-token-sale">Pump.fun plans $1B token sale at $4B valuation: Sources</a>



“For those reasons, we believe that products that provide social insights/tools and gamify the trading experience are key to growing our ecosystem,” pump.fun co-founder Alon Cohen <a href="https://x.com/a1lon9/status/1943400267669467231">said</a> in a post. He previously teased a pump.fun acquisition.&nbsp;



The new product could also cause more users to trade tokens on pump.fun’s frontend rather than going to third-party platforms to trade.



Kolscan is pump.fun’s first acquisition and comes just days before its planned ICO, which will take place on Saturday, July 12.&nbsp;



According to the tokenomics, 33% of PUMP will be sold in the ICO, while 13% was allocated to existing investors. In total, the fully diluted value is around $4 billion.&nbsp;



Blockworks <a href="https://blockworks.co/news/pump-revenue-sharing-token-holders">previously reported</a> that it plans a 25% revenue share with token holders, according to sources.



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Pump.fun

Pump.fun acquires wallet tracker Kolscan

Felix Jauvin

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We’re all navigating the crosscurrents of the next leg of the tariff war, dollar positioning, and rates.



With the “Big Beautiful Bill” now <a href="https://blockworks.co/news/crypto-bills-in-congress">signed and passed</a>, the Trump administration’s gaze is now shifting back toward tariffs.&nbsp;



The true tariff rates are ever-changing these days, and the exact number keeps fluctuating.&nbsp;



That said, based on actual freight container volume transactions, we can approximate a current effective tariff rate of 21% on US imports — down from 54% at the peak of Liberation Day.<img loading="lazy" decoding="async" width="624" height="351" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcYX6aPxcEwJgLdVnzIpwrqy-TVv7zJciBgRd_9aMmJAtMETcZq0-6-7LAwWvMwZc914lBrlCrzfQiDQpgNxZQ4rHoh4X9IIVktk2SjI5LHroOmjPcLQnuDZyv2eh2IFR8f-0qZ?key=u07awB4k3PM-z9ro_PmiBg">



This dynamic is further muddied by the delayed effect in place for the collection of these duties at the border. It takes time to fully ramp up and operationalize this kind of surge in collections, and so actual tariffs collected are approximately half of the stated rate right now.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdFOMR-7e5vDbR3jxfU4Ts-wmlrXXP92v1F7LKd9GMP12kGAGS9ytUKJj2xPm-nZFvR5SUeuOqb2YPkeMJ4NoaQ24rf0GWfLEB-FqnNtm12OIuFGcmAqbegBA9cq6O4mrOn7zHlEQ?key=u07awB4k3PM-z9ro_PmiBg" alt=""/></figure>



It’s evident that some form of a tariff strategy is in place. But assuming they will go back to the pre-election rate of 5% is unrealistic.



Putting this all together, it’s time to think about how this crosscurrent situates itself alongside currencies and the path of monetary policy. As we can see below, the dollar is now down 10.7% year to date, one of the largest-ever drawdowns for the first half of the year.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe4Uk9WghVSBVsEmoIVvusdLjnWVQlWNJxRCMmTRcupeLfOu4pkBJJYuzlef49nLem8BNSV4sQltSWwLrG5wxVJQrjnp0c1K-6GLIPnenZi8Xzfnu1_NjKQM0MkpK3_q9UcEzWbFg?key=u07awB4k3PM-z9ro_PmiBg" alt=""/></figure>



Mechanically, it makes sense for the dollar to be the primary exhaust valve for the impact of tariffs since it aggregates interest rate differentials and the path of monetary policy. Those are driven by inflation expectations, as well as cross-border capital flows.



The broad consensus is that these dynamics will continue to drive the dollar meaningfully lower, and that this could become turbocharged once it becomes evident who will replace Jerome Powell <a href="https://blockworks.co/news/fomc-june-powell-term-end">as the chair</a> of the Federal Reserve. 



If the new Fed Chair is someone committed to the 300-basis point cuts Trump is touting — and if that person can convince the committee to follow them — the dollar is destined for further weakness.



This framework all makes fundamental sense. The issue: This is the consensus view in markets right now, as we head into summer doldrums that often test positioning as volatility compresses.&nbsp;



Looking at current CFTC data, dollar positioning is the most bearish it’s been in years:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeGRs4AC78BU87jv3Rk-xpIgVpTE5k63_BH4-J-8oWRbTFfor5AvEhHKdKxMe2Dy6wQFHPu9bOdcrrjq7uE1cjVUwkv9Rn0WYsqaNp412uzhX_KHAjQZV2ENLIf-XBZh7YbA7JfdA?key=u07awB4k3PM-z9ro_PmiBg" alt=""/></figure>



So, despite fundamentals pointing toward meaningful dollar devaluation continuing, I have a feeling the thesis will be tested over the summer, given it being such a crowded trade.



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Dollar

All signs are pointing to the dollar heading lower. Will it?

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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A recent <a href="https://institutional.fidelity.com/app/proxy/content?literatureURL=/9919383.PDF">report</a> by Fidelity Investments proposes valuing blockchains on the basis of GDP:



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“&#8230; it is more appropriate to compare decentralized blockchains to sovereign nations and their economies rather than web2 companies or products because of the embedded currency.”
</blockquote>



Here’s the GDP formula: C + I + G + (X-M)



C is consumption, I is business investment, G is government spending, X is exports and M is imports, so X-M is net exports.



Fidelity uses ETH as an example. So, when you transpose the GDP formula onto Ethereum blockchain metrics:



<ul class="wp-block-list">
<li>C = What users are spending as gas, to use Uniswap or mint an NFT.</li>



<li>I = The quantity of staked assets or capital in liquidity pools.</li>



<li>G = Ethereum Foundation expenditure, issued ETH to validators.</li>



<li>X-M = How much stablecoins are minted/burned, bridge flows to/from other chains and DePIN rewards.</li>
</ul>



You can see the entire table here:



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfyTJf0piPqpmVIcMBsyMfofyMbY6wWS1zKLD6mgrA-h-svRVRnh5hRnSEJYXVFUim1lp0NZkQ-GjoXtZ2i7ij_vDcgkBpCB-Wg5hxDGE9_5Z7HI58hmVhh6vA2YDeRMNakHG-Dkw?key=H7PIMkWaKDi-W3xgFCjV2w" alt="" style="width:691px;height:auto"/></figure>



It’s a comprehensive effort by Fidelity, but it provokes some questions.



GDP is a measure of domestic production. Think “the value of everything made here.” When a country exports, that’s domestic production. When it imports, that’s spending. That’s why we “net” imports for GDP.



But if millions of stablecoins are bridged onto (import) or off of (export) Ethereum, that bloats a blockchain’s “GDP” even though nothing productive occurs onchain.



Contrast that to when a stablecoin is minted onchain, or when a Helium miner is paid in tokens for providing a useful mobile cellular service. These are productive “imports” that would rightfully count toward a blockchain’s “GDP.”



So measuring “net exports” by bridge flows is conceptually sound, but it needs to account for CEX cold-wallet sweeps, as Blockworks’ Dan Smith aptly pointed out.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Fidelity’s buildout of blockchain GDP in its recent report is interesting, certainly the most robust I’ve seen I think the biggest challenge id net exports. This category is heavily impacted by CEX cold wallet rebalancing, and it’s very unclear how impactful this truly is on… <a href="https://t.co/k5IV0FS0hE">pic.twitter.com/k5IV0FS0hE</a>&mdash; Dan Smith (@smyyguy) <a href="https://twitter.com/smyyguy/status/1942942668079652922?ref_src=twsrc%5Etfw">July 9, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Explicit in Fidelity’s valuation model is also the claim that L1 tokens should be valued on the basis of “money,” or more specifically: a medium of exchange and store of value.



Fidelity argues: “Ether is the dominant trading pair on exchanges and serves as a primary asset to borrow against.”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcDt-cXfhDnuFXFxkEUEn7ADy2AVyXIjhEdaXOGPyVctA3Lmk7tMmSPwie4EQIP8iDAZ6Sfj8t6SKgMCyaUqBfu2_afJrpShwMKAAthpPRtEWuQf4wjsvLsLvqiJon8fuf4v5G1cA?key=H7PIMkWaKDi-W3xgFCjV2w" alt=""/></figure>



I think that at best justifies the “medium of exchange” aspect of money, but is silent on the “unit of account” aspect.



Early crypto investors have questioned the ability of L1 tokens to serve as a unit of account. As John Pfeffer <a href="https://hostingfilesonline.co.uk/An%20Investor%27s%20Take%20on%20Cryptoassets%20v6.pdf">wrote</a> back in 2017:



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“It is thus overly simplistic to assume that people will hoard that which they use to make payments as opposed to converting their store of value via the payment rail at the time of payment in the exact amount needed and for as little time as possible.”
</blockquote>



Account abstraction (ERC-4337) even formalizes this reality, since it enables paying gas fees in any ERC-20 token. That vastly improves the user experience but it removes the need to hoard ETH, thereby undermining the “monetary premium” of the L1 token.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">wow, we&#39;re really peddling the eth = digital oil narrative at a time when account abstraction is taking off and ETH is being disintermediated by stablecoins as payment and trading asset practically everywhere?&mdash; Hasu⚡️🤖 (@hasufl) <a href="https://twitter.com/hasufl/status/1942928343495508027?ref_src=twsrc%5Etfw">July 9, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The final aspect of why I think the GDP analogy is somewhat strained looks to accounting for staked ETH under the “Investment” bucket of GDP.



Staking locks up existing assets, but no new productive capacity is created.



In economist jargon, it doesn’t push the “production possibilities frontier” in the same way investment does in the real economy.



So the “I” in blockchain GDP loses its predictive link to future growth.



Even worse: LP deposits can migrate and earn purely extractive airdrops or MEV.



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