Shockwaves

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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They say crypto rapidly <a href="https://x.com/naiivememe/status/1789562418550669617/photo/1">ages</a> you. Look no further for proof than the ETH chart.



More specifically, the ETH chart in comparison to Intel stock. Their trajectories share an uncanny resemblance.



The chart below plots the price of ETH in pink against Intel stock in blue but with caveats:



<ul class="wp-block-list">
<li>INTC is set over the past 50 years (it went public in 1971) on weekly intervals.</li>



<li>ETH is set over the past seven years on daily intervals.</li>



<li>ETH is advanced by around two and a half years — so it starts in Jan 2018 rather than August 2015.</li>
</ul>



As you can see, ETH has done almost exactly what Intel stock has achieved, just seven times as quickly.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdbonS5VYspwoOqhFkZfcI91u2B9zuilZxDmk4wuK4YVLxsqDxj5gTeiOXBj38I_0S7vHl_5ovLcSgBtq6WgwowAtcI4Md02CIk0Cvpb_j31lnO_CfQbMv6TLmsubvgCPujqn7eew?key=JOAUs5lZRL4PgoRC0B8h7JAu" alt=""/><figcaption class="wp-element-caption">It’s not all bad news: Intel stock has recently tanked harder than ETH</figcaption></figure>



Comparing cryptocurrencies and stocks doesn’t make a lot of sense. Ethereum is not a <a href="https://www.vaneck.com/pl/en/blog/digital-assets/a-potential-valuation-methodology-for-ethereum/">business</a> in the same way that Intel is.&nbsp;



Ethereum is a decentralized network that sells blockspace to apps and other protocols that service users in some way — far from a chipmaker with factories, employees, board members and CEOs.



Still, I can’t help but draw similarities between Ethereum and Intel, at least in terms of narrative arcs.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfB8rjmhX7HGrejCI8tRofdPPaAXVsgpcDkiflLmtfjIJYCqdz6gk2yGmFop-jjldNxhXotcUT8ssSLaHgmWtc6YAGm87EV1cJPmo8JO3TTrC_mnD72-yMuBIwBIQZ6Qdv8OV2Wtg?key=JOAUs5lZRL4PgoRC0B8h7JAu" alt=""/><figcaption class="wp-element-caption">ETH’s market cap is now about four times that of Intel stock</figcaption></figure>



Top brain Vitalik Buterin and the non-profit Ethereum Foundation (EF) he leads are still <a href="https://blockworks.co/news/steep-disconnect-ef-crypto-community">under fire</a> for supposedly misaligning themselves with the modern crypto community — prioritizing infrastructure over exciting new apps that properly accrue value to ETH.



That disconnect has contributed to massively increased market and mindshare for rival Solana and a ETH/BTC ratio at four-year lows.



Intel’s board meanwhile <a href="https://www.cnbc.com/2024/12/02/intel-ceo-pat-gelsinger-is-out.html">ousted</a> its CEO Pat Gelsinger in December over concerns that he&#8217;d failed to capitalize on the AI boom and could no longer stage a comeback against Nvidia.&nbsp;



Intel had long been the most valuable US chipmaker until Nvidia flipped its stock in mid-2020. Many tip SOL to potentially flip ETH somewhere down the line.



If the eerie correlation with Intel stock persists (and that’s a big if), perhaps it could happen sooner rather than later.



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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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ETH is speedrunning the 50-year Intel chart

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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Solana’s validators are about to see a major income bump, but the protocol lacks a way for them to share the wealth with their stakers.&nbsp;



In May, Solana validators <a href="https://blockworks.co/news/solana-validators-tackle-side-deals">passed a proposal</a> to send 100% of priority fees — which are extra funds users can pay for a better chance of landing their transactions — to validators. The proposal’s implementation now seems imminent, but some are calling for Solana to pump the brakes until validators are able to share the extra fees with stakers.&nbsp;



Validators, who run Solana’s software and create blocks in the Solana blockchain, currently receive half of SOL-denominated priority fees, and the other half is burned, or effectively removed from circulation. This leads some validators to strike side deals with users, since a user paying 75% of the priority fee directly to the validator outside of the Solana protocol would benefit both parties, for instance.



Named SIMD-0096, the May proposal aims to end these side deals. But Solana lacks an in-protocol way for validators to share priority fees with stakers — who delegate their SOL to validators for a share of the validator rewards — so the increased SOL inflation would essentially benefit validators at the expense of everyone else.&nbsp;



Some Solana developers have <a href="https://x.com/trentdotsol/status/1887175400159428850">argued</a> that SIMD-0096 could incentivize priority fee spoofing, or validators artificially raising priority fees to take home more rewards. Still, the change is being implemented.



Solana priority fees totaled some $240 million in January, according to Blockworks Research. Implementing SIMD-0096 would have increased Solana’s real economic value, a Blockworks Research metric for blockchain value accrual, by roughly 22% last month.



A newer proposal, <a href="https://x.com/blockworksres/status/1865094406937944571">SIMD-0123</a>, would give validators the ability to directly share priority fees with stakers. As things stand, this proposal has little chance of being implemented by the time SIMD-0096 goes into effect, Solana Foundation validator relations lead Tim Garcia said on X.&nbsp;



Some are <a href="https://x.com/smyyguy/status/1880341498824388732">calling</a> for the network to only approve both proposals together so that stakers can share in the windfall. If these calls aren’t heeded, then stakers will have to rely on the goodwill of validators passing along extra rewards until SIMD-0123 is enabled.



“[V]alidators are only overcompensated if they do not share back the rewards ([H]elius will share back for example),” Mert Mumtaz, CEO of the largest Solana validator in Helius, said in a text. Solana infrastructure shop Jito also offers a way to distribute priority fees via <a href="https://substack.com/home/post/p-156136928?utm_campaign=post&amp;utm_medium=web">TipRouter</a>, a piece of software built for Jito’s restaking protocol that distributes validator rewards.



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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 validator revenue is about to jump, but stakers might miss out

Katherine Ross

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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Today’s the day!



Berachain’s mainnet is finally launching.&nbsp;



Back in August, we looked at how both Berachain and Monad were able to<a href="https://blockworks.co/news/empire-newsletter-layer-1s-professor-coins"> carve their own paths</a> in a very crowded space, and David even <a href="https://empire-31ed59.beehiiv.com/p/eth-s-big-problem?_bhlid=c401c659d0bc1c1ccc2bea7bbefd1fe056fa5b09&amp;last_resource_guid=Post%3A40ad4880-04f7-4d97-912c-95b79fb8975f&amp;utm_campaign=eth-s-big-problem&amp;utm_medium=newsletter&amp;utm_source=empire-31ed59.beehiiv.com">referred</a> to them as potential Solana killers just the other day.



So it’s fair to say the hype train left the station a long time ago.&nbsp;



“Simply put, in a landscape where most blockchain apps and chains today survive or thrive irrespective of one another, Berachain is a philosophical challenge to the current chain-app model. We believe that the network’s novel Proof of Liquidity (PoL) consensus mechanism, which lets network validators direct block rewards to certain apps built on Berachain, could fundamentally reshape how the entire industry views the relationship between builders and blockchains,” Framework’s Michael Anderson explained.&nbsp;



Prior to mainnet launch, Berachain raised a fair amount of capital. In its Series B alone — which was co-led by Framework — it raised $100 million, and that’s not counting the $42 million Series A round.&nbsp;



“The Berachain community is also by far the most fanatical we’ve seen since our involvement in the early days of Chainlink, and we think that the combination of that raw enthusiasm with a real means to influence the direction of the network will be incredibly powerful,” Anderson continued.&nbsp;



Projects that raise as much capital as Berachain are few and far between. But raising more than $140 million before even launching your mainnet is no small sum, so it’s understandable that some might question why crypto projects are looking to raise a ton of money. And why VCs are willing to back such a project.&nbsp;



MV Global’s Tom Dunleavy doesn’t think that projects like Berachain should be raising as much capital. He’d prefer to see raises around $10 million, he wrote in a post on X.&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">No project in crypto needs to raise over $10m. Full stop. I frankly think alot of these big projects (<a href="https://twitter.com/berachain?ref_src=twsrc%5Etfw">@berachain</a> , <a href="https://twitter.com/monad_xyz?ref_src=twsrc%5Etfw">@monad_xyz</a> , <a href="https://twitter.com/AbstractChain?ref_src=twsrc%5Etfw">@AbstractChain</a>, <a href="https://twitter.com/infinex_app?ref_src=twsrc%5Etfw">@infinex_app</a>, <a href="https://twitter.com/movementlabsxyz?ref_src=twsrc%5Etfw">@movementlabsxyz</a> etc) get their valuations strictly because of the need for BIG capital allocations from large VCs.…&mdash; Tom Dunleavy (@dunleavy89) <a href="https://twitter.com/dunleavy89/status/1887135982073376894?ref_src=twsrc%5Etfw">February 5, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



“The valuations associated with big capital intakes set the bar so high that they are priced for perfection for what their user and revenue metrics will be 10 years in the future,” he argued.&nbsp;



But putting a cap on the amount raised isn’t a solution. Mason Nystrom, a junior partner at Pantera, said that there are a variety of reasons for projects to receive funding above $10 million. That includes competition, talent, volatility and opportunity.



Talent is expensive, and Pantera’s own comp survey from last year pegged the average salary at $176,000 for US employees.&nbsp;



Competition and volatility go hand-in-hand. Obviously there’s a lot of competition in the space, especially as an L1. Then you add in the cyclical nature of crypto and, well, the money starts to add up.&nbsp;



Finally, it’s all about opportunity: “The nature of success is power-lawed. The blockchain networks that succeed will be centi-billion to trillion dollar networks. The sheer size of the opportunity presented by blockchain networks (e.g. L1s) enables them to take on more capital to compete to be the power law winners,” Nystrom said.&nbsp;



At this point, crypto funding isn’t out of control and big capital raises aren’t happening every day. If a project manages to close a multi-hundred million dollar round, I say let them cook.



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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 venture capital money is necessary in crypto

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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About two weeks after the SEC formed a <a href="https://blockworks.co/news/new-sec-crypto-task-force">crypto task force</a>, unit leader Hester Peirce checked in.&nbsp;&nbsp;



The rough message: We’re working on a bunch of things, but please be patient.&nbsp;



Peirce (no surprise) criticized the previous path taken by the SEC. It “incessantly slammed on the enforcement brakes as it lurched along a meandering route with a destination not discernible to anyone.”



Further, its handling of crypto “has been marked by legal imprecision and commercial impracticality” (in case you didn’t already know how Peirce felt).&nbsp;



It’ll take time to “disentangle all these strands,” she noted several times — ongoing litigation included. Seemingly related, the SEC plans to scale back staff focused on crypto enforcement actions, the New York Times <a href="https://www.nytimes.com/2025/02/04/business/sec-crypto-task-force.html">reported</a>.&nbsp;



Among 10 listed priorities, Pierce notes the status of crypto assets under the securities laws as “fundamental to resolving many other questions.” This jibes with what Bitwise general counsel Katherine Dowling <a href="https://blockworks.co/news/sec-in-purgatorial-state">told me</a> about the “dolphins in the fish nets” — alluding to assets the SEC has previously <a href="https://blockworks.co/news/the-sec-says-these-crypto-assets-are-securities-their-reasoning-is-wrong#">labeled as securities</a>.



Another priority is to identify areas that fall outside the SEC’s jurisdiction — a signal the agency intends to stay in its lane.



Other focuses include creating a framework for custodying client assets; offering clarity on if and how crypto lending and staking programs are covered by securities laws; and creating some sort of cross-border sandbox for crypto projects.



On crypto ETFs, the task force will be clear about its approach when approving/disapproving planned products, Peirce promises. As issuers look to add staking and in-kind creations/redemptions to existing products, she added, the SEC may first need to make progress on custody (and other) issues.



The SEC is working toward these goals “in an orderly, practical and legally defensible way,” Peirce made clear.



And so, she reminds those eager for change: “It took us a long time to get into this mess, and it is going to take us some time to get out of it.”



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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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SEC’s Peirce points to priorities, asks for patience 

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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Congress has been busy (by its standards, at least) on the crypto front.



First, David Sacks — the country’s first <a href="https://blockworks.co/news/trump-picks-crypto-czar">AI and crypto “czar”</a>— hosted an inaugural press conference, during which he declared a commitment to keeping digital asset innovation in the US.&nbsp;



House and Senate Committee leadership also took this opportunity to unveil a new bicameral crypto working group. If this sounds like a committee of committees, it’s because that’s pretty much exactly what it is.&nbsp;



Meanwhile, Sen. Bill Hagerty introduced a new stablecoin bill. The language is pretty similar to text we saw last Congress, focusing on reserve requirements and audits. It also allows non-banks to issue stablecoins, and has at least some bipartisan support, thanks to longtime crypto advocate Democrat Sen. Kirsten Gillibrand.&nbsp;



Then, today, we got the first crypto-related hearing of the session. The Senate Banking Committee this morning gathered to discuss debanking and so-called “<a href="https://blockworks.co/news/operation-choke-point-2-0">Operation Chokepoint 2.0</a>.”&nbsp;



The hearing coincides with <a href="https://www.barrons.com/articles/bitcoin-trump-crypto-banks-d6de3352">reports</a> that the FDIC plans to adjust its crypto guidelines and allow banks to participate in some crypto activities.&nbsp;



It started out mellow enough. Chair Tim Scott talked about a life-changing loan he got from a community bank in the 90s. Ranking Member Elizabeth Warren said her office has identified more than 11,000 cases of individuals complaining of limited access to banking services.&nbsp;



It seems both parties emphatically agree that <a href="https://blockworks.co/news/solana-teams-analyze-debanking-narrative">debanking is happening</a>, and it’s a problem. But what’s causing it and how to stop it are points of contention. It didn’t take long for the party lines to show.&nbsp;



Being stripped of banking privileges for having a few bounced checks is unfair, said Warren, who focused most of her statements on individual customers vs. companies.



Not so fast, Sen. Thom Tillis countered. Banks shouldn’t be forced to service all customers.&nbsp;



“That&#8217;s called managing a risk,” he said.&nbsp;



Whether or not banks that refuse services to certain businesses and customers are doing so out of risk management or at the direction of federal regulators was also a point of contention.&nbsp;



“The CFPB is the one agency that is actively working to stop unfair debanking,” Warren said. “Right now, the agency has five different rules — either in place or in progress — that would help prevent debanking by addressing some of the root causes, from overdraft fee practices to religious discrimination.” The comment comes on the heels of the CFPB’s new acting chair, Treasury Secretary Scott Bessent ordering the agency to <a href="https://blockworks.co/news/bessent-locks-down-on-cfpb">halt virtually all</a> pending operations. 



Several Republicans argued the opposite. The issue of debanking is only exacerbated by federal agencies.&nbsp;



“Under the Biden administration, we&#8217;ve seen the rise of what many are calling Operation Chokepoint 2.0 where federal regulators exploited their power, pressuring banks to cut off services to individuals and businesses with conservative dispositions, or folks aligned with industries they just didn’t like,” Scott said.&nbsp;



Other Democrats took the hearing as an opportunity to voice concerns about DOGE, the new task force led by Elon Musk, and its access to the Treasury’s payments system.&nbsp;



“The DOGE crowd, there is one person [who] maybe has clearance, and the others, we have no freaking idea,” Sen. Mark Warner said. He declined to use his allotted time to ask witnesses any questions.&nbsp;



Like I said, politics is getting in the way. The victory lap the crypto industry has run since election night is bumping into some hurdles.



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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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The view from Capitol Hill

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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After bitcoin’s ascent to $109,000 and a more recent decline below $93,000, the asset’s price has fluctuated between those levels.



While price predictions remain a normal part of industry fodder, Copper.co took a bit of a different approach.&nbsp;



The crypto custody firm blended technical indicators (like the <a href="https://www.investopedia.com/terms/r/rsi.asp#:~:text=The%20relative%20strength%20index%20(RSI,scale%20of%20zero%20to%20100.">Relative Strength Index</a>) with historical returns, volatility clustering and daily range behavior to forecast possible BTC price outcomes.



“Our main goal was not to pinpoint a specific final peak for bitcoin, but instead to identify price points at which traders might consider the market to be overextended,” Copper.co research head Fadi Aboualfa said in a statement.



The firm’s model indicated “concern levels” for BTC between $140,000 and $200,000 throughout 2025. High-accuracy (up to 91%) simulations paralleling last year’s calmer volatility profile signaled a potential breach near $165,000 in June.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXefGI98wYy28Ob827piUkssIWdtBNPyFmgdPvOcGwREZ8E73gWX2uNE2EmKYFqhU7KwHH1voG6nyAXXRCbJ63O9QwAuw_VAv4plSZaJWMvb2yf7xQGaxLGIZsOJJks16YOv94lIRw?key=dUK85oCSsW1eFD9PF9OaHHNe" alt=""/></figure>



“To clarify, these are not levels bitcoin will necessarily reach, but if it does, the market might be suggesting a potential peak,” the study explains.&nbsp;



The report calls bitcoin’s declining 30-day rolling volatility an “often-overlooked factor” — noting that low volatility allows a longer, smoother price climb. The simulations found any BTC price dip is projected to be short-lived.&nbsp;



Targets can, of course, be negated by external catalysts, the report warns. “If bitcoin hits some of these upper limit projections and the next day the US does indeed announce a <a href="https://blockworks.co/news/empire-newsletter-strategic-bitcoin-reserve">strategic reserve</a>, are you shorting?” it poses. “Unlikely.”



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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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Copper lays out bitcoin price targets, with a twist

Macauley Peterson

Crypto is largely an attention game, with projects in a race to attract new and talented developers as well as users. Cosmos-based Hyperweb is betting big on JavaScript as the key to unlocking mainstream adoption, and <a href="https://hyperweb.io/whitepaper">released</a> its white paper Wednesday.



Officially introduced at Cosmoverse Dubai and supported by notable figures like Ethan Buchman, Hyperweb aims to create a universal JavaScript virtual machine (HVM) that enables seamless cross-chain smart contract execution.



The idea itself is of course nothing new, and even among JavaScript proponents, chains like Agoric have pioneered the concept of “<a href="https://agoric.com/blog/announcements/agoric-orchestration-api-live-on-mainnet-long-lived-smart-contracts-now">orchestrating</a>” actions across chains.



Agoric, a Cosmos OG project, developed “hardened JavaScript” which has been used in production, for instance, in <a href="https://blockworks.co/news/metamask-snaps-agoric-javascript">MetaMask Snaps</a>.



Unlike Agoric, which also leverages JavaScript with additional abstraction layers, Hyperweb aims to be a pure TypeScript ecosystem. Co-founder Dan Lynch describes the difference by way of analogy to modern vs. medieval spoken language.



&#8220;Agoric is kind of like old English — like the Shakespearean ‘where art thou’ — so it&#8217;s definitely something that we can decipher, but it&#8217;s not the way that we speak [today],” Lynch told Blockworks. “There’s too much nomenclature in Agoric…if you’re a programmer, you have to juggle all these things just to try to do what you’re doing,” he said.



<h2 class="wp-block-heading">A fragmented Web3 developer experience</h2>



Lynch describes the current state of Web3 development as unnecessarily complex and fragmented. Despite his 15 years as a chief technology officer and deep technical expertise, jumping into building on Cosmos in 2022 was a nightmare.



“It was one of the hardest things I ever tried to do,” Lynch said. This experience convinced him that the core issue in blockchain adoption isn’t just infrastructure — it’s the developer experience.



Plus, there just aren’t enough qualified Web3 developers. This dilemma has driven efforts to bring Web2 devs into Web3 from the <a href="https://blockworks.co/news/solving-web3s-developer-problem-web2">much larger JavaScript</a> and <a href="https://blockworks.co/news/algorand-adopts-python">Python</a> communities.



Hyperweb’s HVM (Hyperweb Virtual Machine) is a JavaScript-native execution environment that allows developers to write smart contracts in <a href="https://www.typescriptlang.org/">TypeScript</a>, doing an end-run around the learning curve of building in Solidity, Rust or Move.



The use of pure TypeScript — and minimal framework overhead — puts an emphasis on intuitive design. The team tested its system with a group of UC Berkeley students, providing only a boilerplate example contract with no documentation:



“Within a week, they had all 10 contracts written… they were like, ‘Oh my gosh, that was so fun and simple!’” Lynch said.



HVM will also be its own sovereign chain. Pitched as the Interchain JavaScript Hub, it will provide interpreters that tailor the same JavaScript code to different blockchain runtimes (EVM, CosmWasm, Solana VM, etc.). This makes it easier to deploy applications across chains without major rewrites, Lynch argues.



The project’s team previously was supported by a grant from the Interchain Foundation, but is on its own following the ICF’s <a href="https://blockworks.co/news/cosmos-ecosystem-changes-after-skip-acquisition">acquisition of Skip</a> to form Interchain Inc. Hyperweb’s forerunner, Cosmology — a tech suite enabling developers to build Web3 applications in the Cosmos ecosystem — announced the closure of a $5 million seed funding round last March — its only VC funding to date.



<h2 class="wp-block-heading">Tokenomics and incentives</h2>



Unlike most proof-of-stake Cosmos chains, Hyperweb is exploring a proof-of-authority (PoA) model, <a href="https://blockworks.co/news/noble-ditches-cosmos-interchain-security">like stablecoin distributor Noble</a>. It uses a smaller set of validators to reduce staking inflation and sell pressure.



“Cosmos chain tokenomics are broken,” Lynch said, positing that the predominant security model of staking inflation “is unsustainable.”



Fees on Hyperchain will be denominated in Noble USDC, and the native token will function instead as a revenue-sharing mechanism to limit reliance on inflationary rewards.



Long term, Hyperweb plans to integrate Ethereum, Solana and other non-Cosmos chains, enabling truly universal smart contract execution. But that’s a ways off. Details on the Hyperweb token are also still under wraps.



For now, if you’re looking to get in early on Hyperweb, the project has already launched a local net that allows developers to start experimenting with JavaScript-based smart contracts. A public testnet is coming soon, with opportunities for builders to be rewarded for their contributions — potentially in a way similar to <a href="https://tea.xyz/">Tea Protocol’s</a> retrospective incentives for GitHub activity.



The vision for Hyperweb is ambitious — a unified, developer-friendly blockchain ecosystem that eliminates the siloes between old and new.&nbsp;



As Lynch puts it: “Let’s end the war between Web2 and Web3. It’s all the web.”



With millions of users of Hyperweb’s developer tooling and contributions coming from giants like Google, Binance and Supabase, Hyperweb might just be the key to breaking the developer logjam.



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The JavaScript virtual machine that could change Web3

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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ETH’s not having a good time.&nbsp;



And it didn’t just start with this weekend’s selloff. We’ve got “<a href="https://blockworks.co/news/ethereum-tech-vs-money">wartime</a>” Vitalik Buterin, <a href="https://www.coindesk.com/opinion/2025/01/21/the-ethereum-foundation-has-lost-its-way">criticisms</a> of the Ethereum Foundation, not to mention price action (it’s down 10% over the past week).&nbsp;



On the positive side, at least Eric Trump still seems bullish and — in a now-edited post on X — initially encouraged folks to buy ETH, adding “you can thank me later.” But I’m not sure that’s the type of support anybody wants right now.&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 guess “you can thank me later” sounded a bit too crypto KOL grifter even for Eric. <a href="https://t.co/sgo6rZ4hUp">pic.twitter.com/sgo6rZ4hUp</a>&mdash; Stats (@punk9059) <a href="https://twitter.com/punk9059/status/1886544330762150262?ref_src=twsrc%5Etfw">February 3, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



There’s a lot of discussion about what went wrong and how to right the ship. The recent sentiment is nothing new, Tribe Capital’s Evan Park told me.&nbsp;



“When I was at Devcon, I noticed a steep disconnect between the foundation focusing on infrastructure, while retail users and the broader crypto community were demanding exciting new applications. On the one hand, ETH L2s like Base, Ink, and MegaETH are positioned to onboard new applications and users. However, what Ethereum leaders need to realize is that they face accelerating competition from established L1s like Solana and new L1s like Berachain and Monad, which are poised to dominate mindshare over the next year,” he explained.&nbsp;



Even with Buterin signaling a “greater sense of urgency,” we’re in a ‘can’t stop, won’t stop’ moment in the market. Berachain, just yesterday, announced that its mainnet is launching tomorrow.



<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">Berachain&#39;s mainnet will launch on February 6th, 2025. Welcome to Q5.&mdash; Berachain Foundation 🐻⛓ (@berachain) <a href="https://twitter.com/berachain/status/1886777450480259265?ref_src=twsrc%5Etfw">February 4, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



In my conversation with Blockworks Research’s Ryan Connor, he explained that he and his team had initially been “excited” about Max Resnick’s potential cultural impact at ETH. But when that didn’t pan out, and <a href="https://blockworks.co/news/ethereum-researcher-joins-solana-anza">Resnick jumped to Solana</a>, the excitement dissipated.&nbsp;



The situation now is “pretty dire” post-Resnick but Connor told me that there are still ways to, well, make ETH great again.



“Bringing execution back to the base layer is the very simple way of putting it. How do you do that? You scale it technically. You compete with the L2s. You change the culture of the ETH organization, the people who are shipping the upgrades, and the app developers that live on that chain. [It’s] way easier said than done. You have to basically abandon these like very niche political, philosophical views that many people in that ecosystem hold [though] I think it&#8217;s clear over a multi-year period that they&#8217;re not willing to do,” he explained.



That includes leaving the “hardware requirements” focus at the door.&nbsp;



While there are technical things that can be done, it’s going to come down to changing the culture. And that, Connor acknowledged, is not going to be an easy battle to win.&nbsp;



Connor compared it to the Department of Motor Vehicles: It doesn’t matter who’s in charge of the department, they can’t just switch on “wartime” mode and change everything. It just, unfortunately, doesn’t work like that.&nbsp;



Whether or not Buterin and EF are politicked to the point of being similar to a government department remains to be seen.&nbsp;



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‘Steep disconnect’ between Ethereum Foundation and crypto community

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The days of bullish exchange listings may be over.



I spent the morning reviewing price data for every coin listed on Binance and Coinbase since the start of last year. The results are rough.



In total, there were 84 new listings across both exchanges — 45 on Binance and 40 on Coinbase.



As of this morning, only 12 of those listings have increased in value from their initial trade price on either platform.



On the chart below, each circle represents a different coin listing, starting on the far left in January 2024 and ending on the right with the most recent new addition on Coinbase, VVV.



As you can see, VVV’s 40% collapse on its list price — despite its rally in its first few hours of trade — is not an outlier.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdoizus-Xt4G4Wz8_wJLWbde4nnMfuVCSYS_5m3lMm5SbttObp5Mle3vYZZNPsCnHU2ZFumpo_bPlDU3tKSOSVSZW-h2yj7CiZKKLcfLKK0Hb6y66WGim2Ky6yL30r9ZeNVETr8?key=JOAUs5lZRL4PgoRC0B8h7JAu" alt=""/><figcaption class="wp-element-caption">Not shown: MOVE’s listing on Binance</figcaption></figure>



Since December, more than a dozen listings have suffered the same fate. MOODENG, MOG, MOVE, ACX, ORCA, GIGA, ME, TURBO, VELO, USUAL, AIXBT, CGPT, COOKIE, PNUT and TRUMP have all lose value since hitting either Coinbase or Binance —&nbsp;in many cases by more than two&#8211;thirds.



Of course, there have been winners. AERO, the native token for Base liquidity hub Aerodrome, is up 640% since it was listed on Coinbase in February last year.&nbsp;



DRIFT, the token for the Solana perps DEX, and ONDO, for the real-world asset platform, have also posted similarly great returns.



Granted, we already know that most cryptocurrencies probably won’t make it. So perhaps it’s all par for the course.&nbsp;



Coins, especially smaller-cap ones, are painfully tied to whatever happens to the price of bitcoin. Still, it’s obvious that it’s only a matter of time until the market realizes the paradigm has shifted. 



Historically, common sense has suggested that an exchange listing is a milestone for a coin — opening their markets up to wider investor bases and deeper liquidity.  It wouldn’t surprise me if we start to see the general public urging projects not to list their coins on major exchanges moving forward.

Why major exchange listings may soon be considered bearish

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The crypto-powered cellular network Helium Mobile overhauled its pricing model for new subscribers — which formerly offered unlimited call, text and data for $20 per month.



Invite-only free plans come with 3 GB of data, 300 texts, and 100 minutes per month, $15 plans offer 10 GB of data with unlimited talk and text, and unlimited plans are now $30 per month. Legacy subscribers to the $20 per month plan can keep their existing price. It also introduced a points program to reward things like location sharing that users can redeem for gift cards.&nbsp;



The moves come amid a turbulent last several months that included layoffs and an SEC lawsuit at Helium Mobile’s parent company Nova Labs.



Helium Mobile is one of the most ambitious attempts at building a decentralized physical infrastructure network — DePIN for short — a popular concept among the “<a href="https://blockworks.co/news/crypto-lack-of-utility">crypto should do things</a>” crowd.&nbsp;



Helium Mobile comprises a network of individuals plugging in mobile hotspots to create a patchwork of what are essentially mini cell towers. Subscribers use Helium’s service where coverage is available and get T-Mobile service elsewhere. Helium Mobile rolled out its <a href="https://blockworks.co/news/helium-cell-plan-goes-nationwide">unlimited plan nationwide</a> in the US for $20 per month in late 2023.&nbsp;



$20 per month is a fraction of what legacy cell carriers charge for unlimited cellular plans, and combined with the fact that Helium Mobile must pay T-Mobile for some of the data subscribers use, it was never going to last forever. More price options are also nice for consumers — if you use less than 10 GB of data in a month, you no longer need to subsidize usage from data guzzlers.



Helium Mobile’s new free tier is a cool concept, but it’s not clear to me that it’ll find much demand — do you know anyone, particularly in the crypto world, who uses less than three gigs of data and 100 call minutes in a month? One possible target demographic could be <a href="https://blockworks.co/news/2025-solana-product-launches">Solana mobile phone</a> holders, who may own the devices as second phones and wouldn’t want to pay for a second cell plan.



Coco Tang, general manager of Helium Mobile subscribers, said the free plan could also be a good option for consumers wanting to try Helium before fully making the switch. Helium Mobile developer Nova Labs will hope the new pricing model can drive up revenue following what has been a turbulent year for the company. It laid off 36% of its staff in August, <a href="https://blockworks.co/news/helium-parent-company-layoffs">Lightspeed reported exclusively</a>. Then a couple weeks ago, <a href="https://blockworks.co/news/gary-gensler-resigning">outgoing SEC Chair</a> Gary Gensler made his last enforcement action a <a href="https://blockworks.co/news/sec-charges-nova-labs-with-fraud">lawsuit against Nova Labs</a> charging the company with fraud.



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Helium Mobile introduces free plan, hikes price for unlimited data

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Newly-confirmed Treasury Secretary Scott Bessent now has an additional federal agency to oversee, and he’s hitting the ground running.&nbsp;



Bessent was named acting head of the Consumer Financial Protection Bureau yesterday after President Trump fired Rohit Chopra. Chopra, a Biden-era nominee, was known for his aggressive regulatory approach at the agency, which saw major fines against names including Wells Fargo and Citigroup.&nbsp;



Now, Bessent has essentially put the CFPB on lockdown.&nbsp;



Staffers are to halt any litigation, investigation or enforcement proceedings and refrain from issuing public statements. The effective dates for any previously approved rules will also be suspended, per a memo shared with Bloomberg.&nbsp;



The switch-up was seen as particularly positive for the crypto industry, which was also a target under Chopra. The CFPB last month proposed expanding the agency’s electronic funds oversight to include cryptocurrencies.&nbsp;



While the rule is unlikely to ever be finalized, we will note that even the existence of such a proposal could influence pending litigation matters. The language in the proposal could also be adopted by states, several of which already have almost identical electronic fund transfer regulations.&nbsp;



The Trump administration has not yet nominated anyone to head the CFPB. It’s also unclear whether Bessent will hold the acting role until a permanent head is tapped.



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Bessent hits the breaks at CFPB

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January marked an <a href="https://blockworks.co/news/hester-peirce-reveals-sab-121-rescission">end to SAB 121</a>, welcomed Donald Trump’s <a href="https://blockworks.co/news/trump-vs-biden-crypto-orders">crypto executive order</a> and saw the creation of a <a href="https://blockworks.co/news/new-sec-crypto-task-force">new SEC task force</a>.&nbsp;



Pair that with an <a href="https://blockworks.co/news/sec-position-new-crypto-etf-proposals">ETF filing surge</a>, and it’s a good time to catch up with someone on the inside: Bitwise general counsel Katherine Dowling.&nbsp;



Her firm, after all, has plotted ETFs that would hold <a href="https://www.sec.gov/Archives/edgar/data/2039525/000121390024084334/ea0216197-s1_bitwise.htm">XRP</a>, solana and (as of more recently) <a href="https://www.sec.gov/Archives/edgar/data/2053791/000121390025007545/ea0228742-s1_bitwise.htm#:~:text=Additionally%2C%20Dogecoin%20is%20not%20a,the%20U.S.%20federal%20securities%20laws.">dogecoin</a>.



Dowling, an ex-assistant US attorney in the economic crimes unit of the Northern District of California’s US Attorney’s Office, described regulatory work as “siloed” in recent years — with SEC Chair Gary Gensler and the CFTC’s Rostin Behnam having “different views behind the scenes.”



Now, the signal of more SEC-CFTC cooperation is one of the biggest changes from the Gensler-era (“which now we can refer to as <a href="https://blockworks.co/news/gary-gensler-resigning">the past</a>,” she quipped).&nbsp;&nbsp;



The crypto task force seems “incredibly genuine” based on dialogue Bitwise is having with the SEC, Dowling added. That said, Dowling described the securities regulator as being in “a purgatorial state” with SEC chair nominee <a href="https://blockworks.co/news/sec-chair-nominee-crypto-past">Paul Atkins</a> not yet confirmed. Mark Uyeda is serving as acting chair.



The SEC appears to be waiting for “directive from up high” on how to handle litigations, for example. Like that <a href="https://blockworks.co/news/sec-advances-ripple-appeal">case against Ripple</a> you’ve probably read about. “Overnight those don’t just go away, nor should they,” Dowling said. “But when you have new leadership, there’s a new set of eyes. Are we looking at the right things in this particular case? Is there a settlement stance where we can both get what we want?”



The Bitwise exec noted some assets remain “caught up like dolphins in the fish nets.” She’s alluding to those apparently <a href="https://blockworks.co/news/the-sec-says-these-crypto-assets-are-securities-their-reasoning-is-wrong#">classified as securities</a> — <a href="https://blockworks.co/news/lightspeed-newsletter-mango-markets-sol">SOL</a> and XRP among them.



Something “needs to give” on that front before the SEC can move those ETF proposals along — justifying that purgatory, so to speak.



An ETF that holds dogecoin could have a clearer path, Dowling implied. After all, the SEC has not labeled DOGE a security.



Beyond the litigation/securities uncertainty, there’s the question of whether the SEC will require the existence of “a regulated market of significant size” (historically via CME-traded futures).&nbsp;



SOL and XRP futures <a href="https://blockworks.co/news/cme-group-considering-sol-xrp-futures">are coming</a>, Dowling opined — and spot products beyond BTC and ETH exist in other jurisdictions. If the SEC wants to see XRP and solana futures operate for a while, we’ll have to wait for US products holding those.



“But if we can come at it from a different angle and provide another line of argument that gets them comfortable with that, that is great too,” Dowling said.



How long will this take?



She gave a little laugh (recalling her work with the SEC while at the US attorney’s office) before saying: “I always remind people … this is just one subset of what they’re doing.” So, yeah, <a href="https://blockworks.co/news/us-crypto-etfs-approval-outlook">patience will be key</a>. A likely launch in the nearer term? A US ETF holding both bitcoin and ether. Bitwise got the <a href="https://x.com/JSeyff/status/1885098186223542599">19b-4 approval</a> on that. The SEC must now clear the S-1.



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SEC in ‘purgatorial state’ despite positive signs

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Bolstered by Big Tech, US equities were on the road to recovery after yesterday’s <a href="https://blockworks.co/news/trump-tariffs-trade-war">tariff-fueled rou</a>t.&nbsp;



The Magnificent Seven stocks were in the green midway through the session, with Meta and Alphabet as the big winners. Meta is now riding a record 12-session winning streak while Alphabet saw positive momentum ahead of the company’s earnings release later today.&nbsp;



We’re about a third of the way into earnings season and results have been fairly solid.&nbsp;



As of last Friday, when 36% of S&amp;P 500 companies had reported, 77% had beat analysts’ earnings expectations for Q4 2024. This is in line with last year and slightly ahead of the 10-year average. 63% of companies so far have beat on revenue expectations, which is a bit below the 5-year and 10-year averages.&nbsp;



Today’s rebound aside, US Big Tech is still lagging behind big foreign names. NVDA, down almost 15% year to date, is the worst-performing Big Tech stock across every region. Alibaba (+21% in 2025) is the best.&nbsp;



Other top performers so far this year include Hong-Kong-listed Xiaomi (+16%) and Seoul-listed Hynix (+10%).&nbsp;



Zooming out, the CBOE Volatility Index, known as Wall Street’s “fear gauge,” was on the decline Tuesday after a brief surge to around 19.6 on Monday. Anything above 19.5 (the long-run average) is generally viewed as elevated.&nbsp;



While earnings continue to trickle in, these reports will impact share prices. But the bigger catalyst for further corrections is the tariff situation and potential fallout.&nbsp;



The uncertainty of if and when these tariffs may come into play, and the unpredictability of it all, is going to continue to weigh on global equities.



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Tech stocks lead US rebound, but still lag behind global names

Kate Irwin

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Bitcoin and the rest of the crypto market took a turn for the worse over the weekend in price drops that have largely been blamed on <a href="https://blockworks.co/news/trump-tariffs-trade-war">Trump’s promised tariffs</a>. I overheard a handful of X Spaces hosts sound the alarms about it on Monday, acting as though the bull market was over. 



But now that it’s Tuesday, things are already recovering. Tariffs on Mexico and Canada have been delayed, allowing bitcoin and some other cryptos to partially recover.



As often happens, gaming tokens were harder hit.



Immutable’s IMX token fell 14% from Sunday to Monday. Since then, it’s recouped a bit of that loss, but still remains down roughly 26% in the past week.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXee-772v40wcWM_U_lKuws5XG3hC0BMJqWVVfXX7cdD4fQB6mzq4n6MCyH6SvzwlsaZYrUaYIHgfhkf-IcbmmkF-uZDvB42AuWiNU-qV-JPAr9DoH8ye8X90HchLkcwmYQEkhNLqQ?key=1Aue4niH7Xg5RL1f7t8gn2Ac" alt=""/></figure>



Some other market notables:



<ul class="wp-block-list">
<li>SAND, GALA, Ronin, AXS, MANA, BEAM, APE and PRIME all saw similar losses in the same period, with prices dropping anywhere from 21% to 30%.&nbsp;</li>



<li>Notcoin, the Telegram tap-to-earn game’s token, is down about 35% in the past week.</li>



<li>PIXEL fell roughly 32%.&nbsp;</li>
</ul>



Still, it’s not all bad news across the gaming token sector.&nbsp;&nbsp;



Sui is only down less than 2% in the past week. Sweat Economy continues to churn ahead, seeing its price rising about 8% in the past week. GoMining is also up modestly, as is Xterio and other smaller market-cap tokens.&nbsp;



That’s just a handful of winners though — price <a href="https://coinmarketcap.com/view/gaming/">data</a> shows that most other gaming tokens have had a rough week.



<h2 class="wp-block-heading">XP Alert&nbsp;</h2>



<a href="https://blockworks.co/news/pudgy-penguins-parent-layer-2-blockchain">Abstract</a>, the blockchain from the Pudgy Penguins team, doesn’t have a native token (yet). But it is issuing <a href="https://docs.abs.xyz/portal/overview">XP</a> — gamerspeak for experience points — and distributing it for the first time <a href="https://x.com/Phin_totten/status/1886780598531834197">today</a>. How did you do?



<h2 class="wp-block-heading">Deadrop is dead — we all know why</h2>



You’ve probably heard by now that Midnight Society, the studio behind the “vertical extraction shooter” Deadrop, has shut down.&nbsp;



It had promise — think Call of Duty for crypto fans with a heavy Bladerunner vibe. And, I guess, cars you could drive into battle. Kind of cool?



Deadrop’s premature death isn’t surprising, though.&nbsp;



Last year, one of its other co-founders and primary marketer — Guy “Dr. Disrespect” Beahm — admitted in a (since-deleted) <a href="https://x.com/JakeSucky/status/1823741433825698082">X post</a> that he had inappropriate conversations with a minor. That incident was revealed as the reason for Beahm’s permanent ban from Twitch, which had previously been kept under wraps for years.



Shortly after that news broke late last year, the studio laid off some staff in September. Then, last week, the studio <a href="https://x.com/12am/status/1885061680398213160">posted</a> a brief note announcing that it’s shutting down. The studio didn’t say exactly why, and instead asked the broader gaming community to help its 55+ developers find new gigs.&nbsp;



One of its other co-founders, Robert Bowling, purged his social media accounts before the shutdown.



One former Midnight Society employee told me: “It is what it is. We just couldn’t get the Dr. D stink off us.”&nbsp;



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Gaming tokens hit in Trump tariffs fallout after Deadrop shutdown

Donovan Choy

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



L1 tokens have pretty much taken a beating across the board, with one rare exception.



The exception is unsurprisingly Hyperliquid’s HYPE, which has actually posted a 15.8% gain on the week. The perps DEX generated <a href="https://dune.com/x3research/hyperliquid">$18.2 billion</a> in trading volumes and ~$4 million in fees on Sunday.



Those price gains are coming in against a deep backdrop of red. When we zoom in on larger market cap L1s, almost none were spared the guillotine. From previous generation L1s like Cardano (ADA), Avalanche (AVAX) and Algorand (ALGO), to newer generation L1s like Near (NEAR), Sei (SEI) and Ton (TON), all saw 20%+ price declines on the week.



RON saw the greatest price crash of 27%.



One other L1 that bucked the market crash is the little-known Kava Network L1, which is undertaking an AI pivot. The KAVA token ($539 million market cap) saw a 15.7% gain on the week. Kava launched its mainnet in October 2022 after carving out a niche for itself with an interoperable Maker-like collateralized debt position (CDP) product.



<h2 class="wp-block-heading">MANTRA (OM)</h2>



The OM token, which is 31st largest token by market cap, is up 27% on the week.



For a token this large, I’m embarrassed to say I had no idea what OM was, so I looked it up.



OM is apparently the token behind the MANTRA project, a real-world assets-focused L1 catering to the institutional TradFi world.



Its mainnet launched relatively recently in October 2024. The OM token is used for validator staking, gas and governance — all pretty standard use cases. I expected to find huge TVL numbers on rwa.xyz, but they’re not even listed.



As far as I can tell, there is nothing particularly out of the ordinary that explains OM’s impressive price action. But look upon this price chart, ye Mighty, and despair.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcrD-L0vmbwOzURWagHlh4fpnvWJ3eU-7a0CAVj_Am2Vvke6_lPGChyNz1vvXmhscuBMAnxwABwAfJ1qLy0jKr-qrbKwR0KTovqHv3n4EcQu3llE8m-RxjKiYDamVs0j5fAF64gzA?key=tO46BXKOMwW93zUQ1ZlmI0Is" alt=""/></figure>



<h2 class="wp-block-heading">Onyx (XCN)</h2>



Onyx (XCN) was a lending market for fungible and non-fungible tokens built on Ethereum, until it suffered a $3.8 million exploit in September 2024 and <a href="https://x.com/OnyxDAO/status/1839444128775503999">shut down</a>.



Is it possible to summon an explanation for why XCN (96th largest token by market cap) is up 7% on the week? Perhaps, but the mental gymnastics aren’t worth it.



All I have to offer is this: Onyx yesterday announced XCN Ledger, a new L3 blockchain built with the Arbitrum stack, but settling on Base.



<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">Introducing Onyx: XCN Ledger — A modular Layer 3 Blockchain Built on <a href="https://twitter.com/arbitrum?ref_src=twsrc%5Etfw">@Arbitrum</a> &amp; Secured by <a href="https://twitter.com/base?ref_src=twsrc%5Etfw">@Base</a>, with EIP-1559 enabling onchain <a href="https://twitter.com/search?q=%24XCN&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$XCN</a> burns 🔥 Details, Whitepaper &amp; Onepager available at <a href="https://t.co/86kFieYFY7">https://t.co/86kFieYFY7</a><a href="https://t.co/Ce28ook0wR">https://t.co/Ce28ook0wR</a>&mdash; Onyx (@OnyxDAO) <a href="https://twitter.com/OnyxDAO/status/1886539654071046206?ref_src=twsrc%5Etfw">February 3, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<h2 class="wp-block-heading">AI agents</h2>



The AI agent sub sector has taken a <a href="https://blockworks.co/news/ai-selloff-too-much-excitement">pretty hard beating</a> since it <a href="https://blockworks.co/news/ai-crypto-vs-dotcom-bubble">peaked</a> at a market cap of ~$20 billion in early January.



When agents were still going parabolic, everyone wanted to know: How high would this market go? Analysts far smarter than I were making bold <a href="https://blockworks-research.beehiiv.com/p/weekday-month-day-b7b075d4f641dd4e">predictions</a> that placed the agentic market at a range of $100 billion (base case) to $250 billion (bull case).&nbsp;



It’s been a month since, and market caps have cratered to $8 billion. Yikes.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdZP3kMKKwYsRW9rMR2Ta9MZ6eKnZVuTZAmwEKZ9WCAQ0e1sDT9B38p-jHEvUZiBnAIjMZ-oaZD2qDodvsvbxJ6Xc35KD5Auc85VfRKGVIpxcVdsrBvXv_-5fLRLQs77z7nxDNt2w?key=tO46BXKOMwW93zUQ1ZlmI0Is" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://www.cookie.fun/">cookie.fun</a></figcaption></figure>



The top tokens in the AI agent sector haven’t held up: VIRTUAL is down 24% on the week, while FARTCOIN and AI16Z are down 22.5% and 38.6%, respectively.



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HYPE, OM and XCN hold up against crypto crash

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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Altcoin season might never return.



At least, not how you know them. It may be that the next altcoin season will be more of an altcoin glow-up.&nbsp;



No more aping into random buzzy coins and turning a profit by the bull market top. Only a dozen or so high quality projects might give massive returns — coins with sensible tokenomics, realistic narratives and few enough vested interests that normal people stand to benefit early on.



How depressing.



I have an alternative theory: altcoin season is destined to return at size, purely because “crime season” is inevitable.



There’s been an <a href="https://x.com/search?q=crime%20szn&amp;src=typed_query">uptick</a> in calls for crime season since SEC Chair Gensler stepped aside and Trump was elected, at least in my particular algorithm, with the phrase now effectively a substitute for “do whatever you like, as long as it directly benefits you and 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">Crime szn People will fade the idea of it but it&#39;s true The fastest horse is the one that is willing to commit crime in these circumstances so focus should be on that Try to make as much as you can, as quickly as you can, crime is short-term bullish, long-term bearish <a href="https://t.co/0r9EGnh907">https://t.co/0r9EGnh907</a>&mdash; DonAlt (@CryptoDonAlt) <a href="https://twitter.com/CryptoDonAlt/status/1864844570338505021?ref_src=twsrc%5Etfw">December 6, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Crime season is not exactly exclusive to crypto. But in crypto specifically, it’s a return to peak degen behavior, as Virtuals agent AIXBT <a href="https://x.com/DiamondHandsDig/status/1881160815870693702/photo/1https://x.com/DiamondHandsDig/status/1881160815870693702/photo/1">put</a> it, whereby the name of the game is to make the number go up at all costs, even illegally.&nbsp;



Defining “<a href="https://blockworks.co/news/waiting-for-altcoin-season">altcoin season</a>&#8221; was fairly straightforward — comparing growth in altcoins versus bitcoin gives us three distinct altcoin seasons since 2016. The most recent one ended at the top of the November 2021 bull run, so we’re well overdue.



Crime seasons are less mathematical. They instead hinge on major news stories that symbolize the overall market vibe that gave cover to outright criminal enterprise.



The chart below plots crime seasons against altcoin seasons over the past decade or so.&nbsp;



Grey shaded areas in the back show the market capitalization of crypto. Altcoin and crime seasons are represented by the colored bands.



Pink is for crime season, blue is for altcoin season, and purple shows where the two overlap — when crime season and altcoin season are happening at the same time.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdzm6D7UsXdcGf1S8PZrN78_A4sa38cRnP6fjLGdgpP4WcdxCPcDf22i9C9y10P5f5FtzsdFzS4Gsq0F7Lz7bCO2HM4mNIajJoq8pwjx5SMrXs4DubwbBzuecOfij6GnSFDmpVR?key=JOAUs5lZRL4PgoRC0B8h7JAu" alt=""/></figure>



The beginnings and ends of crime seasons are highlighted by the red lines. As you can see, there have been two separate — but huge — seasons of criminality in the past decade.



It’s a broad-brush approach, but to my eye, crypto’s first major crime season started when the first-and-best crypto ponzi <a href="https://en.wikipedia.org/wiki/Bitconnect">BitConnect</a> launched in February 2016.&nbsp;



The season eventually melded with Ethereum ICO mania and ran until April 2018, when the Feds <a href="https://cointelegraph.com/news/third-co-founder-of-centra-tech-charged-with-25-mln-securities-fraud">came</a> for the founders of Centra, the mostly-phony financial services crypto startup which raised $25 million. QuadrigaCX founder Gerald Cotten <a href="https://www.nytimes.com/2019/02/05/business/quadriga-cx-gerald-cotten.html">disappeared</a> around eight months later.



The second crime season otherwise began when Sam Bankman-Fried founded FTX in 2019 — a domino that topped over into NFT bubbles, DeFi Summer, ransomware and flash loan attacks, as well as dog coin frenzies.&nbsp;



Perhaps the greatest crime season to date, it all <a href="https://www.justice.gov/usao-sdny/pr/alleged-perpetrator-100-million-crypto-market-manipulation-scheme-make-initial">ended</a> with the arrest of the Mango Markets <a href="https://www.justice.gov/usao-sdny/pr/alleged-perpetrator-100-million-crypto-market-manipulation-scheme-make-initial">hacker</a>, Avi “profitable trading strategy” Eisenberg, in Puerto Rico on Boxing Day 2022.



Notice that on the chart, altcoin season has always happened alongside crime season, barring just a few months in 2019. In fact, the two largest altcoin seasons in crypto history occurred smack bang in the middle of crime season.&nbsp;



The good news: Crime season is pre-programmed. Humans always find a way to do crime (imagine what autonomous agents will do). So maybe altcoin season is equally likely.



The bad news: Crime season is inevitable.



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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.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

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