Level

Byron Gilliam

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



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



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“The human mind is a story processor, not a logic processor.”&nbsp;



— Jonathan Haidt
</blockquote>



Is the bond market sentient?



You might think so after reading about how “bond vigilantes” pushed the 30-year Treasury yield above 5% this week.



It was a dramatic move and our impulse, as always, was to explain it by anthropomorphizing the market — projecting motives, desires and fears onto an amalgamation of prices.&nbsp;



CNN, for example, ran a <a href="https://www.cnn.com/2025/05/22/investing/bond-market-selloff">headline</a> promising to explain “Why the bond market is so worried about the ‘Big, Beautiful Bill.’”



The proximate cause appeared to be passage of a budget bill whose tax cuts, if enacted and extended for a full decade (as they usually are), would likely add at least $5.3 trillion to the national debt.



But the bond market is not a person, so it probably can’t “worry” about tax cuts or budget deficits.



Even more carefully worded reporting like Reuters’ assessment that “investors worried about the country&#8217;s increasing debt burden” might be overstated — because correlation and causation in markets is notoriously difficult to untangle.



At Jim Simons’ quantitative hedge fund, Renaissance Technologies, a data entry error once caused a trading algorithm to buy 5x as many wheat futures as it intended, making prices shoot artificially higher.



The next day, the Wall Street Journal reported that analysts attributed the move to “the market” anticipating a poor upcoming harvest.



It’s not an unusual occurrence: Every headline about what’s happening in markets is simply a guess at what may have caused it.



Simons didn’t bother to try.



“Our entire premise,” he explained, “was that human actors would act the same way humans did in the past.”



It worked out pretty well for him: Over 30 years, Simons’ flagship Medallion Fund returned 66% per year (before fees).



66%! Per year!



Instructively, Simons achieved those astonishing returns by letting his algorithms make all the decisions — algorithms that were able to spot patterns of human behavior in markets without reimagining the market as a person.&nbsp;



I take that as a reminder that the bond market cannot coordinate to punish fiscal irresponsibility or enact monetary justice, as the term “vigilante” implies.



Instead, its movements simply reflect the expectations of countless investors who are constantly making all kinds of decisions for all kinds of different reasons.



Still, metaphors like “bond vigilantes” can be a helpful shorthand when we’re trying to discern patterns in the noise — which, being humans, we can’t help doing.



The collective decision making of all those investors pushed 30-year yields to 5.15%, presumably on tax-cut fears — and then back down to 5.03%, presumably on tariff fears.



I guess.



Let’s check the charts to see what other patterns we can make out.



Inflation is not the story:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcOFyqZCn5pdRCSCnAniZ380kqz2NSevk3QRDOoqYrxV_ZuvgpWe3MYyjZNwR-BNveHy1qCw71_so_xccVOEsSzJ1XvxIgCbDjECs6FhwGNI9NMgShTXyt1pCqqkv6FGI-Du-vS?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



The Cleveland Fed’s Nowcast model sees US CPI rising 0.12% in May. That works out to just 1.44% annualized, so I think we can rule out “inflation worries” as the reason bond yields are up.&nbsp;



Bonds may be decoupling from GDP:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcPSSHh6QxBA1lpcHxQxGxF9obT76J36J8LPVeOtMBjIx5EE59WbWa8RkrCCq_QldNyl4GhEVAJMxKnFtd9Ae7tbf92dxsVYnE8gSGD85TsEWBQ63xd3jJbpO8q8B9SZTR8pxVDgA?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



Juliette Declercq highlights the unusual divergence between Treasury yields and the ISM’s survey of manufacturing activity — higher yields and lower GDP is, um, not what we want.&nbsp;



The reverse Laffer Curve:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdKeCuZ1mjUVnnxnslOhDPLnBekHRvByYUbyAtR6wHZ9YeAhl0r00im1Qhe4fGhWhewUYhuifW0F6rIpWaaOjsYyiwYbs1dX4c8AapEb54vmHsE_1T3mADqRId7KF7r5u606utrew?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



On the campaign trail, President Trump said that his proposed tax cuts would “be revenue-neutral when you add growth because we’re going to have magnificent growth.”&nbsp;



But history shows that rising deficit spending is correlated to slower GDP growth. &#8220;Stimulus does not stimulate,&#8221; <a href="https://x.com/RA_Insights">Research Affiliates</a> concludes.



A listicle for the US economy:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcyLVBE7514HAg2qIU-rCEiGQkuL2NzPNBqHAfDrZ4lLpeFRJumKXdtTqfwYr4feJCH1JvyB4TaWlKYolHIA960R5BSpkV3dJn9ZLHmKQ4-8sdwqH1D8muOrescNGT0U9LIMcYs?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



The Atlanta Fed has Q2 growth tracking at 2.4%, but Torsten Slok lists 10 reasons why things are likely to get worse thereafter.&nbsp;



Annoyingly, they are all self-imposed. Analysts at Deutsche Bank have an even longer list — they <a href="https://fortune.com/2025/05/20/us-economy-experiencing-death-by-thousand-cuts-deutsche-bank/">warn</a> it will be “death by a thousand cuts” for the US economy.



Europe’s self-imposed tariffs:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdKC-_VrQqu7wGbcWZW2_oeHcz3Y0FxOy4jXawLurjAXzdJqA-YKephwd9E0VKxF1W9t0LdJvoCrKibf8LhOu4Y8wcnlrZgvIJnDkLE0WlRARwVVB0A-p1oIxgvIjkN-fVEDPyAnw?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



President Trump threatened the EU with a 50% tariff on goods this morning, which is disappointing after things had seemed to have settled down. But the EU imposes similar tariffs on itself — Luis Garicano <a href="https://www.siliconcontinent.com/p/the-myth-of-the-single-market">estimates</a> that the internal barriers to trade (country-specific rules and regulations, mostly) between EU countries are equivalent to an internal tariff of 45% on goods and 110% on services. Ouch.



The EU stock market does not seem worried, however:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcFo3ADtmnYUCQVh36xhc2frCdQKut666K0mf8_rkMZVbzq3lNQ59roW5eaGOEBRqUCIfPcAZWKVWA12J35EjtEB0C59WvA7Vc568G0c-kPYlkOrftkwXFo3DXcFBE0v7ucIAuhrg?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



Bitcoin (in purple above) is up 17% over the past month, but it still hasn’t quite caught up with European equities — they’re up 21% on the year.



The vigilantes visit Japan:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeDElx0pSvNXKB7FHdTFCUz8iK-D0b4w7gOKXY_2MC7Pu1IhN0Dfyl7NwX9zmWYi9XihdSZAVM6K4FUz8CM7fTte4m1w6raK05NP9-PSms1HPmrGBnZzYGa4f3DriLU5WKV_Nx_EA?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



The bond vigilantes have always been conspicuously absent in Japan despite the country’s world’s leading debt-to-GDP ratio of 250%.&nbsp;



But they may finally have arrived. This week, yields on 30-year Japanese government bonds rose above 3% for the first time on record (which dates back to only 1999 when the 30-year tenor was first issued).&nbsp;



Fun Japan fact: The four longest-operating companies in the world are all in Japan, led by the construction company <a href="https://en.wikipedia.org/wiki/Kong%C5%8D_Gumi">Kongō Gumi</a>, which was founded in the year 578! Not fun Japan fact: This morning&#8217;s inflation data showed the price of rice is up <a href="https://www.rte.ie/news/business/2025/0523/1514511-why-rice-prices-are-soaring-in-japan/">98% year over year</a>.&nbsp;



Foreigners are a little worried about the US:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfes4tJkWzRFyfeJBvjxHmrjJ1Zz6pggtH-THDys5eLZLn9einb2B4MepUQegOVsf0euJSnNUd0OPas_hLf4bNPjq5gYWdIYR2mKIGKgAKgwZcL_LMYgb3_C2g3aXha5Pz0t4psQw?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



Torsten Slok shows that foreign participation in 30-year Treasury auctions is at a multi-year low. But the y-axis on his chart starts at 57.5% so I guess they’re not that worried.



For when markets are closed:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcbxE7X2MlVMA4kG0WZTB-cOSaVdlW53dpwbFB4sELOUmTr0pHF8MsYWcI3i6xkhmUqipxHYAx6syQqzAB6JJXAZOX4lbaj8a6vCK00Z_JIBETzVPzoFL_b_WT--fTP3-pln5dpvQ?key=VdXUh_ZRVepkaPU5ITsCOg" alt=""/></figure>



Americans subscribe to nearly five streaming services per household now — because we love stories, of course.



Have a great weekend, storied readers.



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The Breakdown Newsletter

Friday Charts: The market is a story

Jack Kubinec

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



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I hosted Permissionless Labs CEO David Rhodus <a href="https://www.youtube.com/watch?v=Ke20r3gJSXE">on the Lightspeed podcast</a> this week, and he gave me an overview of Pipe Network, the company’s forthcoming content delivery network (CDN) that’s being built on Solana.&nbsp;



His pitch made some intuitive sense: CDNs — which temporarily store online content on servers around the world to get closer to end-users — haven’t seen much innovation in 25 years. Pipe could let content be stored even closer to users, which would make their content load faster.&nbsp;



But outside of the product itself, what made an impression on me was the disciplined approach Rhodus described for his DePIN project.&nbsp;



Rhodus said Pipe will be “ruthless” about tokenomics.&nbsp;



“We’re emitting tokens when useful work is done,” Rhodus said. “While we want a lot of nodes, we also want to coordinate them into areas that customers will find useful.” This could look like focusing on business deals where Pipe supplements existing CDN infrastructure in low-performing areas and presumably uses its token to incentivize node operation in those areas.



DePIN is hailed as one of Solana’s most useful business sectors, but the bottom line has proven tricky for these companies so far.&nbsp;



Businesses like Helium and Hivemapper promise to wrest power from legacy infrastructure providers and give control to everyday people, but noble as that goal may be, the economics don&#8217;t always make a ton of sense.&nbsp;



A Messari <a href="https://messari.io/report/state-of-depin-2024">report</a> from the end of 2024 found that 350 DePIN tokens had a collective $50 billion in market capitalization. However, this class of startups has struggled to find mass market adoption and justify that collective valuation.&nbsp;



That’s partly why Rhodus advised potential founders to “go as long as possible” before adding crypto elements to a business.



“Don&#8217;t focus on crypto at all until you&#8217;ve got users and revenue,” Rhodus said.



The days of simply plugging in some kind of mining device and getting lucrative token rewards regardless of a node’s value to the larger network may need to end if the DePIN sector is going to mature past hype and create sustainable businesses.



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DePIN

Solana-based Pipe Network aims to be ‘ruthless’ about tokenomics

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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Many continue to expect massive growth in stablecoin usage and the broader tokenization space — particularly with US legislation in the offing.&nbsp;



The product-market fit of stablecoins in particular is becoming more and more evident. So it’s not surprising that banks are <a href="https://www.wsj.com/finance/banking/crypto-stablecoin-big-banks-a841059e?gaa_at=eafs&amp;gaa_n=AerBZYPFX5a2haacTA5iq7AwIojtxkoHTgqgW6QyYg8lA6-Bm7HnO_KoE507zbgMOa4%3D&amp;gaa_ts=683071d0&amp;gaa_sig=69JEfMxC0kpfln3wX2SssXBckLi76bJzgXQyYbpX26PakTRi7zhDkxoP7enJLe-Agdy4vTSHEQO7qODwVEvLmg%3D%3D">reportedly</a> exploring the possibility of coming together to issue their own.&nbsp;



“The prospect of a consortium of leading US banks entering the cryptocurrency market with a joint stablecoin demonstrates how crypto native products may now be driving the evolution of financial markets,” Mercuryo COO Greg Waisman said in an email.



Outside of stablecoins, demand has grown for tokenized money market funds (like BlackRock’s BUIDL), which essentially act as stablecoins with yield.&nbsp;



Industry execs have debated which other tokenization sectors <a href="https://blockworks.co/news/tokenized-rwa-segments-will-boom-next">could boom</a> in the months and years ahead. Blockchain tech could help improve investor access to private credit and <a href="https://blockworks.co/news/private-company-shares-tokenization">private equities</a> (SpaceX, Open AI, etc.). But perhaps publicly-listed stocks are a better entry point for some?



Crypto exchange Kraken said yesterday it would soon offer tokenized US-listed stocks and ETFs to non-US investors as part of a “broader strategy to bridge TradFi and crypto.”



Developed by Backed, these are SPL tokens issued on the Solana blockchain that the company is calling xStocks. They’re backed 1:1 by the actual underlying shares, held in custody and issued following the Swiss DLT Act.



Kraken plans to start with tokenized versions of Apple (AAPL), Tesla (TSLA) and Nvidia (NVDA), as well as major ETFs like SPDR Gold Trust (GLD) and SPDR S&amp;P 500 ETF (SPY), a spokesperson told me.



A panel I moderated last month at the TokenizeThis conference featured Dinari chief business officer Anna Wroblewska. While some don’t believe as much in tokenized stocks given the ease of using brokerage platforms, she argued the familiarity of public stocks offers a more welcoming gateway for investors looking to move onchain.



Tokenized stocks also come with 24/7 trading, fast settlement and composability with other DeFi services. Plus, not all investors outside the US enjoy solid brokerage infrastructure access.



Dinari, which currently offers 100+ stocks and ETFs to customers in more than 70 countries, is focused on bringing the entire stock market onto the blockchain. Kraken too said it plans to “steadily expand both the range of tokenized assets and the jurisdictions where xStocks are available” — beyond the initial rollout in Europe, Latin America, Africa and Asia.



“It’s very encouraging to see other players in the space beginning to understand the value and demand for tokenized public stocks,” Wroblewska said.



Dinari’s short-term focus is bringing its approach to the US, Wroblewska noted. In the longer term, the company hopes to help facilitate a global, pooled onchain secondary market for tokenized stocks and other real-world assets (RWAs). “Imagine, for example, the cross-asset opportunities if the NYSE, the CBOE and the CME were all unified in one place that all market participants could access,” she explained.



It’s like BlackRock CEO Larry Fink wrote in a March <a href="https://www.blackrock.com/corporate/investor-relations/larry-fink-annual-chairmans-letter">letter</a> to investors: “Every stock, every bond, every fund — every asset — can be tokenized. If they are, it will revolutionize investing.”



We won’t stop sharing developments in this realm.



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Forward Guidance newsletter

Kraken joins accelerating effort to bridge TradFi, crypto

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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DeLorean Labs — the crypto arm of the rebooted 80s car company featured in the Back to the Future films — is working with British actor Sir Patrick Stewart to promote the upcoming DeLorean electric car.



“They say the best way to predict the future is to create it,” Stewart said in a <a href="https://x.com/deloreanmotorco/status/1925583417397452957">video</a>.&nbsp;



DeLorean Labs has launched onchain vehicle reservations using Sui NFTs for the upcoming DeLorean Alpha 5 EV — which would be the first DeLorean produced in over 40 years. We know it’s expected to be available in at least red, white and gray paint options so far, and the team tells me it’s slated to release by 2027.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfXldnozYe4rJFO925RIT1dvcGbAA_o6zddoBvRFobFYXkbBNpAfAWlMUYkb8Ho6EzM3Cxa_4NirJey6pm7IW0QMqw-Lza04TlYFmoX77NibfBoYjojowofJ_GhxUecDUIl-U_JLw?key=9AsBEfOQ0OXas7J9aXiP_g" alt=""/></figure>



The websites for DeLorean, its crypto arm, and its 80s classic cars are separate. But DeLorean Labs is part of the DeLorean Motor Company.



DeLorean Labs is planning to launch a DMC token at some point in the future, as well as token staking. There’s also the dedicated <a href="https://marketplace.delorean.com/">onchain marketplace</a> for DeLorean reservation and vehicle resale. Once the car is released, vehicle stats are also expected to exist onchain, as well.&nbsp;



DeLorean is using Sui for all of this, and it is <a href="https://marketplace.delorean.com/migration">migrating</a> their “legacy” Build Slot NFTs (roughly 1,300 were sold back in 2023) to the Sui chain and new marketplace. Those legacy NFT holders get the first cars made, and we don’t know if there will be a cap on the total number of NFTs issued at any point.



That said, Evan Kuhn, president of DeLorean Labs, told me they may make anywhere from 1,300 to 10,000 vehicles a year. It will be a low-volume, more exclusive car brand.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdRfbeWpVwS3FPOcirjXIMlXn0yO_2kvV7wHUOTvZemJWVGSn2TuQ7gFHGpNm1mlTivlQ99LsEJwsu_d2SAaE7Ufwf6OaEkVHiGGi31v3rylc2pontdbMqn7HP5aJZrzNe7XsNN?key=9AsBEfOQ0OXas7J9aXiP_g" alt=""/></figure>



“Originally we were going to launch the build slot NFTs on Polygon, [but] there were some technical restrictions so DeLorean partnered with Sui Foundation and Mysten Labs as the <a href="https://docs.sui.io/concepts/sui-move-concepts">Move</a> language was very conducive to DeLorean’s goals,” Kuhn told me via email.



Buyers have to register a DeLorean account, connect or create a Sui (<a href="https://slush.app/">Slush</a>) wallet, and buy an Alpha Club membership from DeLorean to then buy a Build Slot NFT (to then ultimately buy the car). The Alpha Club membership is a one-time $88 fee (note that it has also been called the Alphas Club in some areas of the DeLorean site).



Build Slot NFTs can be purchased for $2,500 each from DeLorean’s <a href="https://marketplace.delorean.com/">NFT marketplace</a>. Each NFT then lets buyers over age 18 secure a place in line to then later buy one Alpha 5 EV.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfW6WodkBrdFycO5cvj9dix4B1Yl3180co0Ptq4toxymcQw2rd1_kBWc68n65Wyyjhqr21oeI85JZPXVyNXlk18eCyptHvLx4Vqna6yRjc5akhlEAlKvoXwQWwDAV89lr5E1iQgKQ?key=9AsBEfOQ0OXas7J9aXiP_g" alt=""/></figure>



You might not necessarily pay $2,500 to get one of the 1,272 NFTs, though. If you have an Alpha Club membership, you can make bids on others’ NFTs to get one or more for a price that may be lower — or higher — than that $2,500 amount. But only $2,500 per NFT will be ultimately credited toward a car. Each NFT is a spot in line, with lower numbers getting their reservations processed before higher numbers. We don’t yet know how much the Alpha 5 EV will ultimately cost, either, but some have guessed its MSRP may be <a href="https://www.cnet.com/roadshow/news/new-delorean-unveiled-and-heres-our-first-look/">around $125,000</a>.



It’s a lot of hoops to jump through, for sure, but it’ll be up to DeLorean fans to decide if it’s worth it to get the 80s-inspired car of their dreams.



My two cents? The car looks great so far — like a Tesla mixed with a Porsche — but we don’t yet know when exactly it’ll come out (and you can’t test drive it right now).&nbsp;



You could be waiting a couple years for that $2,500 to pay off.



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NFTs

Star Trek actor Sir Patrick Stewart endorses DeLorean Labs’ crypto reboot

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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Sui’s largest decentralized exchange, Cetus, was <a href="https://blockworks-research.beehiiv.com/p/is-infofi-investable">exploited</a> on May 22 for over $220 million — the most severe DeFi incident in the network’s short history. It raised difficult questions about validator power, decentralization and reactive governance.



The attacker exploited faulty math in Cetus’ smart contracts by using spoofed tokens and miscalculated liquidity ratios. By injecting near-zero value assets into pools and then withdrawing large amounts of real tokens like <a href="https://blockworks.co/tag/sui">SUI</a> and USDC, the exploiter drained about $223 million before the protocol was paused. As Mysten Labs co-founder Adeniyi Abiodun <a href="https://x.com/i/spaces/1OdJrDoXNEeKX">clarified</a> in an X space, “it’s not a bug in Sui consensus, it’s not a bug in Move,” thus isolating the issue to Cetus’ application logic.



But the response drew nearly as much attention as the attack itself. In coordination with the Sui Foundation, validators quickly updated a configuration file in the code powering the network, tailored to reject transactions from the attacker’s wallet. This off-chain coordination didn’t require a vote or protocol-level upgrade, but has resulted in $160 million in stolen assets being frozen.



A brief GitHub <a href="https://github.com/MystenLabs/sui/pull/22199">pull request</a> from Mysten Labs proposed going a step further: adding an “allow list” feature to execute a pre-chosen “recovery” transaction that would bypass signature checks. The PR was <a href="https://x.com/shoucccc/status/1925630756425970012">withdrawn</a> within hours after community backlash, and validators have so far limited their action to censorship, not confiscation. 



“Sui is a decentralized network, so neither Mysten Labs nor Sui Foundation has the ability to block addresses or transactions, ‘control’ validators, or otherwise dictate the behavior of independent actors on Sui,” a Sui Foundation rep told Blockworks.



Still, the episode has reopened a fundamental debate about <a href="https://blockworks.co/tag/decentralization">decentralization</a>: Should a blockchain’s validators ever freeze or seize funds, even in cases of clear theft?



Critics argue that such ad hoc measures threaten Sui’s credibility as a decentralized base layer. “Taking a heavily opinionated stance to censor due to a third-party app exploit is a slippery slope,” <a href="https://x.com/EffortCapital/status/1925603538106757471">warned</a> Blockworks Advisory’s David Rodriguez. Others pointed out the danger of setting a precedent that could be abused in future incidents — or compelled by regulators.



Without onchain checks or governance processes, any validator coordination hinges entirely on informal consensus and the economic gravity of Sui Foundation signals. After all, validators require a 30 million SUI bond, so strong suggestions from on high might well be the <a href="https://x.com/adanautp/status/1925664477095063614">same as</a> “a $114m gun pointing at their heads.”



<h2 class="wp-block-heading">Move is not a silver bullet</h2>



The incident also exposed broader risk beyond Cetus. <a href="https://blog.verichains.io/p/multiple-sui-projects-previously">According to</a> security firm Verichains, three other major Sui protocols — Kriya, FlowX and Turbo Finance — were previously vulnerable to the same math flaw exploited from the latest attack. While Kriya and FlowX patched their contracts, Verichains warned that Turbo Finance still contains the vulnerable code, albeit not actively in use.



“Dead code is not safe code,” Verichains mused.



Verichains’ findings reinforce the idea that while Move-based smart contracts and VM offer stronger technical primitives, in practice, security still depends on shared libraries, developer diligence and tooling maturity.



Looking ahead, several developers and researchers have <a href="https://x.com/non0sigma/status/1925658469866074562">called for</a> a formal, transparent policy on validator powers and emergency responses.



Aave governance lead Marc Zeller expressed <a href="https://x.com/lemiscate/status/1925653403192951109">the view</a> that the centralized <a href="https://blockworks.co/news/decentralization-on-a-deadline">powers on display</a> would make DeFi protocols wary, writing “[you] can be sure Aave will never deploy on Sui.”



Sui may have preserved some value this time (the hacker still exfiltrated some $60 million), but its long-term reputation will depend on whether it can set clear limits — and build credible neutrality — into the system itself.



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0xResearch Newsletter

$160M in stolen funds puts Sui’s decentralization to the test

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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We live in a world of billionaire Bitcoiners — where mega corporations and sovereign governments stack sats, and hyper-capitalized prop trading firms split the difference.



It’s easy, then, to feel small in the Bitcoin space. But for every story about Gigachads like Michael Saylor, there are countless untold stories about regular people who’ve reached out and touched the world through Bitcoin.



Today’s Legend, Isaac Miller, is the embodiment of the Bitcoin Everyman. A living reminder that Bitcoin is first and foremost for the individual; it all comes down to how you harness it.



<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/hashtag/BITCOIN?src=hash&amp;ref_src=twsrc%5Etfw">#BITCOIN</a> LEGEND: ISAAC MILLER Watched BTC hit $100 Watched BTC hit $100,000 HODLed all the way A thread 🔥 <a href="https://t.co/sYGJlGRrlU">pic.twitter.com/sYGJlGRrlU</a>&mdash; The Bitcoin Historian (@pete_rizzo_) <a href="https://twitter.com/pete_rizzo_/status/1908897635932516554?ref_src=twsrc%5Etfw">April 6, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<h2 class="wp-block-heading">Bitcoin Legends – Isaac Miller</h2>



You probably best know Isaac from his famous video: Me reacting to Bitcoin breaking $100 in 2013.



“Right here, watching history be made. Bitcoin is now up to $111. It’s an all-time high, and it’s continuing to rise,” Miller said in April of that year, speaking directly to the camera in his hand.



“I&#8217;ve seen it break three times today, it went up to $110, and this is the highest that it’s been.” Miller spun around in his chair to fit his PC screen into the shot.&nbsp;



“It’s ridiculous. Last trade: 189 bitcoin for $111 apiece. That’s amazing to me. Just look at this graph, you see this graph, that’s the last three hours.”&nbsp;



Miller’s <a href="https://headsaflame.com/about/">road</a> to tech and Bitcoin started years earlier. He’d grown up on a small farm in Northern Michigan built by his great grandfather, where he learned to help out, even milking the goats.&nbsp;



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/vOu6n44ldJU?si=Ko4vIKmNLFI-J6j4" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>







Miller was homeschooled and channelled his extracurricular energy into entrepreneurship. At eight years old, he pulled a cart — “Isaac’s Lunch Wagon” — around town, selling lunches to local businesses, each one backed by mom’s cooking.&nbsp;



That drive morphed into learning to code as a teenager, leading Miller to launch digital media projects out of his bedroom.&nbsp;



His growing portfolio of web experience landed him a role as County Coordinator for Ron Paul’s presidential campaign in 2008 — “building websites and designing graphics, organizing debates and directing television commercials, to live streaming from the campaign bus to having conversations on private jets!”



Suddenly, Miller had found himself deeply entrenched in libertarian circles and had formed connections in international tech. It was around then that a friend introduced him to Bitcoin, sometime before early 2011, when BTC had not yet reached dollar parity for the first time.



Miller apparently didn’t buy any bitcoin at that point. He showed up on <a href="https://bitcointalk.org/index.php?topic=154802.msg1640941#msg1640941">Bitcointalk</a>, two years later, ready to make a splash with a thread: “$20,000 in the bank, should I invest?”



“I have over $20,000 just sitting in an account. Would it be a good idea to invest some or all of it in bitcoin? I&#8217;m looking for any way I can to stick it to the central banking system, and if I can make a few bucks by doing it, all the better.”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdLgZz1a3n7WcHHw_ksWhAy-AEWkU8U9JE_JPQubB1tefpQ4pBovbMxPbFpFlsLnJEXi9DvhaioCylvGJJ-IIktloBIPbeZojiYxu-BYYAfV8PowdT_IwUuZ2Gi9t0rovjmo_PX?key=zTFis2eXovKmE0syY-ZtRg" alt=""/><figcaption class="wp-element-caption">In other threads, Miller expressed a desire to contribute to the Bitcoin ecosystem as best he could.</figcaption></figure>



One user asked the sensible questions: How much would losing $20,000 affect you right now, and how much BTC do you own to begin with?



Miller replied: “I currently have no bitcoins, I just really started looking into bitcoin a few days ago. I&#8217;m not thinking $20,000 to start, but I&#8217;m willing to invest a chunk of it to see how it works out.”



“It looks to me like I&#8217;m already a tad too late if I was in it for the most profit, but I&#8217;m still optimistic about where bitcoin&#8217;s going. I&#8217;m only 21 so $20,0000 is quite a bit in my mind, I&#8217;m working on changing that though lol.”



Miller ended up opting to start with just $2,000 and made an account with Mt. Gox in March 2013 — about 10 months before it would collapse — when bitcoin changed hands for about $90.



He may have never spoken publicly about whether he was stung by the Mt. Gox debacle. But $2,000 worth of bitcoin bought around the time of that thread would’ve converted to 22.22 BTC — currently valued at nearly $2.5 million.&nbsp;



And that was just 10% of the fiat that Miller wanted to deploy as a central bank protest.



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/ROsk12bogVU?si=Sz25KRLKN4CEWBHd" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>







Last year, Miller recreated his famous 2013 video for an advertising campaign with Coinbase. Here they are side by side.



Over the following nine years, Miller wouldn’t post about Bitcoin. His YouTube feed mostly showcased his music — until February 2021, when bitcoin was in the midst of a monster rally to $60,000 for the first time.



In a <a href="https://www.youtube.com/watch?v=IEbhRKVH8bo&amp;t=29s">video</a> titled: “Did I HODL? The question on everyone&#8217;s minds,” Miller set the record straight:



“What kind of question is that? Of course I did. Of course I did. I HODL’d. I bought more and I HODL’d again. I’ve HODL’d everything. I HODL’d Bitcoin’s children: Bitcoin Cash, Bitcoin Satoshi’s Vision. I’ve HODL’d every single thing. And that so far has been the best decision I’ve ever made financially in my life.”



“And I keep buying more. I buy bitcoin every single week. I buy uniswap every single week. I bought uniswap at $2 and it’s at $20 in like three months. This is the new financial system and it’s so incredibly simple — you literally just buy and you HODL. So HODL away, gentlemen. Keep those diamond hands. Keep ‘em shiny.”



For that and more, Miller will forever be a Bitcoin Legend. Stay tuned to see Isaac on the <a href="https://www.youtube.com/@SupplyShockBW">Supply Shock podcast</a> sometime soon!



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Bitcoin

How Isaac Miller fought the central banks with Bitcoin and $20K

Katherine Ross

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



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It’s been a while since we last talked about DePINs. Blockworks Research analyst Nick Carpinito is giving us the perfect excuse to dig back in after publishing a note that not only focuses on <a href="https://blockworks.co/tag/depin">DePINs</a>, but specifically looks at <a href="https://app.blockworksresearch.com/research/tokenized-virtual-power-plants">tokenized power plants</a>. And, yes, it’s much more exciting than it initially seems.&nbsp;



Carpinito told me that he felt compelled to dig into the subject because of <a href="https://blockworks.co/tag/artificial-intelligence">artificial intelligence</a>.&nbsp;



“One of the critical pieces of AI today is that you&#8217;re seeing that the sector as a whole, outside of the decentralized piece, is having some serious energy constraints, especially outside the US, but even in the US,” he explained. So he did a deep dive to see just how viable it is.&nbsp;



The long and short of it is that “projects that credibly tie infrastructure performance to real-world revenue, navigate policy fragmentation, and maintain network quality will be well-positioned to shape the next generation of energy markets.”



But if this is the first time you’re hearing about these types of dePINs, you’re not alone. I asked Carpinito about that, and he explained that wireless tends to be one of the most popular subsectors within DePIN — something that does track with <a href="https://blockworks.co/news/empire-newsletter-depin-public-goods">what we’ve previously covered in Empire</a>.



There’s been “very little innovation in the energy space,” he said. It’ll take time to see “meaningful scale,” but Carpinito isn’t too worried about that.&nbsp;



In fact, his hot take is that some projects could start operating as “pieces in the grid” in the coming year.&nbsp;



The theory I’ve been working on is the successful use case of DePINs. <a href="https://blockworks.co/tag/rwas">RWAs</a> and stablecoins have seen great success, and DePINs follow a bit of a similar model. You take a non-crypto industry and put it on crypto rails, not only to improve it, but to open doors for non-crypto folks to come onchain. Sounds like it matches the recipe for success we’ve seen, yeah?



Admittedly, reality is slightly more complicated.&nbsp;



“If a DePIN project is successful when they&#8217;re pitching to a customer, they shouldn&#8217;t have to call themselves DePIN. The advantages of the product should be clear, both on a cost standpoint and on a performance standpoint. And the projects that are successful with this…are able to position themselves as valuable, real-world utilities [that don’t] have a very high barrier to entry,” Carpinito explained.&nbsp;



In lots of ways, “it’s very similar to <a href="https://blockworks.co/tag/stablecoins">stablecoins</a>, maybe even a lower barrier to entry than most stablecoins for the end customer. The other component of that is — and this is probably one of the things that attracted me to DePINs in the early days —- it&#8217;s compelling and, I think, really [opens up] the narrative that everybody needs to buy their first token.”



Now, we just need to get more non-crypto native folks onchain.



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Can DePINs offer a ‘lower barrier to entry’ than stablecoins?

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Missionaries build better products.”



— Jeff Bezos
</blockquote>



Q: Do we need a new internet?



The business model that populated the world wide web with information was straightforward: create content, attract traffic, sell ads.



Now, however, you can often get better, aggregated information from a large language model, which sends a bot to visit those same websites on your behalf.&nbsp;



Soon, most traffic on the web will be bots and therefore impervious to ads (and tragically uninterested in subscribing to newsletters).



This might break the web’s business model: The best search results now come from AI language models, but those AIs get their information from human-written content that may soon cease to exist if its creators can’t get paid.



(Side note: Please click the ads on this webpage.)



As more web traffic becomes &#8220;agentic&#8221; — i.e., automated, machine-based and impervious to monetization — the entire incentive structure for populating the web with information begins to unravel.



Ben Thompson, however, <a href="https://stratechery.com/2025/the-agentic-web-and-original-sin/">proposes</a> an ambitious solution: Create an all-new web economy in which AI agents pay for the information they retrieve — with crypto!



Thompson believes it’s possible to “build an entirely new marketplace for content” but that this would require a new protocol layer that includes “a mechanism for payments via digital currency, i.e., stablecoins.”&nbsp;



Unlike existing web protocols, this new protocol would allow language model providers like OpenAI to “build an auction mechanism that pays out content sources based on the frequency with which they are cited in AI answers.”



This, Thompson says, is the “best possible way to not only keep the web alive, but also in the process create better and more useful AI.”



Creating such an “agentic” version of the world wide web — with internet-native payments — is no small task, however.



Thompson is enthusiastic about “MCP as a protocol layer” (a kind of machine-to-machine version of HTTP) and “NLWeb as a markup layer” (a kind of HTML for language models).&nbsp;



It took years for HTTP and HTML to become the global standard for web traffic, so I’m not sure we’ll be seeing MCP and NLWeb anytime soon.



But if we do, crypto will have a new mission: saving the internet.



Q: Is crypto straying too far from things of value?&nbsp;



In a recent <a href="https://youtu.be/477qF6QNSvc?si=JC2qJNDr65oWrO2v&amp;t=9823">discussion</a> with Epic Games founder Tim Sweeney, Lex Fridman notes that crypto is a “really powerful technology,” but also “frustrating” because “so many people use it to try to make money — to create these bubbles, and the hype and the memecoins — [that it] drifts far away…from things that are of value.”&nbsp;



A lot of people, even within crypto, share his frustration — mostly because memecoins still account for such a high percentage of crypto activity and mindshare.&nbsp;



(Real Bitcoiners don’t even approve of Ethereum, let alone Fartcoin.)



But Fridman has a rather memecoin-y definition of value himself: “How your outfit looks in Fortnite provably holds value.”&nbsp;



Exactly! Part of crypto’s promise is that it allows you to own that outfit instead of just borrowing it from Epic Games.



But to own something digitally, it has to be tradeable and that invites speculation.&nbsp;



Fridman seems unhappy with this — he wants crypto to create “a standard definition of money” but not “let it become this hype thing.”



It’s a fine line to walk (and if you want the “thing” to be permissionless, an impossible one).



“People try to buy and sell to make money instead of staying close to the thing that actually has value,” Fridman, whose five-hour podcasts must make him quite a lot of money, complains.&nbsp;



“Forget the money,” he advises. “It’s more about exchanging valuable experiences.”&nbsp;&nbsp;



Buying and selling things is a time-honored way to earn money, of course.



But, that aside, how do you make “valuable experiences” exchangeable without allowing people to buy and sell them?



You probably can’t: Making everything tradeable makes everything speculative.



I think that’s a feature of crypto, but a lot of people understandably think it&#8217;s a flaw.



Q: Is Trump bad for crypto?



There have been pluses and minuses.



On the plus side, bitcoin made another all-time high today, the SEC has flipped from enemy to advocate, crypto industry legal fees must be down about 99%, stablecoins may soon be legally recognized and we might even get a market structure bill at some point.



But that doesn&#8217;t really capture the sea change of perception we’ve lived through: The Economist noted <a href="https://www.economist.com/briefing/2025/05/15/the-crypto-industry-is-suddenly-at-the-heart-of-american-politics">last week</a> that the crypto industry “suddenly finds itself at the heart of American public life” — kind of an astonishing thing to read.



Unfortunately, they didn’t mean that as a plus.



Instead, The Economist warns that “the Trump family’s crypto frenzy is making it harder for the industry to win sufficient support in Congress” and that “Mr. Trump’s enthusiasm for crypto may end up doing the industry more harm than good.”



I’m not sure how it’d quantify “more harm than good” because its argument is mostly about politics and there would be far less political support for crypto had Trump lost the election.



But I do wonder whether crypto might ultimately have been better off if it had been forced to develop in a hostile environment — we might have ended up with more censorship-resistance and fewer memecoins.



Counterfactuals are impossible to prove, of course, but it’s not inconceivable that The Economist is right — and that single-issue crypto voters may have voted the wrong way.



Q: Do ideals matter in crypto anymore?



It feels less mission-driven these days: Centralized exchanges, centralized stablecoins, bitcoin “treasury companies,” BlackRock ETFs — the biggest drivers of crypto have strayed a long way from Bitcoin’s cypherpunk roots.&nbsp;



“Bitcoin was supposed to be the rebellion,” one <a href="https://open.substack.com/pub/mensmercatus/p/the-great-bitcoin-copy-machine?utm_source=share&amp;utm_medium=android&amp;r=3qcul">blogger</a> sums up. “Instead, it&#8217;s being re-engineered by ‘The Empire.’”



But maybe the rebellion’s mission is just changing?



Crypto used to be more about building permissionless software and disintermediating dark-side middlemen like central banks and social media companies.&nbsp;



Now it&#8217;s more about permissionlessly building startups that make money.



Instead of the old emphasis on DeFi legos, where cooperative composability was the goal, we now have fierce competition — like pump.fun building an exchange to capture Raydium’s profits and Raydium building a launchpad to capture pump.fun’s profits.



This isn’t necessarily bad, it&#8217;s just different.



Or better, if you like startups. “Crypto is very different today,” <a href="https://youtu.be/61O5345QUgU?si=9iJ1za6ctCMYOU9_">Ryan Connor approvingly says</a>. “Crypto has legitimate builders who are commercially oriented, who are non-ideological.”



Non-ideological is good in his book: “In the past, you had people who had to maximally decentralize everything and didn’t have a history of building successful startups or did not have that Web2 orientation that really matters for winning markets.”



Web2 is supposed to be the bad guy, I know.



But this is the normal evolution of a nascent industry — like when Red Hat jumpstarted an industry of for-profit businesses built on top of open-source Linux.



In crypto, old school ideologues can continue building open-source, decentralized and censorship-resistant apps and blockchains — and newer startup types can build businesses on top of them.



(See yesterday’s <a href="https://blockworks-research.beehiiv.com/p/money-without-gatekeepers?_bhlid=6eefe643d0e92030153b124eb21795b271a45bc8&amp;utm_campaign=money-without-gatekeepers&amp;utm_medium=newsletter&amp;utm_source=blockworks-research.beehiiv.com">0xResearch newsletter</a> for an example of people still doing ideological things, like attempting to reinvent money.)



There might also be a happy medium to be found here because, as Jeff Bezos says, “missionaries build the best products.”&nbsp;



I’d argue that you don&#8217;t have to be a cypherpunk to build in crypto but that you do have to believe in something — even if that something is just a marketable product.



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Thursday Mailbag: Micropayments, digital value and mission-driven crypto

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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As the Solana community descended on Pier 36 in New York for the Accelerate conference, the feeling in the air was one of reset expectations.



Propositions about Solana’s tech and investment prospects that seemed like consensus just six months ago have now gone out of style.&nbsp;



For one, there’s the muted impact of Firedancer. The Jump-developed client was once spoken of in quasi-religious terms by Solana fans. The software’s launch was going to let Solana <a href="https://blockworks.co/news/lightspeed-newsletter-blockchain-tps-testing">hit one million</a> transactions per second — a nice and round, if meaningless, figure.&nbsp;



A partial Firedancer implementation called Frankendancer is live but so far has struggled to gain adoption. Just 5% of Solana stake currently <a href="https://reports.firedancer.io/?tab=versions">runs</a> on the client. Firedancer is launching a stake <a href="https://delegation.firedancer.io/delegation-program">delegation program</a> similar to what the Solana Foundation offers for Agave, perhaps in hopes of growing its slice of the pie.



Jump’s head of R&amp;D, Kevin Bowers, gave a talk to kick off Accelerate, but it was overshadowed by a talk from a different client developer: On Monday, Anza’s head of research Roger Wattenhofer gave a talk announcing Alpenglow, a major overhaul of Solana’s consensus protocol that could greatly <a href="https://www.anza.xyz/blog/alpenglow-a-new-consensus-for-solana">reduce</a> Solana’s latency.&nbsp;



In short, some in Solana’s validator community are finding, to paraphrase Taylor Swift, that the client they’ve been dreaming of has been here the whole time — in Agave.&nbsp;



I ran into Anza’s lead economist, Max Resnick, at Accelerate. He said the developer shop had to spend time pruning and ironing out bugs in the original Solana client’s code — longtime readers will remember last April, when it became <a href="https://blockworks.co/news/solana-bug-patch-zero-knowledge-proofs">difficult to land</a> transactions on the network at all — before it could test out more frontier ideas like Alpenglow.



It also used to seem obvious to many in Solana-land that ETF approval was going to prove a <a href="https://blockworks.co/news/bitwise-ceo-solana-ncredible-emerging-asset">major tailwind</a> for the asset. That no longer seems to necessarily be the case, as MicroStrategy-like companies make major SOL <a href="https://blockworks.co/news/smallcap-stocks-solana-treasury-buys">treasury purchases</a>.&nbsp;



Some investors made a lot of money by taking a non-consensus bet on SOL following the FTX collapse. Now, as the Solana network looks more consensus than before, conventional wisdom within the ecosystem is starting to be turned on its head.



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conference

Solana Accelerate Day 1: Time to challenge assumptions

Felix Jauvin

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



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I’m old enough to remember when, just a few months ago, the Trump administration talked about cutting deficits to 3% of GDP.



Ever since the Liberation Day pivot, however, the Trump administration has 180’d on its goals and is now pushing a new way to manage the US debt situation: Run it hot.&nbsp;



Oftentimes, the zeitgeist of a moment can easily be encapsulated by a meme: 



<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" width="676" height="652" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/RunItHot.png" alt="" class="wp-image-102875" style="width:441px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/RunItHot.png?w=676 676w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/RunItHot.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/RunItHot.png?w=266 266w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/RunItHot.png?w=271 271w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/RunItHot.png?w=227 227w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/RunItHot.png?w=80 80w" sizes="auto, (max-width: 676px) 100vw, 676px" /></figure>



Last week, Treasury Secretary Scott Bessent hinted at this pivot in a CNN interview:



“There is the potential growth of the debt, but what’s more important is we grow the economy faster. I inherited a 6.7% deficit as a percentage of GDP, and we’re trying to bring that down by decreasing spending, increasing revenue and [growing] the GDP faster than the debt.”&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">We&#39;ve inherited a 6.7% deficit-to-GDP, the highest outside war or recession. Our focus is to grow the economy faster than the debt, that’s how we will stabilize debt-to-GDP. <a href="https://t.co/yblwrunO9t">pic.twitter.com/yblwrunO9t</a>&mdash; Treasury Secretary Scott Bessent (@SecScottBessent) <a href="https://twitter.com/SecScottBessent/status/1924110227168690298?ref_src=twsrc%5Etfw">May 18, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Read between the lines of Bessent’s quote and you realize the implications for owners of US Treasurys.&nbsp;



Luke Gromen said it best:



<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">When the US Treasury Secretary tells you holders of LT USTs are going to lose money on a real basis, you should believe him 👇 <a href="https://t.co/WTpwJzKqvd">https://t.co/WTpwJzKqvd</a>&mdash; Luke Gromen (@LukeGromen) <a href="https://twitter.com/LukeGromen/status/1924132829656478112?ref_src=twsrc%5Etfw">May 18, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



This is financial repression in action: Grow the way out of an elevated debt/GDP ratio by making bonds yield less than the growth rate of the economy.



For example, if bond yields remain fixed at 4% but the economy grows at 6% nominally, you can outgrow the debt since the yield is fixed and will become less of a burden over time as higher revenues make it less burdensome.&nbsp;



I&#8217;m sympathetic to the idea Bessent articulated during the interview: The White House wants to cut spending and increase revenues. However, squaring that idea with the House tax and spending bill, just passed overnight —&nbsp;it doesn’t quite pass the sniff test.&nbsp;



The new bill would increase deficits by nearly $3 trillion over the next 10 years:



<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" width="646" height="702" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Budget-Bill.png" alt="" class="wp-image-102876" style="width:472px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Budget-Bill.png?w=646 646w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Budget-Bill.png?w=276 276w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Budget-Bill.png?w=236 236w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Budget-Bill.png?w=240 240w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Budget-Bill.png?w=202 202w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Budget-Bill.png?w=74 74w" sizes="auto, (max-width: 646px) 100vw, 646px" /></figure>



Breaking down the calculus, a significant amount of the bill’s spending will need to be funded by higher debt issuance: 



<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" width="835" height="700" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Deficit-changes-WSJ.png" alt="" class="wp-image-102877" style="width:666px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Deficit-changes-WSJ.png?w=835 835w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Deficit-changes-WSJ.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Deficit-changes-WSJ.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Deficit-changes-WSJ.png?w=307 307w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Deficit-changes-WSJ.png?w=311 311w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Deficit-changes-WSJ.png?w=261 261w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Deficit-changes-WSJ.png?w=80 80w" sizes="auto, (max-width: 835px) 100vw, 835px" /><figcaption class="wp-element-caption">Source: Wall Street Journal </figcaption></figure>



To play devil’s advocate, the scoring and measurement of this bill is fraught with inconsistencies that should be acknowledged:&nbsp;



<ol class="wp-block-list">
<li>It doesn’t account for increasing tariff revenues to partially offset this bill. An effective tariff rate of 15%, which is roughly where things stand today, would bring in $300-$400 billion a year. This would help partially offset the widening deficit, but not entirely, and this revenue certainly wouldn’t be the golden goose that the Trump administration hoped it would be so as to narrow the deficit to pre-Biden levels. </li>



<li>The scoring in the bill assumes a quick expiration of Trump’s first-term tax cuts that then get reinstated afterward, leading to a superficial surge in tax cuts despite them being net-neutral. </li>
</ol>



<figure class="wp-block-image is-resized"><a href="https://x.com/wabuffo/status/1925559627204153737"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfarIbthsNp-zIhVeJtja-m6omwUZ7IhSV9orEsVMAgFfXnxRwr7tyInqWPzpfknFKGb21h8gcFSQc0QzqJA3t-Uj_834LTcfzyv29eI2297rW4mgTXETwwN8ndbYU1KTYuQzomVg?key=luZ3IeQth6XoFpp55SR3Xw" alt="" style="width:687px;height:auto"/></a><figcaption class="wp-element-caption">Source: @wabuffo on X</figcaption></figure>



Semantics aside, it&#8217;s clear that the policy goal has shifted from one of austerity (remember DOGE?) to one that involves running the economy hot to outpace debt growth. 



This strategy is nothing new. In fact, it&#8217;s more in line with the US government’s approach from 2021 onwards.



In the great words of Lyn Alden: Nothing stops this train.



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congress

The strategic pivot from ‘austerity’ to ‘running it hot’

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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Ember Sword, a crypto MMORPG in development, has been cancelled. They say it’s because the team couldn’t get more funding for the game.



Ember Sword once used Polygon, then the Immutable X chain, then Mantle, <a href="https://medium.com/embersword/ember-sword-immutable-x-migration-b9db9db243cc">asking</a> early NFT buyers to migrate their assets from chain to chain over the years.



“In today’s market,” the team wrote in a message, all that’s left of its now-wiped <a href="https://embersword.com/">website</a>, “we couldn’t find a path to keep building. Our journey, and the servers, will go offline.”



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfdrH8of1ZKv4pEzQvNZ5ugh-pDOCmLBc_8vnvgd3Eh1MLA-Oh8ANsWjxOy6B1xwjLuZofe_R7zKKr4S9ZK3kPOYMFBMsDRs-dSuy-cyJTON_24qkvlbAZVFUjM10o0-BNsjqYj?key=Sf26KBWnHx6TgQMpCq11sg" alt="" style="width:795px;height:auto"/></figure>



So how much funding did Ember Sword have? It’s unclear. Bright Star Studios, the team behind the game, raised <a href="https://www.blockchaingamer.biz/news/14032/ember-sword-bright-star-studios-700000-seed-play-ventures-galaxy-eos-fund/">$700,000</a> in 2020 and another <a href="https://www.prnewswire.com/news-releases/bright-star-studios-secures-2m-investment-ahead-of-ember-swords-first-land-sale-on-may-27th-301299164.html">$2 million</a> in 2021 in publicly disclosed rounds, according to data from BlockchainGamer.biz and a press release. Before 2020, Bright Star was called So Couch Studios.



In 2021 — a peak time for NFTs more broadly — prospective Ember Sword players collectively pledged a total of <a href="https://www.coindesk.com/business/2021/08/04/gamers-pledge-203m-in-ember-swords-virtual-land-sale">$203 million</a> in NFT land sales for the unreleased game.&nbsp;



VentureBeat <a href="https://venturebeat.com/games/bright-star-studios-launches-land-sale-for-web3-mmo-ember-sword/">reported</a> in 2023 that the game had over $18 million in funding from investors ($7.1 million) and land sales, not including the game’s 2023 “<a href="https://www.immutable.com/blog/immutable-games-spotlight-ember-sword-announces-alpha-land-sale">Alpha land sale</a>.”&nbsp;



As we’ve <a href="https://blockworks.co/news/crypto-games-shouldnt-monetize-early-nfts">heard from some VCs</a> recently, it’s not always a good idea to monetize your crypto game too early.&nbsp;



It’s also difficult to know for certain how much money a studio has raised in total, as some blockchain partnerships and grant deals are not publicly disclosed.



Ember Sword had apparently been in development for over <a href="https://massivelyop.com/2018/10/18/new-mobile-mmo-ember-sword-is-another-cryptocurrency-game/">seven years</a>, since <a href="https://web.archive.org/web/20230921143607/https://embersword.com/blog/bright-star-studios-forging-better-experiences-in-gaming-and-technology-in-2023-beyond">2018</a>. The game only <a href="https://x.com/PlayEmberSword/status/1863564192814350541">offered</a> full early access in December 2024, though there have been some community opportunities to playtest earlier versions of the game since at least 2023.&nbsp;



The game’s token, EMBER, deployed in mid-2024 and is now down <a href="https://www.coingecko.com/en/coins/ember-sword">over 99%</a> from its all-time high that it saw at its launch.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfIiVAp9PHRH3z8ibJjoGp2uu-ZIwN5Qupd_SY-eDPvHdqi3BQQdrV5y7JJEyxUYDNpW3-KEdYpfStdKe3BpN3hU2SOqsLdXus3lzQPtMiRo0ITaSC3cnAz1iivHQI3LD_x7XIUKQ?key=Sf26KBWnHx6TgQMpCq11sg" alt=""/></figure>



Image: EMBER price over time.



The studio previously <a href="https://nordic.ign.com/ember-sword/74597/preview/ember-sword-hands-on-preview-potentially-great-mmo-but-worries-about-blockchain">ditched Unity</a> in favor of developing its own game engine, and then cycled through five different proprietary engines before making a final decision (Bright Star’s website, now purged, has deleted its past webpages with these details).



“As a team we have developed and worked on 5 engines in total,” an <a href="https://web.archive.org/web/20230921143607/https://embersword.com/blog/bright-star-studios-forging-better-experiences-in-gaming-and-technology-in-2023-beyond">archived copy</a> of a webpage published in January 2023 from the studio’s site reads.



“Make no mistake — this is not just another browser game. This is a fully functioning highly competitive MMORPG,” the team claimed on that now-deleted page, further adding: “Having a game accessible via the browser is made possible by our own proprietary engine, Project SERIUS which allows for much higher accessibility, allowing hundreds of millions of users to enjoy it as opposed to a few million.”



Now, it looks like not even a single user will get to play it.



Ember Sword did not respond to my requests for comment.



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Gaming

Crypto game Ember Sword shuts down after 7 years of development

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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One of the longstanding complaints against Big Tech is that they “exploit” user data for their own profit.



In some sense, I guess that’s true. I’ve used Twitter for years, and was never paid a cent for giving up any information about my demographics and interests.&nbsp;



But is that “exploitation?”



Sure, my data is valuable in hindsight. But billions of dollars in cloud infrastructure and data analytics had to be invested to turn it into something economically valuable that marketers want to buy.



InfoFi, short for “Information Finance,” is a niche sector in crypto looking to do something similar.



Is InfoFi an investable category? Consider Kaito, the leader in this space.



Kaito has two main products. Both of these products generate a substantial $33 million in annualized revenue, based on <a href="https://dune.com/kaitoai/kaito">Dune</a>.



The first is its data analytics platform, offering structured, sentiment analysis of public information. This is packaged as a monthly $833 subscription service that is sold to traders, AI agent companies and funds whose businesses depend on accurate sentiment tracking.



The second is a B2B service for crypto companies doing marketing. Dozens of <a href="https://yaps.kaito.ai/yapper-leaderboards">prominent projects</a> use Kaito for this purpose today.



The rough idea is this: Companies want to do marketing. Rather than the traditional top-down way of sponsoring events, media or paid influencers, Kaito offers an alternative way to incentivize bottom-up and organic content marketing.



Anyone can register on Kaito, start tweeting about a listed project on Twitter, and earn a share of these rewards. dYdX, for instance, is <a href="https://www.dydx.xyz/blog/dydx-yapper-leaderboard?utm_source=dYdXTwitter&amp;utm_medium=GlobalSocial&amp;utm_campaign=GlobalSocial">committing</a> $50k a month in tokens for such a campaign with Kaito.&nbsp;



The problem, of course, is that this opens the door to all manner of trolls and low-quality content.



That’s where Kaito’s proprietary AI tech comes in. It’s supposedly filtering out slop from genuinely thoughtful content. So if you’re just posting “gmdYdX” or “bullish dYdX,” you’ll likely qualify for almost no rewards.



In sum, what Kaito’s really doing is using the blockchain to place a market value on attention, clout, social capital, or whatever you want to call it. Hence, “InfoFi.”



Based on partnerships with companies like Story, EigenLayer, Berachain and more, Kaito has helped distribute <a href="https://dune.com/kaitoai/kaito">$72.3 million</a> to <a href="https://blockworks.co/news/kaito-yap-to-earn-takeover">yappers</a> (this excludes KAITO’s own airdrop).



The KAITO token isn’t simply a governance token, either. The token can be <a href="https://yaps.kaito.ai/stake">staked</a> for an 11% APY, and the team has committed to buybacks — about $3.9 million cumulatively so far.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcPaXtlPzsvj00qTP-PQLu4zUzhfIkhsUAHmNBZL_YOuJFJgHX69u-HULZpQifw9AL_KkqeyL-5rDpA50zFVVJXaVzx0YJ373QdsXXA7Z2dtmHQEkRGzH5pW6bAVqFr-aKSt8VzAg?key=heH_Hib5eGQdBysOkiQnOg" alt=""/></figure>



At a circulating market cap of $502 million today, KAITO is trading at a ~15.8 P/S ratio. If you’re willing to comps KAITO to traditional SaaS companies (~20x), then it suggests KAITO is undervalued.



The tricky thing, of course, is that no one really knows what the “right” multiples are for a crypto company, let alone one in a niche subsector.&nbsp;



I think Kaito is leveraging token incentives to do something genuinely innovative. It’s struck up partnerships with major crypto teams like <a href="https://blockworks.co/tag/eigenlayer">EigenLayer</a>, Berachain and more.



Its success has attracted a few emerging competitors. One of them is Cookie DAO, a data analytics platform that rose to prominence during the <a href="https://blockworks.co/news/crypto-welcomes-ai-overlords">AI token craze</a> earlier this year. As far as I can tell, Cookies DAO is doing something almost identical. Instead of yaps, you have <a href="https://x.com/cookiedotfun/status/1924939636004237549">snaps</a>. Instead of yappers, they’re called snappers. You get the idea.



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe63byUPx84imoj3sODspXIesul01KxypbmthYLyMGTWX1mTQ7Xsp7_TcqAurKG4rbTWO1aQOaxWfQGiDdb8gVwRN1h4XvZP8gfp0hmSwvVbGVMM4mjY3fC4qbrVPo14eJuZofBOA?key=heH_Hib5eGQdBysOkiQnOg" alt="" style="width:684px;height:auto"/><figcaption class="wp-element-caption">Source: @ahboyash on <a href="https://x.com/ahboyash/status/1925540901772026191">X</a></figcaption></figure>



This brings into question how strong Kaito’s moat is.&nbsp;



Anyone can scrape public social media data. Switching costs are also fairly low. In theory, it’d be easy for Kaito’s clients to switch to another sentiment analysis platform.



Where its edge lies, I think, are in its AI tools, and how well it scores user-generated content and filters for high-quality content. That’s crucial because it determines what kind of marketing is rewarded, which in turn determines continued usage.&nbsp;



The devil’s in the details.



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Is InfoFi an investable sector? Crypto’s attempt to tokenize attention

Pete Rizzo

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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Today’s Bitcoin Pizza Day is shaping up to be a special one. Yes, it’s the first Pizza Day where the two pies in question are worth <a href="https://x.com/pete_rizzo_/status/1925488081437688273">over $1 billion</a>, but that’s not what I’m talking about here.&nbsp;



No, sometime today, in the heart of New York City, in <a href="https://www.meetup.com/pubkey-meetups/events/307585025/?recId=74ebef07-8cb7-4a9b-9026-9b4dcdd495b2&amp;recSource=ml-popular-events-nearby-offline&amp;searchId=d2673ef2-15f0-4f28-a943-76bfc72e47d4&amp;eventOrigin=find_page%24all">the back of a humble bar room</a>, Laszlo Hanycez’s heroic contribution is going to be honored with something else — a simple metal plaque that represents his induction into the Bitcoin Hall of Fame. Officially launching at <a href="https://pubkey.bar/">Pubkey Bar and Restaurant</a>, it’s a small addition to the 500 or so Hall of Fames estimated to have been established globally. It may even seem an odd choice. I can’t imagine, for instance, that many early Bitcoiners were enamored with sports accolades. 



Yet, it’s a small reminder of something that gets lost in all the conversation around bitcoin’s march above $100,000 —&nbsp;that while bitcoin may be, objectively, the best store of value, value is itself subjective. As the Austrian economists learned (and fiat economists too often forget), it’s something we create and exchange through our actions.



 So, I, for one, will be there to lend my support, because I value Laszlo’s sacrifice. Sure, he may have lost $1 billion, but he’s earned something far more: our respect and admiration for his intentions and his foresight.&nbsp;



And for that, I can’t think of anyone better to be inducted into the Bitcoin Hall of Fame.



— Rizzo



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



Bitcoin Pizza Day is really more of a Bitcoin Pizza Week.



It took four whole days for someone to take Laszlo Hanycez up on his offer of 10,000 BTC for two large pizzas.



“I like things like onions, peppers, sausage, mushrooms, tomatoes, pepperoni, etc.. just standard stuff no weird fish topping or anything like that. I also like regular cheese pizzas which may be cheaper to prepare or otherwise acquire,” he <a href="https://bitcointalk.org/index.php?topic=137.0">wrote</a> on Bitcointalk.



Without willing counterparties, Laszlo even suggested that he raise his bid: “So nobody wants to buy me pizza? Is the bitcoin amount I&#8217;m offering too low?”



User BitcoinFX replied: “laszlo I would offer to buy you a pizza, but I&#8217;m not based in the USA, so they might think I&#8217;m a prank caller. If you don&#8217;t get any other offers I might look into how to go about buying you one online. Are you getting hungry or do you just like pizza?”



The next day, Laszlo would show <a href="https://x.com/pete_rizzo_/status/1925488081437688273">picture</a> proof that someone had finally done the deed. The deal was <a href="https://blockworks.co/news/3-piping-hot-pizza-day-facts-for-bitcoin-connoisseurs">organized on IRC</a> with early adopter Jeremy “Jercos” Studivant, who’d also been mining bitcoin around the same time via the cloud.



No question that Laszlo did a lot for Bitcoin with his passion for pizza. He also did a lot for Satoshi, even when he didn’t really feel like it.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXffVHnqN2ehImH6STHTb5DoKfzDI5Bx9MeuXXQ8-W-7WVAGuliwCTyD1F-auxksE9ubEQYqdKzW7eUztUcZpbXCA0hvES3Y9ktwxBW16X4v_0Vc4Hdftm7rd3L7VEULYMq4OhI5YA?key=_2iCpYHNxRNpulU1KTJ8aw" alt=""/><figcaption class="wp-element-caption">Laszlo’s first pizza purchase would now be valued at $1.1 billion. An equivalent amount invested into Papa John’s stock would otherwise be worth $164.</figcaption></figure>



In a 2018 <a href="https://www.businessinsider.nl/satoshi-nakamoto-was-weird-and-bossy-says-bitcoin-developer-2018-5?international=true&amp;r=US">interview</a>, Laszlo gave perhaps the most candid insight into what it was like to develop Bitcoin alongside Satoshi in the very early days.&nbsp;



In total, Laszlo exchanged hundreds of emails with Satoshi across 2010, leading Bitcoin’s creator to frequently send tasks to complete.



“I thought bitcoin was awesome, and I wanted to be involved, but I had a regular developing job,” Hanyecz told Business Insider. &#8220;Nakamoto would send me emails like &#8216;Hey, can you fix this bug?&#8217; &#8216;Hey, can you do this?’”



&#8220;He&#8217;d say, &#8216;Hey, the west side&#8217;s down,&#8217; or &#8216;We have these bugs — we need to fix this.&#8217; I&#8217;d be like, we? We&#8217;re not a team. I thought that it was approval from him, that maybe he accepted me as a member. But I didn&#8217;t want the responsibility. I didn&#8217;t really understand all of the forces that were going on at the time.&#8221;



Laszlo was clear that he deeply respected Satoshi, but there were still a few requests that didn’t sit quite right. &#8220;I brushed them off because I was like, who cares if this guy tells me to go pound sand and go away? This wasn&#8217;t my job or anything — it was a hobby.”



“I was trying to be friends with him. He seemed very paranoid about people breaking the software. He kept calling it &#8216;pre-release,&#8217; and I was helping him get it to release.&#8221;



Bitcoin Core developers would only drop the “0.x” naming convention, which implied the software is still in beta, in 2021 — over a decade later. It was a symbolic move, representing Bitcoin’s maturation since Satoshi’s heyday. And so is Bitcoin Pizza Day.



— David



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Bitcoin celebrates Pizza Day with price record, Hall of Fame induction

As the world’s largest asset manager expands its crypto reach, its chief rival has thus far resisted entering the market.



BlackRock has added a layer of credibility to crypto for a segment of investors, given its management of $11.5 trillion in assets. The iShares Bitcoin Trust (IBIT), the fastest-growing ETF of all time, managed nearly $69 billion as of Wednesday.&nbsp;



Yet Vanguard, with its roughly $10 trillion in assets under management, isn’t biting — even as major competitors continue to seek more entry points.&nbsp;&nbsp;&nbsp;



Vanguard was not among the firms lining up to launch the first US spot bitcoin ETFs in January 2024. When those ETFs started trading, the company told Blockworks the funds <a href="https://blockworks.co/news/vanguard-disallows-bitcoin-etf-trading">would not be available</a> for purchase on Vanguard’s brokerage platform.&nbsp;



Roughly six months later, Vanguard similarly <a href="https://blockworks.co/news/vanguard-opposes-platforming-eth-etfs">blocked the trading</a> of ETFs holding ether.



Read more: <a href="https://blockworks.co/news/wealth-managers-feel-pressure-bitcoin-etfs">Restricting access to growing bitcoin ETFs becoming ‘hard to justify’</a>



Both times, a representative told Blockworks that crypto ETFs “do not align with our [offerings] focused on asset classes such as equities, bonds and cash, which Vanguard views as the building blocks of a well-balanced, long-term investment portfolio.”



They added: “We continuously evaluate our brokerage [offering] and evaluate new product entries to the market.”



A Vanguard spokesperson told Blockworks at the <a href="https://blockworks.co/news/crypto-exchange-etf-event-vegas">Exchange ETF conference</a> in March that the firm’s view on crypto has not changed. Representatives at the company did not return Blockworks’ newest requests for further comment.&nbsp;



<h2 class="wp-block-heading">Vanguard rivals flock to crypto</h2>



Executives at a number of traditional finance giants have historically been wary of bitcoin and the crypto space more broadly.



Vanguard founder John Bogle told people in 2017 to “avoid bitcoin like the plague.” BlackRock CEO Larry Fink once <a href="https://www.cnbc.com/2017/10/13/blackrock-ceo-larry-fink-calls-bitcoin-an-index-of-money-laundering.html">called</a> bitcoin “an index of money laundering.”&nbsp;



<a href="https://blockworks.co/news/bitcoin-salesmen-michael-saylor-larry-fink">Fink’s view evolved</a> as demand grew, with the BlackRock leader labeling bitcoin (after launching IBIT) as “an asset class that protects you” from economic uncertainty and geopolitical risk. Bogle had no such stance change — at least publicly — before his death in 2019.&nbsp;



Fink has also been adamant about the benefits of blockchain technology, noting in a March letter to shareholders that <a href="https://blockworks.co/news/stablecoins-tokenization-blackrock-galaxy-das">tokenizing</a> every stock, bond and fund would “revolutionize” investing.



Samara Cohen, BlackRock’s CIO of ETF and Index Investments, <a href="https://www.youtube.com/watch?v=61XGfxAgKUc">told Blockworks co-founder Jason Yanowitz</a> last month that company executives have been “students of crypto for years.”&nbsp;



She added: “What we heard from clients in 2020 and 2021 was really changing from what it had been a few years before in thinking that this actually has a potential role in a diversified portfolio, and why.”



BlackRock launched a private bitcoin trust in 2022 before debuting its spot bitcoin ETF less than two years later. Earlier this year, the firm’s alternatives-focused model portfolios began allocating between 1% and 2% of its assets to IBIT.



Ric Edelman, founder of Edelman Financial Engines and the Digital Assets Council of Financial Professionals, said Vanguard is clearly unmoved by data showing <a href="https://blockworks.co/news/bitcoin-boosts-60-40-portfolios">the historical benefit</a> (on risk-adjusted returns) of adding a small single-digit percentage allocation to bitcoin.



“If you fundamentally believe in modern portfolio theory, if you believe in diversification and portfolio rebalancing, then you want assets included that are both volatile and non-correlated,” he said. “Bitcoin is the perfect example of a volatile, non-correlated asset.”



BlackRock is not the only financial titan seeking to capitalize on investor demand for crypto.



State Street Global Advisors — the third-largest fund manager and issuer of the first US ETF in 1993 — is bullish on diversified, actively managed crypto portfolios. The company <a href="https://blockworks.co/news/state-street-galaxy-crypto-etfs">launched several such funds</a> last year via a partnership with Galaxy Digital.



Fidelity formed a digital assets unit in 2018 and has a bitcoin ETF with roughly $20 billion assets under management. <a href="https://blockworks.co/news/franklin-templeton-etfs-tokenization-2025">Franklin Templeton</a> has a BTC ETF as well — and, like BlackRock, is in the tokenized money market fund game.



Charles Schwab <a href="https://blockworks.co/news/charles-schwab-spot-crypto-etfs-plan">has not ruled out offering a bitcoin fund</a>. In the meantime, the brokerage titan allows investors to buy and sell crypto ETFs on its platform and has signaled its interest in offering spot crypto trading when more regulatory clarity comes.



Morgan Stanley, too, is <a href="https://www.bloomberg.com/news/articles/2025-05-01/morgan-stanley-plans-to-offer-crypto-trading-to-e-trade-clients">reportedly</a> looking into adding crypto trading to its E*Trade platform, though a spokesperson declined to comment.



Read more: <a href="https://blockworks.co/news/spot-crypto-trading-wall-street-interestschwab">Spot crypto trading to become ‘commoditized’ as Wall St. interest persists</a>



Wells Fargo — a firm with no concrete, public crypto plans — still recognizes crypto as a viable asset class. The bank <a href="https://blockworks.co/news/merrill-wells-fargo-offer-bitcoin-etfs">made available</a> unsolicited spot bitcoin ETF purchases to certain clients last year and called digital assets “investable as they continue to evolve” in a March report.



Even JPMorgan Chase CEO Jamie Dimon, who has criticized bitcoin for years, <a href="https://www.cnbc.com/2025/05/19/jpmorgan-ceo-jamie-dimon-says-the-bank-will-let-clients-buy-bitcoin.html">said</a> Monday that clients of the bank will be able to buy bitcoin. He likened buying bitcoin to smoking — saying he doesn’t think you should, but: “I defend your right to buy bitcoin.”



Those comments came a couple days before BTC hit a new all-time high above $111,000.&nbsp;



Outside of bitcoin, Bank of America CEO Brian Moynihan said at the Economic Club of Washington, D.C. in February that the company would enter the stablecoin business if US lawmakers give regulatory approval. Citi analysts’ base-case estimate for the stablecoin market’s size in 2030 is $1.6 trillion — roughly seven times its current size of $230 million.&nbsp;&nbsp;&nbsp;



<h2 class="wp-block-heading">Vanguard’s choice ‘befuddling’ to some&nbsp;&nbsp;</h2>



Edelman argued that Vanguard’s decision to “draw a line in the sand” on crypto products is “bufuddling” and makes no business sense.&nbsp;



“It puts Vanguard in the awkward position of acting as a stepmother dictating behavior of its children, as opposed to a business partner facilitating the ability of their customers to invest as they choose,” he told Blockworks.



Bloomberg Intelligence analyst Eric Balchunas — author of “The Bogle Effect” — said Vanguard has avoided Wall Street scandals over the years and built up perhaps more trust than any other financial services company.&nbsp;



But its decision to block crypto ETFs from trading on its platform seems “nannyish and targeted,” he argued.



“It feels like maybe they’re trying too hard to be the responsible Boy Scout trustworthy person in this case,” Balchunas told me. “I don’t think they need to do that. I think what might even be more trustworthy is to trust their own investors to make the decision.”



Bitwise CIO Matt Hougan said the irony with Vanguard is they’ve been on both sides of the financial innovation curve.&nbsp;



The mainstream asset management industry scoffed when Vanguard introduced index funds in the 1970s, calling such passive vehicles &#8220;unAmerican&#8221; and &#8220;Bogle&#8217;s folly.” Balchunas’ book on Bogle chronicles how Vanguard transformed the financial industry in part by lowering fund costs.&nbsp;&nbsp;



On the other hand, Bogle was skeptical of ETFs as iShares and State Street Global Advisors built dominant franchises. The firm has since established itself as a low-cost leader in the category; the Vanguard S&amp;P 500 ETF (VOO) is the world’s largest ETF, with about $660 billion in AUM.&nbsp;&nbsp;



“So they know what it&#8217;s like to dismiss an innovation and then realize their mistake,” Hougan said. “And yet, here they are again with crypto.”



Beyond Vanguard’s statements to Blockworks over the last 16 or so months, a January 2024 <a href="https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/no-bitcoin-etfs-at-vanguard-heres-why.html">Q&amp;A</a> with executives Janel Jackson and Andrew Kadjeski provides a bit more color on their thinking.



In the post — titled “No bitcoin ETFs at Vanguard? Here’s why” — Kadjeski notes Vanguard removed access to leveraged and inverse funds on its brokerage platform in 2019.&nbsp;



He says: “These products are often misunderstood and misused by investors and can magnify losses.”



Hougan noted that many platforms indeed initially created gates or educational requirements that made it hard to buy leveraged funds. But it’s not the best analogy, he told Blockworks, given that the compounding effect (and its impact on returns, particularly over the long term) can make such products difficult to understand.&nbsp;



“But a bitcoin ETF is one of the simplest ETFs in the world,” the Bitwise CIO said. “It holds bitcoin, and that&#8217;s it. No confusion.”



Hougan added: “There&#8217;s a good case to be made for ensuring investors understand the ETFs they buy. But I think platforms make a huge mistake when they start telling investors which ETFs they should or should not own.”



<h2 class="wp-block-heading">Will they budge?&nbsp;</h2>



Vanguard’s leadership is one reason some believe it’ll ultimately choose to jump into the crypto game. CEO Salim Ramji led BlackRock’s ETF business as it prepared to launch IBIT.



Read more: <a href="https://blockworks.co/news/vanguard-ceo-blackrock-bitcoin-etf">Yes, Vanguard’s new CEO supported BlackRock’s bitcoin ETF launch</a>



Ramji told ETF.com in August that the company would not be launching crypto ETFs. “I’m not going to copy competitors,” he added. “It’s important that a company stay consistent with who they are.” 



But positions can change, industry watchers maintain.



“I don’t think, when he joined, he wanted to rock the boat so quickly,” Balchunas said of Ramji.



Edelman said he’s “highly confident” Vanguard will “reverse its policy position” by the end of the decade — ultimately listing these on its platform and offering its own crypto ETFs. “They will obviously be recognized as a me-too player,” he said. “Nobody who already owns a crypto ETF is going to shift over to theirs unless they offer a compelling reason to do so.”



Offering lower-cost funds could be the way they gain market share, Edelman acknowledged.



The advice and wealth management business Vanguard teased in December could also spur movement on the crypto front, Balchunas argued.



“I would think over time they’re going to get more requests from people who want crypto as part of their portfolio, even if it’s not in a Vanguard ETF,” he said. “Are they going to keep denying them that? I think the desire to grow the advisory business could ultimately make them cave on the brokerage platform thing.”



While Edelman believes consumer demand will push Vanguard to offer their own crypto funds, Balchunas is less sure about that.&nbsp;&nbsp;



The company has avoided launching its own gold ETF, citing its view of focusing on equities, bonds and cash. Still, it allows gold ETFs from BlackRock, SSGA and others to trade on its platform.&nbsp;



Either way, various segment observers agree Vanguard will at least lift the bitcoin ETF ban from its brokerage platform.



Time and competition will be what pushes Vanguard to update its “antiquated, 2013-era view of bitcoin,” Hougan argued.&nbsp;



“They say everyone gets the bitcoin price they deserve,” he noted. “I&#8217;d say every brokerage gets the bitcoin entry point it deserves too. But make no mistake, the day is coming.”



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bitcoin ETFs

As more TradFi giants flock to crypto, Vanguard stands apart

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



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Yesterday I had the opportunity to moderate a panel for American Banker’s <a href="https://conference.americanbanker.com/event/AB-Crypto-Virtual-Summit/summary">virtual stablecoin summit</a>.



Obviously, the audience that the panel catered to was more TradFi than crypto, but my panelists included <a href="https://blockworks.co/tag/a16z">a16z Crypto’s</a> Sam Broner, EY’s <a href="https://blockworks.co/speaker/paul-brody">Paul Brody</a>, Halliday’s Griffin Dunaif and Superstate’s <a href="https://blockworks.co/tag/robert-leshner">Robert Leshner</a>, which meant we could cover a wide variety of topics.&nbsp;



Anecdotally, one of my takeaways was that there’s a lot of interest and appetite for stablecoins. And the base level of knowledge is pretty high for folks who are presumably not crypto-native. One of the highlights for me was the infra talk, even if it’s not necessarily the most attractive topic.



But back to the panel itself: Brody, who’s EY’s global blockchain leader, told me that they’ve estimated that if they moved all of EY’s payments from the traditional systems to crypto rails, it would save them a $100 million a year. (He added that they can’t do that, because of regulations.)&nbsp;



Even for EY, $100 million isn’t a small amount.&nbsp;



Dunaif, at one point, also brought up that “the stablecoin moment” opens the door for “the Amazon Web Services moment” in finance.&nbsp;



“I think one of the most exciting properties of a blockchain is that we’re making our commercial systems, our finance systems, look a lot more like data systems and traditional [software as a service] systems. So what that means is that value suddenly becomes a programming primitive, right? It’s in the runtime itself,” he explained.



So there’s the potential for a bank or a FinTech to offer a service akin to what AWS does for the cloud.&nbsp;



“There’s probably not a whole lot of margins in just the stablecoin itself, but in the services you could add on top,” he added.



While I think the overall thought has been that stablecoin rails could clean up and simplify the preexisting system, Brody noted that the infrastructure may look “just as complicated” as what was there previously, but “it might be much more contestable, much more open, much more competitive.”



Don’t get too excited, though. Broner still thinks we’re a few years out, even with the uptick in demand and regulatory potential. He believes the adoption will be slow, but it’s coming. It’s not just the EYs of the world that are looking to be more efficient and save money; there are plenty of smaller firms that would love to save money on things like international money transfers.&nbsp;



And that’s your vibe check this wonderful Thursday.



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Are stablecoins crypto’s AWS moment?

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“The value of any stock, bond or business today is determined by the cash inflows and outflows … that can be expected to occur during the remaining life of the asset.”



— Warren Buffett
</blockquote>



When Warren Buffett explained that the value of every stock, bond or business is a function of its future cash flows, he was paraphrasing John William Burr, who formally articulated the “discounted cash flow” (DCF) method of valuation in his 1938 book The Theory of Investment Value.



Burr didn’t invent the ideas behind his calculations, however.



The <a href="https://www.ausimm.com/bulletin/bulletin-articles/some-surprising-facts-about-the-history-of-value-within-the-mining-industry/">first recorded instance</a> of discounting future cash flows to present value dates to 1773, when an engineer, Edward Smith, estimated the “present worth” of a coal mining operation based on its future stream of income.&nbsp;



In fact, the logic of present value has been used even longer than that.



With the publication of his Liber Abaci in 1202, Leonardo Pisano (better known as Fibonacci) is <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3473153">credited</a> as the “first to develop present value analysis for comparing the economic value of alternative contractual cash flows.”



823 years later, that’s still the best way to do it: Discounted cash flow is as close as you can get to a fundamental truth in the art of financial valuation.



It rarely feels that way, however, which is confusing — the best argument against DCF is that it doesn’t match our lived experience as investors.



Stocks, for example, trade up, down and all around for reasons that are entirely unrelated to future cash flows — even in hindsight, it’s impossible to discern any cash-flow logic in the price charts.



John Maynard Keynes is right to call stock market investing a “<a href="https://en.wikipedia.org/wiki/Keynesian_beauty_contest">beauty contest</a>” that’s unrelated to fundamentals — and there’s no disputing Robert Shiller’s <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=262076">findings</a> that stock prices are far more volatile than can be explained by subsequent changes in dividend payments.



But I draw the line at Austrian economist Carl Menger’s <a href="https://www.econlib.org/carl-menger-on-value/">conclusion</a> that “value does not exist outside the consciousness of men.”



Inferring value from price movements (and human behavior) is like concluding the stars revolve around Earth — it only looks that way from where we stand.



It’s true that DCF can’t be proven in a mathematical sense — it isn’t a physical law of the universe.



But it’s as close to a law as we can get in finance, however unrelated it is to how asset prices move in the real world.&nbsp;



We can pseudo-prove this with a thought experiment.



Imagine, for example, you were asked to bid for two assets: Asset A, which is guaranteed to pay holders $10 a year for the next 10 years, and Asset B, which may or may not pay you an unknowable amount of money at some unknowable time.



Which would you offer money for?



Asset A, of course, because you could calculate how much to offer by putting its predictable stream of future cash flows into an excel model and discounting them back to a present value.



You could do that for Asset B, too, except that you’d have to guess at all the model’s inputs, which makes it much less useful in practice.



In theory, however, it’s still the mental model to use for understanding why financial assets have value.



Asset A in the above example is a bond, of course, and Asset B is a stock — which is why people rarely use DCF models for stocks.



DCF models require too many guesses about things that will happen too far in the future (out to 10 years, typically, and even that’s too short to really know).&nbsp;



Instead, we like to look one, two or three years out, guess at just one thing — say, earnings — and pick a somewhat arbitrary multiple of that guess to arrive at a price target.



But a price target is a forecast of where a stock will trade, not what it’s worth.



Valuation metrics like price-to-earnings, price-to-sales, price-to-EBITDA — these are all stand-ins for the unknowable discounted cash flow valuation of a stock.



However you want to think about it, what any stock is worth remains the present value of its future cash flows, which are annoyingly unknowable.



This is why hardly anyone actually values stocks this way — not even Warren Buffett builds DCF models.



&#8220;Warren often talks about these discounted cash flows,” Charlie Munger once <a href="https://nvariant.substack.com/p/why-warren-buffett-never-calculates">noted</a>, “but I’ve never seen him do one.”&nbsp;



That’s because Munger and Buffett both worried that the “false precision” of a DCF model was likely to lead them astray — if the value of an investment &#8220;doesn’t just scream out at you,” Buffett says, you shouldn’t invest.



In other words, you should know that the value of a financial asset is a function of its future cash flows — but you shouldn’t try to calculate it.



For investors, DCF is less of a practical playbook and more of a state of mind.



<h2 class="wp-block-heading">But crypto is different, right?</h2>



On the most recent <a href="https://youtu.be/RzT7-3jAHyM?si=7uFKiqomkrNect37&amp;t=276">episode</a> of the Empire podcast, crypto investor Tom Dunleavy predicted that the fees people pay to use layer-1 blockchains like Ethereum “are effectively going to zero.”



That made me double-check the title of the podcast — “The Bull Case for Ethereum” — because that sounds like the ultimate bear case for a cash flow-minded investor like myself.



But Dunleavy thinks I’m doing it wrong: When valuing a layer-1 token like ETH, “revenue and cash flow is the exact wrong way to think about it.”



Instead, L1s should be valued “as a percentage of assets that will come onchain at some point in the future.” (“Theoretically,” he adds.)



He might be right about that, I don’t know — and he might also be right that the price of ETH will be correlated to the amount of assets Ethereum hosts (although that remains speculative).



But to argue that the value of ether is based on anything other than its future cash flows is to argue that ether is exempt from Buffett’s dictum about stocks, bonds and businesses.&nbsp;



Lots of people think it should be.



The “Ethereum investor” Ryan Berckmans, for example, <a href="https://youtu.be/RzT7-3jAHyM?si=tW7SQRkto5g82OKE&amp;t=707">argues</a> the case for ether by refuting the idea that it’s a business selling blockspace: “What Ethereum sells is freedom and global prosperity.”



Maybe so — but how else would you measure an investment in freedom and prosperity if not by forecasting how much people will pay to access it?



Berckmans may have implicitly conceded the point later in the podcast: “Value accrual will happen, yes, through fees in the long term.”



That about sums things up for me: Buy a crypto token for any reason, sure — freedom, prosperity, vibes — but the only way to invest in a token is on the assumption that its current price is justified by its future cash flows.



In the meantime, no one says the price of that token will be correlated to REV or any other financial metric — and crypto assets with no prospect of future revenue (like bitcoin) are free to be priced however people choose to price them.&nbsp;



But I’d argue that any asset that collects fees from users (as ETH does) is a financial asset and therefore subject to Buffett’s dictum that cash flows determine value.



If so, crypto investors might want to get into more of a DCF state of mind.



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