Indexed Finance

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">
&#8220;I do not fear computers. I fear the lack of them.&#8221;



— Isaac Asimov
</blockquote>



Bill Gates <a href="https://www.cnbc.com/2025/03/26/bill-gates-on-ai-humans-wont-be-needed-for-most-things.html">expects</a> that within a decade, humans will no longer be needed “for most things.”



We’re entering an era of “free intelligence,” he explains, in which expertise in all subjects will be commoditized — the best doctors and teachers, for example, will be AIs.&nbsp;



“It’s very profound and even a little bit scary,” Gates <a href="https://www.harvardmagazine.com/2025/02/harvard-bill-gates-ai-and-innovation">told</a> Harvard Magazine, “because it’s happening very quickly, and there is no upper bound.”



Listening to ex-Google CEO Eric Schmidt <a href="https://x.com/vitrupo/status/1911934053378588842">tell it</a> is even scarier: “Within the next one year, the vast majority of programmers will be replaced by AI programmers.”



Within five years, he adds, we&#8217;ll achieve artificial general intelligence, after which AIs will be as smart as the top expert in any field — and within six years we’ll achieve artificial super intelligence, where a single AI is smarter than the sum of all human intelligence.&nbsp;



“There’s no language for what happens with the arrival of this,” he warns.



But I wouldn’t worry too much just yet — these remain predictions about the future and the future, as Yogi Berra tells us, is famously hard to predict.



Also, evidence from the present suggests that humans won’t be so easily replaced.



For example, the founder of Cursor <a href="https://x.com/amanrsanger/status/1916968123535880684?t=8px6XEfAM8KWKnRiZC7c8w&amp;s=19">said</a> this week that the AI code editor he developed is now writing one billion lines of code per day.



That’s a lot — almost certainly more than the total lines of code written by every software developer in the United States put together.



And yet, the Bureau of Labor Statistics <a href="https://data.bls.gov/oesprofile/">estimates</a> there are at least 1.6 million software developers still employed in the US.



That could be about to change, who knows?



But if AI is already writing a billion lines of code without any discernible effect on employment, I suspect that’s an indication that human programmers have many years of employment to look forward to still.



Another indicator: Subscriptions for Microsoft’s Copilot have <a href="https://ben-evans.us6.list-manage.com/track/click?u=b98e2de85f03865f1d38de74f&amp;id=abd0ff0a30&amp;e=cfa7b309bc">reportedly</a> been stagnant for a full year now — which suggests that Copilot really is an “AI companion” for human employees (as the company markets it) and not a replacement for them.



Similarly, OpenAI <a href="https://techcrunch.com/2025/02/20/openai-now-serves-400-million-users-every-week/">reports</a> that ChatGPT has over 400 million active weekly users now — almost 5% of the world’s population!



But I still have to type this newsletter out myself.&nbsp;



LLMs don’t seem to be taking any other jobs, either: “We find muted effects of AI on employment due to offsetting effects,” one <a href="https://www.nationalaffairs.com/blog/detail/findings-a-daily-roundup/job-assignment">academic study</a> reports. “Highly exposed occupations experience relatively lower demand compared to less exposed occupations, but the resulting increase in firm productivity increases overall employment across all occupations.”



<a href="https://bfi.uchicago.edu/wp-content/uploads/2025/04/BFI_WP_2025-56-1.pdf">Another study</a> found similarly that despite widespread adoption of LLMs, “AI chatbots have had no significant impact on earnings or recorded hours in any occupation.”



So even newsletter writers appear to be safe for now.



And even if not, we’ll probably find something else to do.



Benedict Evans recently <a href="https://www.ben-evans.com/benedictevans/2023/7/2/working-with-ai">recounted</a> the long history of new technologies leading to higher, not lower, employment, citing examples such as the invention of typewriters and adding machines: &#8220;What did that do to clerical employment? People hired far more clerks. Automation plus the Jevons paradox meant more jobs.&#8221;



Evans illustrates this point by noting that the vast floor of human calculators that Jack Lemmon worked on in <a href="https://www.rogerebert.com/reviews/great-movie-the-apartment-1960">The Apartment</a> has since been replaced by a single spreadsheet.



But there are far more people employed using spreadsheets today than there ever were using adding machines.



In some places, the greater concern is that there are too many jobs and not enough people: Greece, for example, introduced a six-day work week last year “due to the twin perils of a shrinking population and shortage of skilled workers,” as The Guardian <a href="https://www.theguardian.com/world/article/2024/jul/01/greece-introduces-growth-oriented-six-day-working-week">reported</a> it.



Similarly, at least part of the reason for the persistent <a href="https://www.haas.berkeley.edu/wp-content/uploads/Howard_Wang_Zhang_Housing-Supply-and-Construction-Labor-Dayin-Zhang.pdf">shortage of affordable homes</a> in the US is that there aren’t enough humans available to build them.



This could change, of course.&nbsp;



ChatGPT may soon write this newsletter faster and better than I can — I’ve noticed, not without trepidation, that it’s slowly been getting better at proofreading individual sentences for me.



And even construction workers may someday fear for their jobs.



Analysts at Bank of America <a href="https://www.actuia.com/en/news/according-to-a-bank-of-america-study-3-billion-humanoid-robots-will-be-in-service-by-2060/">predict</a> there will be three billion humanoid robots roaming the planet by the year 2060, doing everything from handling hazardous materials to caring for the elderly.



2060 is still a long way off, however, and chances are we (like Jack Lemmon) will have found better things to do by then.



In the meantime, though, let’s keep ourselves busy by checking the charts.



How it’s going so far:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdjjcD-7dCneloeehpy60rwtUGsiFzdgLesw1gOfzVSwmz_bL4TC4OkY7cJaaI19VVuHZmhkWzwUq5dgylStbdp6x1HOm54lstIxgLBU3HB3o_WKVZOC28N7ryb3dk9rwq8gG80xQ?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



A simple but amazing chart: Exactly one month after Liberation Day, Nasdaq is 3.2% higher. That is ….not what I expected. Also, Liberation Day was ONE month ago??? Feels like 10 years.



Not all is well in markets, however:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcF1HD5lGzeWtpUiph1GfoW2MAL3K2eGUS8GdnB2uY4ik0bhzZLtV2E8mlPdrz70k30R257E_TwrxvtVEijLRqN1eakU8QLQh8_RjgIXUdtTOgPdPXDmulbL_-oWDdGtwsg1B6v?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



Gold is up, the dollar is down and oil is down a lot. This seems more consistent with yesterday’s <a href="https://x.com/SpencerHakimian/status/1918059517461577913">news</a> that tariffs are costing Apple $900 million a quarter and this morning’s <a href="https://www.reuters.com/business/us-cedes-little-ground-key-tariffs-talks-with-japan-nikkei-says-2025-05-02/">news</a> that Japan isn’t interested in the trade deal currently on offer.



Zooming out:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeD2uZMhzrvjK_2q_b9_rQDZpThDqzck5lmwtiAut7vv9CeU73kv_PDOGgwGCSfq7AOADIFP0EcoYwTGo5BZlUWeOJQp7iuQJGl-T4U1RL5V9fOSt5Rkt6vGPOpODGQlseS5LBl_Q?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



The US dollar tends to move in decade-long trends. With Japan now <a href="https://www.reuters.com/markets/asia/japans-us-treasury-holdings-among-tools-trade-talks-finance-minister-kato-says-2025-05-01/">threatening</a> to unload its massive stockpile of US Treasurys, it’s easy to see why the next trend might be down.



The economy’s firewall:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcUsBU4IPyLPOiXKzvLY6GC5aNtoqxzrjmBl8-Jo6ndwuE1opDEkS7uJXjwZZTeR5RX8CbDSNNW7qUG8WD_mp9P55nSv4KcMFy4vDLyNTVOHQPiroEt3uLomgisIGxhtmPGrKYpug?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



This morning’s report that the US added 177,000 jobs in April, which is encouraging, but of course backward looking, according to <a href="https://x.com/Markzandi/status/1918298122088005718">Mark Zandi</a>: “The job market remains a firewall between continued growth and a downturn. But…the firewall feels fragile. Unless the trade war de-escalates in the next few weeks, the firewall will come down, and a recession will ensue.”



Looking forward:&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd-DdnPGZIDI4Zv8cIr2J8KgItSu3-yvfOP5LjfUsbUawDrnQ4FL5X7BaoIOWrG8AL5POgjjsfdYjhFCffuzOxgKLMuTgxSLzycdu0aN7_RRxZZjVnyb6OK1w_7DtaotFovay70OA?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



Torston Slok warns that this morning’s employment data was collected the week after Liberation Day tariffs were announced and that the correlation to University of Michigan survey data suggest that employment is set to turn lower and “perhaps even negative.”



Don’t forget the little guys:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd0QHrPSuXA6xLcjnZEhC_dG6Sonw5FoJaLnDgud4cv4h8DqKTbMNMY43ygxhji-wt-ScA_tZag5DMcO6SeXVgiScfRMtr6emZXfzNaiqqYM1ZjI99dh4kOkotwwKo4UNS7UoyUVg?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



Apple can weather tariffs at even a cost of $1 billion a quarter, but smaller businesses dependent on imports from China probably cannot.



Congratulations to the class of 2025:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfTFZHlgHM_X4XgiKqJoJYcW7Qaaoqq_BnV7rbCAgLSE9NETDXOcJ2plO3tQR30WuOvCwBiFrj2As2oYdHjTER8qHH-Cc_gPpYPV9cHKieO1hzme-LPpuAzq-qr11fWznpzQNwc7Q?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



This chart from the Atlantic shows that contrary to the historical norm, recent college graduates now have a higher unemployment rate than the average American. (I’d probably still trade places with them though.)



It’s cheaper to stay in school, at least:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXefQQqhCR7lmuoyhLaEVpyl2DUSLQ9ICMJRhWcxlVhrWL_rVbqZ_4U4oX_GSS_-sPcP8Zox2Symyt0slalGewA9pa6t41jPNFk5qZTUsAJhO8SpWGIroneeS5ieqSB9-zRGaeSBQA?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



Bloomberg’s Jon Authers notes that Covid broke the multi-decade uptrend in the cost of college, which is now headed lower.



Recession odds:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="828" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=1024&amp;h=1024" alt="" class="wp-image-101512" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-1.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The Polymarket odds have been ticking up, which seems weird given what stocks are doing. One analyst <a href="https://x.com/dailychartbook/status/1918312020824473871">estimates</a> that stock prices are now pricing in only a 34% chance of recession. Even more discordant is the <a href="https://www.bloomberg.com/news/videos/2025-04-22/economic-uncertainty-higher-than-past-recessions-hunter-video?srnd=phx-markets">estimate</a> from Constance Hunter, chief economist at the economist intelligence unit, who puts the probability at 80%.



Not a prediction:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeEJwkr7nEFKXp0_r6AjDlvFwQqNAPtRCLcdqpr7q8slLIo3SjgTX8cqpVa2S-bItl8sH4d5mZ6yzW26clLMFtkg4GVuNlrBQIDe4DSTPXAmCxJCXFZ-j0wc7Lz_Ice8GuVko6UJg?key=wj6o-hDlSwrRevncwZWcaZYm" alt=""/></figure>



The <a href="https://www.vizionapi.com/blog/tariff-tracker">latest data</a> from Vizion’s Global Ocean Bookings Tracker shows exports from China to the US down 48.6% from a year before. “Maybe the children will have two dolls instead of thirty,” the president <a href="https://x.com/Acyn/status/1917634492539494557">said</a> in response this week. “Maybe the two dolls will cost a couple of bucks more.”



That sounds pretty recessionary to me — but maybe he’s right that the boats are filled with “stuff we don’t need.”



As long as we keep the jobs we need, I think everyone would be fine with that.



Let’s hope that’s what the markets are telling us.



Have a great weekend, naturally intelligent readers.&nbsp;



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Get the news in your inbox. Explore Blockworks newsletters:



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<li><a href="https://blockworks.co/newsletter/daily">Blockworks Daily</a>: Unpacking crypto and the markets.</li>



<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>

The Breakdown Newsletter

Friday Charts: Will natural intelligence keep us employed?

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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Have you ever wondered why stock trades take days to settle? Have you ever looked at the UX nightmare that is fractional ownership and thought, How in the world is this still the norm? And why is it exactly that your shares must live inside custodial black boxes?



These design failures boil down to the fact that the US equity market is fundamentally outdated. It&#8217;s <a href="https://ir.nasdaq.com/news-releases/news-release-details/nasdaq-study-shows-legacy-technology-and-regulation-preventing">trapped</a> inside legacy infrastructure, shackled by intermediaries and probably <a href="https://www.zdnet.com/article/if-cobol-is-so-problematic-why-does-the-us-government-still-use-it/">coded</a> in COBOL.



Efforts to modernize the system are usually surface-level. We might get faster messaging or marginally updated interfaces, but the core always seems to remain untouched. Hence, we live in a holding pattern of settlement delays, bloated fees and an ecosystem that is as opaque as it is exclusionary.



Enter Project Open, a <a href="https://www.sec.gov/files/ctf-written-project-open-wireframe-04282025.pdf">newly submitted SEC pilot proposal</a> with blockchain at its core. Jointly proposed by the Solana Policy Institute, Superstate and Orca (and with legal support from Lowenstein Sandler), Project Open is a <a href="https://x.com/SolanaInstitute/status/1917650618677686764">request</a> for exemptive relief that would allow equity securities to be issued, registered and traded directly on public blockchain networks like Solana.



The Solana Policy Institute, which <a href="https://www.solanapolicyinstitute.org/blog/announcing-the-launch-of-solana-policy-institute">launched</a> at the end of March, is a non-partisan advocacy group <a href="https://blockworks.co/news/solana-policy-institute-ceos-political">aiming to help policymakers</a> understand the role public blockchains can play in economic and social infrastructure. Project Open is its first major public action.



The group <a href="https://www.sec.gov/files/ctf-written-project-open-wireframe-04282025.pdf">submitted</a> a 20+ page legal framework to the SEC&#8217;s <a href="https://blockworks.co/news/sec-new-crypto-task-force">crypto task force</a> this week, complete with registration pathways, KYC onboarding, smart contract-based settlement, investor education modules and blockchain-native transfer agent roles.



Issuers would file traditional-style registration statements, which is same-same with how we do things now. The main difference involves using a digital token class instead of paper shares. Transactions would settle instantly, wallet-to-wallet, onchain.



Project Open takes a head-on approach to compliance, proposing a pilot program with a gated issuer cohort, 18-month duration and SEC oversight baked in.



Investors would hold &#8220;Token Shares&#8221; in whitelisted wallets after passing KYC and educational onboarding. A registered transfer agent would track all shares using the blockchain as the system of record, with super-admin rights to fix errors, recover assets or enforce restrictions. No custodians. There wouldn&#8217;t be any net settlement. No post-trade ambiguity. Just delicious, deterministic finality.



Project Open proposes trading on rails using smart contracts (a la Orca AMM or bilateral P2P swaps) rather than traditional exchanges. The filing even outlines how tokenized trading mechanisms would navigate existing rules like Reg NMS and broker-dealer custody requirements — or bypass them via targeted exemptions.



It&#8217;s frankly an opportune time for this proposal to land, what with <a href="https://blockworks.co/news/gary-gensler-resigning">Gary Gensler out</a>, the subsequent <a href="https://blockworks.co/news/sec-potential-shift-enforcement-actions">rollback of enforcement actions</a>, and new SEC Chair Paul Atkins <a href="https://blockworks.co/news/sec-chair-nominee-crypto-past">signaling</a> openness to &#8220;huge benefits&#8221; from blockchain infra.



We&#8217;ve heard a similar song a lot lately. In his investor letter last month, BlackRock CEO Larry Fink <a href="https://www.blackrock.com/corporate/investor-relations/larry-fink-annual-chairmans-letter">said plainly</a>:



&#8220;Every stock, every bond, every fund — every asset — can be tokenized. If they are, it will revolutionize investing. Markets wouldn&#8217;t need to close. Transactions that currently take days would clear in seconds. And billions of dollars currently immobilized by settlement delays could be reinvested immediately back into the economy, generating more growth.&#8221;



If he&#8217;s right, then Project Open may be the first serious attempt to give that future a regulatory foundation in the US.



The goal is for internet capital markets to settle in seconds, run on open infrastructure, and restore user-level control. Faster, fairer, cheaper, smarter, with the opacity dial thinned to nil.



Project Open reads like the culmination of years of onchain trial and error. It&#8217;s the sober recognition that blockchain tech is ready for real finance, not just DeFi.&nbsp;



If the SEC says yes, even conditionally, it would be a meaningful convergence of TradFi and crypto — on the scale of ETFs, and just as important as tokenized Treasurys onchain.&nbsp;



If it says no, the status quo holds&#8230;for a little longer, anyway.



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Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/daily">Blockworks Daily</a>: Unpacking crypto and the markets.</li>



<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>

Lightspeed Newsletter

Project Open makes its case to the SEC

Ben Strack

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



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Financial giants mulling ways to better serve clients clamoring for crypto is no longer surprising.&nbsp;



That doesn’t exactly make it any less significant, though.&nbsp;&nbsp;&nbsp;&nbsp;



First up is Morgan Stanley, which is reportedly working on adding crypto trading to its E*Trade platform (possibly next year). A spokesperson declined to comment when I requested for details.&nbsp;



This <a href="https://www.bloomberg.com/news/articles/2025-05-01/morgan-stanley-plans-to-offer-crypto-trading-to-e-trade-clients">report</a> — citing people familiar — doesn’t shock us, given our own reporting in recent weeks and months (even years). It’s even less surprising now, given the changing <a href="https://blockworks.co/news/trump-first-100-days-crypto-policy">US regulatory landscape</a> could ease burdens for TradFi players wanting to offer more crypto services.



So, if Morgan Stanley is thinking about this, will they follow through?&nbsp;



In a word, ZX Squared Capital co-founder CK Zheng told me: “Yes.” Particularly as they assess a market Zheng says could grow by 10x or 20x in the next decade. And, ya know, the whole thing about portfolio diversification.



Bitcoin held up better than many other risk assets during last month’s market volatility, added Zheng, an ex-valuation risk management director at (where else) Morgan Stanley. He spent nearly two decades in a similar role at Credit Suisse.&nbsp;&nbsp;&nbsp;



“With the ongoing <a href="https://blockworks.co/news/us-economy-shrank-q2-fears-tariff-impact">tariff wars</a>, many investors may want to diversify away from US equities, US bonds and <a href="https://blockworks.co/news/trump-sell-us-assets-trade-deficit">US dollar assets</a>,” Zheng said.



Charles Schwab, meanwhile, plans to offer spot bitcoin and ether trading within the next 12 months, CEO Rick Wurster <a href="https://www.reuters.com/business/finance/charles-schwab-ceo-says-investors-are-de-risking-diversifying-2025-05-01/">told</a> Reuters.



This matches what a Schwab representative <a href="https://blockworks.co/news/charles-schwab-spot-crypto-etfs-plan">told me</a> in November, and again yesterday — that it planned to offer spot crypto trading once there’s “more clarity in the regulatory environment.” The rep added: “We anticipate that will happen, and we’re getting ready for that eventuality.”&nbsp;



They didn’t immediately share with me what the company’s waiting for specifically (but I’m thinking a <a href="https://blockworks.co/news/congress-crypto-market-structure-bill-regulation-cftc">market structure bill</a>, at least).&nbsp;



Another tidbit I heard from the Schwab spokesperson — the company in Q4 saw a 400% increase in traffic to the crypto <a href="https://www.schwab.com/cryptocurrency">page</a> on Schwab.com.



In the meantime, Schwab and other brokerages (<a href="https://blockworks.co/news/vanguard-opposes-platforming-eth-etfs">but not Vanguard</a>) allow investors to access spot and futures crypto ETFs, as well as blockchain equity ETFs like the fund <a href="https://blockworks.co/news/first-charles-schwab-crypto-etf-set-to-launch-next-week">Schwab launched</a> in mid-2022. Bitcoin and ether futures too, but only for Schwab clients with futures accounts.&nbsp;



You might remember that Morgan Stanley started allowing its financial advisers to offer the BlackRock and Fidelity bitcoin ETFs to certain clients. This soliciting <a href="https://blockworks.co/news/on-the-margin-newsletter-morgan-stanley-bitcoin-adoption">was different</a> from what it did before (allowing investments into such products only if clients actively sought them out).



Let’s throw another financial behemoth name in here: Wells Fargo. The bank <a href="https://blockworks.co/news/merrill-wells-fargo-offer-bitcoin-etfs">made available</a> unsolicited spot bitcoin ETF purchases to certain clients (via Wells Fargo Advisors or its WellsTrade platform) in early 2024.



More recently, the Wells Fargo Investment Institute called digital assets “investable as they continue to evolve” in a March <a href="https://saf.wellsfargoadvisors.com/emx/dctm/Research/wfii/wfii_reports/Investment_Strategy/digital_assets_intro_to_digital_assets_basics.pdf">report</a> meant to address common questions.



Brian Rehling, who leads WFII’s global fixed income strategy, told me this was a response to “an increasing number of inquiries from clients and investment professionals about digital assets and if they should include allocations in their portfolios.” Most of these questions are limited to bitcoin for now, he added.



A Wells Fargo spokesperson didn’t want to comment today on any possible spot crypto trading plans — instead reiterating the ability for clients to buy bitcoin ETFs.



The proliferation of spot crypto trading on Wall Street would clearly be a milestone beyond the existing ETF access.&nbsp;



“Even though many investors can invest in bitcoin ETFs, spot bitcoin trading will provide easy 24/7 direct trading access with less fees,” Zheng said.&nbsp;



And while <a href="https://blockworks.co/news/revenue-diversity-analysts-coin-buy-rating">Coinbase</a> and <a href="https://blockworks.co/news/robinhood-crypto-diversification-q1-earnings-trading">Robinhood</a> offer this today, there would be a segment of investors that would appreciate the familiarity of traditional institution platforms — and their reputations, the exec noted.&nbsp;



“This will make the competition more fierce, and potentially make their services better and safer with lower transaction fees,” Zheng added. “In the end, spot trading will be a commoditized business.”



As crypto natives might say, it’s probably nothing.



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Charles Schwab

Spot crypto trading to become ‘commoditized’ as Wall St. interest persists

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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We now know what’s been hinted at for a while: MapleStory’s crypto spinoff, MapleStory N, is finally launching on May 15.



On May 8, players in select countries will be able to <a href="https://docs.maplestoryn.io/announcement/let-the-countdown-begin">pre-download</a> the game.



The new game will be a 2D, sidescrolling MMORPG like the original game. MapleStory N is part of MapleStory Universe (MSU), which also includes plans for a mobile game version for players plus MapleStory N SDK and Project ModN (a blockchain game sandbox) for developers.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdRG-ge3gkm8vxVNmO36WPam6EAVI_SBYSIrKdlfOenmKKoDA58m4NmofBjp4tfJZT15rdOUTbOrtdeCZbfjD43E10EszgEXwyRco8nB_RAqM685XCUF3MAd6MvRbH7J7YIbplSpA?key=Sj-kQXDqHg6-zTmxL_bjkIE5" alt=""/></figure>



MapleStory N uses its own Avalanche L1 (also referred to as a subnet) to facilitate player-to-player game item trading without an in-game shop. Players will be able to buy and sell in-game items and create game items, too.



MapleStory N will have a built-in anticheat feature and use AvaCloud’s security infrastructure. The game has been tested with millions of onchain activities already across roughly 972,000 registered wallets. The team estimates they had about 506,000 total users during the prelaunch period.



The original MapleStory game from Nexon sports a pixelated “chibi” anime aesthetic where players can choose from different character classes such as warrior, magician, bowman, thief or pirate. Players can join guilds, auction items, enhance items, level up, navigate dungeons, battle monsters and bosses, and select new skills — to name a few ways players engage with the world.&nbsp;



But there’s a hitch with MapleStory N: It won’t be available in the US, most of Europe, or countries like Japan and South Korea.



MSU’s <a href="https://msu.io/policy/terms">terms</a> put forth a long list of over 50 restricted countries — that’s 1 in 4 countries in the world. Ten months ago, some Redditors <a href="https://www.reddit.com/r/Maplestory/comments/1dncvyi/maplestory_univerese_country_restriction/">noticed</a> this. Notably, Norway, Switzerland, Canada, Mexico, Australia, South Africa, India, and some countries in southeast Asia are not on that restricted list:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdqBgCh2ANaiwRr66huVczaYtMB8DVEzVd-zeytPE004FolR1CD4xon_SfQfnKd7eYTFiSoL_6dMsAAkJBYY1tk1yzwGzrh0bg_srN1FPOpN-QBBXb5W3DwO4YZw__7bb7TR7R6?key=Sj-kQXDqHg6-zTmxL_bjkIE5" alt=""/></figure>



That list is still the case today, though MapleStory N is apparently trying to support more regions.



Being banned in the US and much of Europe could pose a significant problem for this game, because it won’t really be able to reach Western audiences, which make up a large part of the game industry’s spenders. South Korea and Japan are also important markets in gaming.&nbsp;



In fact, MSN will not be available in the top <a href="https://newzoo.com/resources/rankings/top-10-countries-by-game-revenues">7 largest gaming markets</a> globally. It will only be available in 2 of the top 10 markets by revenue (Mexico and Canada).



Yes, players may try to use VPNs to get around these restrictions, but some platforms are able to identify and block VPN use.



What’s strange is that other crypto games, like <a href="https://blockworks.co/news/off-the-grid-token-launch-anticipated">Off The Grid</a>, have launched with a token and dedicated Avalanche L1 in the US without problems.&nbsp;



MapleStory’s terms say that all of these countries are barred from playing its game because of “the status of crypto sanction or regulations in each country.”&nbsp;



But the US, under Trump, has pivoted toward a favorable stance on cryptocurrencies overall. The SEC has also dismissed a slew of prior investigations into OpenSea, Uniswap, and others.



If the MSU doesn’t change its terms, this game won’t get nearly the audience it otherwise could. I think that’s sad, because this one is promising.



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Gaming

MapleStory N launches in 2 weeks — but not in the USA

Donovan Choy

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



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A lot has happened since I last <a href="https://blockworks.co/news/movement-launches-mainnet">wrote</a> on Movement. At the time, the chain was not live.



About a month later, on April 15, Blockworks’ Katherine Ross and Jack Kubinec <a href="https://blockworks.co/news/movement-market-maker-investigation">broke a story</a> on market maker “misconduct” around the project’s MOVE token on the Binance exchange.



The market marker was <a href="https://x.com/zachxbt/status/1904499840089772445">alleged</a> by ZachXBT to be linked to market making firm Web3Port. At the time, MOVE traded at $0.29, about 74% down from its highs of $1.12 in December.



Movement Labs co-founder Rushi Manche was also reportedly taking a “temporary leave” from the company, a claim that Manche neither explicitly affirmed nor denied at the time.



As of yesterday, Movement officially <a href="https://x.com/movementlabsxyz/status/1918134801028268187">confirmed</a> that Manche has been suspended “in light of ongoing events” regarding “organizational governance and recent incidents involving a market maker.”



The market maker in question was confirmed to be Web3Port in a CoinDesk exposé <a href="https://www.coindesk.com/tech/2025/04/30/inside-movement-s-token-dump-scandal-secret-contracts-shadow-advisors-and-hidden-middlemen">published</a> on Wednesday.



The market maker reportedly sold 66 million MOVE tokens (worth $38 million and about 2.64% of the total circulating supply at the time) on Dec. 9, 2024 — the day of the token’s Binance listing. On Mar. 25, Binance <a href="https://www.binance.com/en/support/announcement/detail/478515187fab440fa80e56137c148a1b">banned</a> the market maker engaged by Movement after it netted a profit of $38m.



In the aftermath of the Binance ban, Movement quickly condemned the market maker, citing that the firm’s actions were “against our wishes, without our consent, and in breach of our agreement.” Within the same <a href="https://www.movementnetwork.xyz/article/movement-network-foundation-statement">blog post</a>, Movement quickly announced a $38 m MOVE buyback program to “return the USDT liquidity to the Movement ecosystem.”



Coinbase exchange announced also today its decision to <a href="https://x.com/CoinbaseAssets/status/1917976973046853893">suspend</a> trading on the MOVE token. MOVE has plummeted to $0.19, down about 21% in the last 24 hours.



<h2 class="wp-block-heading">The exposé</h2>



CoinDesk’s piece revealed that Web3Port had initially floated a contract with Movement Foundation that included a clause allowing the market maker to liquidate its MOVE positions on the condition that the token reached a $5 billion FDV, then shared profits on a 50-50 basis.



Movement initially pushed back against the contractual agreements. Yet, after some revisions, the resulting signed agreement retained the market maker’s ability to “sell tokens for a profit,” CoinDesk reported.



According to Movement Foundation’s general counsel YK Pek, the renegotiated agreement used a “variable interest” mechanism, where a portion of tokens would be loaned to Web3Port only when the token price exceeded a certain rate.&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">31/ Anything in excess of 0.25, 50% of it would be paid as &#39;variable interest&#39; to the Foundation. So at 0.30, the Foundation would earn 0.25+0.025 and the MM would earn 0.025. In other words, after the &#39;agreed principal USD value&#39;, the MM earns an upside. <a href="https://t.co/nRm9KpcNqo">pic.twitter.com/nRm9KpcNqo</a>&mdash; wassielawyer （哇西律师） (@wassielawyer) <a href="https://twitter.com/wassielawyer/status/1918182021530292437?ref_src=twsrc%5Etfw">May 2, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



This was an improvement over the previous proposed clause that would not require the market maker to sell any tokens below a $5b FDV price. It helped to solve for the “incentive misalignment with a hard dump figure at 5bn,” Pek said in the X post.



Web3Port’s contract with Movement Foundation was brokered through Rentech, a questionable middleman entity that looks to be a Web3Port subsidiary.



The real controversy, Movement Foundation’s general counsel YK Pek said, was that the foundation was misled into entering an agreement under a false impression, rather than on the terms themselves.



Disclosure: Blockworks co-founder Jason Yanowitz is an angel investor in Movement Labs.



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0xResearch Newsletter

Movement’s Rushi Manche faces suspension amid market maker controversy

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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Picture the iconic Spider-Man meme with the various Spider-Men pointing at each other.



Got it in your head?



Kraken said yesterday that it turned the tables on a North Korean hacker who was trying to get a job at the exchange.



I spoke to Kraken’s chief security officer, Nick Percoco, who gave me some details that are, honestly, just perfect for a Friday edition.



Percoco told me Kraken had received a list of email addresses tied to hackers. They, as one would expect, checked to see if any of those addresses would pop up around Kraken. One did. The person had applied for a job and was in a pool of candidates.



Basically, he explained, the person’s resume wasn’t standout enough for the hiring team to otherwise pay attention. But the team decided to see what would happen if they proceeded with the hacker.



According to Percoco, given some red flags, the person wouldn’t have gotten very far in the job application process. For example, when the person joined a Zoom call, it was under a different name (not the name he’d used on the application), and then he quickly changed it.



When Percoco virtually sat down with the individual for one of the cultural interviews, things got interesting. It was Halloween, so naturally, Percoco asked the individual what he was doing for Halloween. After an extensive conversation, he claims it was pretty clear the person didn’t understand the holiday.



Then, when asked to pull out his phone and show his Google map location (to verify that he was in Houston, Texas), the individual struggled with that, too, Kraken said. It took him a few minutes of pretty obvious scrolling to find Texas on his Google Maps, per Percoco.



While this story is amusing now, it pulls back the curtain on a bigger problem in crypto. These bad actors are actively trying to infiltrate US crypto companies.



Percoco warned that companies have to be more careful about who they’re hiring and how they verify them. In Kraken’s case, the individual had enough missteps that he wouldn’t have made it through the normal process. But hiring someone directly through Discord, for example, could leave a project at risk.



His advice for screening a candidate that’s raising some red flags is to have them go to a place like a local Starbucks or McDonald’s and order something. That way — on a Zoom or virtual call — you can see where they are and it gives the interviewer insight into the location. For example, a McDonald’s in Germany would have German on the packaging instead of English, he said.



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Empire Newsletter

Kraken thwarts hacker’s ill-intentioned job application

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



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



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“It looks a little bit like crypto keeps playing a prank on the stock market, and the stock market keeps falling for it.” — Matt Levine on bitcoin treasury companies
</blockquote>



Q: Will you let Worldcoin scan your eyeballs?



Now that it’s finally <a href="https://blockworks.co/news/sam-altman-worldcoin-orb-mini-eye-scan">available in the US</a>, I will — enthusiastically.&nbsp;



That might put me in the minority because Worldcoin has gotten a chilly reception in crypto circles, mostly because its eyeball-scanning orb looks like surveillance tech straight out of Minority Report.



But how else are you going to prove you’re human?



In the coming age of AI-generated fake news, deepfake videos, financial scams and <a href="https://www.cnbc.com/2025/04/08/fake-job-seekers-use-ai-to-interview-for-remote-jobs-tech-ceos-say.html">fake job applicants</a>, someone will need to store a proof that you’re human.



You will only have three options to choose from: a government, a corporation or a decentralized crypto protocol.&nbsp;



Seems like an easy choice.



Vitalik has <a href="https://vitalik.ca/general/2023/07/24/biometric.html">explained</a> that “proof of personhood is valuable because it solves a lot of anti-spam and anti-concentration-of-power problems that many people have, in a way that avoids dependence on centralized authorities and reveals the minimal information possible.”



But even non-crypto people will likely agree that identity on the internet should be decentralized, sybil-resistant, provable and open source.



Last night, Sam Altman reassured us that Worldcoin’s technology was “a way to make sure humans remained central and special in a world where the internet had a lot of AI-driven content.”



Altman is admittedly proposing to solve a problem that he himself has created, but he’s right that proving unique humanness is about to become mission critical — and CAPTCHAs are not going to do it.



So far, Worldcoin is the only plausible solution for proof-of-personhood I&#8217;ve seen (or can even imagine, really) — and it proves that personhood in a most crypto-native way: by turning your iris scan into a hash and storing it on a decentralized blockchain.



It’s not even your full iris data that’s stored, just a mathematical representation of it that can be used to check for uniqueness.



Don’t we all want to be unique?



And anonymous?



Seems like something true crypto cypherpunks should embrace.



Q: Should stablecoins be allowed to pay interest?



I’d like to receive interest on mine, but paying interest turns stablecoins into narrow banks and there’s a reason why the Federal Reserve doesn’t give bank charters to narrow banks — the banking system is supposed to intermediate between savers and risk takers, not savers and the government.&nbsp;



Narrow banks take money from savers and park it in risk-free T-bills and reverse repos, which is neither economically productive nor socially desirable.&nbsp;



But banking has been getting more narrow ever since the introduction of money market funds in the 1970s (which Paul Volcker argued against as a dangerous kind of regulatory arbitrage).



And now, brokerages like Fidelity and Vanguard let you pay bills out of those high-yielding money market funds.



Seeing as that’s allowed, why not let stablecoins pay interest, too?



Seems intuitive enough, but <a href="https://x.com/CampbellJAustin/status/1917581563598102830">Austin Campbell</a> makes an even simpler case for why stablecoins should pay interest: “If you are banning interest payment on stablecoins, that interest doesn’t go away. It just goes into the pockets of corporate executives.”



The pockets at Tether HQ are particularly overflowing at the moment: Per their <a href="https://tether.io/news/tether-approaching-120b-in-u-s-treasuries-confirms-quarterly-operating-profit-over-1b-and-strengthens-global-usdt-demand-in-q1-2025/">Q1 attestation</a> released this morning, Tether’s owners paid themselves $2.347 billion last quarter.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe9B61csnKZqUxIheGk3CUOEkq7kUUcjasfd65td3_Ij3hyTQpYddtEE84n6m_EeaYSkh3BErtJWgPLU3e61pN-IIynlYMSlSLylnhhA9rP2c9uqrD0CrPvuRYCeIiIk-zxlbNVxg?key=g-zCDNtssgzQwZk0A6w2WfUO" alt=""/></figure>



That is quite the payday considering that Tether reportedly has as few as five owners — four top executives plus Cantor Fitzgerald who recently took a <a href="https://www.wsj.com/finance/currencies/howard-lutnick-giancarlo-devasini-tether-cryptocurrency-3d0a961c">5% stake</a> (for reasons obviously unrelated to Tether’s non-existent need for capital).



The Cantor investment valued Tether at $12 billion, which means the owners just received a quarterly dividend of 19.5%.&nbsp;



Tether’s operating profit for the quarter was just $1 billion, so the $2.3 billion dividend cuts into their “equity” buffer and they won’t be doing that every quarter.&nbsp;



Still, though, 19.5%!&nbsp;



You can see why Circle <a href="https://www.bloomberg.com/news/articles/2025-04-30/ripple-is-said-to-have-offered-to-buy-stablecoin-rival-circle">reportedly</a> turned down an offer of $5 billion from Ripple this week.



Q: How is the president’s stablecoin doing?



Right.&nbsp;



Another reason that Congress may prevent stablecoins from paying interest is that the president happens to own a stablecoin issuer.



On stage at Token 2049 today, it was <a href="https://www.nytimes.com/2025/05/01/us/politics/trump-cryptocurrency-usd1-dubai-conference-announcement.html">announced</a> that a $2 billion transaction between Binance and the state-backed Emirati investment firm MGX would be made in USD1, the Trump family stablecoin.



That represents about $80 million of annualized revenue going into the pockets of the issuer for as long as the money stays there.



“Virtually every detail of [the] announcement, made during a conference panel with Mr. Trump’s second-eldest son, contained a conflict of interest,” the New York Times reported.&nbsp;



Ugh.



Q: What&#8217;s it mean when a SPAC trades at $50?



It means people are losing their minds again.



The SPAC mania of 2021 revealed what happens when price discovery is left to retail investors: Deals that would never have made it past the first IPO roadshow meeting were rapturously received as “SPACs.”



Special Purpose Acquisition Companies (SPACs) are publicly traded pools of capital created to acquire a private company and take it public — an alternative to the traditional IPO process.



SPAC shares are customarily issued at $10 per share and usually trade somewhere around that level while the managers of the SPAC go looking for a deal.&nbsp;



After a deal is announced, SPAC shares will trade higher or lower depending on how the deal is perceived by investors.&nbsp;



Roughly speaking, if a SPAC trades at $11 after announcing a deal, it means that investors expect their stake in that deal will instantly be worth 10% more than the money they’re contributing to it — a reasonable assumption to make.



In the 2021 mania, however, it became common for SPAC shares to trade at $20, $30 or more.



That wasn’t a reasonable assumption to make because it implied that the company the SPAC managers found to buy would be worth far more on the stock exchange than it was a private company.



They almost never were — few SPACs ended up justifying their $10 issue price, let alone the wildly inflated post-deal prices investors insisted on paying in 2021.



It’s hard for me to imagine that it will go any better for the investors currently paying $50 for the Cantor Equity Partners (CEP) SPAC.



Last week, CEP <a href="https://www.businesswire.com/news/home/20250423962305/en/Tether-SoftBank-Group-and-Jack-Mallers-Launch-Twenty-One-a-Bitcoin-native-Company-Through-a-Business-Combination-With-Cantor-Equity-Partners">reached a deal</a> with Tether and Softbank to form a new “bitcoin-native company,” Twenty One.



Like Strategy, Twenty One will basically just be a pile of bitcoin with Tether and Softbank’s ownership stake based on how much bitcoin they contribute to the pile.



Current holders of CEP will receive a 2.9% share of that pile in return for their $100 million pot of cash.



This makes the math very simple: Today’s $50 price of CEP implies that investors believe that $100 million of bitcoin is worth $500 million on the stock exchange.



That feels about as crazy as anything that happened in 2021 — which I never expected to see again.



Are we really letting Tether quintuple the value of its bitcoin like that?



Contributing our crypto to bitcoin treasury companies seems like approximately the least cypherpunk thing we could do.



But crypto people are just as excited about it as stock market people.



Number go up, I guess.



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Thursday Mailbag: Is it cypherpunk to contribute crypto to bitcoin treasury companies?

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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Over the past few months, people involved in Solana DeFi have been asking questions about SolFi, a DEX that sprang up in November and almost immediately captured over 20% market share on swaps between stablecoins and SOL.



SolFi was able to quote better prices than competitors, but at least one business partner I spoke to didn’t know who was behind the new exchange before today. In general, few seemed to be in the loop as to how SolFi was achieving such good prices.



Today, Ellipsis Labs — a DeFi shop currently building an Ethereum layer-2 that uses Solana’s software called Atlas — publicly claimed credit for developing SolFi.&nbsp;



In an announcement on X, Ellipsis Labs co-founder Eugene Chen said the DEX “came from our deep understanding of the market structure on Solana.” Prior to building Atlas, Ellipsis created an orderbook Solana DEX called Phoenix.&nbsp;



SolFi has no frontend, but Chen added that the DEX had partnered with Jupiter Exchange to bring the product to retail traders. SolFi is one of 51 DEXs that are part of Jupiter’s swap aggregator, but it currently makes up for 25% of Jupiter volume — far more than any other DEX — according to a Dune <a href="https://dune.com/ilemi/jupiter-aggregator-solana">dashboard</a>.&nbsp;



The Solana rumor mill tended to reason that SolFi’s creators had to be someone with roots in the network, and Ellipsis certainly seems to have the technical chops to fit the bill.



“The Ellipsis Labs team are some of the most talented SVM developers in the ecosystem. It should be no surprise, given what they’ve built with Phoenix and Atlas, that they’ve also been able to find success with SolFi,” Switchboard co-founder Chris Hermida said.



SolFi isn’t the only anonymous Solana DEX. Orbic and ZeroFi are other newer Solana DEXs that have commanded significant trading volumes without publicly disclosing who their developers are.



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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>

DEXs

Ellipsis Labs claims credit for mysterious top Solana DEX

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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Forward Guidance has covered <a href="https://blockworks.co/news/meta-microsoft-earnings-q1-stocks-higher">Mag 7</a> and <a href="https://blockworks.co/news/gm-stock-earnings-release-auto-tariffs">automaker earnings</a>. But let’s jump to Robinhood, which is looking to wade deeper into crypto.



The trading platform’s transaction revenues amounted to $583 million in Q1. Roughly 43% of that ($252 million) came from crypto trading.



The $252 million total is less than last quarter’s record crypto transaction revenue of $358 million, Robinhood reported — but up 100% year over year.&nbsp;



It appears concerns around the health of Robinhood&#8217;s user base after April&#8217;s <a href="https://blockworks.co/news/tariff-markets-crypto-drop">market selloff</a> have dissipated. After all, Compass Point analysts Ed Engel and Joe Flynn noted that net deposits accelerated last month ($6.5 billion) and margin balances “fared OK” ($8.4 billion).&nbsp;



“Equities trading is at a four-year high,” Robinhood CFO Jason Warnick said on yesterday’s earnings call. “Options are in the zone of an all-time high, and crypto trading is north of $8 billion.”&nbsp;



Compass Point increased its HOOD price target to $64. Robinhood shares were trading for around $47 at 2 pm ET — down nearly 4% on the day.



Robinhood CEO Vlad Tenev said that while the company seeks to make itself less reliant on crypto transaction volumes, it also looks to diversify the crypto business itself.&nbsp;&nbsp;&nbsp;



We’ll be watching for product news that might come out of Robinhood’s June crypto rendez-vous in France. &nbsp;



“Regulatory ambiguity has deterred HOOD from launching staking in the US, as well as listing a wider range of tokens,” Engel and Flynn wrote in a note. “With the SEC moving <a href="https://blockworks.co/news/sec-actions-timeline">faster than expected</a>, we see a chance that Robinhood announces staking and new token listings at the June event.”&nbsp;



Tenev called clarity on listing crypto asset securities “a big opportunity,” adding: “We&#8217;re just in the early innings of having this technology permeate the financial system.”&nbsp;



The CEO reiterated, too, that tokenizing private equities would be a huge unlock for individuals and companies. That is one of Robinhood’s top policy priorities.



And don’t forget about <a href="https://blockworks.co/news/robinhood-bitstamp-institutional-clients">Robinhood’s acquisition</a> of crypto exchange Bitstamp, which remains on track to close mid-year.&nbsp;&nbsp;



It’s clearly a crypto-linked stock to keep an eye on.



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<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/daily">Blockworks Daily</a>: Unpacking crypto and the markets.</li>



<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>

Equities

Robinhood eyes crypto diversification as trading strength persists

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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Stocks were back in the green after Magnificent 7 giants Meta and Microsoft reported better-than-expected Q1 reports after the close yesterday.&nbsp;



Following their respective earnings releases, shares of Microsoft gained as much as 7.8%, and Meta stock surged more than 5% in after-hours trading Wednesday night. At 2:15 pm ET Thursday, Meta was trading 5.2% higher, while Microsoft was up 9%.&nbsp;



Meta reported earnings per share of $6.43 on revenue of $42.3 billion — coming in ahead of projections calling for $5.25 EPS on $36.4 billion in revenue. Executives also calmed investors by saying they’re not concerned about tariffs impacting ad revenue.&nbsp;



“I think we’re well-positioned to weather the macroeconomic uncertainty,” CEO Mark Zuckerberg said on Wednesday’s call.&nbsp;



In a rare move this earnings season, Meta also provided some positive guidance, upping its intended capital spend. Most of that is earmarked for AI investments.&nbsp;



Microsoft also beat on EPS and revenue. The company reported EPS of $3.46 on $70 billion in revenue vs. the expected $3.22 EPS on $68.4 billion in revenue.&nbsp;



Microsoft, like Meta, will also continue its investments in AI. Capital expenditures for the first quarter came in at $16.7 billion, slightly higher than projections.&nbsp;



Microsoft execs uttered the word “tariff” just once on yesterday’s call, which shareholders surely loved.&nbsp;



Overall, it’s two solid reports. But economic conditions still pose a threat for both firms.&nbsp;



Next on the docket are Amazon and Apple, scheduled to post earnings this afternoon. Nvidia, the last of the Mag 7 to report, is scheduled to release on May 28.



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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>

Economy

Meta, Microsoft earnings beat send stocks higher

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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This week is one of the biggest we’ve had in a while for economic data releases.



In the spirit of all this data, let’s run through some charts and takeaways.&nbsp;



<h2 class="wp-block-heading">JOLTS report</h2>



On Tuesday we received the Job Openings and Labor Turnover Survey (JOLTS) report. It was a mixed one.



On one side, we saw job openings miss to the downside and begin to roll over after a few months of positive surprises:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdDaL2OJDnn3r36agPhI_jUSvNsO7hXsMg0UejpL3dLheBxLmQKp93qa1q-JW957arsogfe4USbzEpwiuLTui0LMHZ9ZrrFaWUOT2kLEWcYqK-9xrZArSP24ixL_RFxHWQFBWnoYQ?key=90IYwOw3SLKy-ekNe1rwF0Vl" alt=""/></figure>



On the other side, we saw the quits rate actually increase, hinting at increased confidence in the jobs market by individuals willing to quit their jobs and find something better elsewhere:&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcELLxRE2bP81fjPy9t6XP712Ykd5iUBZ2FxBBeFnIiUWuP6CAWwF4MbHHwaZvHQwaKYVVKqFuaxnSael5VJciXp9O-5F_RT-cqwby4duOFc1H68rKg5QPNj068SBOfH6XbKer2?key=90IYwOw3SLKy-ekNe1rwF0Vl" alt=""/></figure>



It’s pretty rare to see these two prints diverge. I think we’ll need to see the jobs report on Friday to get a cleaner read on the direction of the labor market, which is a key driver of the Fed’s reaction function.&nbsp;



<h2 class="wp-block-heading">GDP print</h2>



As mentioned in <a href="https://forward-guidance.beehiiv.com/p/greatly-disappointing-print">yesterday’s newsletter</a>, we received the first look at Q1’s GDP print, which was also quite mixed. The topline number of -0.3% quarter over quarter hid some interesting insights:



The big driver was net exports crashing lower, primarily due to a huge increase in imports. That mechanically lowers GDP growth. 



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="427" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=1024&amp;h=1024" alt="" class="wp-image-101447" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg1.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



However, looking at the more important components of GDP, consumption held up decently, and investment actually surged!



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf9SXvl6WS4nt_dH7l2sh2PD2flD1RjKSPo5HWmi8mc6Nl_9F5RR8XxCjibX98yqGJ52x7xeJD7p8685nvzVfAat-DNfOMuXFvK4xVvSisRxcbTFuQGvD4yt2N2ak75QQryWcIywA?key=90IYwOw3SLKy-ekNe1rwF0Vl" alt=""/></figure>



This hints at something I’ve been thinking a lot about recently, which is that tariffs could be creating a mirage in the hard data. This mirage creates the appearance of a strong economy because of all the tariff frontrunning that occurs from both consumers and businesses trying to buy goods before the tariffs truly begin.&nbsp;



<h2 class="wp-block-heading">Core PCE print</h2>



We also got the Core Personal Consumption Expenditures (PCE) print, which came in at 0% month over month (vs. consensus expectations of 0.1%)!



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="996" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=1024&amp;h=1024" alt="" class="wp-image-101448" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=413 413w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=419 419w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=352 352w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/fg2.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



This kind of data shines a light on how, if it weren’t for the fear of tariff-induced inflation, inflation would be on a fast track back to target and the Fed would be cutting interest rates like mad.&nbsp;



<h2 class="wp-block-heading">ISM survey</h2>



Finally, today saw the ISM Manufacturing PMI survey results, which provide a leading look into how the economy is digesting the <a href="https://blockworks.co/news/trump-sell-us-assets-trade-deficit">tariff war</a>.&nbsp;



Overall, we’re seeing it hold strong, and I think this validates the notion that a lot of manufacturing activity has been frontloaded due to tariffs:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc9bme6dNflh9HIshm1LDj1E1jz0Atsj96Kxm6Jxkif6_EENC7kHMX5deQnnaPNNDJQLRUE-Fm0t6zqE9NGQfEUayoIE6XROcwzGDfa5h9tPSSn9zomSGzZqoNXL_TlBHJhP3LBaQ?key=90IYwOw3SLKy-ekNe1rwF0Vl" alt=""/></figure>



Out of the subcomponents, the aspect that continues to be of more interest to me is the prices-paid component, which continues to surge:&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfCjRXyVpzq2JWE1Uv6xNrQM7TeflEqYSRSdLK96I4kt9g_5kf6WsJFl1NCCEVjV2N6gumKY3BfN7le7uwjmozRZeNwfJO-e1TsDxD74IH9R8aLXMZQJd5W_fuUYmvswuVe902HIw?key=90IYwOw3SLKy-ekNe1rwF0Vl" alt=""/></figure>



As one of the most leading indicators of inflation, this kind of uptick in prices paid does not bode well for the trajectory of rate cuts expected from the Fed.



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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>
</ul>

Unpacking a big week for US economic data

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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Crypto accelerator <a href="https://alliance.xyz/">Alliance</a> DAO has announced its latest cohort of 20 startups: the ALL14. They received over 1,700 applications this time around.&nbsp;



Accepted startups will join the three-month accelerator to further build their businesses. The first two weeks are in-person, and the remaining weeks occur remotely.



Typically, accelerators offer connections, networking and guidance in exchange for some equity in the startup that is accelerated. This accelerator includes lectures, one-to-one mentorship, weekly check–ins and a demo day.



Alliance DAO, formerly known as DeFi Alliance, counts other founders, lawyers, liquidity providers and auditors among its members.



“We only require a $450k investment in your company (at unparalleled, founder-friendly terms). We&#8217;ve learned that our best performing teams actually do want us to have skin-in-the-game,” the group’s website states.



Alliance says its median startup raises $3.5 million after the program. VCs like Paradigm, Dragonfly, and Multicoin have invested in Alliance-accelerated startups in the past.



<h2 class="wp-block-heading">About the cohort</h2>



Solana and Ethereum were the most-used chains by startups that applied to ALL14, and Base was the most-used L2.



35% of admitted teams are focused on AI, while 30% are focused on stablecoin innovations, a sign that both are continuing to trend in the startup world.



Alliance’s latest cohort offers an interesting glimpse into the future of crypto, AI, and where things might go from here.



Whet your appetite with some of these names:



<ul class="wp-block-list">
<li>Slop Club </li>



<li>Poof</li>



<li>Wootzapp</li>
</ul>



Some of the teams’ pedigrees are pretty impressive, though. Think founders that are also Stanford engineers, have had stints at billion-dollar firms, or have worked at prior startups with top Silicon Valley investors before starting their new thing.&nbsp;



A list of the crypto-focused:



<ul class="wp-block-list">
<li>8020 (Moonshot for Asia)</li>



<li>Zabio (P2P stablecoin exchange for LATAM)</li>



<li>Lemonade Payments (Crypto payments in Africa)</li>



<li>Zynk Labs (Instant crypto settlements)</li>



<li>Fido (DeFi-powered neobank)</li>



<li>Guess.best (opinion-based betting market)</li>



<li>Junction (cross-chain DeFi toolkit)</li>



<li>Ripe (stablecoin payments for Asia)</li>



<li>Orbit (AI assistant for DeFi trading)</li>



<li>Poof (vibe coding for dApps)</li>



<li>Seismic (encrypted blockchain)</li>



<li>Offline protocol (communication, payments without internet)</li>



<li>GrandmAIsters (AI agent chess arena game)</li>



<li>FactCheck (stablecoin-incentivized fact-checking)</li>
</ul>



Others in the cohort:



<ul class="wp-block-list">
<li>Slop Club (Tiktok for AI videos)</li>



<li>Freedom GPT (Pagerank for AI)</li>



<li>Wootzapp (Private data crowdsourcing for AI training)</li>



<li>Afterschool (AI tutor)</li>



<li>CollectiveScience (Academic peer review tool)</li>



<li>CreatorGen (AI avatar marketplace)</li>
</ul>



Alliance also hosted an IRL event this week:



<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">Yesterday was demo day at <a href="https://twitter.com/alliancedao?ref_src=twsrc%5Etfw">@alliancedao</a>. It’s been a pleasure to be part of ALL14 full of such incredible people with the best energy and vibes. Super grateful to <a href="https://twitter.com/QwQiao?ref_src=twsrc%5Etfw">@QwQiao</a>’s who’s original post of wanting to invest in subversive tech made me apply and his consequent vote of… <a href="https://t.co/K7pc2cjeux">pic.twitter.com/K7pc2cjeux</a>&mdash; satvik (@sxtvik) <a href="https://twitter.com/sxtvik/status/1917576094078640361?ref_src=twsrc%5Etfw">April 30, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The application window for the next cohort closes on May 28.



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<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/daily">Blockworks Daily</a>: Unpacking crypto and the markets.</li>



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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>
</ul>

DAOs

Alliance DAO unveils cohort of startups for 3-month accelerator

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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Worldcoin — usable via the World mobile app — is finally launching in the US and making a big splash with a slew of big integrations.



World cofounder and OpenAI CEO Sam Altman briefly took the stage during the live event Wednesday night and declared: “I am a very proud American.”&nbsp;



Thanks for that, Sam.



<h2 class="wp-block-heading">Orbs in America</h2>



US residents can now <a href="https://blockworks.co/news/worldcoin-eyeballs-scan-brooklyn">get their irises scanned</a> to claim some WLD tokens as part of an ongoing airdrop. Iris-scanning Orbs are being set up in Atlanta, Austin, Los Angeles, Miami, Nashville and San Francisco to start (sorry, New Yorkers).&nbsp;



Those in the US who pre-registered for World have also been airdropped 150 WLD, which is about $150.



The for-profit firm Tools for Humanity is the developer of World, and the nonprofit World Foundation is behind the Worldcoin token.



TFH’s goal is to “verify” as many humans as possible and get people set up with World IDs so that humans can discern between AI or bot accounts and real human-run accounts. Users can get verified World IDs by getting their irises scanned by a metallic Orb (if this sounds dystopian to you, you’re not wrong).



The next step in this vision is the Orb Mini, revealed Wednesday night. It looks like an eyephone with Apple Vision sockets on the back, if you ask me:



<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">NEW: the Orb Mini can scan to verify humans for the World Network <a href="https://t.co/LbnuzU8OlO">pic.twitter.com/LbnuzU8OlO</a>&mdash; The Drop (@thedropnft) <a href="https://twitter.com/thedropnft/status/1917769725318177029?ref_src=twsrc%5Etfw">May 1, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The Orb Mini’s main purpose is to make scanning people’s irises easier, but at some point, it’s expected to also serve as a point-of-sale terminal.



“We tried everything not to build a hardware device,” said Tools for Humanity CEO Alex Blania on developing the Orb concept. He also noted the company has spent “millions” on developing the Orbs.



The Orb Mini as a point-of-sale would mean you could buy items using just your eyeballs, and the Orb would deduct the amount to be paid from your World wallet. Sounds like a Black Mirror episode — or like Amazon’s pay-with-your-palm thing.



Until that day comes, you can pay for items with a World Visa card instead that pulls directly from your World wallet.



The standard-size Orb has also been updated, which we knew about previously, and they’ve made a point of reminding us there’s <a href="https://www.pcmag.com/news/sam-altman-worldcoin-launches-deep-face-new-eye-scanning-orb">an Nvidia chip</a> in there.



Orb manufacturing is being spun up in Texas, too.



<h2 class="wp-block-heading">World 4.0</h2>



The World app received another big update with its 4.0 edition. Verified profile pictures and a Stripe integration are also being added.&nbsp;



Within the World app, there’s now a prediction markets mini-app called Kalsi available to US residents where users can make predictions with WLD. Morpho, another miniapp, enables DeFi lending for World wallet users to borrow against crypto held in that wallet (Morpho’s also available for the US).



Circle’s USDC is also being added natively to the World app, with plans for a Euro stablecoin to be added at some point.



TFH is <a href="https://blockworks.co/news/world-id-verification-gaming">continuing its gaming plans</a> with a “League of Humans” tournament with gaming tech firm Razer, will put Orbs in Razer stores, and may add its “Deep Face” tech to Razer webcams for deepfake prevention and human verification.&nbsp;



During a press conference, the TFH team said South Korea is also a big focus for them because of the country’s strong presence in the gaming world.



World ID badges on Tinder, Hinge, and Match will be piloted in Japan to verify dating profiles in the country.



TFH says there are a total of 26 million World accounts now with 12 million verified users. Over 350 million World crypto wallet transactions have occurred in total.



Despite all this news, the WLD token price didn’t do much — it climbed from about $1.02 at the start of the live event, rose to $1.16, and then fell back to $1.05 by the end of the night.



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sam altman

Sam Altman’s Worldcoin gets new Orb Mini and US launch

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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Privacy on the blockchain is a nice idea, but it’s hard to build.



Applications like <a href="https://blockworks.co/news/defi-privacy-zero-knowledge-proofs">Railgun</a> on Ethereum enable that today, but it’s computationally expensive. You could opt for a chain like <a href="https://blockworks.co/tag/monero">Monero</a>, but it lacks smart-contract programmability.



So the holy grail of onchain privacy looks a little like this: opt-in privacy, native smart-contract programmability and, ideally, a bridge into the EVM world of DeFi. All while keeping the protocol decentralized.



The Aztec team may be closest to cracking that code.



Enter Aztec Network, a zk rollup built on Ethereum (not to be confused with Aztec Connect, which was sunset in 2023). The public testnet launches today.



By leveraging zero-knowledge technology, user balances and transactions on the L2 are encrypted to ensure privacy around details such as the sender, recipient or the transaction itself.



Aztec’s programmability is enabled by <a href="https://blockworks.co/news/dappicom-web3-gaming-nintendo">Noir</a>, the company’s Rust-like language for zero-knowledge circuits. Noir lets developers write smart contracts that can perform shielded loans or private voting without needing to learn cryptography.



&#8220;Developers can use Aztec to build dapps with privacy features that seamlessly blend with Ethereum&#8217;s existing infrastructure, and they won&#8217;t need to struggle implementing complex cryptography,” said Aztec Network co-founder Zachary Williamson in a press release.



<h2 class="wp-block-heading">Aztec’s differentiation</h2>



Unlike most L2s (one exception is <a href="https://blockworks.co/news/arbitrum-stylus-testnet">Arbitrum’s WASM</a>), Aztec makes some significant modifications to the chain’s execution layer.



Public transactions on Aztec are executed through its custom Aztec Virtual Machine (AVM). Private transactions, however, are offloaded to a client-side environment known as the <a href="https://docs.aztec.network/aztec/concepts/pxe">Private eXecution Environment</a>. PXE is used to generate proofs and run smart contract logic privately.



Transaction proofs are then aggregated into single proofs for Ethereum settlement.



Client-side generation of <a href="https://blockworks.co/news/brief-history-zk-tech">zk proofs</a> is typically expensive. Yet, Aztec’s new L2 keeps costs down. That’s largely thanks to its PLONK proving system, which makes it “simpler to generate client-side proofs on expensive hardware,” according to the company’s&nbsp; <a href="https://aztec.network/blog/history-of-aztec-pioneering-privacy-in-web3#:~:text=In%20tandem%2C%20the%20team%20also,%E2%80%9Cmakes%20the%20blockchain%20real%2C%E2%80%9D%20bringing">blog</a>. PLONK was <a href="https://vitalik.eth.limo/general/2019/09/22/plonk.html">co-invented</a> by Aztec co-founder and CEO Zachary Williamson himself.



“Our client-side Prover incorporates the latest in PLONK research with the Protogalaxy folding scheme and a unique technique we call Goblin Plonk to accelerate recursion. We also built our own programming language, Noir, from scratch to compile programs directly into zero-knowledge circuits, which allows us to bypass the overheads seen with zero-knowledge virtual machines,” Williamson told Blockworks.



Contrary to popular belief, most zk rollups do not actually leverage zero-knowledge tech for the purposes of privacy encryption, making it somewhat of a misnomer. Zk rollups today use the tech primarily for the size compression of transactions —&nbsp;<a href="https://blockworks.co/news/zk-rollups-cheaper-with-scale">for scaling throughput</a> — without encrypting user data.



Aztec applies zk proofs not just for verification, but also to enable end-to-end encryption of transaction metadata. Privacy is optional, however, tying into Aztec’s goals of developing a chain that has flexible privacy and selective disclosure.



That architecture is not possible on the Ethereum L1 today, where all details would be publicly exposed. Neither is it possible on other L1 chains like Monero or Zcash, which allow for private payments but lack smart contract programmability.



&#8220;We currently view blockchain privacy as all or nothing, but it doesn’t have to be,&#8221; Williamson said.



Aztec’s testnet already has over 100 sequencers in its Devnet and Provernet networks, paving the way for decentralization starting from day one.



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ZK rollup Aztec launches testnet today

David Canellis

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



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Thirty-two years ago this week, in May 1993, WIRED released its second-ever print edition featuring three legendary cypherpunks on the cover: Tim May, Eric Hughes and John Gilmore.



Steven Levy’s piece, “<a href="https://www.wired.com/1993/02/crypto-rebels/">Crypto Rebels</a>,” handily documents the genesis of the Cypherpunk movement, starting almost two decades earlier in 1975, when Whitfield Diffie led the creation of public-key cryptography alongside Martin Hellman and Ralph Merkle.



Until then, the US government codebreakers had dominated cryptography through the National Security Agency (NSA). Cryptographic tools were considered weapons under the Arms Regulation law, “right alongside tanks and bomber planes,” Levy wrote.



The act of giving regular citizens access to “military-grade” privacy tech like public-key cryptography — which would allow information to be stored trustlessly and sent securely over unsecure networks — was then a brave act of defiance for personal liberty. A fight against government tyranny.



Public-key cryptography would go on to be a cornerstone of the modern internet, protecting emails, bank accounts, website interactions, many other online matters, and, of course, everyone’s bitcoin.



Or as late The Codebreakers author David Kahn wrote, public-key cryptography was the “most revolutionary new concept in the field since…the Renaissance.”&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd3eI8nlufJatICA1Q805iDNciY0hVaE0tNaucD2tyAVbeVroSBSvABh0r-nflKE-61NP4_b2mL3uJV6Fjl8zqJQMP3Of8UmCkXJfU77YaLGoOePM5XjvKKaOixrOaTLVowutElVA?key=7vIqJnFhH6Y8sg0_EjaADRk9" alt=""/><figcaption class="wp-element-caption">Satoshi, is that you?</figcaption></figure>



Around the same time, MIT scientists Rivest, Shamir and Adleman developed a separate public-key method, RSA, which had far greater potential than the government-created Data Encryption Standard, which didn’t use public keys at all.



WIRED’s article also detailed the plight of cryptographer Phil Zimmermann in the wake of his invention of Pretty Good Privacy (PGP) — a mighty, free alternative to RSA that utilized RSA patented technology without permission.



Zimmermann went to great lengths to build PGP, missing five mortgage payments and “coming within an inch” of losing his home. But he wasn’t selling the software — he simply released it into the wild (internet bulletin boards), “like thousands of dandelion seeds blowing in the wind,” he wrote.



Still, the US government made Zimmermann the target of a criminal investigation for munitions export without a license, which was still ongoing at the time of WIRED’s piece.&nbsp;



Two years later, Zimmermann published the entire PGP source code in a hardback book released by MIT Press — allowing anyone in the world to build their own privacy tech all by themselves.&nbsp;



Exporting books is a First Amendment right that should trump any restrictions on the exportation of cryptographic software. The investigation was eventually closed and the Feds brought no charges.



<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">Cypherpunk history &#8211; Wired Magazine issue #2 May 1993, Crypto Rebels. Gilmore, May, Hughes, Zimmerman, Chaum&#39;s &quot;anonymous digital money&quot;. &quot;Cypherpunks write code. Crypto Anarchy is inevitable. It&#39;s already happening&quot; READ: <a href="https://t.co/J5FnbfvSqw">https://t.co/J5FnbfvSqw</a> Photos: an internet premier. <a href="https://t.co/GcXbvn6fNe">pic.twitter.com/GcXbvn6fNe</a>&mdash; FRANCIS &#8211; BULLBITCOIN.COM (@francispouliot_) <a href="https://twitter.com/francispouliot_/status/1046141148786577408?ref_src=twsrc%5Etfw">September 29, 2018</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>







To say that there might be no Bitcoin without the Cypherpunks is a severe understatement. Satoshi Nakamoto himself may very well be underneath one of the many masks featured in WIRED’s article.



Here’s how deep the parallels go: at multiple points in Levy’s writing, one could easily sub Bitcoin-related terms into any number of sentences describing the fight for accessible cryptography:



“Diffie recognized that the solution rested in a decentralized system in which each person held the literal key to his or her own <s>privacy</s> financial sovereignty.”



“In the Cypherpunk mind, <s>cryptography</s> money is too important to leave to governments or even well-meaning companies.”



&#8220;You can have my <s>encryption algorithm</s>… bitcoins, when you pry my cold dead fingers from my private key.&#8221;



I’ll leave you to read the <a href="https://www.wired.com/1993/02/crypto-rebels/">full piece</a>, which is still available online, if nothing more than to reinforce the significance of the “crypto” in “cryptocurrency.” 



After all, very real individuals fought years for its existence.



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Cybersecurity

Crypto in 1993: WIRED cover story on Cypherpunks turns 32

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



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It’s been a busy week for VC raises, and some of the projects have caught heat around social media for being infra plays.&nbsp;



Like Unto Labs, for example. 



“We definitely got bucketed into the whole ‘another L1, oh no’ [discourse]. We felt a little sad about that, but we’ll just have to prove it. Because, in some ways, it’s true,” cofounder Will Yoo told me.&nbsp;



But both Yoo and cofounder Liam Heeger said they’re up to the challenge because they’ve both “done this before,” whereas other teams haven’t “built systems that are supposed to perform at extremely high levels of scale.”&nbsp;



“We love Solana and we think they’re going to be an incredible competitor. We’d be honored to compete with them,” Yoo said. They’ll be “ripping” out the Solana virtual machine with Thru, and they argue that they won’t be competing with Jump’s Solana client — something that’s literally <a href="https://x.com/whosknave/status/1897396270639251537">held up</a> in court.&nbsp;



Heeger is ex-Jump Crypto, but he didn’t leave without making some waves. Jump <a href="https://blockworks.co/news/jump-sues-former-solana-client-engineer">filed a suit </a>against Heeger after he departed Firedancer to start Unto with Yoo. The case was <a href="https://x.com/whosknave/status/1889001063199711610">dismissed</a> in February, and the two told me that they had a term sheet from Electric Capital, which led their seed round, the next day.&nbsp;



They wouldn’t comment further on the litigation.



The $14.4 million rounds are a combined pre-seed and seed raises. Framework Ventures led their pre-seed.&nbsp;



The capital will go towards building out the core infrastructure on Thru and the ecosystem around it, which they expect to be “capital-intensive, but because [Thru’s] going first-party rather than third-party, we believe we can be capital-efficient.”



The two, in Thru’s <a href="https://www.thru.xyz/">manifesto</a>, argued that blockchains “have lost their way.”



“Thru&#8217;s consensus scales through competition, not accumulation. Operators earn their spot with uptime, throughput, and by relentlessly pushing fees toward zero, not by how much stake they can attract,” it said. The goal is to not only compete with other Web3 projects, but also to compete with Web2. 



Lofty ambitions, right?&nbsp;



I asked Yoo and Heeger where they think they’ll be in a year, and they told me they want to “spend the amount of time necessary to create something incredible.”



So it may take some time, but the two think they can stand out in the long term.



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