Moon Eye

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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Almost a month ago, OKX announced an expansion into the US.&nbsp;



To lead the expansion, OKX tapped Roshan Robert, who’s held a number of TradFi-crypto roles throughout his career — having worked at both Hidden Road and Barclays.&nbsp;



On paper, the expansion makes sense: OKX wants a piece of the American pie, which is now more intriguing and, well, friendlier.&nbsp;



However, Robert told me he actually joined OKX back in September, before the path forward became more clear and when it looked like SEC chair Gary Gensler would still be in charge.&nbsp;



“I joined [OKX] before we had any idea of how the elections were going to turn out. Over the past many years, I have had a belief that public blockchains are the future of finance,” he said.&nbsp;



It was a “no brainer” to build out a US position, he told me. The team then plotted out next steps, which would later turn out to include a California headquarters.&nbsp;



“A lot has evolved since I&#8217;ve joined, including some long-awaited regulatory clarity in the US, and it&#8217;s a more stable environment to properly expand in the US,” he continued.&nbsp;



OKX has the opportunity to expand with a “strong compliance and risk management focus,” with the goal of delivering seamless onramps and low fees to users. The team also aims to ensure that between the risk management and the liquidity, it’s bringing in institutional clients.&nbsp;



But no doubt it’s a crowded arena right now, and from the looks of things, both Kraken and Coinbase are making billion-dollar acquisitions to differentiate their offering.



OKX picked San Jose to embed itself in Silicon Valley’s “innovation engine.” Right now, it’s available in 46 states (and Washington, DC). The focus is not only to keep building, but securing the proper licenses before looking at other areas to expand its presence.&nbsp;



It may be early days for OKX in comparison to some of the other giants operating in the US right now, but I also have to point out that OKX is kind of doing the opposite of Coinbase and Kraken. The two US-based companies are looking to expand internationally, whereas OKX has an international presence and is doing the exact opposite — expanding to the US.&nbsp;



I’m curious to see how OKX can go toe-to-toe with the other big exchanges once it&#8217;s had some time to mature in the market.&nbsp;



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Empire Newsletter

‘No brainer’ to expand into US: OKX US CEO

Byron Gilliam

This is a segment from the Blockworks Daily newsletter. To read full editions, <a href="https://blockworks.co/newsletter/daily">subscribe</a>.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Bitcoin offers something unique: unstoppable, uncensorable, permissionless money.”



— Win Ko Ko Aung
</blockquote>



Q: Should sentiment in crypto be better?



I think it should — crypto market cap is back above $3 trillion, bitcoin has become part of the zeitgeist, stablecoins are booming, the institutions are here, regulators are sympathetic, memecoins are out, utility is in.&nbsp;&nbsp;



But I can also see why it isn’t.



Among other things (many listed <a href="https://x.com/intern/status/1919791584888881154">here</a>), it feels like the wealth that crypto is currently generating is unrelated to the value that it hopes to deliver.



Case in point: If you bought Bearchain’s token, BERA, when it launched in February, you’re down about 50% — which is fair enough because people don’t seem to be using the chain very much (per data from <a href="https://app.blockworksresearch.com/analytics/berachain">Blockworks Research</a>, Berachain has been generating about $500 of revenue per day).



But the <a href="https://x.com/crainbf/status/1919715154113040618">unofficial marketing</a> around Berachain celebrates wealth as if investing in it will somehow allow you to live a lifestyle of the rich and famous — now, before the project has delivered any value.&nbsp;



Similarly, Token2049 was reportedly a party, but from The Wall Street Journal’s <a href="https://www.wsj.com/finance/crypto-token2049-dubai-cz-eric-trump-rave-093b1d7e">reporting</a>, it sounds like what was being celebrated was not so much crypto’s utility as its political influence.



So far, the benefits of that influence have been narrowly distributed.



The FT <a href="https://www.ft.com/content/f5797d16-6299-444c-b990-5cbc6a7ccfca">reported</a> this week, for example, that a “small group of traders” made $99.6 million by buying up the MELANIA token in the two and half minutes before it was publicly announced.&nbsp;



These well-informed buyers unloaded 81% of their tokens within 12 hours of the launch — at&nbsp; prices at least 90% above where they are now.&nbsp;



This kind of thing is dispiriting to anyone who invested in crypto because they thought people would use crypto.&nbsp;&nbsp;



But it’s worth remembering that this is a story at least as old as stock markets.



Recounting the 1870s mania for railroad shares, <a href="https://www.google.com/search?client=safari&amp;sca_esv=896bc82726dbc1e3&amp;rls=en&amp;q=Americana:+A+400-Year+History+of+American+Capitalism&amp;stick=H4sIAAAAAAAAAONgFuLVT9c3NEypSMqzNEs2VoJwk82KjbIKjSq0pLKTrfST8vOz9RNLSzLyi6xA7GKF_LycykWsJo65qUWZyYl5iVYKjgomBga6kamJRQoemcUl-UWVCvlpCjAFCs6JBZkliTmZxbk7WBkBxhLeHHYAAAA&amp;sa=X&amp;ved=2ahUKEwi8-rXtvZSNAxUQHNAFHdmHB-gQgOQBegQIMxAG&amp;biw=1152&amp;bih=656&amp;dpr=2">Bhu Srinivasan</a> writes that “shareholders got rich when railroad stocks went up, not when people actually used the railroad.”



When “the moment of clarity set in” and “financing for speculative and incomplete projects was frozen,” the investing mania ended in a financial crisis.&nbsp;



But people did end up using the railroads.&nbsp;



Q: What could get people to start using crypto?



Stablecoins still seem like the best bet.



At Stripe’s <a href="https://www.youtube.com/live/ONIexChUpuw?si=wKbOYVrzJ_hf-BHc&amp;t=1460">annual conference</a> yesterday, the co-founding Collison brothers listed stablecoins and AI as “the two big tailwinds” they expect to drive the next evolution of “the internet economy.”



Amazingly, stablecoins were listed ahead of AI:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe44Yp2x9NR-x-srtPYt1qMR_kRuOtuZ74DtYcYwmYg3RkmuIKeWRtLpzKmKPh-_zn0Qr3OFDLQrE4pmMNm2oiu0Y6xGHiuqZG0pYpa52efoPDzIMxsW53dSRu1hG8Tpd1UC0YuAQ?key=xzgnyWEn7hk7cKiVAdZs2A" alt=""/></figure>



I guess that ordering is to be expected from a payments company, but still, John Collison made a convincing case for why stablecoins, paired with AI, will lead to a “way higher rate of breakout company creation.”&nbsp;



Stablecoins enable “borderless financial services,” he explained, which will make it possible for small businesses to be borderless, too.



Collison says it’s already happening: “People have been waiting since 2010 to see if crypto is for real and what you&#8217;re seeing with stablecoins is real utility for real business at a growth rate which eclipses anything we’ve seen before at Stripe, including Stripe itself.”



Stablecoins are centralized, so this is not exactly the realization of cypherpunks’ dreams.



But it’s real-world utility and the world will be a better place with a “higher rate of breakout company creation” — so I&#8217;ll take it.



Q: Could SBF have turned a profit?



I think so, yes.



To take just one example, the FTX estate sold SBF’s seed round investment in Cursor for exactly what he paid for it: $200,000.



At Cursor’s latest valuation, that stake would be worth <a href="https://dailyhodl.com/2025/05/06/ftx-estate-fumbles-500000000-investment-as-ai-coding-platform-cursor-now-valued-at-nearly-1000000000-report/">$500 million</a>.&nbsp;



That’s a 250,000% return — far more than the crypto he “borrowed” from FTX customers would have returned.&nbsp;



A profitable fraud is still a fraud, of course.



Still, pretty funny to think that if he had managed to fake it just a little longer, he might actually have made it.



Q: Is bitcoin a risk-on asset or risk-off asset?



Yes.



It’s been a risk-on asset this week, as evidenced by all the headlines saying some version of “bitcoin up on talk of trade deals.”&nbsp;



This doesn’t entirely make sense — the asset for people who think things will be bad, is good because things are not as bad as expected?



But bitcoin’s correlation to risk comes and goes and it feels like it’s trending toward being more risk-off.



Here, for example, is the year-to-date return of bitcoin (in purple) oscillating around the return of gold (in, well, gold):



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdxp_Gre6jaWtymm7VomZqk5gVW4Kc4MV-_rCoK0HWO0pjsuZO7v5hexv3osKGa64rZZ2ZcsElenVRMc__zGguo2BOTGWblLJxvuYzgVfZeO0u0vkT-ppb07MIQ0a7zNrTzRUcPBg?key=xzgnyWEn7hk7cKiVAdZs2A" alt=""/></figure>



Were it to carry on like that, bitcoin might finally cement itself in investors’ minds as a risk-off asset (which should make it more valuable).



I expect it will continue to be both risk-on and -off for a while — it’s still the only liquid thing you can sell when you’re feeling nervous on nights and weekends.&nbsp;



But that could change.&nbsp;



It was <a href="https://www.bloomberg.com/news/articles/2025-05-07/robinhood-said-to-plan-blockchain-to-trade-us-assets-in-europe?taid=681ba7d579cfff00010e5bc2&amp;utm_campaign=trueanthem&amp;utm_content=business&amp;utm_medium=social&amp;utm_source=twitter">reported</a> this week that Robinhood is developing a blockchain platform to offer US securities trading to European investors — and people like Kyle Samani and Robert Leshner think that eventually, all assets will be available to trade onchain, all the time.



If so, we’ll be able to stop using bitcoin to amplify our short-term risks — and start using it to hedge our long-term ones.&nbsp;



Q: Is bitcoin just another thing to trade?



Not for the people who really need it, no.



In a recent <a href="https://mailchi.mp/hrf.org/hrf-fountainhead-announce-resident-artists-9101873?e=824562d621">email</a>, the Human Rights Foundation (HRF) highlighted the story of Win Ko Ko Aung, who fled persecution in his native Burma in 2021: “I made it to the US with almost nothing — except a small amount of bitcoin I had once bought out of curiosity. With my money trapped back home, bitcoin helped me survive.”



Since then, he’s been promoting the use of bitcoin as a form of resistance money: “For people living under dictatorship, it’s a tool for financial autonomy and freedom,” he writes.



Aung cites the example of the recent earthquake in his native Burma: “The military junta blocked access to the hardest-hit areas and even launched airstrikes against people trying to flee, continuing their long-standing pattern of blocking humanitarian and financial aid. But bitcoin made peer-to-peer relief possible.”



“When governments fail, repress their people, and collapse currencies,” he concludes, “bitcoin provides an escape hatch. In times of crisis, it makes aid and survival possible.”



That, at least, is something everyone can agree to feel good about.



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
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The Breakdown Newsletter

Thursday Mailbag: Sentiment, stablecoins and resistance money

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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Superstate, the tokenization startup co-founded by DeFi OG Robert Leshner, announced a new stock tokenization product on Solana and Ethereum this morning.



Named “Opening Bell,” the platform allows companies to natively issue shares onchain — a notable innovation for tokenized public equities. The Solana-focused holding company <a href="https://blockworks.co/news/sol-strategies-is-solanas-microstrategy">Sol Strategies</a> became the platform’s first participant.



Many in Solana were quick to celebrate the news, because in its early days, Solana co-founder Anatoly Yakovenko would sometimes <a href="https://cointelegraph.com/news/solana-genesis-story-powering-nasdaq-on-public-blockchain">liken</a> the network to Nasdaq on the blockchain. Today, Yakovenko penned a rare blog post alongside Anza lead economist Max Resnick <a href="https://www.anza.xyz/blog/the-path-to-decentralized-nasdaq">outlining</a> how Solana’s path to creating a decentralized Nasdaq runs through the implementation of multiple concurrent leaders, where different validators can create blocks at the same time.&nbsp;&nbsp;&nbsp;



The concept of tokenized stocks isn’t new: I could give you a token in exchange for your Tesla stock, and there it is. Besides potential regulatory red flags, the issue with this kind of thing is that your token would trade in a less-liquid environment than the original stock did. If you tried trading it on DEXs, you could get stuck with stale prices compared to what’s available on stock exchanges.



What seems to set Superstate apart is its SEC-registered transfer <a href="https://superstate.com/blog/superstate-transfer-agent-registration">agent</a> that performs the issuance and redemption of shares or dividends on behalf of companies. Onchain equity issued this way can move around the world more efficiently, and maybe even be used as collateral in DeFi. Users must go through KYC checks before accessing shares on Opening Bell.



Superstate <a href="https://superstate.com/blog/introducing-opening-bell">points</a> out another interesting use case: “up-listing,” whereby non-public companies can issue shares on a crypto-native market before trying to achieve listing on the Nasdaq or NYSE. In a Telegram message, Leshner told me Superstate can’t make it easier for companies to go public, but he believes that the “up-listing” process will become popular nonetheless.&nbsp;



To see why this may be the case, consider a hypothetical: Sol Strategies is currently awaiting approval to trade on the Nasdaq. If its shares gin up a lot of interest on Opening Bell, perhaps that could make regulators more assured in approving and investment bankers more excited about underwriting US-based Sol Strategies stock.&nbsp;



“[We’re] proud to be the first public company working hard to take this step,” Sol Strategies CEO Leah Wald said. “Tokenizing shares is more than a technology upgrade — it’s about aligning with the next generation of market infrastructure and investor expectations.”



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Anatoly Yakovenko

‘Nasdaq on Solana’ vision sees progress with Opening Bell launch

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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With the US imposing 145% tariffs on China, the two largest economies in the world are effectively in a trade embargo. Shipping volumes from China are completely freezing up. Many compare this situation to the Covid supply chain shock we experienced just a few years ago.&nbsp;



To better understand what’s truly going on and how to effectively analyze the situation, I had Craig Fuller, CEO and founder of FreightWaves, on Forward Guidance this week to unpack all things shipping and logistics.&nbsp;



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/xbERzXSG0qQ?si=m9zZJT1n3DO-F_ei" 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>







Here are my top takeaways from our interview:



<h2 class="wp-block-heading">Covid vs. today</h2>



Craig was quick to emphasize that there won’t be toilet paper shortages or food shortages. He was also quick to emphasize that the US is highly self-sufficient in that realm, and the bigger impact will be on hard goods.



As Craig told me:



“There&#8217;s unlikely to be a food shortage. I remember in early Covid, you would go to the grocery store and there wouldn&#8217;t be meat, there wouldn&#8217;t be chicken. Those types of things just aren&#8217;t real [concerns] here. And one of the things to keep in mind is, everybody keeps talking about supermarket shelves being empty, and that&#8217;s not going to happen.&nbsp;



“We produce 88% of the food we eat here in the United States. So the idea that you&#8217;re gonna go to the grocery store and not have food is not credible.”



<h2 class="wp-block-heading">Shipping volumes drying up from China</h2>



Due to the <a href="https://blockworks.co/news/us-stocks-retreat-trump-china-trade-deal-uncertain">Chinese tariffs</a>, shipping containers heading to the US are already down 35% year over year and accelerating.&nbsp;



What’s crucial is understanding how the second-order impacts will affect the US economy.&nbsp;



Craig was quick to mention that some of the first things to spike will be trucker and distribution center layoffs:



“The volume that would&#8217;ve come over is not coming, and now we&#8217;re in the thick of it, where we are seeing sharp volume drops going to major shipping ports.&nbsp;



“And so let&#8217;s talk about what happens from there. There’s half a million people in Southern California that work in logistics. They&#8217;re just simply not gonna have as much work. So the ports union contracts have a little bit more…staying power. They can do maintenance around the port, but then you&#8217;ve got this sort of dependency of the truckers that are in and out of the ports. They&#8217;re gonna see a sharp drop. So you&#8217;re going to see reduced order counts that will quickly shift into mass layoffs.”



<h2 class="wp-block-heading">How long does Trump have to negotiate before it’s too late?</h2>



The big question for many: How long can the economy weather this storm and draw down inventories until the store shortages become more apparent and we hit the point of no return?&nbsp;



Although Craig was quick to highlight that a “point of no return” is not the right way to think about it, he did imply that things can still revert if tariffs normalize by the summer:



“So let&#8217;s say we get a trade deal in a couple of weeks. Those orders that would have come over for back-to-school can easily be sent over, and inventory stockouts just probably aren&#8217;t a major concern.&nbsp;



“But if we get later into the calendar, and we&#8217;re starting to look in July and certainly August, this is where ‘would-be orders’ are a problem. Because what&#8217;s happening is, US companies are not placing orders to Chinese contract manufacturers, because they&#8217;re not placing orders to contract manufacturers.&nbsp;



“The lead time, if we were to get a deal, would be about a month to put the economy back in line and [for] those products that were ordered to come back and flow over. So if trade can somewhat normalize by July or August, the economy would be able to look through this.”



There’s a lot more to the interview, so I recommend giving it a watch. But to summarize the framework I learned for how to think about this supply shock:



<ul class="wp-block-list">
<li>There are more differences than similarities between this shock and the Covid shock, and it’s really more a convenient comparison.</li>



<li>Shipping volumes are drying up and will quickly trigger layoffs and inactivity in wide swaths of the shipping industry.</li>



<li>The Trump administration has until summer to get a deal done. Otherwise, the negative impacts of this trade war will be set in stone to a certain degree.</li>
</ul>



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/xbERzXSG0qQ?si=m9zZJT1n3DO-F_ei" 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>







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Donald Trump

What’s going on with the supply chain? We asked an expert

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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There’s now sparkling water that comes with an Abstract NFT and points attached.



Rekt Brands — a crypto startup from the traders known on X as OSF (Ovie Faruq) and RektMando on social media — has launched a new drink. It’s a sparkling water dubbed Abstract Apple.



Like its name suggests, Abstract Apple offers rewards for the Ethereum L2 chain Abstract. Each case of 24 cans <a href="https://x.com/rektdrinks/status/1919436083495874907">grants</a> the buyer <a href="https://x.com/AbstractChain/status/1880035786772607487">Abstract XP</a> and 25,000 DRANK points (Rekt’s rewards points), plus an Abstract NFT. Next week, case buyers <a href="https://x.com/rektdrinks/status/1919436103536324689">can collect</a> their Abstract NFTs.&nbsp;



Each case costs $69.69 (plus shipping and applicable tax, of course), and can be bought using crypto or fiat currencies.



Buyers could purchase up to 250 cases per order, but could place multiple orders.&nbsp;



That’s a LOT of cans.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcDqFQMe7tm3TdpwYmP8X3Kg5PtfMjKct8FSCmWCRp-98-KU2Pb_1Rsu6MUVHoWgAkds0U7lJQJcDqIcc3eVZaDckOkZvMKFtSUDipuZPjjLNArQ9M9z_lOrC4vKjjr07OzqEGE?key=OT2IUAxfUKjU_-OIb83isQ" alt=""/></figure>



From Abstract team member <a href="https://x.com/Rajp_14">Raj on X</a>.



While the launch sold out on Wednesday, with over 220,000 cans of sparkling water purchased, the Rekt team said extra DRANK points were being given out by mistake.



“Devs are on it, will get it fixed,” the brand <a href="https://x.com/rektdrinks/status/1920187030505488411">said</a> in a post.



A member of the Abstract team confirmed to me that they aren’t involved in this project, but they said that future collabs between Rekt and Abstract are being explored.



Rekt Brands’ first drink, a lime-flavored sparkling water, was announced in November and similarly sold <a href="https://x.com/rektdrinks/status/1852734297985417511">over 220,000 cans</a> within 48 hours.



Rekt Brands previously <a href="https://chainwire.org/2024/11/07/rekt-raises-1-5m-seed-round-backed-by-angels-and-community-following-sell-out-success-of-rekt-drinks/">raised $1.5 million</a> in seeding funding late last year. Their brand was created following the 2022 NFT collection OSF launched called Rektguy.



Others have tried to bring crypto to the food and drink industry before, though the efforts thus far have primarily come from holders of <a href="https://blockworks.co/tag/bored-ape-yacht-club">Bored Ape Yacht Club</a> NFTs. There’s Ape Water, for instance, which is canned water with a Bored Ape emblazoned across it. In 2023, Snoop Dogg released ice cream inspired by his Bored Ape.



There was also a short-lived Bored Ape-themed burger joint, Bored &amp; Hungry, which I visited back in 2022 (food was good, but most of the people there had zero clue what the Apes were, and didn’t care).



In the case of Rekt Brands, its limited-edition runs of sparkling water that you only hear about on Crypto Twitter don’t seem to be targeting the masses — but broader distribution may be coming soon.



Rekt is planning to release new flavors and bring back older ones, too, in future drops. It may also expand beyond just sparkling water.



“Our goal is to have mainstream distribution and we have been actively working on it over the past few months. There will be a point where people can get their hands on Rekt in their local store,” OSF told me in a DM, adding: “Maybe for some that&#8217;s sooner than they think.”



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<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

food

Drink-to-earn? A new sparkling water comes with an NFT and points

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>.



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



Obol launches its native OBOL token today.



Token holders will be able to stake OBOL for a liquid staking token, which can be used for governance in the Obol Collective, as DeFi collateral, or for voting in retroactive funding rounds (RAF).



&#8220;After years of building reliable, distributed validator technology that eliminates single points of failure, we&#8217;re now putting governance in the hands of the community,&#8221; said Obol Association CEO Thomas Heremans.



&#8220;The OBOL Token represents more than just governance — it&#8217;s the coordination mechanism for an entire ecosystem of operators who are revolutionizing how Ethereum secures its infrastructure.&#8221;



<h2 class="wp-block-heading">What is Obol?</h2>



Obol is a <a href="https://blockworks.co/news/obol-network-sustainable-ethereum-development">middleware tech provider</a> for Ethereum network staking. The company enables “distributed validators” (DV), which allow multiple independent nodes to collectively operate one validator by sharing its duties and private keys.



This solves a longstanding problem faced by all proof-of-stake networks.



Ethereum validators stake about a collective <a href="https://beaconscan.com/">~34 million ETH</a> ($64.7 billion) today. Large institutions especially may control hundreds of millions of dollars as one operator entity. These operators may be hosting validators across the same hardware servers or in concentrated geographic jurisdictions, exposing them to technological disruption or regulatory risks.



Thanks to distributed validator technology enabled by companies like Obol and SSV, multiple nodes (two of three, four of seven, seven of ten) globally can now collectively run one Ethereum validator. 



Therefore, one node going down causes no disruption to the validator, reducing its exposure to these concentrated risks.



This helps validators avoid slashing and reduces risks of single points of failure, thereby improving validator uptime and overall network resilience.



Today, 800+ unique node operators, from major staking services to solo home stakers, run Obol-powered validators. <a href="https://obol.org/">$975 million</a> worth of ETH from Lido, EtherFi, StakeWise, Swell, Bitcoin Suisse and more are secured by Obol’s distributed validator clusters across Ethereum today.



Thanks to Obol, Lido has increased its operators from 36 to over 200, according to its press release.



EtherFi, the largest restaking protocol with $5.4 billion TVL, was able to expand its operators from ~10 to nearly 100 today. About 258,784 ETH ($499 million) from EtherFi is staked on Obol DVs today. An additional 40 on testnet are set to move to mainnet soon.



According to DV Labs, the 30-day average RAVER score in January 2025 for Obol DVT was 98.23%, outperforming SSV SDVT and a curated Lido set. The RAVER score is a metric used to measure validator effectiveness across proposal and attestation success in Ethereum staking.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXciNcsmlRWwDKqMrdRYzzhw5xsz9j10p0oTq1QFh3ggs3NxmUG03pdim1cWqq5e7nPRCRNij_90ozrHQiJheRajf5fh-3uXICwFS8WI0qnf1UR0rJkgcjXP_P3BfltWGI96G1qz5g?key=I9lTUDkD_yYeib4zoapi_w" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://x.com/DV_Labs/status/1882769337762890237">DV Labs</a></figcaption></figure>



The Pectra network upgrade, <a href="https://blockworks.co/news/ethereum-pectra-fork-live">which went live yesterday</a>, included EIP-7251. This increased the maximum validator stake to 2048 ETH from its previous cap of 32 ETH. That favors institutions, who can consolidate thousands of validators.



“EIP-7251 represents a long-awaited leap forward in validator efficiency,” Heremans told Blockworks.



“By enabling validator consolidations, it addresses one of the biggest operational burdens faced by large stakers and institutions,” Heremans said. He forecasts “up to 80% reductions in operational and infrastructure costs.”



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

0xResearch Newsletter

Distributed validator technology provider Obol launches OBOL token

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>.



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



When Johannes Gutenberg built the first movable-type printing press in the mid-15th century, he could hardly have imagined the impact it would have on humankind.



Civilization-style achievements fell like dominos over the next 300 years. People who weren&#8217;t priests learned to read within decades, and within a lifetime, the Protestant Reformation brought <a href="https://www.libertymagazine.org/article/the-protestant-reformation-and-freedom-of-conscience">freedom of conscience</a>, trailed by an explosion in scientific progress half a century later.&nbsp;



When the 1800s came around — 332 years after Gutenberg’s death — the Enlightenment and the scientific revolution had reshaped the world, powered by the printed works of Galileo, Newton, Descartes and others.&nbsp;



Then came public education, decolonization and the subsequent rise of nation-states, some of which are now opening their coffers to bitcoin, including the US.



When Satoshi toppled the first of his own set of dominos, could they have anticipated that only 16 years later, multiple US states would compete for bitcoin bragging rights?



Arizona is now the first state to ensure that any unclaimed bitcoin or cryptocurrency is never sold for cash.&nbsp;



The law includes the establishment of a state-controlled bitcoin reserve fund, which would also custody any other cryptocurrencies handed over to the Arizona revenue department.&nbsp;



Arizona officials are permitted to stake crypto held by the fund and even collect airdrops. But by law, they can’t sell any coins.



“Digital assets aren’t the future — they’re the present,” said House Committee Chair Jeff Weninger in a <a href="https://www.azleg.gov/press/house/57LEG/1R/250507WENINGERHB2749.pdf">release</a>. “This law ensures Arizona doesn’t leave value sitting on the table and puts us in a position to lead the country in how we secure, manage and ultimately benefit from abandoned digital currency.”



<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">ARIZONA SIGNS STRATEGIC BITCOIN RESERVE INTO LAW! 🇺🇸 <a href="https://t.co/xQXsm2fEXQ">pic.twitter.com/xQXsm2fEXQ</a>&mdash; Dennis Porter (@Dennis_Porter_) <a href="https://twitter.com/Dennis_Porter_/status/1920270813506290100?ref_src=twsrc%5Etfw">May 8, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Is this cool? For sure. Could it be cooler? Also yes.



The law relates only to property for which the state cannot find or contact the original owner for three years. Think lost property, forgotten bank accounts and now, perhaps, crypto exchange accounts belonging to the deceased.



Arizona’s fund is different from the US government’s strategic bitcoin reserve <a href="https://www.whitehouse.gov/presidential-actions/2025/03/establishment-of-the-strategic-bitcoin-reserve-and-united-states-digital-asset-stockpile/">established</a> by Trump earlier this year, which for now exclusively holds coins seized by criminal forfeiture (although we still don’t know exactly how many).&nbsp;



The Arizona law is more about adding bitcoin and crypto to standard civil asset procedures, with Governor Katie Hobbs <a href="https://blockworks.co/podcast/thebreakdown/ccdd2238-2a1b-11f0-80b0-0fe8e51e0e48">vetoing</a> a separate bill earlier this week that would’ve permitted the state to invest 10% of its public funds into bitcoin.&nbsp;



Weninger explained in an X post that there are other avenues through which Arizona’s fund can acquire bitcoin without taxpayer money.



<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">Hi &#8211; it’s staking any crypto asset that is being held for the consumer as unclaimed property that has emissions. Then that revenue is sent to the treasurer where the bitcoin reserve would be. At that point most revenue would be converted into Bitcoin most likely and held. Actual…&mdash; Jeff Weninger (@JeffWeninger) <a href="https://twitter.com/JeffWeninger/status/1920299302674718980?ref_src=twsrc%5Etfw">May 8, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



It’s all necessary progress that was long overdue. However, both Arizona and Trump’s reserves would be radically improved if they could actually buy bitcoin at will, which at least in the latter’s case, is technically on the table pending budget-neutral strategies.



New Hampshire has already laid claim over those bragging rights, with Governor Kelly Ayotte on Tuesday <a href="https://blockworks.co/news/new-hampshire-crypto-reserve-bitcoin-state-governments">signing into law</a> provisions for the state to invest 5% of all public funds into bitcoin.



The real question is then: Where does this put Bitcoin on its grand unified timeline, if the white paper was the first domino?&nbsp;



Almost two decades in, it’s clear we’re still early. Just look at the printing press.



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
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Bitcoin

Domino effect: Arizona forms 2nd state bitcoin reserve in one week

Ben Strack

Coinbase’s <a href="https://blockworks.co/news/coinbase-to-acquire-deribit-in-2-9b-deal">agreement to acquire</a> crypto options giant Deribit affirms the trend of industry players flocking to a fast-growing derivatives market.&nbsp;&nbsp;



Industry observers expect more deals to come in this sub-sector, as the changing regulatory landscape empowers crypto giants to capitalize on heightened institutional demand.



The crypto exchange is set to pay roughly $2.9 billion for the Panama City-based company — $700 million in cash and 11 million shares of COIN stock.



Coinbase said in a blog post that Deribit’s options platform complements its US futures and international perpetual futures businesses — “completing our derivatives offering.”



The company added: “This is an important step toward our goal of providing traders access to spot, futures, perpetual futures, and options trading — all in one seamless, capital-efficient platform.”



This deal — subject to regulatory approvals — “would give the company an immediate and dominant foothold in the high-growth derivatives space ahead of an anticipated increase in institutional adoption of digital assets,” Benchmark analyst Mark Palmer wrote in a Thursday research note.



After all, he noted, Deribit is the world’s largest platform for bitcoin and ether options. Its nearly $1.2 trillion in trading volume in 2024 was almost double that of the prior year.&nbsp;



“The firm’s sophisticated trading tools, which cater to institutional and high-frequency traders, could strengthen Coinbase’s Prime platform and institutional appeal,” Palmer explained.&nbsp;



This pending deal follows Coinbase’s 2022 acquisition of FairX, which was later rebranded to Coinbase Derivatives Exchange. That gave the company a CFTC-regulated platform for offering crypto derivatives in the US.&nbsp;



Coinbase is now going a step further by expanding its international footprint, Morningstar analyst Michael Miller said.&nbsp;&nbsp;



“This is also a sign that the new regulatory environment is giving them more confidence to be aggressive in their growth efforts,” Miller told me.



The crypto industry saw <a href="https://blockworks.co/news/crypto-ma-mergers-feeding-frenzy-kraken">a record number of M&amp;A deals</a> during the first three months of 2025. There were 62 such crypto transactions in Q1, according to advisory firm Architect Partners — up from 59 deals in the final quarter of 2024.&nbsp;



This deal would surpass — in size — two others revealed earlier this year. Kraken shared in March that it was set to purchase NinjaTrader for $1.5 billion. A few weeks later, <a href="https://blockworks.co/news/crypto-tradfi-intersections-ripple-blackrock">Ripple said it agreed to buy Hidden Road</a> — a prime broker clearing $3 trillion annually — for $1.25 billion.&nbsp;



Before those, digital asset prime broker FalconX bought trading firm Arbelos Markets in January as part of a push to become one of the largest crypto derivatives dealers.



“It follows our thesis that derivatives M&amp;A will continue to be active,” Architect Partners’ Michael Klena told me. “But the difference in this deal is scale, as Coinbase acquired one of the largest in a headline deal.”



Because derivatives are a higher-margin product than spot trading, firms will look to expand those types of offerings as trading fees are compressed, he added.



Regulatory changes and optimism around upcoming crypto-friendly frameworks has also spurred institutional demand — further fueling these kinds of moves. Coinbase’s institutional trading volume in 2024 amounted to $941 billion, which was up 139% year over year.



“Since Coinbase is taking captive one of the largest derivatives firms, their competitors will be looking to enhance product via acquisitions,” Klena said. “So overall it&#8217;s a deal that makes sense in the market, and we expect more to come around derivatives trading and infrastructure.”



Coinbase’s stock price was roughly $205 at 11 a.m. ET, marking a 4.3% increase on the day.&nbsp;



The company is hosting a Q1 earnings call at 5:30 p.m. ET. Following the deal announcement, Palmer noted: “Our estimates for the company are under review.”



<a href="https://blockworks.co/newsletter/forwardguidance">Subscribe</a> to the Forward Guidance newsletter for more on Coinbase’s Q1 results.  



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Coinbase

Coinbase-Deribit deal affirms industry’s growing focus on derivatives

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



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



If spending $1.1 billion wasn’t enough of a sign that Stripe is serious about stablecoins and gaining market share there, its newest announcement shows that it is serious.



Stripe unveiled Stablecoin Financial Accounts, which — much like the name suggests — is a money-management feature. Businesses in over 100 countries can now use these “stablecoin-powered” accounts.&nbsp;



Basically, a business can not only hold their balance in stablecoins, but they can also receive funds on both crypto and fiat rails.&nbsp;



Oh, whoop, big deal.&nbsp;



Let me explain: Empire subscribers like yourself are very in the weeds when it comes to crypto. Many of you are crypto-native and likely interact with crypto daily.&nbsp;



We’re all aware that stablecoins have been the big winner for crypto, and the extent of their usefulness hasn’t even been realized yet by non-crypto folks. Announcements like this are the exact sort of moves you want to see when introducing stablecoins to businesses, entrepreneurs and executives who’ve probably heard about stablecoins through headlines, but don’t understand the usefulness.&nbsp;



“Because stablecoins make it dramatically faster and cheaper to move money internationally, many of the world’s largest companies are turning to Stripe to help assemble their stablecoin strategies. But a challenge remains: making it possible to spend stablecoins at businesses that only accept fiat currencies,” Stripe said in a <a href="https://stripe.com/en-hk/newsroom/news/sessions-2025">press release</a>.



Announcements like Stripe’s have a chance to open the eyes of non-crypto folks to show them how stablecoin payments can make a difference when it comes to speed and cost.&nbsp;



If we pair this with the one they made last week (<a href="https://stripe.com/en-hk/newsroom/news/bridge-partners-with-visa">partnering</a> with Visa on a card-issuing product that allows folks to spend stablecoin balances as fiat), we really are cooking.&nbsp;



Normalizing stablecoins — and showing off how effective they are — is the first step to mass adoption, if we’re simplifying it.&nbsp;



Patrick Collison, CEO, noted that stablecoins are a “gale-force” tailwind alongside AI, and are “dramatically reshaping the economic landscape around us.”



“Our job is to pull these technologies forward so businesses on Stripe can benefit from them right away,” he added.



Last year, businesses using Stripe processed roughly $1.4 trillion in total payment volume. Yes, with a T.&nbsp;



Right now, these accounts will support USDC and USDB (Bridge’s stablecoin), but it plans to add more in the future.&nbsp;



This is how crypto wins.



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

What Stripe’s new Stablecoin Financial Accounts mean for adoption

Coinbase has agreed to snap up Deribit in a $2.9 billion deal, executives from both companies told The Wall Street Journal.&nbsp;



The deal is the single largest acquisition in crypto’s history, easily beating Kraken’s $1.5 billion deal for NinjaTrader earlier this year. Stripe said it planned to acquire Bridge in a $1.1 billion deal, and Ripple announced it would acquire Hidden Road for $1.25 billion.&nbsp;



The makeup of the deal is $700 million in cash and 11 million shares of its Class A common stock.&nbsp;



In a blog post, Coinbase said that it expects the deal to close by the end of this year.



By acquiring Deribit, which had been shopping itself around for a few months, Coinbase will now expand into crypto derivatives. Deribit has seen an <a href="https://insights.deribit.com/exchange-updates/deribit-reports-q4-and-2024-year-end-volumes-provides-operational-update/">uptick</a> in overall trading volume activity thanks to a softening regulatory environment and expanding interest from institutional investors looking to capitalize on crypto.&nbsp;



“With Deribit’s strong presence and professional client base, Coinbase is making its most substantial move yet to accelerate our international growth strategy,” Coinbase said. It plans to create the most “comprehensive institutional derivatives platform.”



“We’re excited to join forces with Coinbase to power a new era in global crypto derivatives,” Deribit CEO Luuk Strijers said in a statement emailed to Blockworks.



“As the leading crypto options platform, we’ve built a strong, profitable business, and this acquisition will accelerate the foundation we laid while providing traders with even more opportunities across spot, futures, perpetuals, and options – all under one trusted brand. Together with Coinbase, we’re set to shape the future of the global crypto derivatives market.&#8221;



Prior to striking the deal with Coinbase, Kraken also expressed <a href="https://www.coindesk.com/business/2025/02/20/crypto-exchange-deribit-still-in-talks-to-be-acquired-by-kraken-source">interest</a> in the options exchange.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcEpvO2GFVKQmVXCxIrDu4X8iCBJdZdpf-Qi8e-ocH8XGrnU_sQYBNqGb0LPJXmeeKt2LXgOyuBm9MUO3wtC1G_YXf663Ow-mbs6271AVnSBQ70xOgA1_RXGO76uhVl0pFpeh3BHQ?key=mnhKqsV8m8wnndNQJnLvBg" alt=""/></figure>



Overall crypto M&amp;A has seen an uptick last quarter, per data from Blockworks Research. Crypto firms specializing in finance have seen the largest amount of M&amp;A activity.&nbsp;







Updated May 8, 2025 at 9:30 am ET: Added additional context throughout.



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



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<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
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Coinbase to acquire Deribit in $2.9B deal

This is a segment from the Blockworks Daily newsletter. To read full editions, <a href="https://blockworks.co/newsletter/daily">subscribe</a>.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“The social object of skilled investment should be to defeat the dark forces of time and ignorance which envelop our future.”



— John Maynard Keynes
</blockquote>



Despite all the numbers involved, investing is widely acknowledged to be more art than science.



&#8220;Common stock selection is a difficult art,” Benjamin Graham cautioned.



Graham’s life-long student, Warren Buffett, specified that “investing is the art&#8230;of laying out cash now to get a whole lot more cash later on.”&nbsp;



Pretty much all investing boils down to predicting those cash flows.



But investors “who&#8217;ve been trained to rigidly quantify everything have a big disadvantage,&#8221; Peter Lynch warned.



That does not, however, mean that “valuation is a meme,” as financial nihilists like to claim.



Instead, it means that applying and interpreting quantifiable valuation metrics is a creative endeavor.



What valuation metric to use for which investments is a subjective decision — and knowing how to interpret the results is even more so.



A low valuation, for example, doesn’t mean a stock is cheap and a high one doesn’t mean a stock is expensive (it’s just as often the opposite).



A stock can look appealingly cheap on one metric and appallingly expensive on another.



And none of these things are obviously correlated to returns.&nbsp;



This is often cause for despair — if cheap stocks don’t go up and expensive ones don’t go down, why bother trying to figure it all out?



It’s worth figuring out, I think, because that’s what makes investing fun and interesting — and, if so, the fun of crypto investing is only just getting started.



Until recently, crypto investors didn’t have many numbers to work with beyond token price and market capitalization.&nbsp;



That made everything in crypto a “story” — which is fine!



Investing is about telling stories.



But the best investing stories are told with numbers and crypto increasingly has them because more protocols are earning revenue and more of that revenue is being passed on to token holders.



Also, these numbers are becoming more accessible thanks to the likes of <a href="https://app.blockworksresearch.com">Blockworks Research</a>, whose analysts package them up in digestible charts and report them for us.



This is helping crypto advance to a higher stage of storytelling: storytelling with numbers.



Let’s check some current ones.



<h2 class="wp-block-heading">Ethereum vs. Solana</h2>



Judging by Crypto Twitter and podcasting, it seems obvious that sentiment on Ethereum has sunk to new lows, especially relative to Solana.



But an uninitiated TradFi refugee going straight to the numbers would likely guess otherwise.



Solana recorded $36 million of “token holder net income” in April, according to Blockworks Research data, which puts the SOL token on 178x annualized earnings — a rich, but possibly fair multiple if you think current activity levels are low.



Ethereum, by contrast, did $21 million in token holder net income for April, putting the ETH token on 841x earnings.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdiIdt5yNc7TbGaCg29EnOItfhmPeu85fyxeadUGplWJpbc130wy6BDzqeDTce3BeZLf1NC1Gg0fAzrig0jhbTlO_-5aTlP52g4kMzGOOEhjDM2AyF592I_Ty8mhrxdi9jnDSw1Sw?key=b6NzDIc5luKsYjQm8mwuVQ" alt=""/></figure>



A TradFi refugee seeing ETH trading at 5x the multiple of SOL wouldn’t immediately think, “wow, why is everyone so bearish on Ethereum?”



But they wouldn’t immediately think people are 5x less positive on Solana, either.



Instead, they might conclude Solana’s revenue gets a low multiple because it mostly comes from “low-quality” memecoin activity — while Ethereum’s revenue commands a higher multiple, at least in part, because it includes higher-quality activity like real-world assets.



Now we have something to work with: If you think memecoin activity isn’t so low-quality, SOL is probably undervalued, and if you think RWAs are the future, ETH might not be so overvalued.



You could also dig a little deeper.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdz3YXAvpqD6K_wg-Emh4xjeeyYC_MTRf4tAmC3qoaCbdjivGBlLtMejijW3Soax8batKbWuH71sxhUtyYisVtEGJJHkqUuqqCJUQJHGIaHmLlnTHZAYky186RsjdDkd56qoL8y-g?key=b6NzDIc5luKsYjQm8mwuVQ" alt=""/></figure>



Blockworks Research data shows that the revenue collected by all Solana apps is only about 1.8x greater than the revenue collected by Solana.



As platform businesses go, that is a very high take rate — much higher than the maximum 30% take rate at Apple, which the US government thinks is monopolistic.



This might mean that Solana is overearning and that its token should therefore trade at a low multiple of earnings — or that Solana has a business moat and its token should therefore trade at a high multiple of earnings.



Either way, it’s a story.



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



Hyperliquid, a semi-decentralized crypto exchange, is the strange story of a protocol that earns quite a lot in revenue ($43 million in April) and pays virtually all of it out to token holders.



This has unsurprisingly helped the token outperform recently: “The assistance fund uses trading fees for token buybacks every 10 minutes,” the single-named <a href="https://x.com/salveboccaccio">Boccaccio</a> noted in a recent report for Blockworks Research, “creating consistent buy pressure.”&nbsp;



Every 10 minutes!



It’s hard to know what to make of that because there is no such thing in TradFi as a company that returns 100% of its revenue to shareholders — let alone every 10 minutes.



Judging by its valuation, crypto seems a little uncertain too.



The HYPE token trades on about 17x annualized revenue (based on market capitalization), which would normally be considered expensive.



But, in this case, revenue and earnings appear to be the same thing, so it seems pretty reasonable — if you believe the story that HYPE will continue to win business from centralized exchanges.&nbsp;&nbsp;



Boccaccio cautions that HYPE is trading at a significantly higher multiple than its decentralized peers, but also that these might not be the right peers to compare it.



“The Hyperliquid L1 would have to take a very small percentage of overall Binance daily volume to meaningfully increase its volumes…Taking just 10-15% of only the BTC/USDT pairs volume [from Binance], would lead to a 50% increase in the HyperCore volume.”



“A growth multiple is warranted,” Boccaccio concludes.&nbsp;



How much of one depends on how much you believe the story, of course.



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



Jupiter, a Solana DEX aggregator, returns a comparatively modest 50% of revenue to token holders (also via buybacks) — but similarly has quite a lot of it.



<a href="https://x.com/marcarjoon">Marc Arjoon</a> estimates that Jupiter may earn $280 million of revenue over the next 12 months, which would put the JUP token on a yield of about 11.5% yield, based on market cap.



In equities, an 11.5% yield would imply that the underlying business is distressed, but that does not seem to be the case here.



Jupiter is “the default router” on Solana, Arjoon writes, “currently has no equal in aggregation,” and is “the fourth-highest revenue-generating application among all crypto dapps.”



Better yet, it’s run like a business: “Jupiter’s strategic maneuvers throughout 2024-2025 reflect an organization aggressively entering a hyper-growth phase, ambitiously positioning itself as Solana’s premier crypto super-app.”



That hardly sounds like a business that should yield anything close to 11.5%.



There are plenty of risks, of course, which Arjoon details in his most recent note.&nbsp;



But his takeaway is that “Jupiter currently trades at compellingly low multiples relative to its peers, suggesting considerable upside potential even without multiple expansion.”



He even quantifies this in a sum-of-the-parts scenario analysis, which warms my TradFi heart:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf5jZdFKHhav5udssAeDF5sYBQ3Ols2JEqYW2r74SQtS1QmfUBNpgW2JSpgqWs0c2Y7DOgOwR4plhldVhGfMM5xCVSGmOrqIhuGqUiL1TNKXl94r4vUan2rvCvvuF5BjzM9_0uzhw?key=b6NzDIc5luKsYjQm8mwuVQ" alt=""/></figure>



Looks like a good story.



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



Helium, a decentralized telecom provider, has been a crypto story for a long time now — it was founded way back in 2013.



But now it’s a story with numbers: “Revenue as measured by data credit burn is accelerating, growing at 43% QoQ,” Blockworks Research&#8217;s <a href="https://x.com/0xMetaLight">Nick Carpinito</a> wrote in a recent note.



“Importantly, Helium’s mix of revenue is shifting from Helium Mobile to Mobile Offload, with the latter now accounting for roughly 3x more DC burn, and growing at nearly 180% QoQ, an astounding rate for a DePIN protocol selling into enterprise budgets.”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcxW0Jfw6F0fpD2pKkB3RB32IX57drA63Bjt08Q5ErFkECKJ0v4oycIaVx287_6jYq7PEnv79HVU3EfWMU0s7HhGB7wo8mhrrmDczn4N717ntr2L05h33YaPghqqpUh4ggTTIRRpw?key=b6NzDIc5luKsYjQm8mwuVQ" alt=""/></figure>



“Mobile Offload” is the blue line above and its quarterly growth rate of 180% is an astounding number for anyone, really.



Helium’s HNT token might seem to be priced for it, trading on about 120x annualized sales.



But Carpinito told the <a href="https://youtu.be/F6BsNclvbsM?si=QKQkyLaC187ttITq&amp;t=1545">0xResearch podcast</a> that he expects revenue to accelerate thanks to a “surge in data credit use through AT&amp;T allowing its subscribers in the US to connect to Helium.”



As a result, “there’s a high likelihood that we see some HNT price appreciation over the next 12 months that is unprecedented and also much more stable than any Helium price appreciation we’ve seen in the past, which was largely based on speculation.”



It’s unusual in crypto to hear anyone make that kind of price prediction based on anything other than speculation.



And refreshing.



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



Finally, Pendle is a “yield trading” protocol whose new offering, dubbed “Boros,” will allow users to speculate on any off-chain or onchain yield, beginning with funding rates.&nbsp;



“The implementation will look similar to a classical interest rate swap market, where traders can pay a floating rate to receive a fixed rate, or pay a fixed rate to receive a floating rate, on margin,” Blockworks Research’s <a href="https://x.com/0xMether">Luke Leasure</a> explained.



That doesn’t mean too much to an equities guy like myself, but it’s apparently a big market: “With perpetual futures markets settling nearly $60 trillion annually with hundreds of billions in open interest, Boros will enter an entirely new, enormous and untapped market,” according to Leasure, who expects that Boros could double Pendle’s revenue rate.



That’s not something you hear much in TradFi.



In a bull case, Leasure estimates that the “vote-escrowed” version of Pendle’s token might be trading on just 1.6x earnings:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf2aq6w286aRRLTlakCa-F1zzPsmOxPLmt4Q-3P1R_lY96Hc-1p5M1R0kMK78oB0a8_XRyyyhUPB3onOOsZ1eHVMYo2q-1K8QS0a2dji7PJADx3-1cQ9KX_Em-qCbpJUcosY9H1?key=b6NzDIc5luKsYjQm8mwuVQ" alt=""/></figure>



1.6x!



Nothing in equities ever trades on 1.6x earnings unless its business is about to fall off a cliff, which doesn’t seem to be the case here.



Still, that’s not investment advice (from me, at least) because Pendle is a complicated story — as most of them are in crypto.



But at least they’re now stories that can be told in numbers.



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



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Blockworks Research

How crypto investing is becoming a better story

Jeff Albus

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



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Earlier this week, we wrote that Solayer was about to begin its token unlocks.



We <a href="https://blockworks.co/news/solana-bug-patch-zero-knowledge-proofs">noted</a> that this would mark the first real loosening of grip over Solayer’s tightly controlled float, and observed that while the token had surged 87% in a month, traders appeared to be bracing for volatility.



Well, SURPRISE! That volatility came early.



In the 48 hours that followed, $LAYER <a href="https://app.blockworksresearch.com/assets/layer">collapsed more than 55%</a> from its all-time high, wiping out over $350 million in market cap. The selloff was sharp, disorderly and possibly — in the eyes of some — deliberate.



Back in March, onchain researcher Andrew 10 GWEI <a href="https://x.com/Andrey_10gwei/status/1919829616115540303">flagged</a> a series of Solayer team-linked wallets that <a href="https://x.com/Andrey_10gwei/status/1904213428148826407">received</a> large airdrop allocations, <a href="https://x.com/Andrey_10gwei/status/1904213436877140478">deposited</a> funds to Binance and appeared to sell into the market well ahead of this week’s unlock.&nbsp;



His analysis <a href="https://x.com/Andrey_10gwei/status/1904213441339924484">suggested</a> that only 3.6% of the total token supply — rather than the 12% promised — was actually distributed through the Genesis Drop. He claimed at the time that over $28 million in tokens were routed through wallets tied to the team.



Though Blockworks was unable to directly verify these claims, they have contributed to <a href="https://x.com/onchainquant/status/1919641933796016535">speculation</a> that the <a href="https://x.com/langeriuseth/status/1919855807404863796">downturn</a> was more of a <a href="https://x.com/Colasama/status/1919823238575649249">coordinated</a> exit. But whether orchestrated or not, the crash fed on itself. Thin order books, high leverage and looming dilution made for a classic cascade. The market structure Solayer relied on — thin float, heavy lockups and delayed investor cliffs — is the same playbook that powered dozens of outsized runs this cycle. But this can also be deeply unstable.



When a token trades with a high FDV and low float, <a href="https://www.binance.com/en/square/post/20199723509546">price discovery</a> becomes a function of narrative momentum, not actual demand depth. Early buyers are betting they can rotate out before gravity hits, and any deviation — a perceived exit, a mispriced unlock, a sharp funding flip — sparks the kindling.



Once that kind of volatility begins, there’s usually little structural support to stop it.



Zooming out, while Solayer unraveled, the Solana ecosystem <a href="https://app.blockworksresearch.com/flashnotes/solana-april-2025-update">posted</a> one of its strongest months in a year. DEX volumes and REV bounced back. SOL outperformed both ETH and BTC in April.



Block space rose to 50 million CUs with 60 million on the way. SolFi and ZeroFi, two closed-source “prop AMMs,” now make up 20% of DEX volume. Stablecoin supply hit an all-time high of $12.6 billion. Solana’s price at the time of publication is $146.57.



The chain’s fundamentals continue to accelerate. So why, then, does one of its most high-performing new tokens seem to have imploded?



Maybe because Solayer wasn’t priced on fundamentals — it was priced on narrative. On mechanical scarcity. On the hope that a thin float, institutional heat and Solana tailwinds could suspend gravity. The future of Solana itself may be bright, but its token economy is still wild, still early, and still very much a game of timing.



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investors

Volatility arrives early for Solayer

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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New Hampshire has won the <a href="https://blockworks.co/news/us-states-btc-reserve-proposals">race</a> among US states mulling laws to allow digital assets investments and/or create reserves.



How quickly should we expect a wave of others to follow suit?



Headed to Arizona Gov. Katie Hobbs’ desk, as of yesterday, was a law to establish a state treasurer-run “digital assets strategic reserve fund.”&nbsp;



But Hobbs could veto this, given that she rejected a separate bill last week to allow a state public fund to invest up to 10% in “virtual currency holdings.” She <a href="https://www.azleg.gov/govlettr/57leg/1r/sb1025.pdf">called</a> those “untested investments.”&nbsp;



So if Arizona is not next, who will be? Perhaps North Carolina or Texas, filings compiled <a href="https://bitcoinlaws.io/reserve-race">here</a> indicate.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdG7sUR5W-dDhK0Tl6sGReRcz4ng46eXGsVH4dmgZpuyCTv2-w0AmFXQTEV-73IW7tSq7JCFa_pPmFR_-uA-vPYyDU2oKdVsW9brspe51lPRLlRpmDHA5CBv0G1bDu8Ibu5h-zpqg?key=pQwIpy1cyCnnxyZ6QtSKr6nl" alt=""/></figure>



North Carolina’s Digital Assets Investments Act would authorize the state treasurer to invest up to 5% of any designated funds in “qualifying digital assets.” That passed a second reading in the House (71-44) on April 30 and moved on to the Senate.&nbsp;



That bill would also “examine the feasibility” of allowing state retirement income plan members to make such investments (via crypto ETPs) and study a state reserve to hold seized or forfeited crypto.



Looking at Texas, the state’s <a href="https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&amp;Bill=SB21">proposed</a> Strategic Bitcoin Reserve and Investment Act would establish a special fund to invest in crypto assets with a market cap of $500 billion or more (currently only BTC).&nbsp;



Ishmael Green, a partner at law firm Diaz Reus, said he expects half a dozen or so states to follow New Hampshire in the near-to-medium term — “because states are looking to hedge against inflation, in addition to protecting their balance sheets.”



Indeed, the Texas bill text states the following:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfgo-iSyTKee3EEbRELZLoOh9Tnkgr0tFqp-uHpzOGI32WRd6--zwM4taciCIYmZaifGdBpsQ6P26taYo2_9xOTkCRtPmfxFvJxVLM09eXLdKieCD06cHrY_qyAW6eCt9Fzh0UdJA?key=pQwIpy1cyCnnxyZ6QtSKr6nl" alt=""/></figure>



“Long term, these sorts of laws will lead to an upward price pressure and supply shortage, as states and other institutional entities scramble to accumulate more bitcoin,” Green told me.



As for how the North Carolina and Texas governors feel about crypto, if these bills reach their desks? NC Gov. Josh Stein hasn’t said much on the topic, but has <a href="https://www.wfae.org/2025-03-03/nc-invest-cryptocurrency-destin-hall-bill-bitcoin">indicated</a> support for the legislation.



In a November X <a href="https://x.com/GregAbbott_TX/status/1855015903496147225">post</a>, Texas Gov. Greg Abbott wrote: “Texas is already the home of crypto mining. This session Texas should become the crypto capital.”



FalconX research head David Lawant said he too expects at least a few more states to enact these types of laws in the next six to 12 months.&nbsp;



But he’s watching out for a Bitcoin Policy Institute framework (set for release in June) that aims to help states craft effective BTC reserve laws.



“A common issue with many of the current proposals is that they’re not as clearly written or thoughtfully structured as they could be,” Lawant told me.



Suffice it to say, there’s plenty more where this came from.



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After New Hampshire’s crypto reserve race win, which states are next?

Casey Wagner

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



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The Federal Open Market Committee (FOMC) today, as expected, kept interest rates unchanged.&nbsp;



Committee members cited a “stabilized” unemployment rate, “solid” labor market and continued elevated inflation. However, they noted there’s now an increased risk that unemployment and inflation will rise in the coming months.&nbsp;



Stocks were mostly flat on the news. The S&amp;P 500 was up 0.2% on the day, as of 2:30 pm ET. The Nasdaq Composite was trading 0.3% lower.&nbsp;



“If the tariffs that have been announced are sustained, they’re likely to generate a rise in inflation, a slowdown in economic growth and increase in unemployment reflecting a one-time shift in the price level,” Fed Chair Jerome Powell said shortly before publication. 



The Fed’s focus on the unemployment rate in today’s statement suggests that a so-called “Fed put” (the central bank stepping in to lower rates and prevent a sharp market decline) will not come until — or unless — the labor market starts to deteriorate.&nbsp;



In other words, should tariffs spur significant layoffs, we could be looking at an interest rate cut sooner rather than later.&nbsp;



Committee members did not release projection materials this month, so it’s hard to know how they’re thinking about the impact of new and pending tariffs. In March, FOMC members indicated they still expect two cuts in 2025.&nbsp;



It’s been a tumultuous six weeks for markets since the Fed’s last meeting in March. Stocks whipsawed along with President Trump’s tariff policies at the beginning of April — rising and falling as optimism over trade deals fluctuated.&nbsp;



In the past couple of weeks, though, major indexes have erased their “Liberation Day” losses. As of Tuesday’s close, the S&amp;P 500 was up 0.5% from April 2. The Nasdaq Composite gained 2.8% in that period, no doubt benefiting from tech giants’ <a href="https://blockworks.co/news/meta-microsoft-earnings-q1-stocks-higher">positive Q1 earnings</a>.



Investors are, apparently, confident that the <a href="https://blockworks.co/news/us-economy-shrank-q2-fears-tariff-impact">looming trade war</a> won’t be so bad after all. Pushing the start date for most tariffs on foreign imports and granting exemptions for the select tech and <a href="https://blockworks.co/news/gm-stock-earnings-release-auto-tariffs">auto levies</a> helped markets rally.&nbsp;



While fears around tariff impact may be easing, analysts warn that many of the trade policies — and their impact on prices, consumer spending and the labor market — remain to be seen.&nbsp;



In a constantly changing situation, traders must be cautious to give credence to any single statement. Case in point: Trump just after 2 pm ET said he wasn’t open to lowering the 145% tariff rate on China. This comes hours after China said it agreed to meet with the White House.&nbsp;&nbsp;



The decision comes after weeks of President Trump <a href="https://blockworks.co/news/trump-criticizes-fed-chair-powell">urging Powell</a> to cut rates. Trump quelled fears that he’d attempt to remove Powell, but tension between the two remains. 



Since November, Powell has been <a href="https://blockworks.co/news/equities-trade-war-powell-rate-cut">consistent</a> in his stance that he will be waiting and watching the data before making any decisions. So don’t expect committee members to cut rates on headlines.



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Federal Reserve

Fed holds rates, cites increased risk of setbacks in the labor market, inflation

Macauley Peterson

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



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Ethereum’s most ambitious upgrade since <a href="https://blockworks.co/tag/ethereum-merge">the Merge</a> is now live.



The Pectra hard fork, which <a href="https://x.com/yeluacaM/status/1920058186997936608">activated smoothly</a> shortly after 6 am ET, delivers a powerful set of upgrades to Ethereum’s execution and consensus layers, affecting everything from validator operations to transaction UX and data availability.



<h2 class="wp-block-heading">What’s changed?</h2>



The upgrade introduces several important features, grouped roughly into three categories:



<h3 class="wp-block-heading">Smart accounts (EIP-7702)</h3>



This upgrade <a href="https://blockworks.co/news/ethereum-upgrade-account-abstraction-proposal">lets EOAs</a> temporarily behave like smart contracts, opening the door to batched transactions, stablecoin and sponsored gas payments — a massive UX unlock, according to Hart Lambur, co-founder of Risk Labs (which built Across and UMA).



For example, “users will be able to sign a single intent that seamlessly triggers actions across chains — no need for native gas, no extra wallet setup and no extra developer work,” Lambur told Blockworks. “It gets us closer to a world where bridging is invisible and cross-chain coordination just happens under the hood.”



<h3 class="wp-block-heading">Data availability scaling (EIP-7691)</h3>



By doubling <a href="https://blockworks.co/news/ethereum-blobs-balancing-act">blobspace</a> capacity from six to 12 blobs per block, Ethereum increases throughput for <a href="https://blockworks.co/tag/rollups">rollups</a> and reduces L2 fees. But as Ansgar Dietrichs <a href="https://x.com/adietrichs/status/1920082921873870859">pointed out</a>, saturation of this new capacity would be good for Ethereum, provided it can continue scaling bandwidth to avoid too much fee pressure as demand grows.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcO_eL5-nOFyGE8bOf11k4-Rkabi35gY7gEchuAOpxf6tC1UHm5-N8FNmzhXR7yPsexGK_euqXpg947WIZDrynrFisoDp_YQVaxnBisClAyjfpYPRW02gXyU7i6PrwxfVkxAGlHRQ?key=50kD8TET5WXoo_sD0HAAfw" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://x.com/hildobby_/status/1920067472960762207">@hildobby</a></figcaption></figure>



<h3 class="wp-block-heading">Validator UX and efficiency</h3>



Pectra raises the maximum effective validator balance from 32 ETH to 2,048 ETH, which <a href="https://blockworks.co/podcast/bellcurve/9fd1a758-a922-11ee-85f0-2bb0374896a4">Alluvial</a> co-founder Matt Leisinger calls “a meaningful unlock for institutions.”



“Institutions can now autocompound rewards natively — no more skimming and aggregating 32 ETH to stay efficient,” Leisinger told Blockworks.



Bohdan Opryshko at Everstake thinks it may be the “most institution-friendly update yet.” He notes EIP-7002 also allows validators to exit using execution-layer controls, reducing trust assumptions for stakers and protocols alike — altogether making “staking at scale with operational clarity” possible for more conservative capital.



<h2 class="wp-block-heading">What happens next?</h2>



Pectra sets the stage for <a href="https://blockworks.co/news/ethereum-consensus-evm-upgrade-fusaka-devs">Fusaka</a>, Ethereum’s next major upgrade — now tentatively pushed to 2026. That fork is expected to introduce PeerDAS, a more efficient data availability sampling scheme for rollups, and continue laying the groundwork for future upgrades like <a href="https://blockworks.co/news/ethereum-developers-consider-evm-upgrade">Verkle trees</a> and full account abstraction.



But in the coming months, attention will shift to ecosystem adoption as teams try to showcase the real-world capabilities of the upgrade.&nbsp;



How will wallets, L2s and dapps move to support <a href="https://blockworks.co/news/vitalik-buterin-eip-account-abstraction">EIP-7702</a>? We can expect features like batched transactions, gas sponsorship and stablecoin fee payments.



According to OP Labs&#8217; Sam McIngvale, “apps drive this adoption curve.”



“Wallets will follow once there&#8217;s clear demand,” McIngvale told Blockworks. “If widely adopted, 7702 could finally make one-click onboarding and abstracted UX the norm.”



Now that rollups can post more data to Ethereum cheaply, how long will it take to saturate that bandwidth? This could have consequences for rollups’ adoption of alternative DA layers such as <a href="https://blockworks.co/news/eigenlayer-restaking-mantle-zksync">EigenDA</a>, <a href="https://blockworks.co/tag/celestia">Celestia</a> and <a href="https://blockworks.co/tag/avail">Avail</a>. If L2 activity fails to match blob supply, scaling momentum could stall. Conversely, if demand rises too quickly, Ethereum may need to accelerate PeerDAS or further blob increases to prevent bottlenecks.



Large operators can collapse thousands of validators into a few, but testnets couldn’t simulate how much that will improve efficiency, so it will be interesting to observe the concrete effects.



Solo stakers may benefit indirectly, according to Preston van Loon, a core developer with <a href="https://blockworks.co/tag/offchain-labs">Offchain Labs</a>. Fewer attestations from consolidated validators means lower network bandwidth requirements. “It really does help everybody,” van Loon told Blockworks. “It&#8217;s hard to say which group has the outsized benefit.”



Dashboards tracking validator set composition, message propagation and slashing rates will become key indicators.



The “unpredictability of network behavior” may be a risk in the future, MIT professor and <a href="https://blockworks.co/news/optimum-ram-web3-protocol-memory-decentralized">Optimum</a> co-founder Muriel Médard warned. “As blob sizes and message throughput increase, Ethereum’s ability to propagate data efficiently and predictably will define how far it can scale,” Médard told Blockworks.



Considering the fork involved more EIPs than any prior upgrade, Pectra’s <a href="https://x.com/elbuenmayini/status/1920082396625375387?s=46&amp;t=yjAdM2ddX0KgGQimu7jcDQ">quiet launch</a> may signal just how much <a href="https://blockworks.co/tag/ethereum">Ethereum</a> has matured as a decentralized protocol. Still, the protocol has a long way to go and faces more competition than ever.



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Ethereum quietly flips the switch on Pectra

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



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Bitcoin miners are earning more than $1.2 billion per month to secure the chain.



What are they securing, exactly?



At its core, the collective hash power of honest miners ensures that bad actors can’t suddenly build up and release a second, dubious chain that might usurp the current one’s claim as the longest.



Together with full node operators, miners also protect the chain from non-standard transactions. But miners can only ever select transactions that full nodes (which they generally operate themselves) have already deemed to be valid.



So, how do those nodes decide which transactions are valid? That’s the role of Bitcoin Core’s relay code, which enforces standardness rules that determine whether a transaction ever makes it to a miner’s mempool at all.



Those standardness rules (also referred to as policy rules) secure Bitcoin in a very different way. They effectively define what Bitcoin is and isn’t, and they’re <a href="https://blog.bitmex.com/dapps-or-only-bitcoin-transactions-the-2014-debate/">routinely</a> up for debate.



<h2 class="wp-block-heading">On This Day: Ordinals take Bitcoin</h2>



This time around, discussion has centered on the lifting of a policy rule that capped OP_RETURN outputs at 80 bytes, limiting the amount of arbitrary information that can be posted to the network through individual transactions.



Two years ago to the day, however, Bitcoin was reckoning with the sudden popularity of digital collectibles protocol Ordinals, which utilizes three other opcodes introduced under the Taproot umbrella in 2021.



At the time, 425,000 transactions were sitting in the Bitcoin mempool, as <a href="https://mempool.jhoenicke.de/#BTC,all,count">represented</a> by Jochen Hoenicke’s full node, breaking the previous record of almost 262,000 from peak bull market in December 2017.&nbsp;



Average bitcoin transaction fees spiked to more than $31, up from $2 days earlier.



Through Ordinals, <a href="https://www.coindesk.com/tech/2024/12/09/bitcoin-four-meggers-ordinals-bot-inscribes-largest-ever-file-on-the-og-blockchain">files</a> of close to 4MB (enough to <a href="https://blockworks.co/news/inside-bitcoin-biggest-block">fill an entire block</a>) have been written to Bitcoin including images, videos, audio and video games without relying on OP_RETURN, thereby avoiding its 80-byte limit altogether.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcwOED68Iy271t0R-xzZ5tPnW4-xwvyt9MTSzdM5YVtxaA6qVQX2akNqRPXqCbbXArg3Ney_cg_Ed1SPxNuZZfs7AIls0dsUVpc71AZmrjbo2oPpuOlFqMC4EgXKLlsHGxNRrMU?key=hn2Rv85GBuJrZ8j20Y4AeQ" alt=""/><figcaption class="wp-element-caption">The purple arrow points to May 7, 2023, when Ordinals hype really set in.</figcaption></figure>



All this has made Bitcoin a content storage network, to some degree. Each Ordinal is, essentially, tokenized non-financial data that can be traded peer-to-peer — the type of <s>nonsense</s> utility that had been typically reserved for virtual machine chains like Ethereum and Solana.



These days, Ordinals activity has cooled, but has its moments. Bitcoin Core developers, in lifting the 80-byte policy rule on OP_RETURN data, are hoping to reduce the incentives for further workarounds that might damage the network in unknown ways.



“The change re-affirms that Bitcoin is governed by transparent, minimal rules rather than editorial preference,” Blockstream engineer Gregory Sanders <a href="https://gist.github.com/instagibbs/c436110890ab25aa9997b13c2270d5ce">wrote</a>. “By retiring a deterrent that no longer deters, Bitcoin Core keeps the policy surface lean and lets the fee market arbitrate competing demands.”



Times like these remind us that Bitcoin is not sentient, but it does evolve. For living things, it’s the biological code inside DNA that informs how they grow.&nbsp;



On the other hand, Bitcoin’s “blind watchmaker” is the collective resolve of its active developers, even if they don’t have unanimous support for their proposed changes, as expressed through the willingness of miners, node operators and users to adopt them.



Or, as Sanders put it: “Dissenting parties remain free to modify software, run stricter policy, or propose new resource limits if empirical harm emerges.”



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