Multichain

Donovan Choy

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/research">subscribe</a>.



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The Ethereum Foundation is going through a bit of civil unrest, but work on the world computer continues.&nbsp;



Ethereum researcher Justin Drake published on the <a href="https://ethresear.ch/t/native-rollups-superpowers-from-l1-execution/21517">ethresearch</a> forums yesterday a compilation article on a new rollup design known as “native rollups.”



If you’re non-technical like I am, keeping up with Ethereum’s ever-changing landscape of rollup designs is tedious — let alone keeping up with its entire infrastructural stack.



But the simplest way to think about native rollups is that it relies on Ethereum L1 validators for proving, i.e., state transition function and validation.



This contrasts with optimistic rollups (e.g., Optimism, Arbitrum) or zk-rollups (e.g. Starknet, ZKsync) that push the computational burden of execution to an L2 before relying on a fraud or zk proof system to generate a state root and proof which settles back on mainnet.



These proof systems are code-heavy and subject to bugs and other vulnerabilities, which is why rollup sequencers — the entity that orders transactions on an L2 — have historically been centralized. Complaints about sequencer centralization in turn have spurred “based” rollup designs like Taiko that rely on Ethereum L1 validators to perform sequencing (you can read all about it <a href="https://blockworks.co/news/unpacking-the-based-rollups-debate">here</a>).



But back to native rollups. Drake’s proposal suggests introducing an “execute” precompile — a hardcoded function into the EVM — that will verify EVM state transitions of users’ transactions. This achieves a few breakthroughs:



<ul class="wp-block-list">
<li>Native rollups no longer need to invest in and maintain expensive prover networks of miners with specialized GPU hardware since proving would be handled and enforced by L1 validators.</li>



<li>Native rollups no longer need to maintain complex governance structures involving trusted security councils to approve contract upgrades in order to achieve EVM-equivalency.</li>
</ul>



Both of these unlocks in effect make native rollups “trustless” by inheriting the security of Ethereum L1.



Finally, like based rollups, native rollups would enjoy “synchronous composability,” which refers to the ability of onchain transactions to be composable across different rollup chains, rather than being fragmented. The return to seamless fungibility of assets across L1 and L2 chains would solve the longstanding UX problem of constant bridging across chains.



Unlike based rollups, however, native rollup execution will not be constrained by the 12-second block time. Thanks to the “execute” precompile, L1 validators will only need to verify zk proofs without having to perform computation themselves.



Could native rollups mitigate the problem of ETH value accrual? Perhaps.



As I understand it, validators would enforce execution with the new precompile, which would make ETH necessary for transaction settlement.



Second, the elimination of L2 governance (and its tokens) could redirect value back to ETH as the primary value sink.



Native rollups represent yet another incremental but pivotal step toward reinforcing Ethereum&#8217;s value proposition and ETH’s role as the foundation of the decentralized ecosystem.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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Ethereum’s native rollups promise trustless scalability

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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I’m happy to announce that we can officially retire the term “regulation by enforcement.” It can now join “cautiously optimistic” and “soft landing” on the shelf of terms nobody needs to hear anytime soon.&nbsp;



Yesterday, acting chair Mark Uyeda announced that Hester Peirce — known around here as Crypto Mom for her dissents over the SEC’s approach to the space — would head up a new taskforce: Crypto 2.0.



With Gary Gensler officially out of the building, it’s now abundantly clear that the SEC is serious about crypto companies coming in and registering. Don’t believe me? Just look at what Uyeda said in the press release: Crypto 2.0 “will succeed only if the Task Force has input from a wide range of investors, industry participants, academics and other interested parties.”



If you’re an avid Empire reader, I’m sure you’ve noticed the optimistic tone David and I have carried for a few months now. We&#8217;ve been saying that the winds of change have shifted the vibe. This week just proved it.&nbsp;



The launch of Trump’s coin led to some confusion and criticism (some of it, <a href="https://blockworks.co/news/trump-token-sets-tone-for-crypto">like I talked about yesterday</a>, is justified) but the SEC’s newest task force shows that it’s looking to ensure a framework that actually works for the industry.&nbsp;



Whether this means that the current lawsuits, including the one the SEC filed against Helium’s Nova Labs on Friday, will be dismissed is still up in the air.&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">I haven&#39;t been privy to these communications (and we&#39;re in largely unprecedented territory), but the Chair and the Enforcement Director are free to have conversations that could lead the Enforcement Division to pursue certain approaches &amp; bring the results back for a vote.&mdash; Marc Fagel (@Marc_Fagel) <a href="https://twitter.com/Marc_Fagel/status/1881793239419859046?ref_src=twsrc%5Etfw">January 21, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div><figcaption class="wp-element-caption">Lots of moving parts behind the scenes at the SEC right now</figcaption></figure>



Remember that Haynes Boone partner Matthew Frankle <a href="https://blockworks.co/news/sec-crypto-lawsuits-future">told us earlier this month</a> that we could perhaps see cases dropped as the SEC adopts a friendlier approach.&nbsp;



The vibes are high, Crypto Mom is in charge, and we’re soo back.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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Why the SEC’s new crypto task force passes the vibe check

David Canellis

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



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It used to be that pop culture ran on a 20-year cycle. These days, it’s <a href="https://www.vice.com/en/article/how-the-20-year-trend-cycle-collapsed/">more like 10</a>, or even five.



Crypto is undergoing something very similar, and it’s fast becoming ICOs’ turn.&nbsp;



Seven years ago, a tidal wave of public token sales hit Ethereum, with over <a href="https://www.gemini.com/cryptopedia/initial-coin-offering-explained-ethereum-ico#section-ic-os-receive-increased-regulatory-scrutiny">2,000</a> separate offerings raking in more than $10 billion — almost two-thirds coming in the first three months of 2018 alone.



Here’s one clear sign that initial coin offerings are coming back: Corn’s recent token sale was seven times oversubscribed in the first few hours, so much so they ended up turning away thousands of investors.



Corn is merging two hot narratives from cycles past: public token sales and yield farming. It <a href="https://blog.usecorn.com/corn-the-genesis-of-the-super-yield-network-f52170ffbe84">debuted</a> last year as the “super yield network,” an Ethereum layer-2 on the Arbitrum Orbit stack with a Bitcoin twist.



It’s built to use tokenized wrapped bitcoin, BTCN, as its native asset — to stake, pay gas and otherwise be put to work across its budding DeFi <a href="https://usecorn.com/app?action=earn">ecosystem</a>.



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1600" height="833" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXeBeSmxKVaF5EfuIQoCaM2XSR4xykBC0OuUm66JLkcQNlT3uS9_yZ9Rr6S4nD4WHUeeBkLLYHXb81HYlBuYsDXgljON43Ku8zX7AhTAu-XwjqnzRs2MLtJSM9Kl1vu0_obIcr4I_A.png" alt="" class="wp-image-96486" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXeBeSmxKVaF5EfuIQoCaM2XSR4xykBC0OuUm66JLkcQNlT3uS9_yZ9Rr6S4nD4WHUeeBkLLYHXb81HYlBuYsDXgljON43Ku8zX7AhTAu-XwjqnzRs2MLtJSM9Kl1vu0_obIcr4I_A.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXeBeSmxKVaF5EfuIQoCaM2XSR4xykBC0OuUm66JLkcQNlT3uS9_yZ9Rr6S4nD4WHUeeBkLLYHXb81HYlBuYsDXgljON43Ku8zX7AhTAu-XwjqnzRs2MLtJSM9Kl1vu0_obIcr4I_A.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXeBeSmxKVaF5EfuIQoCaM2XSR4xykBC0OuUm66JLkcQNlT3uS9_yZ9Rr6S4nD4WHUeeBkLLYHXb81HYlBuYsDXgljON43Ku8zX7AhTAu-XwjqnzRs2MLtJSM9Kl1vu0_obIcr4I_A.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXeBeSmxKVaF5EfuIQoCaM2XSR4xykBC0OuUm66JLkcQNlT3uS9_yZ9Rr6S4nD4WHUeeBkLLYHXb81HYlBuYsDXgljON43Ku8zX7AhTAu-XwjqnzRs2MLtJSM9Kl1vu0_obIcr4I_A.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXeBeSmxKVaF5EfuIQoCaM2XSR4xykBC0OuUm66JLkcQNlT3uS9_yZ9Rr6S4nD4WHUeeBkLLYHXb81HYlBuYsDXgljON43Ku8zX7AhTAu-XwjqnzRs2MLtJSM9Kl1vu0_obIcr4I_A.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXeBeSmxKVaF5EfuIQoCaM2XSR4xykBC0OuUm66JLkcQNlT3uS9_yZ9Rr6S4nD4WHUeeBkLLYHXb81HYlBuYsDXgljON43Ku8zX7AhTAu-XwjqnzRs2MLtJSM9Kl1vu0_obIcr4I_A.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXeBeSmxKVaF5EfuIQoCaM2XSR4xykBC0OuUm66JLkcQNlT3uS9_yZ9Rr6S4nD4WHUeeBkLLYHXb81HYlBuYsDXgljON43Ku8zX7AhTAu-XwjqnzRs2MLtJSM9Kl1vu0_obIcr4I_A.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXeBeSmxKVaF5EfuIQoCaM2XSR4xykBC0OuUm66JLkcQNlT3uS9_yZ9Rr6S4nD4WHUeeBkLLYHXb81HYlBuYsDXgljON43Ku8zX7AhTAu-XwjqnzRs2MLtJSM9Kl1vu0_obIcr4I_A.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXeBeSmxKVaF5EfuIQoCaM2XSR4xykBC0OuUm66JLkcQNlT3uS9_yZ9Rr6S4nD4WHUeeBkLLYHXb81HYlBuYsDXgljON43Ku8zX7AhTAu-XwjqnzRs2MLtJSM9Kl1vu0_obIcr4I_A.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /><figcaption class="wp-element-caption">You’ve heard of DeFi Summer. How about BTCFi Spring?</figcaption></figure>



Corn’s ICO was conducted through <a href="https://blockworks.co/news/mica-euro-stablecoin-renaissance">MiCA-compliant</a> token sale platform Legion. Nearly 4,300 applicants requested $69 million in allocations, with the team accepting $8.3 million from around 700 investors.&nbsp;



Legion is a merit-based venue for connecting projects with the right capital. All participants (which excludes UK and retail in the US) must first KYC, but the real value add is that users can also connect their crypto wallets, X accounts and GitHub profiles.



This allows projects to prioritize investors who are active in crypto, whether that’s showing up onchain or in code, if they so choose.



“We thought: ‘How do we create something that&#8217;s fair and open for small and big, and how do we get very targeted with our token distribution, so we can be in a place to say we have 1,000 or 2,000 long-term committed investors well before the token goes live?” Chris Spadafora, Corn founder, told me over the weekend.



“That&#8217;s what drove us to go down this path, but it wasn&#8217;t an easy decision and it required a lot of work to kind of coordinate all the different groups.”



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1382" height="996" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXcKOPSTIwmo_JtLJH_WFH12OLS1O6-0CHxPGvUwd-4GH1XFrReGXJuz8miLHrMK-BSSJ7F_7_PbHE2AfvSO40AUfd7nKVMBe3jizgpMb_AFFIreA9BAJYHwJbk-gKfgs8ge7WwF.png" alt="" class="wp-image-96485" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXcKOPSTIwmo_JtLJH_WFH12OLS1O6-0CHxPGvUwd-4GH1XFrReGXJuz8miLHrMK-BSSJ7F_7_PbHE2AfvSO40AUfd7nKVMBe3jizgpMb_AFFIreA9BAJYHwJbk-gKfgs8ge7WwF.png?w=1382 1382w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXcKOPSTIwmo_JtLJH_WFH12OLS1O6-0CHxPGvUwd-4GH1XFrReGXJuz8miLHrMK-BSSJ7F_7_PbHE2AfvSO40AUfd7nKVMBe3jizgpMb_AFFIreA9BAJYHwJbk-gKfgs8ge7WwF.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXcKOPSTIwmo_JtLJH_WFH12OLS1O6-0CHxPGvUwd-4GH1XFrReGXJuz8miLHrMK-BSSJ7F_7_PbHE2AfvSO40AUfd7nKVMBe3jizgpMb_AFFIreA9BAJYHwJbk-gKfgs8ge7WwF.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXcKOPSTIwmo_JtLJH_WFH12OLS1O6-0CHxPGvUwd-4GH1XFrReGXJuz8miLHrMK-BSSJ7F_7_PbHE2AfvSO40AUfd7nKVMBe3jizgpMb_AFFIreA9BAJYHwJbk-gKfgs8ge7WwF.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXcKOPSTIwmo_JtLJH_WFH12OLS1O6-0CHxPGvUwd-4GH1XFrReGXJuz8miLHrMK-BSSJ7F_7_PbHE2AfvSO40AUfd7nKVMBe3jizgpMb_AFFIreA9BAJYHwJbk-gKfgs8ge7WwF.png?w=357 357w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXcKOPSTIwmo_JtLJH_WFH12OLS1O6-0CHxPGvUwd-4GH1XFrReGXJuz8miLHrMK-BSSJ7F_7_PbHE2AfvSO40AUfd7nKVMBe3jizgpMb_AFFIreA9BAJYHwJbk-gKfgs8ge7WwF.png?w=362 362w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXcKOPSTIwmo_JtLJH_WFH12OLS1O6-0CHxPGvUwd-4GH1XFrReGXJuz8miLHrMK-BSSJ7F_7_PbHE2AfvSO40AUfd7nKVMBe3jizgpMb_AFFIreA9BAJYHwJbk-gKfgs8ge7WwF.png?w=304 304w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/AD_4nXcKOPSTIwmo_JtLJH_WFH12OLS1O6-0CHxPGvUwd-4GH1XFrReGXJuz8miLHrMK-BSSJ7F_7_PbHE2AfvSO40AUfd7nKVMBe3jizgpMb_AFFIreA9BAJYHwJbk-gKfgs8ge7WwF.png?w=80 80w" sizes="auto, (max-width: 1382px) 100vw, 1382px" /><figcaption class="wp-element-caption">Early Corn users are earning <a href="https://docs.usecorn.com/docs/users/The_Kernel_Season_2/#how-does-the-program-work">points</a> (or Kernals) for keeping crypto within the Butter Network</figcaption></figure>



Those parties included existing Corn backers from its seed and venture rounds last year — venture capital firms Polychain Capital, GSR, Laser Digital and more.



“Anyone that participated in this round went through an identical process,” Spadafora said. “They had to onboard to Legion, they had to apply, and then we had to accept them.”&nbsp;



The kicker, according to Spadafora, is now that all those funds have been onboarded, the next project that wants to launch on Legion has a direct line and access to some of the biggest funds in the world — along with another 10,000 or 100,000 people on Legion that can invest at the same terms.



But if ICOs really are back, there would need to be improvements. ICOs in 2017 and 2018 were often opaque and painfully skewed toward insiders. Corn’s offering meanwhile had no side letters or secret undisclosed deals.&nbsp;



“There was one contract, it was loaded. If you wanted to invest $1,000 or a million dollars, it was the same deal. Take it or get the fuck out of here,” Spadafora said, and that attitude might be just what ICOs needed all along.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



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ICO for bitcoin yield farming chain Corn screams we’re so back

Jack Kubinec

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



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The first crypto president did a very crypto thing.&nbsp;



Donald Trump launched a memecoin on Friday night, creating arguably the largest trading demand spike ever in crypto. Solana apps and infrastructure <a href="https://blockworks.co/news/trump-memecoins-rock-solana">buckled and sometimes broke</a> as the network processed $39 billion in DEX trading volume on Sunday alone, blowing past its prior daily high of $10 billion, <a href="https://app.blockworksresearch.com/analytics/sol?dashboard=sol-financial">according</a> to Blockworks Research.&nbsp;



Some were quick to cast Trump’s first memecoin foray as a means to onboard masses of new users into crypto, although that seems like wishful thinking. The token is already down 40% from its Sunday high, and there’s no indication that the project has any purpose apart from gambling.



Still, there was one Trumpcoin development I think could have longer-term implications — an overnight surge in Solana’s stablecoin supply. The Solana network housed around $6.1 billion stablecoins on Friday, per Blockworks Research data. Yesterday, Solana held $9.6 billion in stables. That’s $3.5 billion in new stablecoins, amounting to a 57% increase, in just three days.&nbsp;



To put this in perspective, Solana added its last $3.5 billion in stablecoins over a period stretching from March 17, 2024 until Friday. The network packed 306 days of stablecoin growth into a long weekend.&nbsp;



The TRUMP and MELANIA memecoins minted by America’s leading couple were paired with Circle’s USDC stablecoin, meaning traders had to buy the tokens with USDC, Blockworks Research data lead Dan Smith said. This put tons of upward price pressure on Solana-native USDC, so arbitrageurs likely bridged stablecoins over to essentially sell dollars for a little over a dollar.



Historically, stablecoin supply tends to be sticky. It’s been a while since the 2021 halcyon days of Ethereum DeFi, but the layer-1 still holds some $113 billion in stablecoins, more than 11 times Solana’s supply.



In addition to providing liquidity for memecoins, stables can be used for real-world stuff like remittances, payments, or onchain banking. That’s perhaps why a large number of Solana founders called payments and stablecoins the network’s most underrated sectors in <a href="https://blockworks.co/news/solana-founders-survey-responses">our anonymous poll</a>.



So was the TRUMP memecoin — 80% of which is <a href="https://gettrumpmemes.com/#tokenomics">held</a> by insiders — a shameless cash grab? Likely yes, but that doesn’t mean it can’t bring positive knock-on effects to Solana.&nbsp;



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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Solana stablecoin supply up 57% after Trump memecoin launch

Ben Strack

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



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Crypto.com has launched its “institutional-grade venue” in the US a day after the first so-called pro-crypto president was sworn in.



The exchange’s CEO, Kris Marszalek, was perhaps alluding to the start of Trump’s term when beginning a Tuesday X <a href="https://x.com/kris/status/1881728439377600975">post</a> with “Today is Day 1.”



Marszalek touted the new US platform’s “deep liquidity, stable banking rails, robust APIs for most demanding high frequency traders, competitive fees and white glove service for all VIPs.”



This comes roughly 18 months after Crypto.com said it would <a href="https://blockworks.co/news/crypto-com-suspending-us-institutional-exchange">temporarily shut down</a> the initial version of the US institutional exchange it was testing. The company cited “limited demand from institutions in the US in the current market landscape” — an apparent reference to SEC lawsuits launched against fellow exchanges <a href="https://blockworks.co/news/binance-changpeng-zhao-face-sec-charges">Binance</a> and <a href="https://blockworks.co/news/sec-sues-coinbase">Coinbase</a> just days prior.



The company noted at the time it could reopen the institutional trading platform in the future. With a president (and many <a href="https://blockworks.co/news/crypto-friendly-congress-steps-into-power">members of Congress</a>) now vowing to support the crypto space, here we are.



“After years of operating in an environment of regulation by enforcement, we are confident that the new administration will work with industry to develop clear regulations to protect consumers and harness the opportunities advancing the industry to make the US the global leader in cryptocurrency,” a Crypto.com spokesperson told me in an email Tuesday.  



This news also follows Marszalek’s <a href="https://x.com/kris/status/1868812557525697004">meeting</a> with Donald Trump last month. A person familiar with the rendez-vous <a href="https://blockworks.co/news/trump-crypto-ceo-btc-reserve-meeting">had told me</a> the two talked about crypto-related appointments and a bitcoin reserve.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



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Crypto.com launches the US exchange it suspended in 2023 

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



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Stablecoin issuer Circle has acquired Hashnote, the company that created the largest tokenized money market fund.



Circle is the company behind USDC, a stablecoin with a market cap that has grown to $48 billion. Call it tokenized cash if you like; Circle CEO Jeremy Allaire did in a Tuesday X space.



But now there’s also growing interest in bringing more real-world assets onchain, the executive noted. Outside of stablecoins, the largest category within the segment is tokenized Treasurys/money market funds.



<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">BREAKING NEWS:  3 big announcements from <a href="https://twitter.com/circle?ref_src=twsrc%5Etfw">@circle</a>.   1) We have acquired Hashnote, issuer of the world’s largest Tokenized Money Market Fund (USYC);  2) we have entered into a strategic partnership with global trading firm DRW to drive USDC and USDY in  crypto and TradFi…&mdash; Jeremy Allaire &#8211; jda.eth / jdallaire.sol (@jerallaire) <a href="https://twitter.com/jerallaire/status/1881726224311206298?ref_src=twsrc%5Etfw">January 21, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Franklin Templeton launched its OnChain US Government Money Fund (FOBXX) — a <a href="https://blockworks.co/news/stablecoin-with-yield-franklin-templeton">yield-bearing alternative</a> to stablecoins — in 2021. Asset management giant BlackRock launched a competing product, <a href="https://blockworks.co/news/empire-newsletter-blackrock-buidl-milestone">called BUIDL</a>, last year.



Hashnote’s version of that is USYC US Yield Coin (USYC). It’s the onchain representation of its Short Duration Yield Fund (SDYF), which holds short-term T-bills. Assets deployed into USYC stand at roughly $1.5 billion, accounting for about half the tokenized Treasurys space.&nbsp;



“We see this as a key building block now,” Allaire said. “The problem that we want to solve is, how can market participants…use yield-bearing collateral, but instantly enable it to be used as cash and to create a sort of 24/7, 365 continuous model for how you can move between cash and yield?” The Circle CEO added: “That’s what this unlocks.”&nbsp;



The Hashnote deal is essentially part of the broader goal of taking the benefits of crypto — constant, globally available market infrastructure — and bringing that over to the TradFi world, lowering costs and boosting efficiency.&nbsp;



Circle is partnering with trading firm DRW via its subsidiary Cumberland, which will expand liquidity and settlement capabilities in USDC and USYC. The stablecoin issuer also said it plans to deploy USDC on the public blockchain Canton.&nbsp;



Whether trillions of dollars worth of assets come onto the blockchain — and how quickly — will depend on institutions seeing enough value in emerging use cases, <a href="https://blockworks.co/news/tokenization-depends-on-use-cases-benefits">Ripple’s James Wallis told me</a> in October. 



Perhaps this Circle deal will accelerate those entities seeing such benefits across the segment. 



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Circle-Hashnote deal looks to ease movement between cash, yield

Casey Wagner

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



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During his first 12 hours in office, the 47th president issued 46 presidential actions.



Some were <a href="https://blockworks.co/news/cftc-chair-announces-departure">expected</a>: Donald Trump designated acting chairs of the CFTC (Caroline Pham) and SEC (Mark Uyeda). Others were promised, like the executive orders mandating a federal <a href="https://www.whitehouse.gov/presidential-actions/2025/01/hiring-freeze/">hiring freeze</a> and declaring a <a href="https://www.whitehouse.gov/presidential-actions/2025/01/declaring-a-national-energy-emergency/">national energy emergency</a>. 



Some were symbolic: <a href="https://www.whitehouse.gov/presidential-actions/2025/01/restoring-names-that-honor-american-greatness/">ordering</a> the Gulf of Mexico to become the Gulf of America, and renaming Alaskan peak Denali to Mount McKinley.&nbsp;&nbsp;



Trump got to work on his immigration crackdown, issuing two executive orders: “guaranteeing <a href="https://www.whitehouse.gov/presidential-actions/2025/01/guaranteeing-the-states-protection-against-invasion/">the states protection</a> against invasion” and “protecting the <a href="https://www.whitehouse.gov/presidential-actions/2025/01/protecting-the-american-people-against-invasion/">American people </a>against invasion.”&nbsp;



There were also actions aimed at accomplishing Trump’s “anti-woke” agenda, including executive orders abolishing <a href="https://www.whitehouse.gov/presidential-actions/2025/01/ending-radical-and-wasteful-government-dei-programs-and-preferencing/">DEI</a> programs and requiring agencies to “end the federal funding of <a href="https://www.whitehouse.gov/presidential-actions/2025/01/defending-women-from-gender-ideology-extremism-and-restoring-biological-truth-to-the-federal-government/">gender ideology</a>.&#8221;&nbsp;



Then there are the actions Trump did not make. None of his “<a href="https://blockworks.co/news/trump-day-one-crypto-promises">day 1</a>” moves had to do with the cryptocurrency industry.&nbsp;



To be fair, by my count, Trump only made two explicit “day 1” promises on crypto: fire Gary Gensler (which became moot when <a href="https://blockworks.co/news/gary-gensler-resigning">Gary resigned</a>) and <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-crypto-promises">commute the sentence</a> of Silk Road founder Ross Ulbricht.&nbsp;



That latter promise did not happen.&nbsp;



<a href="https://x.com/elonmusk/status/1881524296386031892">Insiders</a> say the pardon is imminent, though Trump himself has not commented on his plans. Trump has never publicly said why he didn’t pardon or commute Ulbricht during his first term in office.&nbsp;



Trump wooed the crypto industry for months on the campaign trail. His first appearance post-assasination attempt was at the Bitcoin Conference <a href="https://blockworks.co/news/bitcoin-2024-nashville-recap">in Nashville</a>. He hosted Messari founder Ryan Selkis at Mar-a-Lago. He even launched his own <a href="https://blockworks.co/news/donald-trump-touts-new-family-defi-project">DeFi project</a>.&nbsp;



Industry heavyweights paid up, and these first few weeks of Trump 2.0 were supposed to be <a href="https://blockworks.co/news/mike-novogratz-on-trump-presidency">their victory lap</a>. And it still can be. But it’s also clear that Trump’s relationship to the crypto industry has gotten more complicated in the past few days.&nbsp;



Trump never actually said he’d establish a strategic bitcoin reserve or overturn SAB 121 on his first day. But he also never said he’d <a href="https://blockworks.co/news/trump-token-sets-tone-for-crypto">launch $TRUMP</a> and $MELANIA right before taking the oath of office.&nbsp;



To a large portion of the industry, it’s fine if Trump waits weeks or even months before he executes promised crypto policies (whether some of these things can even be accomplished via executive order is legally questionable anyway).&nbsp;



But the president of the United States engaging in this speculative, highly-manipulated corner of the crypto space is decidedly not fine.&nbsp;



Even Selkis, who arguably <a href="https://fortune.com/crypto/2024/07/19/ryan-selkis-messari-trump-steps-down-ceo-politcally-charged-war/">lost control</a> of his company over his vocal support for Trump, said the $MELANIA launch was a <a href="https://x.com/twobitidiot/status/1881106291445449215">mistake</a>.



The memecoins have seemingly put the industry on edge. When $TRUMP launched at 9 pm last Friday night, the mood at <a href="https://blockworks.co/news/inauguration-weekend-crypto-ball">the Crypto Ball</a> shifted. It’s no secret that Trump has a chaotic approach to decision-making, but it’s almost as if some in the crypto world are realizing it —&nbsp;and seeing the ramifications — for the first time.&nbsp;



Lobbyists and donors were unsettled. Almost no one wanted to comment on it, at least on the record — I’d imagine in fear of alienating the administration or Trump himself. Blockchain Association director of government relations Ron Hammond even <a href="https://x.com/RonwHammond/status/1881372088050872808">joked</a> that he’s “staying out of it.”&nbsp;



We’re just barely over 24 hours into Trump’s second term. For those of us watching from the sidelines, it’s shaping up to be a really entertaining four years.



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Proclamations and memoranda and executive orders, oh my! 

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/research">subscribe</a>.



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Launched last Friday, <a href="https://docs.infinitypools.finance/protocol-overview/introduction">InfinityPools</a> is a new DEX on Base that offers unlimited leverage and no liquidations.&nbsp;



How does it work?



To perform leveraged trades, InfinityPool traders take out loans in the form of Univ3-style concentrated AMM liquidity, as opposed to traditional stablecoin loans for margin trading. This is the crux of InfinityPool’s unique liquidation mechanism: Traders have the guaranteed option to sell their borrowed collateral back to the pool at a fixed price regardless of how much market prices fall (like a put option), thereby capping their losses at their initial deposits.



For example, a trader wants to take a leveraged trade on ETH, so they borrow liquidity designed to protect against a 10% price drop. If ETH falls below the 10% threshold, they can simply return the borrowed ETH to settle the loan, and traders can’t lose more than their deposit.



InfinityPools has currently two live pools — sUSDe/USDC and sUSDE/wstETH — with about $2 million in TVL on each pool. The first pool is offering ENA rewards, while the latter is offering LDO rewards.



<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">Great to see <a href="https://twitter.com/InfPools?ref_src=twsrc%5Etfw">@InfPools</a> launch on <a href="https://twitter.com/base?ref_src=twsrc%5Etfw">@base</a>. Just noting an interesting strategy that a few wallets have demonstrated: 1. Borrow USDC at a fixed rate on Size <a href="https://twitter.com/SizeCredit?ref_src=twsrc%5Etfw">@SizeCredit</a> 2. Swap half into sUSDe on IP (Inf. Pools) 3. LP on IP Result: farm an early protocol launch with a fixed cost…&mdash; Jason Gao (@ancap_gao) <a href="https://twitter.com/ancap_gao/status/1880279951334572389?ref_src=twsrc%5Etfw">January 17, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



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‘Unlimited leverage, no liquidation’ DEX launches on Base

Macauley Peterson

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/research">subscribe</a>.



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Overshadowed by this weekend’s <a href="https://blockworks.co/news/trump-token-sets-tone-for-crypto">Trump meme mania</a>, the ongoing debates surrounding Ethereum&#8217;s future have reached fever pitch. The public discussion highlights divides between parts of the community and the Ethereum Foundation (EF). Debates touch on governance, the network’s scalability roadmap and long-term vision.



One key area of debate is the <a href="https://blockworks.co/news/ethereum-scaling-progress-and-leadership">governance of the EF</a>. Critics argue that the EF&#8217;s internal structure may not be suitable for the current era. Despite its mission to decentralize, the foundation&#8217;s current centralized decision-making invites critiques of its responsiveness to competitive threats and evolving narratives.



Ironically, much of the strident criticism against current executive director Aya Miyaguchi stems from a mistranslation of comments she made in a Japanese interview, which has caused considerable misunderstanding and misrepresentation of her views.



Vitalik Buterin himself and other community members have <a href="https://x.com/VitalikButerin/status/1881680522159833329">called attention</a> to the issue, emphasizing the distinction between the original Japanese article and the version promulgated on Crypto Twitter — which wrongly claimed Miyaguchi said &#8220;competing and winning” are values antithetical to Ethereum culture. (They are not.)



The mistranslation is so blatant, it’s hard to imagine it wasn’t intentional. These errors in translation have fueled online bullying, which has continued despite the clarification.



Some commentary has grown toxic enough to spook core devs, with pseudonymous Prysm developer Potuz <a href="https://x.com/potuz_eth/status/1881681162340548751">commenting</a> on the broader sentiment: “Reading twitter these last few days has made me feel that either I should just log off and keep coding or leave the space altogether.”



How best to articulate Ethereum&#8217;s core mission is another sore spot. On one side, those who emphasize Ethereum as a settlement layer argue that a strong monetary premium is essential for network security. On the other side, voices like Martin Koeppelmann <a href="https://x.com/koeppelmann/status/1881605896070967462">advocate</a> for positioning Ethereum as a &#8220;world computer,&#8221; with a focus on transaction capacity and total fees as the main indicators of success. Such voices view ETH as “money” secondarily.



Ethereum’s scalability plan via rollups continues to be questioned. We’re seeing a fresh batch of calls for more ambitious strategies to scale Ethereum mainnet — this time from within the EF itself.



&#8220;If Ethereum wants to win, we need to be ambitious,” Dankrad Feist <a href="https://x.com/dankrad/status/1881387224350052528">wrote</a> Monday on X.&nbsp;



Achieving bandwidth goals by 2026 is crucial, he argued. &#8220;We need to get to our current target of one megabyte per second in 1–2 years rather than 5, and then KEEP GOING.”



That the status quo won’t cut it seems to be the emerging consensus.



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Ethereum leadership and scaling debates heat up

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



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Anthony Bourdain would famously go to great lengths to avoid and outwit a guy inside him who wanted to rot in bed all day.



I do something similar with my inner contrarian. But I can’t help it with this one: The crypto portfolio of Trump-linked DeFi platform World Liberty Financial could very well turn out to be the crypto strategic reserve that many anticipate will soon be announced.&nbsp;



And it’s already getting messy.



To the conspiracy theorist that sometimes types for me — like the rat in Ratatouille — there are obvious signs.



Donald Trump Jr. perhaps let it slip on X. To commemorate Trump Sr.’s second inauguration on Monday, becoming the 45th and 47th US president, World Liberty Financial made a series of what it <a href="https://x.com/DonaldJTrumpJr/status/1881494777293611302">called</a> “strategic purchases” of various coins.



<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">To commemorate the inauguration of Donald J. Trump as the 47th President of the United States, <a href="https://twitter.com/search?q=%24WLFI&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$WLFI</a> is proud to announce the following strategic purchases today: $47,000,000 ETH $47,000,000 wBTC $4,700,000 Aave $4,700,000 LINK $4,700,000 TRX $4,700,000 ENA Excited for the…&mdash; Donald Trump Jr. (@DonaldJTrumpJr) <a href="https://twitter.com/DonaldJTrumpJr/status/1881494777293611302?ref_src=twsrc%5Etfw">January 21, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Deep thinkers would quickly spot that one of those coins is not like the others.&nbsp;



World Liberty Financial runs on Ethereum — so ETH makes sense. Trump has also done well courting the Bitcoiners, so wBTC gets a green check as a DeFi-compatible nod to the real thing.&nbsp;



So does AAVE, LINK and ENA. Platforms tied to all three coins are expected to integrate with World Liberty Financial whenever it goes live.



But why TRX?



(The conspiracist in me is now screaming about the $30 million <a href="https://blockworks.co/news/tracking-trumps-crypto-footprint">plowed</a> into the World Liberty Financial token sale by Tron founder Justin Sun last month. And the curious switch from cbBTC to WBTC amid that drama. Ignore him.)



<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">The first US 🇺🇸 national crypto exchange should be named “Trump Reserve Xchange,” abbreviated as T.R.X.&mdash; H.E. Justin Sun 🍌 (@justinsuntron) <a href="https://twitter.com/justinsuntron/status/1856583549811589538?ref_src=twsrc%5Etfw">November 13, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div><figcaption class="wp-element-caption">He somehow snuck this one through</figcaption></figure>



For what it’s worth, if World Liberty Financial really is the US crypto strategic reserve in disguise, it’s doing pretty well so far.&nbsp;



It has spent $220.1 million on crypto since the end of November. Now it’s worth $234 million, putting it over 6% ahead, with gains made on BTC, ETH and AAVE against losses in TRX, ENA and ONDO.



Maybe let it cook.



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Is World Liberty Financial actually Trump’s strategic crypto reserve?

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



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<a href="https://blockworks.co/news/trump-more-than-a-memecoin">David was right yesterday</a>, TRUMP is so much more than a memecoin.&nbsp;



Empire co-host Santiago Santos, in an Empire livestream last night, said that the launch “sets the tone,” and, honestly, I agree.&nbsp;



“One of Trump’s superpowers is that he has the unbelievable ability to read the room at scale, and he has a really good sense of what people want from him and what&#8217;s going to resonate with people,” Blockworks co-founder Mike Ippolito said on the stream.&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"><a href="https://twitter.com/search?q=%24TRUMP&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$TRUMP</a> Takeaways | LIVE w/ <a href="https://twitter.com/JasonYanowitz?ref_src=twsrc%5Etfw">@JasonYanowitz</a> <a href="https://twitter.com/MikeIppolito_?ref_src=twsrc%5Etfw">@MikeIppolito_</a> <a href="https://twitter.com/santiagoroel?ref_src=twsrc%5Etfw">@santiagoroel</a> <a href="https://t.co/Kg4zJ9xY0K">https://t.co/Kg4zJ9xY0K</a>&mdash; Empire 🟪 (@theempirepod) <a href="https://twitter.com/theempirepod/status/1881507476610425185?ref_src=twsrc%5Etfw">January 21, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



About recent memecoin launches, I’ve seen and heard a lot of comparisons to ICOs back in 2017. That comparison makes sense, but there’s a slightly different one I want to make today, so bear with me.&nbsp;



As this played out over the weekend, I was quietly watching markets for Trump’s coin. For some reason, I couldn’t help but see similarities to the GameStop-driven memestock (or momentum stocks, <a href="https://www.thestreet.com/jim-cramer/jim-cramer-meme-stocks-versus-momentum-stocks">IYKYK</a>) craze around Covid.&nbsp;



It’s not a perfect comparison, and I’m well aware of that, but the hype and appetite over the weekend brought me right back to 2021.



With TRUMP, there wasn’t a Reddit post that started the snowball effect, and the leader of the free world is very different from GameStop CEO Ryan Cohen in terms of both celebrity and power.



Still, it was clear in how people interacted with TRUMP. I heard from folks that they were jumping into Trump’s token merely for the vibe (and the hope of making some generational wealth).



The lack of communication from Trump or his team regarding the token gave me weird flashbacks — when people took cryptic tweets Cohen’s account as a surefire sign that he was going to make GameStop great again.&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">Can’t stop, won’t stop. <a href="https://t.co/ZXuiKywIbK">pic.twitter.com/ZXuiKywIbK</a>&mdash; Ryan Cohen (@ryancohen) <a href="https://twitter.com/ryancohen/status/1418751218566918146?ref_src=twsrc%5Etfw">July 24, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Santos thinks that if Trump’s team had been more transparent, there might’ve been a different reaction to the MELANIA token (ICYMI, TRUMP tanked after the Melania token was announced before regaining a little).&nbsp;



Although, I suspect there would’ve been a leg down no matter what, considering people were certain to still be left wondering what the hell was happening.&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">I&#39;m fairly certain there are two separate teams behind these tokens. TRUMP was created by professionals. MELANIA was created by a PumpFun trader. These are not the same teams.&mdash; Yano 🟪 (@JasonYanowitz) <a href="https://twitter.com/JasonYanowitz/status/1881105916155838567?ref_src=twsrc%5Etfw">January 19, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Ippolito’s concern is that this erodes some of the hard-earned trust that crypto is trying to earn back post-FTX. Whether or not that’s the case, discussions I had with non-crypto people this weekend suggest some folks have a hard time looking past the meme of it all.&nbsp;



On the positive front: “Crypto is showing how much legs it has in terms of being a new capital market,” Ippolito said. And that is one of the most interesting aspects of TRUMP. Perhaps, like the team behind the Trump token said to Jason Yanowitz, the token really is a movement.&nbsp;



Either way, this whole saga has started conversations about the potential for more of these types of political or celebrity tokens. But we also need to keep dialogue open about the effects they may have on crypto.



There’s always a place for memes in crypto. Let’s not become the meme.&nbsp;



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Trump token ‘sets the tone’ for new era

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Crypto is much ado about AI these days, and two Solana startups recently closed funding rounds for businesses merging AI with social applications.&nbsp;



Social graph protocol Tapestry announced a $5.75 million Series A led by Union Square Ventures and Fabric Ventures, and Oh raised $4.5 million in seed funding to “build AI agents for the spicy content industry.” The pair of fundraises both came with expansive ideas about the future of AI — and how humans can still stake a claim to that future.



Tapestry is focused on creating onchain social graphs, which describes an individual and all their connections online. The protocol takes social profile and connection data and stores it onchain using the same technological ideas as Solana’s compressed NFTs, which is how the social app DRiP <a href="https://blockworks.co/news/lightspeed-newsletter-drip-seed-raise-nfts">makes its blockchain usage cost-effective</a>, for instance.&nbsp;



Decentralized social graphs are a popular idea in crypto. Aave founder Stani Kulechov started Lens, which lets users own their social graphs on Ethereum. The popular crypto social app Farcaster does something similar. Generally, these projects are built around the idea that social media users should own their data rather than let their data be monetized by someone else, as is the case with legacy social media.



With one Tapestry account, a user could sign into any platform with social features that has Tapestry integrated. The startup’s pitch combines this fact with AI vision casting.



“In a world of abundant AI creation, thousands of viral, ephemeral web apps will emerge over the next decade — far outpacing iOS apps. A unified social layer enables these apps to thrive outside App Store constraints,” the project wrote on X.&nbsp;



Still, crypto social graph projects have so far failed to catch on. Tapestry makes social apps composable, but its graph arguably only becomes valuable once lots of teams integrate it in the first place. Tapestry founder David Gabeau admitted Tapestry has a lot of work to do but said its service is still useful, particularly in the looming age of AI.



“Right now, using Solana is very similar to using Google on Incognito mode,” Gabeau told me. If AI is going to simplify Solana app creation, then Tapestry can help users take something like a Google profile from app to app, he said.



Then there’s Oh, a sexed-up AI companionship platform that will be integrating with Solana for its token offerings. Its seed round drew participation from Tangent and Big Brain Holdings, among others. The platform <a href="https://x.com/ohdotxyz/status/1877686850585862645">claims</a> to be combining OpenAI with OnlyFans in that it is developing centralized AI models with decentralized distribution of revenue.



Its proof of concept for this model came with the so-called digital twins it created for a handful of risque models. Whoever creates a digital twin or an original AI bot on the platform receives 80% of the revenue the models generate from users paying to interact with them.&nbsp;



A year and a half ago, <a href="https://blockworks.co/news/socialfi-web3-social-media#:~:text=In%20short%2C%20SocialFi%20uses%20blockchain,to%20earn%20rewards%20for%20scrolling.">SocialFi just referred</a> to giving users ownership or a financial stake in their social presence. Today, some sort of AI tie-in seems to be becoming table stakes for the sector.



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Two AI-focused Solana social startups closed funding rounds

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A new type of bitcoin ETF is set to go live this week. It’s one that aims to bring a particular kind of investor off the sidelines.



The Calamos Bitcoin Structured Alt Protection ETF — January (CBOJ) is set to offer “systematic risk management” across its roughly one-year outcome period. In other words, investors who buy on the first day of trading will essentially be protected against BTC price drops if they hold shares throughout that span, Calamos Investments ETF head Matt Kaufman noted.



Read the <a href="https://www.sec.gov/Archives/edgar/data/1579881/000110465924061248/tm2413885d1_485apos.htm">fine print</a>, of course.



While investors could gain BTC exposure with 100% downside protection, there’s a slight catch: The upside potential is capped (at an amount to be determined on the expected Jan. 22 launch date).



CBOJ seeks to achieve this strategy by investing in what are known as FLEX options, as well as other securities like US Treasurys.&nbsp;



The demand for US spot bitcoin ETFs has so far <a href="https://blockworks.co/news/one-year-since-bitcoin-etf-approval">surpassed the expectations</a> of many; the funds notched net inflows north of $35 billion in their first year.&nbsp;



A number of <a href="https://blockworks.co/news/advisers-bitcoin-etfs-client-portfolios">wealth managers</a> — and even <a href="https://blockworks.co/news/btc-exposure-pensions-endowments">pension funds</a> — have bought into them. Still, we know from 13F filings (and more <a href="https://x.com/byKatherineRoss/status/1844079341220790708">anecdotally</a> too) that many of these buyers are retail investors.&nbsp;



Enter this new product, which could be a game-changer for some. Financial advisers and institutions are generally willing to give up some gains for a known protection against loss and reduction of risk, Calamos’s Kaufman argued.



“Such a capital-protected bitcoin strategy should exhibit relatively low volatility, though likely higher than a capital-protected strategy tied to the equity market,” he told me.



A Bitwise/VettaFi <a href="https://bitwiseinvestments.com/crypto-market-insights/the-bitwise-vettafi-2025-benchmark-survey">report</a> published earlier this month found advisers are indeed curious about more sophisticated crypto investment strategies. Roughly a quarter of those surveyed expressed interest in buffered strategies — aka “defined outcome” funds — that seek to mitigate crypto’s volatility.&nbsp;



The Bitwise/VettaFi interpretation? These pros allocating for clients “want access to strategies that can provide a differentiated set of returns beyond buy-and-hold exposure.”



Kaufman noted some might choose to pair CBOJ (or other risk-managed bitcoin ETFs) with a spot product like <a href="https://blockworks.co/news/blackrock-etf-outperforming-bitcoin">BlackRock’s IBIT</a> “to reduce the risk of loss and shape their experience.”



It’s of course easy for an executive whose firm is selling such an ETF to say this. Flow data over time will give us a better sense of the demand for such tools.



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Bitcoin ETF with downside protection set to debut

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If you aren’t in DC and/or have not spent your inauguration weekend scrolling through Crypto Twitter, here’s a quick recap:&nbsp;



<ol class="wp-block-list">
<li>Crypto industry elites (and a journalist or two) donned black tie at the Crypto Ball Friday night.&nbsp;</li>



<li>Halfway through the ball, Donald Trump launched a memecoin, $TRUMP, which hit a market cap of $1 billion before Snoop Dogg left the stage.&nbsp;</li>
</ol>



Guests included <a href="https://blockworks.co/news/trump-picks-crypto-czar">incoming crypto czar</a> David Sacks, Donald Trump Jr., Treasury Secretary nominee Scott Bessent and, oddly enough, former Congress member and convicted felon George Santos.&nbsp;



House Speaker Mike Johnson, Sen. Cynthia Lummis and Rep. Bryan Steil, the new chair of the digital assets subcommittee, also made appearances.&nbsp;



“The reign of terror against crypto is over,” Sacks said during the only speech of the night.&nbsp;



Snoop Dogg, Rick Ross and Soulja Boy performed. Almost all of the crypto bros adhered to the black tie dress code, and only one tux-wearer opted for a splash of bitcoin orange: <a href="https://x.com/stasia_bk/status/1880517573793726701">Michael Saylor</a>. 



Other big industry names in attendance included Jesse Powell, the Winklevoss twins and Brian Armstrong. 



Tickets to the main event started at $2,500 and eventually hit $10,000 before selling out. VIP tickets went for $100,000. $1 million got you four VIP tickets plus dinner for one with Donald Trump, who did not attend the ball, “at a later date.”&nbsp;



Let’s dispel a couple of myths about the event: It was not “<a href="https://x.com/zGuz/status/1880621437956063577">invite only</a>” and it was not hosted by Donald Trump. MAGA Inc. and Bitcoin Inc. ran the event, along with several sponsoring companies and co-hosts, including Kraken, Exodus and Anchorage Digital. 



As for the memecoin, to say “no one at the ball knew about it” would be false. To say “few people at the ball cared about it,” on the other hand, would be more accurate.&nbsp;



As someone in the room, the politicians, industry execs and the ultra wealthy were far more interested in hearing Snoop perform covers of Fleetwood Mac (odd choice, I know).&nbsp;



Ball attendees may have missed out (or been late to the party, at least) on what turned out to be a lucrative trade, but the vast majority of the people in that room already have something far more coveted: political influence.&nbsp;



Plus, it’s crypto. You don’t need to be sitting at a desktop computer to make a few buys. The token is now available on Kraken and Coinbase. 



To be clear though, plenty of people at the ball weren’t happy about $TRUMP. But it wasn’t because they felt “left out” — it’s because they think the memecoin gives crypto a bad name, and could throw a wrench in some of their legislative plans. 



“This is a horrible look for the industry already trying to make the case that we’re not a bunch of hucksters, scammers and fraudsters,” one lobbyist told <a href="https://www.cnn.com/2025/01/20/tech/meme-coins-donald-melania-trump-intl-hnk/index.html">Politico</a>.&nbsp;



As of Inauguration Day morning, $TRUMP’s market cap was hovering just below $11 billion.&nbsp;



I made it out of DC just in time to skip the chaos of the weekend, but I’ll be watching from afar to see which “day one” promises come to fruition. You won’t want to miss tomorrow’s newsletter.



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Views from inside the Crypto Ball 

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Talk about a crazy weekend in crypto!&nbsp;



Here’s what played out over the weekend leading to Trump’s inauguration today:



<ol class="wp-block-list">
<li>Trump launches the TRUMP memecoin (with an egregious <a href="https://x.com/martypartymusic/status/1880511255103844602">80% insider allocation</a>) on Friday, catapulting to a $14 billion market cap — and $50+ billion fully-diluted valuation — over the next 33 hours.</li>



<li>On Sunday evening, Melania Trump <a href="https://x.com/MELANIATRUMP/status/1881094861279129643">announced</a> on her Twitter page the launch of her own MELANIA memecoin. It’s not clear if these are created by the same teams, though Anthony Pompliano <a href="https://x.com/APompliano/status/1881139314832359566">claims</a> they are not.</li>



<li>TRUMP cratered 50%, and MELANIA soared to a $13 billion market cap in four hours (Crypto Twitter laughs up an imminent divorce).</li>



<li>SOL places new time-highs again at $292.</li>



<li>Crypto speculators are feverishly awaiting the rest of the “<a href="https://x.com/clairekart/status/1881235816527397231">roadmap</a>” involving tokens from the rest of the Trump family.</li>
</ol>



Amid the frenzy to ape onchain, Solana the network did not go down, though many key infrastructural stacks suffered instabilities.



Jito’s block engine, which provides off-chain auctions for MEV protection, saw a brief three-hour window where transactions couldn’t be submitted. Median priority fees (tips) rocketed in this period.



<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">Yep During today&#39;s chaos, Jito experienced severe degradation &#8212; namely a 3 hour window following the melania token launch where Jito transaction submission was effectively broken During this window: &#8211; median prio fee jumped 5000x &#8211; transaction count fell 66% (reverts stayed… <a href="https://t.co/ODd1pnvm5s">https://t.co/ODd1pnvm5s</a> <a href="https://t.co/z1SLithW7h">pic.twitter.com/z1SLithW7h</a>&mdash; Dan Smith (@smyyguy) <a href="https://twitter.com/smyyguy/status/1881191943675219996?ref_src=twsrc%5Etfw">January 20, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Many users on Phantom wallet <a target="_blank" rel="noreferrer noopener" href="https://x.com/R89Capital/status/1881114518291710362">reported</a> wallet loading failures and inability to send transactions, due to <a target="_blank" rel="noreferrer noopener" href="https://x.com/phantom/status/1881112436549599328">a high amount</a> of transaction requests. Phantom claims there were at least 10 million transactions processed on Sunday.



Jupiter exchange founder <a target="_blank" rel="noreferrer noopener" href="https://x.com/weremeow/status/1881166068196233399">says</a> its price API and quoting engine were temporarily disrupted.



Users also <a target="_blank" rel="noreferrer noopener" href="https://x.com/KookCapitalLLC/status/1881293403012690067">reported</a> long wait times for transfers from Coinbase to Solana, or frozen withdrawals from Binance.



Solana daily DEX volumes shot up from $6 million (Friday) to $28 million (Saturday) and $39 million on Sunday.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc83SjbsmdyD-7nQlPDuJg6AOrmzBdcSPsTqyQ_0eQeKn17jO_Xfpxb-hwx_E0M-0Qi9VvChaq3kpIcCum-zGFjEx9hMG8Np5ZZ0cHt_vaa9LnKhfBOgFCs6BIO4EAAD6fLq8zqUQ?key=rHxXDmnAl21ExxFmkBexQWzW" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://app.blockworksresearch.com/analytics/sol?dashboard=sol-financial">Blockworks Research</a></figcaption></figure>



<h2 class="wp-block-heading">Impact on Solana’s onchain metrics</h2>



Solana’s real economic value (REV), defined as all fees (including MEV tips) users are paying to transact onchain, spiked to $57 million on Sunday.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf97KewAucxHHZkz2O2m-fd3zck9YYTU7T0MYxbUmw4nrBjzH4O6vlokB9IUuzHYpJ9jg4UTyKGZaTJKAtH1LjpmHyp6xElZ9L0rRoqZTGCWpwVLwck5yMMyOS3IyqHJKbOzhMhlw?key=rHxXDmnAl21ExxFmkBexQWzW" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://app.blockworksresearch.com/analytics/sol?dashboard=sol-financial">Blockworks Research</a></figcaption></figure>



In sum, onchain speculators have a lot of fun gambling, Solana takes a big win, while Nic Carter calls the memecoin launch “<a href="https://x.com/nic__carter/status/1881129532981444999">preposterous</a>,” and Alex Becker calls it “<a href="https://x.com/ZssBecker/status/1881097888157364522">embarrassing for the United States</a>.”



Proponents of the metaphorical “<a href="https://x.com/BobLoukas/status/1880587393402867777">simulation</a>” definitely got a boost.



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Trump memecoins rock Solana

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Marc Andreessen was right — our timelines really are splitting. 



Andreessen, on the Joe Rogan Experience in late November, theorized that our timeline had already split twice in the previous four months.



If that’s true, our universe has obviously diverged a third time with the launch of Trump’s official cryptocurrency, TRUMP, this past weekend.



The first occurred when Trump was shot last July. “And there was that moment where the world was going to head in two totally different directions [if Trump died],” Andreessen <a href="https://www.youtube.com/watch?v=ye8MOfxD5nU">said</a>.&nbsp;



Instead, we got the “most conspicuous display of physical bravery” he’s ever seen, referring to the almighty fist pump combined with a call to “fight, fight, fight!” — a killer combo now being used to promote TRUMP.



“Right at that moment it could have gone, you know, horrifically badly for the entire world after that. So that was timeline split number one. That other timeline&#8217;s out there somewhere,” Andreessen said. “And I don’t want to visit it. That’s the bad place.”



Trump’s win on election day in November caused the second rift, per Andreessen, paving the way for TRUMP to permanently split our timeline a third time — for better or worse.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1291" height="832" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-12.25.05.png?w=1024&amp;h=1024" alt="" class="wp-image-96373" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-12.25.05.png?w=1291 1291w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-12.25.05.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-12.25.05.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-12.25.05.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-12.25.05.png?w=399 399w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-12.25.05.png?w=405 405w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-12.25.05.png?w=340 340w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-12.25.05.png?w=80 80w" sizes="auto, (max-width: 1291px) 100vw, 1291px" /><figcaption class="wp-element-caption">Melania’s team also appears to have launched a token, which has already flipped AI16Z and WIF.</figcaption></figure>



TRUMP’s <a href="https://www.bbc.com/news/articles/c9vmym2jvy9o">coin</a> is worldwide news. It was deployed on Solana on Friday evening and took only 90 minutes to hit a $1-billion market cap, and barely another day to break $10 billion — making it a top 20 coin alongside toncoin, sui, litecoin and shiba inu.



While only 10% of the total TRUMP supply is currently available to the public, leading to some outcry, it’s hard to say how many people bought TRUMP on its way up.&nbsp;



Onchain <a href="https://dune.com/maditim/solana-dash?token_address_t2eabb=6p6xgHyF7AeE6TZkSmFsko444wqoP15icUSqi2jfGiPN">data</a> points to 110,000 individual addresses acquiring it in its first three hours of DEX trading and over half a million within the first 16 hours.&nbsp;



Currently, there’s over 900,000 addresses holding TRUMP, but it’s unlikely that figure maps to that many actual persons.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1291" height="830" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.49.25.png?w=1024&amp;h=1024" alt="" class="wp-image-96374" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.49.25.png?w=1291 1291w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.49.25.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.49.25.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.49.25.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.49.25.png?w=400 400w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.49.25.png?w=406 406w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.49.25.png?w=341 341w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.49.25.png?w=80 80w" sizes="auto, (max-width: 1291px) 100vw, 1291px" /><figcaption class="wp-element-caption">Purple lines show where the timelines would’ve split, going by Andreessen’s theory</figcaption></figure>



Still, given volumes ranging in the billions on CEXs — where user holdings aren’t reflected onchain — that there could be a million TRUMP holders isn’t so unrealistic in our brand-new timeline.



This universe is only three days old, so the rules aren’t yet clear. But there’s an obvious trend in the markets: Trump is up, almost everything else is down.



Except for SOL, which hit a new all-time high after gaining over 20% amid the TRUMP pump, perhaps due to buzz about the next US President launching a token on the network.



Since TRUMP was first issued — leading to a monstrous 400x — most major coins have lost value.&nbsp;



BTC also jumped to a new record this morning, reaching as high as $108,786.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1135" height="650" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.58.03.png?w=1024&amp;h=1024" alt="" class="wp-image-96376" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.58.03.png?w=1135 1135w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.58.03.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.58.03.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.58.03.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.58.03.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.58.03.png?w=456 456w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.58.03.png?w=382 382w, https://blockworks-co.imgix.net/wp-content/uploads/2025/01/Screenshot-2025-01-20-at-13.58.03.png?w=80 80w" sizes="auto, (max-width: 1135px) 100vw, 1135px" /><figcaption class="wp-element-caption">Performance as of 4 am ET.</figcaption></figure>



The only other top-25 tokens (not counting stablecoins) to gain were AAVE and LINK, which were up 6% and 7.5% as of this morning.&nbsp;



Both coins are tied to projects which are <a href="https://blockworks.co/news/0xresearch-newsletter-trump-world-liberty-financial-aave">on track</a> to <a href="https://www.prnewswire.com/news-releases/donald-j-trump-inspired-world-liberty-financial-adopts-the-chainlink-standard-to-accelerate-the-mass-adoption-of-defi-302305219.html">integrate</a> with Trump’s upcoming DeFi platform World Liberty Financial.&nbsp;



Meanwhile, the WLF token sale has hugely benefited. It has raked in an additional $200 million overnight, <a href="https://dune.com/seoul/wlfi">sending</a> total cumulative sales from under $90 million to its targeted $300 million.&nbsp;



It’s not outside the realm of possibility that some of the funds that just flowed into the WLF token sale were generated by trading TRUMP on its way up.



All this makes TRUMP much bigger than a memecoin. It’s a proof-of-concept that has demonstrated to the world what’s possible in this crypto-enabled timeline.&nbsp;



Apparently, that’s creating billions of dollars in onchain capital at the drop of a MAGA hat.



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