Sonar

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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When people hoped that more efficient steam engines would help conserve England’s limited reserves of coal, William Jevons warned of just the opposite: Greater efficiency, he predicted, would lead to even greater consumption.&nbsp;



He was right, of course, and his prediction became known as the Jevons paradox, which is often invoked whenever efficiency gains inspire people to use more of something.



When cars got more fuel-efficient, people drove more; when lightbulbs got more efficient, people installed more of them; when HVAC got more efficient, people built bigger houses.



But these are better described as examples of a “rebound effect,” where some, but not all, of the expected savings from efficiency are offset by increased usage.



It wasn’t until the digital revolution that the Jevons paradox truly came into its own: As fast as Moore’s law has decreased the cost of computing, our use of computers has increased even faster.



As a result, things like semiconductors and cloud computing — where costs are in perpetual decline — have been both great businesses and great investments.&nbsp;&nbsp;



The current craze for investing in AI is similarly predicated on more efficient GPUs enabling a disproportionately large expansion of usage.



Microsoft’s Satya Nadella is confident that it will: “Jevons paradox strikes again,” he <a href="https://x.com/satyanadella/status/1883753899255046301">posted</a> on X in response to investors briefly worrying that the advent of DeepSeek would reduce demand for both GPUs and cloud services.&nbsp;



So far, he seems to be right — the efficiency gains from DeepSeek and other more efficient LLMs seem to have been more than offset by increased demand.&nbsp;



But any investor in either airline or telecommunication stocks can tell you that it doesn’t always work out that way.



In both cases, efficiency rose, costs fell and usage increased disproportionately — but investors still lost.



Airline traffic, for example, has increased exponentially since people started flying commercially in the 1950s (and with only the smallest of cyclical downturns):



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeaBqOYzu0azaYsc84h_iGgfy9C1_Sw_XDCvkh9OyRPlO95ws6ItZ2fHf4i7_mCqVgPs7K3i1U0kqLs6ycMeLno8ohYQmdFLOaDXi8FuiSBFyYIyEoi6uq1EqWvvHaM-Y_Tksj_PA?key=WRLkgfDF6uV-2-i6m20KfNva" alt=""/></figure>



That looks like a highly investable chart and the Jevons paradox-related <a href="https://www.iata.org/en/iata-repository/publications/economic-reports/global-air-passenger-markets-riding-out-periods-of-turbulence/">numbers</a> are even better: Since 1970, the real cost of air travel has fallen by 1.7% per year, on average, while the underlying rate of air traffic has grown 4.4% per year.



Anyone who had those numbers in advance would likely have started an airline or at least invested in airline stocks — but they’d have come to regret it: Warren Buffett calls airlines the “worst sort of business” and airline stocks a “deathtrap for investors.”



Similarly, lots of people who correctly predicted the explosion of internet traffic in the 1990s — or underpredicted it even — lost money buying stock in the companies that hosted that traffic.&nbsp;



Internet traffic grew 127% per year between 1997 and 2003 — at the end of which period investors in the likes of Level 3 Communications, Global Crossing and WorldCom were more or less wiped out.



Now consider crypto.



Much of crypto investing is predicated on the assumption that more efficient, lower-cost blockspace will lead to an exponential increase in demand for that blockspace.&nbsp;



The results have been mixed so far.



Cheaper blockspace has led to an explosion of activity on blockchains like Solana and Ethereum layer-2s like Base.



But that’s mostly been thanks to memecoin trading, which is presumably not a decades-long growth story — it’s hard to imagine that even cheaper blockspace will lead to even more memecoin trading.



(Let’s hope not, at least.)&nbsp;



For what the elasticity of blockspace demand looks like without memecoins, we might only have to look at Ethereum.



Early hopes that moving execution off-chain would lead to Ethereum collecting more fees in settlement and data availability than it lost in execution have been disappointed.



On Ethereum itself, the cost of transacting has fallen over 90% from its 2021 peak — but, per data from <a href="https://app.blockworksresearch.com/analytics/ethereum?dashboard=82">Blockworks Research</a>, the number of transactions is close to unchanged.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXckG13181CJJ6hp1eT5_CxwQ1OQ22M-LWXTUxqM9NLqXKTvX-wG3nGzrKLHB9pjoR7n-WdGs1qz0BRBWOx7lpMxEZYFS39Is5p7pbIHfmoOcUPZNDmeb2WeC1zrOX06bvdtt2OdSg?key=WRLkgfDF6uV-2-i6m20KfNva" alt=""/></figure>



Worse still, the combined fees paid on all Ethereum-aligned layer-2 blockchains does not offset the loss of fees on layer-1 Ethereum — so the ecosystem as a whole does not appear to be an instance of the Jevons paradox.



That does not mean that it’s headed for failure.&nbsp;



The airline and telecommunication industries have been extremely useful to the world, providing positive externalities for society far in excess of the negative internalities that shareholders have suffered.



But that is a lesson to be learned: You can be right about the Jevons paradox and still lose money investing in it.



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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>



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investors

What crypto investors can learn from Jevons paradox

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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Solana is stalled sideways, with the broader crypto market hitting some light turbulence. SOL is trading at $145.45 midweek, down 2.5% from last Wednesday and now drifting crabwise after a month-long rally that pushed it up nearly 30% from April lows.&nbsp;



Despite the modest cooling of momentum, Solana <a href="https://app.blockworksresearch.com/assets/sol?tags=sol&amp;interval=1w">continues</a> to print usage at speed. Over the past 30 days, transaction fees have hit an annualized $432.9 million, with SOL burn running at an annualized $216.5 million pace.



Besides macro headwinds, we can probably trace some of the cautious price action to the looming FTX liquidation, where over 60% of the estate&#8217;s onchain assets are in SOL. The first wave of creditor repayments is scheduled for May 30 — funded by prior asset sales, including FTX’s March SOL deals — which may still weigh on sentiment even if the tokens themselves are no longer in play. SOL&#8217;s market cap has slipped to $75.3 billion, and while 24-hour volume remains strong at $3.49 billion, buyers can&#8217;t seem to stop peeking over their shoulders.



The last round of FTX estate unlocks <a href="https://blockworks.co/news/sol-investors-shrug-off-unlocks">kicked off March 1</a> — right before a drawdown in SOL’s price, although there were obviously <a href="https://blockworks.co/news/tariff-fears-wipe-out-sol-gains">other factors involved</a>.&nbsp;



Bitcoin, meanwhile, had a little gut punch this morning due to macro. On Wednesday, BTC <a href="https://blockworks.co/price/btc">dropped</a> to $92,910 after US GDP data showed a <a href="https://forward-guidance.beehiiv.com/p/greatly-disappointing-print">0.3% contraction in Q1</a> — its first in three years. Analysts were quick to cite the sudden impact of Trump&#8217;s revived tariff policy, with imports surging and dragging down the GDP print. Stocks sold off, recession chatter kicked up, and bitcoin dipped. As is tradition, the price rebounded within hours to $94,000, buoyed by strong spot demand and resilient ETF inflows, including over $3 billion in net new capital through April 29.&nbsp;



Last weekend&#8217;s <a href="https://blockworks.co/news/crypto-solana-community-istanbul-turkey-conference">Crossroads event in Istanbul</a> allowed the Solana community to take stock of direction. It was a lot of builders comparing notes, investors checking pulse, and variant teams workshopping infrastructure that still has a shot at scaling mainstream demand — lots of honest conversations about payments, gaming, DePIN and the gaps that still need filling.



So far, though, the resulting confidence of those discussions has not translated into price. For now, conviction is expensive. The market is still frozen by what-ifs. What if the market prices in the FTX overhang? What if bitcoin fails to clear $96K and drags everything else with it? What if global retaliation hits US tech exports, and risk assets feel the heat?&nbsp;



Once these questions have answers, folks will either step up or step aside. And that&#8217;s when the market&#8217;ll start moving again&#8230;ready or not.



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



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



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



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

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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We have a more specific date on when Galaxy Digital intends to (finally) go public in the US. And speaking of crypto-related equities, Grayscale’s launched a new ETF.



First, on Galaxy: The firm is eyeing May 16 for its Nasdaq listing. We reported earlier this month that the SEC <a href="https://blockworks.co/news/galaxy-sec-listing-nasdaq-ipo-market-crypto">“declared effective”</a> the company’s registration statement to do so. There’s still that shareholder meeting to approve the move on May 9.



Galaxy shares have traded on the Toronto Stock Exchange since 2020 and will continue to do so “for a period of time” if and when the Nasdaq listing is finalized, the company says. The new listing will “enable us to attract a broader investor base,” CEO Mike Novogratz said in a statement.&nbsp;



It would seem he’s right given financial pros like to see cash flows, balance sheets, etc. — things bitcoin alone doesn’t offer. And as noted before we’re keeping an eye on the other segment players looking to <a href="https://blockworks.co/news/circle-ipo-stablecoin-competition-investors">soon go public</a> (looking at you, Circle and <a href="https://blockworks.co/news/crypto-ipo-boom-etoro-kraken">eToro</a>).



On to the Grayscale update, the firm has launched an ETF that invests in companies adopting bitcoin as a treasury asset. Galaxy’s TSX-listed shares are actually the fund’s seventh-largest holding out of the gate. Its top two holdings are Strategy and Tesla, with ~27% and ~17% positions, respectively.&nbsp;



Bitwise launched a similar product in March. That one, too, skews heavily toward MSTR (also at nearly 27%) but opts for Marathon Digital and Riot Platforms as its next-biggest holdings (~11% and ~9%). Less than 2% of the fund’s assets currently go toward Tesla. 



That Bitwise offering has just $5 million in AUM after nearly two months on the market; still, these funds’ investable universes are <a href="https://blockworks.co/news/corporate-bitcoin-adoption-boom-inevitable-kraken">expected to grow quickly</a>. We’ll see what kind of impact that has on the demand for them.



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ETFs

Another crypto equity ETF launches ahead of Galaxy’s US public listing

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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A household name is teaming up with a stablecoin platform in a bid to bring tokenized dollars into everyday life.



That would be payments giant Visa, which is now launching stablecoin-linked cards.&nbsp;



What does that even mean? Essentially, fintech developers using Bridge can offer these cards to their customers, who can then make purchases at any merchant location that accepts Visa.&nbsp;



Bridge deducts funds from the cardholder’s stablecoin balance and converts the balance into fiat so the merchant gets paid in their local currency. The card programs are starting in Argentina, Colombia, Ecuador, Mexico, Peru and Chile.



Stablecoins are a roughly $230 billion market. We’ve <a href="https://blockworks.co/news/yield-bearing-settlement-network-tokenization">written before</a> about how industry watchers expect this space to multiply into the trillions of dollars in the coming years.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd2HTSPpxI8_NcY_wNScbXJ-Q_3sVDe_HLuRRGOnfPuNjWFSRF1lPr2Ls3BICr2nf5dvtq9_GBlWLBJ2poNappI2Q2v1_o8g8P4RUKkaF9uuRCMgq8ra1WRUEDkOwQsN823jKIL?key=bliKFCbrz6MFZ2hPLgJRCh01" alt=""/></figure>



Why this space is poised to grow substantially doesn’t seem too difficult a concept.



“By enabling fast, cheap, global payments, among other uses, stablecoins have become one of crypto’s most obvious killer apps,” a16z noted in a 2024 State of Crypto <a href="https://a16zcrypto.com/posts/article/state-of-crypto-report-2024/">report</a>.



More people than ever seem to be <a href="https://blockworks.co/news/stablecoins-tokenization-blackrock-galaxy-das">paying attention now</a>, especially as tokenized money market funds — viewed by some as a sort of yield-bearing alternative to stablecoins — <a href="https://blockworks.co/news/tokenized-yield-funds-complement-stablecoins">also gain steam</a>.



A look at a Treasury Borrowing Advisory Committee <a href="https://home.treasury.gov/system/files/221/TBACCharge2Q22025.pdf">presentation</a> (dated today) discusses stablecoins’ potential to “catalyse structural changes” across bank deposits, the Treasury market and monetary supply.&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">Another 20 page presentation at <a href="https://twitter.com/USTreasury?ref_src=twsrc%5Etfw">@USTreasury</a> regarding stablecoins. The most comprehensive I&#39;ve seen to date. cc <a href="https://twitter.com/nic__carter?ref_src=twsrc%5Etfw">@nic__carter</a> <a href="https://t.co/4SbarnGOwX">pic.twitter.com/4SbarnGOwX</a>&mdash; Quinn Thompson (@qthomp) <a href="https://twitter.com/qthomp/status/1917619129676357692?ref_src=twsrc%5Etfw">April 30, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



You might remember Bridge being in the news last October, when Stripe said it would <a href="https://blockworks.co/news/stripe-bridge-acquisition-stablecoin-infrastructure">acquire the company</a>. The $1.1 billion deal closed in February.



Architect Partners’ Eric Risley called the deal “the most important M&amp;A transaction to date for our industry” at the time. It offered more evidence that stablecoin-based payments have compelling benefits even to non-crypto companies, he added.&nbsp;



It would seem integrating stablecoins into Visa’s existing network furthers that narrative.&nbsp;



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Bridge

Visa-Bridge link-up extends the stablecoin adoption narrative

Casey Wagner

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



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The US economy contracted in the year’s first three months. It’s the first quarterly decline since 2022.&nbsp;



Today’s advanced GDP estimate for Q1 showed a 0.3% annualized decline, sending stocks lower, and Treasury yields and gold higher. Analysts had expected GDP to grow 0.4% in the first quarter.&nbsp;



The report comes a day after President Trump marked <a href="https://blockworks.co/news/trump-first-100-days-crypto-policy">100 days in office</a>, during which time the S&amp;P 500 notched its worst performance (-7.3% since Inauguration Day) since the first 100 days of President Nixon’s second term. The Nasdaq Composite lost 11%, which is the biggest drop since President Bush’s first term in 2001.&nbsp;



In a Truth Social post Wednesday, Trump insisted that “This is Biden’s stock market, not Trump’s.”&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfc1IoHcsGz19_gnIcx4nixhvqbb9R1Kmj6keCI1ugHw9EH6wPqAX8ELsmtIPwYrP2MAxeb3uoVh_dMTwHhBog_dI5F9Dqqa9GPFDj-R0uby1Cy6zcYQLJ82UEwMUgwiNEwORnG2g?key=bliKFCbrz6MFZ2hPLgJRCh01" alt=""/></figure>



While the “Liberation Day” <a href="https://blockworks.co/news/tariffs-effect-economy-recession-gdp-trump">tariffs came</a> at the beginning of the second quarter, the Q1 data suggested that consumers and businesses started preparing for more aggressive trade policies at the beginning of the year. The first quarter saw an increase in imports alongside declines in consumer and government spending — the perfect recipe for a negative print.&nbsp;



Imports were up more than 41% in Q1, compared with a 1.9% decline in the last quarter of 2024. Goods imports were up more than 50%, showing that consumers and businesses were in a rush to secure larger purchases and increase inventories ahead of expected tariffs.&nbsp;



The GDP print, as expected, falls between projections from the Atlanta Fed’s GDPNow (-1.9%) and the New York Fed’s Nowcast (2.6%).



Also today, the Treasury Department announced plans to revamp its buyback program. There could be “possible enhancements” made to the purchase amounts, scheduling and frequency, Treasury said in a <a href="https://www.bloomberg.com/news/articles/2025-04-30/us-keeps-long-term-debt-sales-guidance-may-enhance-its-buybacks">statement</a>.&nbsp;



The update comes after <a href="https://blockworks.co/news/trade-war-hits-treasurys">Treasurys sold off</a> earlier this month, <a href="https://blockworks.co/news/global-markets-recalibration">sending yields higher</a> and raising concerns about a slowing economy and tightening financial conditions. The surge in yields, Trump said, was concerning enough for him to pivot on some of his tariff policies; he issued the 90-day pause on most countries just a week after Liberation Day.&nbsp;



Now investors are waiting for signs that the administration is inking trade deals with other countries. After comments from Treasury Secretary Scott Bessent that the situation with <a href="https://blockworks.co/news/global-trade-us-china-deal?utm_source=mail.blockworks.com&amp;utm_medium=newsletter&amp;utm_campaign=fed-independence-may-be-the-next-major-loser">China is “unsustainable,”</a> stocks felt some short-term relief, but have since faltered on the recovery path.&nbsp;



The GDP print also comes a day after the Conference Board released the latest consumer confidence figures, which surprise, surprise, were very bleak. The index fell 7.9 points, marking the eighth straight monthly decline and the lowest reading since 2020.&nbsp;



As Sevens Report Research founder Tom Essaye wrote in a note this morning, the report emphatically proves that investors and consumers are certain that the future looks bleak.&nbsp;



Apologies for ending on a negative note, but the numbers just don’t lie! We’ll be back tomorrow with hopefully some better news.



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Donald Trump

US economy shrank in first 3 months of the year as fears of tariff impact grow

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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Remember the “interoperability” gaming dream?&nbsp;



Ubisoft is spinning up a Decentralized Verification Network (DVN) to verify crypto assets that are being moved or bridged from one blockchain to another.&nbsp;



The company is using LayerZero’s tech — more specifically, its codebase and omnichain messaging protocol — in the deal. The game studio is running its own clients and nodes for its network, however.



The DVN means Ubisoft can let players move their NFTs and in-game currencies from one chain to another, which makes them usable with other Ubisoft crypto games (or external games or platforms). It could also make complete migrations from one chain to another easier if Ubisoft ever decided to move one of its blockchain games.



Ubisoft may enable cross-chain bridging soon for its fantasy turn-based RPG Champions Tactics: Grimoria Chronicles, which launched using the Oasys <a href="https://www.coinbase.com/learn/crypto-glossary/what-is-the-ethereum-virtual-machine">EVM</a> blockchain in October 2024. Last year — months before the game launched — LayerZero <a href="https://x.com/LayerZero_Core/status/1778136368025313532">said it was adding support</a> for Oasys with the end goal of making Champions Tactics “omnichain.”



Now, it sounds like that’s actually possible.



LayerZero’s tech turns assets in transit into Omnichain NFTs (<a href="https://docs.layerzero.network/v2/developers/evm/oft/quickstart">ONFTs</a>) or Omnichain fungible tokens (OFTs). ONFTs could be assets like in-game items, while OFTs could be used for in-game currencies.&nbsp;



Ubisoft will be able to decide the cost of bridging assets for users, LayerZero Labs CEO and cofounder Bryan Pellegrino told Blockworks in an interview. LayerZero tech makes all costs upfront, so that no surprise tokens are required for bridging.



The DVN is intended to be easier to use than a traditional crypto bridge, which can require multiple currencies across multiple chains and anywhere from a few minutes to a week to complete bridging an asset depending on the chain.



Pellegrino believes crypto gaming is moving toward becoming a “broader, much more liquid ecosystem,” and that enabling more asset movement between chains is a step toward that vision.



We don’t yet know which chains Ubisoft plans to support with its DVN. But given its existing and upcoming games use Oasys and Immutable zkEVM, respectively, those may be two of the options if Ubisoft adds a bridging feature to Champions Tactics, for example. LayerZero currently supports over 130 blockchains including Ethereum and Solana.



Ubisoft’s Nicolas Pouard, VP of the studio’s Strategic Innovation Lab, has previously said their goal is to be chain-agnostic — which a DVN supporting dozens to over a hundred chains would certainly enable.



After I previously <a href="https://blockworks.co/news/immutable-teases-potential-ubisoft-collab">reported</a> that Ubisoft’s next crypto game is likely a trading card game (TCG) using Immutable’s zkEVM, Ubisoft and Immutable <a href="https://blockworks.co/news/immutable-ubisoft-tcg-might-and-magic">announced</a> that they’re rebooting Might and Magic as a crypto TCG.



“Long term, the goal is that, you know, the user doesn’t think about a chain at all. They don’t think about gas at all. Their wallets are just dollar-denominated. Everything is just abstracted in the backend,” Pellegrino said, adding: “Users aren’t going to think about chains and <a href="https://help.coinbase.com/en/coinbase/getting-started/crypto-education/glossary/rpc-node">RPCs</a> for too much longer.”



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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>

Gaming

Ubisoft, LayerZero launch network for migrating crypto game assets

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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Every traditional asset will eventually be tokenized.&nbsp;



Here’s BlackRock CEO Larry Fink making the case in his latest 2025 <a href="https://www.blackrock.com/corporate/literature/presentation/larry-fink-annual-chairmans-letter.pdf">investor letter</a>:



“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.”



Which asset is winning that race? It’s private credit, with about $12.9 billion onchain, as of today. For context, tokenized T-bills are currently $6.2 billion, commodities are $1.4 billion, and equities are $484 million.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcaLCYLLgv42cLiZAKwwp2c2pB65wp2nm-btiGyhf2bDZsE4X7ar9UcTtTofi5ZKMDNwgW4eK2X5kcITdY5KCWoOfsZSMsaGJIZOiLDAn-VSk0CtvOZVAr0KnaRPxLGZfzFjrabPg?key=QnyurCUocybuljbckZsd4Xoj" alt=""/><figcaption class="wp-element-caption">Source: RWA.xyz</figcaption></figure>



Private credit markets involve businesses borrowing from institutional lenders like private equity funds and asset managers, rather than banks.&nbsp;



It’s a booming ~$2 trillion market globally today, with potential growth to $3 trillion by 2028, by Moody’s <a href="https://www.moodys.com/web/en/us/insights/credit-risk/outlooks/private-credit-2025.html">estimates</a>.



Now, here are the problems:



<ol class="wp-block-list">
<li>Lender access to traditional private credit is limited — only accredited investors get to participate (due to regulatory laws).</li>



<li>Traditional private credit is illiquid and not easily tradable. Due to its private lender-borrower relationship structure, the asset class lacks a public market where loan values can be easily benchmarked. This lack of standardized pricing, along with its multi-year maturity, is why private credit yields are typically higher (8-12%) so as to compensate for that risk.</li>
</ol>



These problems — inaccessibility, illiquidity and non-transparency — are ameliorated by blockchains to an extent.



It’s a $2 trillion market for the taking, and crypto companies are seizing the opportunity.



<h2 class="wp-block-heading">A snapshot of DeFi onchain credit</h2>



Each company’s model varies, but the idea is generally the same.&nbsp;



Offchain loan originators offer loans to lenders issued as an ERC-20 token or ERC-721 non-fungible token governed by smart contracts. Lenders deposit stablecoins or crypto asset collateral, entitling them to the token which represents a legal claim on future interest payments.



DeFi private credit is dominated today by Figure, with about $9.9b in active loans today.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfhMMDomHXhtdy6HLHyExculr4rFPo6sehODakv8PHRAEScL5bvCIhWB6Wx7DR9feCXu50y6JT8jrJXmRwyA5Q9UPp3HtubQbhKmpzULYURbh8RTsuP0IHvZ-1rfcMniUbK6zyIsw?key=QnyurCUocybuljbckZsd4Xoj" alt=""/><figcaption class="wp-element-caption">Source: RWA.xyz</figcaption></figure>



Figure tokenizes its private credit assets on <a href="https://blockworks-research.beehiiv.com/p/maybe-larry-finks-something">Provenance</a>, an L1 blockchain built with the Cosmos SDK. While the chain is publicly usable, smart contracts require governance approval, presumably to limit the chain’s use for RWA tokenization. The majority of Figure’s loans are “Home Equity Lines of Credit” (HELOC) — revolving credit products offered to everyday homeowners. For a deep dive on Provenance, see Marc-Thomas Arjoon’s Blockworks Research <a href="https://app.blockworksresearch.com/research/provenance">report</a>.



Tradable, on the other hand, has tokenized $1.8 billion in <a href="https://www.businesswire.com/news/home/20250116872887/en/Tradable-Brings-%241.7-Billion-in-Tokenized-Alternative-Assets-to-ZKsync-Secures-Strategic-Investment-from-ParaFi-Capital">more than 30</a> institutional-grade private credit positions on the ZKsync L2 chain. Tokenized assets on Tradable vary from fintech senior secured loans and legal receivables to music royalties.



<a href="https://blockworks.co/tag/maple-finance">Maple Finance</a> is another prominent player in the onchain private credit space. Maple uses a pooled model where pools are overseen by “pool delegates” who determine creditworthiness and loan terms. Its <a href="https://maple.finance/news/maple-launches-syrup-institutional-yield-unlocked">Syrup</a> platform is one of the few DeFi opportunities where retail investors can access yields from the private credit market.



Private credit assets are still largely perceived as securities. For that reason, most of the aforementioned platforms still largely employ geofences and KYC/AML restrictions that exclude the average retail investor from participation.



Yet, onchain private credit can still benefit from liquidity and transparency improvements by offering real-time visibility and verification.



In a recent <a href="https://blockworks.co/news/tokenized-private-credit-centrifuge-keyrock-report">report</a>, Keyrock estimates a gradual growth of onchain private credit to $15-17.5 billion by 2026.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeTr6MO0aIKW_s2is0c6BbYyWZYG9ejKNMYavcKllBA18So4GO58IN-zNesjLrj_1S8wDCBW1WEXVpIylur8RaQdQOHWHt4gOeCHjXqSwtLQORr2dyN29z298-Iv2mGiOQ6X7nY?key=QnyurCUocybuljbckZsd4Xoj" alt=""/></figure>



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0xResearch Newsletter

How private credit tokenization is leading the race in tokenization

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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To be clear, Satoshi never actually coded a poker game into the Bitcoin client.&nbsp;



Bitcoin’s creator did, however, include the graphic user interface for a poker lobby in the first <a href="https://github.com/bitcoin/bitcoin/commit/4405b78d6059e536c36974088a8ed4d9f0f29898">version</a>. Satoshi removed the code in the very next commit.



Erik Voorhees made up for it and then some with SatoshiDice.



The service <a href="https://bitcointalk.org/index.php?topic=77870.0">launched</a> around this time in 2012 as a provably fair Bitcoin betting game that mostly ran onchain.



Players would directly send bitcoin to one of many “1dice” vanity addresses, each with their own special properties designated by the platform.



Deposit between 0.001 BTC and ~20 BTC to 1dice7fUk, for example, and you’d have 24.4% odds of instantly quadrupling your coins.



Otherwise, sending up to 0.0025 BTC to 1dice1e6p… would net a 0.0015% chance of boosting your original bet by 65,000x.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfT1cr2wqn1yUtkOc9HthO-1tttkML228QkP-GTRz4FIBKc5Qr-jV2tVSMMb3mTW7ESembExsMEsA72wk7JfAy0YFnaUnH62Yub6UBSVZAioNZwQpg3zwBZi_pCQbF8deyOzeBBVQ?key=W4Xnu8cU1IbUl2CiljmF_UEd" alt=""/><figcaption class="wp-element-caption">The original SatoshiDice is defunct, so do your own research before interacting with any modern sites with similar names.</figcaption></figure>



SatoshiDice bets won or lost depending on their transaction hash. The site would run the bet’s hash through a secondary function and use the first four bytes of that hash as the so-called lucky number.&nbsp;



If that number fell below a preset threshold for the associated odds, the bet was considered a winner and was paid out immediately. Losers would instead receive a single satoshi in return.&nbsp;



SatoshiDice later published the secrets used to hash the transaction IDs, so that players could reverse-engineer the process to confirm the game wasn’t rigged. This method was the precursor to the Provably Fair system utilized by many modern crypto gambling sites.



“SatoshiDice is a subroutine of an advanced artificial intelligence, which arose spontaneously as one of the less-harmful consequences of the United States&#8217; quantitative easing monetary program,” joked the site’s <a href="https://web.archive.org/web/20120508030355/http://www.satoshidice.com/bits.php">documentation</a>.&nbsp;



“The system exists solely within the RAM of an abandoned Nokia 3310 mobile phone which was left in a subway station in Tokyo, and powers itself by feeding off the ghost of the late Satoshi Nakamoto (who was in fact a super hot 20 yr old female Japanese programmer and exotic animal collector).”



“While the Intelligence decides on its next course of action, it runs this SatoshiDice subroutine. Some people ask why Bitcoin was really created&#8230;it was created by the Intelligence as an internet currency which enables free individuals around the world to play the SatoshiDice game. By playing, you are fulfilling the Intelligence&#8217;s Grand Vision.”



Uptake was fast. The bets were super cheap, after all — costing fractions of a penny in fees — and they were accepted and paid out with zero confirmations, usually within 30 seconds.



In a 2014 <a href="https://www.federalreserve.gov/econresdata/feds/2014/files/2014104pap.pdf#:~:text=,weeks%20of%20its%20inception%2C">report</a> on the Bitcoin ecosystem, Federal Reserve analysts found that within weeks, SatoshiDice was responsible for more than half of all bitcoin transactions by volume.&nbsp;



“It is reasonable to conclude that almost all small-value transactions [under $100] on the Bitcoin network before mid-2013 were driven by the online gambling site,” they wrote.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdvHa_qoA9fAWLIByGzDHzl40fM7182i00-A214YthCOscUDbK0kLFimZwygCsK7Bpxb402dBjX2pDSEWEKa0WhN4n4USa_z-c77pVbx305I4lRPwUEz_wNPlj17wu2iGYAS9tW?key=W4Xnu8cU1IbUl2CiljmF_UEd" alt=""/><figcaption class="wp-element-caption">In the left graph, SatoshiDice volume is shown by the red area with all other Bitcoin activity shown in green.</figcaption></figure>



Meanwhile, SatoshiDice had proved extremely profitable. In its first 15 months of operation, over 5.3 million bets had been made through SatoshiDice.



Around 3.9 million were winning bets, in part due to the popularity of addresses carrying the highest odds, with 21% of all bets placed in the 97% category.&nbsp;



SatoshiDice’s <a href="https://www.investopedia.com/articles/personal-finance/110415/why-does-house-always-win-look-casino-profitability.asp#:~:text=The%20house%20edge%2C%20which%20is,to%20a%20bit%20over%202%25.">house edge</a> was <a href="https://wizardofvegas.com/forum/gambling/betting-systems/34702-satoshi-dice-safest-aggressive-martingale-at-50-odds/">calculated</a> at between 1% and 1.9%. One <a href="https://thenextweb.com/news/first-major-bitcoin-acquisition-sees-gambling-site-satoshidice-sold-for-11-5-million">report</a> cited the site’s income at past $50,000 per week, preceding Voorhees to list dividend-paying shares in SatoshiDice on the long-gone Bitcoin securities exchange MPEX in August 2012.



Overall, 13 million shares in the platform were sold to the public, raising 50,600 BTC ($5 million at the time).



With the number of SatoshiDice bets regularly eclipsing BTC transfers, concerns grew over whether it was, in fact, spamming the chain with non-economic activity. 



Around the same time, some miners briefly <a href="https://research.mempool.space/block-size-report/#:~:text=,with%20the%20satoshi%20dice%20website">enforced</a> smaller block size limits, which has been suggested may have been to avoid managing relatively large volumes of SatoshiDice data.



<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">Just discovered that my Bitcoin casino game, SatoshiDice, is now responsible for over 50% of all Bitcoin transactions ever (over 1.37m txs)&mdash; Erik Voorhees (@ErikVoorhees) <a href="https://twitter.com/ErikVoorhees/status/226436118088933376?ref_src=twsrc%5Etfw">July 20, 2012</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Still, in one <a href="https://www.reddit.com/r/Bitcoin/comments/195hvp/satoshidice_player_bets_002_btc_wins_1278_btc/?rdt=62849#:~:text=SatoshiDice%20Player%20Bets%200,2%20or%203%20bitcoins">case</a> shared on Reddit, a SatoshiDice player had bet 0.02 BTC (~$0.40 at the time) to win 1,278 BTC — a 64,000x payout then worth $28,000 and nearly $127 million in today’s money.&nbsp;



Voorhees was also a big winner, despite a minor <a href="https://www.sec.gov/newsroom/press-releases/2014-111">run-in</a> with the SEC over the MPEX offering. He made <a href="https://thenextweb.com/news/first-major-bitcoin-acquisition-sees-gambling-site-satoshidice-sold-for-11-5-million">history</a> when he sold his SatoshiDice stake in July 2013 to an unnamed buyer for $11.5 million.



The deal was paid entirely in bitcoins, precisely 126,315 BTC, the equivalent of almost $12 billion at current prices.&nbsp;



If held until today, that’s equal to Voorhees winning a 10,000x bet on SatoshiDice, which carried winning odds of just 0.0061%.&nbsp;



Although, it’s more likely that some of those coins went into funding ShapeShift, which Voorhees founded about a year after cashing out. Clearly, the house always wins.



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Bitcoin gambling: How SatoshiDice picked up where Satoshi left off

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>.



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



One of the biggest narratives we’ve discussed a lot is the rise of institutional adoption.&nbsp;



Sygnum, the digital asset banking group, is no stranger to the shift and announced yesterday that it’s seen a 400% increase in its average annual growth in trading volumes since 2020.&nbsp;



“What we have seen over the past year and a half is a significant number of traditional institutional trading counterparties coming into the industry and gaining interest in using our solutions to delve into the space,” Sygnum’s Head of Corporate Clients, Néstor Palao, told me.



“We talk about brokerage firms, prime brokers, investment funds and family offices that see, in Sygnum, a regulated gateway into this industry. And this, I would say, indeed, is something that we have seen growing.”



But the change — and overall growth in the industry — has led to crypto projects themselves evolving.&nbsp;



Specifically, Palao noted that startups have been approaching Sygnum more and more. In the past, they’d just seek out a bank account so that they could pay employees or contractors, since traditional banks were, well, not so welcoming.&nbsp;



But over the last few years, projects have come to Sygnum and “professionalized themselves significantly.” Palao explained that these projects now have a finance department, not just a founding team, and “professionalize the management of their capital.”



“We see projects daily that launch a project; they manage to raise a significant amount of capital, or their token gains a lot of attention, and they end up sitting on a very significant balance of treasury assets,” he explained.&nbsp;



“In the beginning, it was purely to ‘Give me a bank account so I can pay my employees.’ Now, it’s still that, but it’s also a lot more about, ‘How can I properly manage my treasury of tokens? How can I hedge my exposure? How can I generate yield on my holdings?’”



What Palao told us lines up with what we’ve seen in other segments around crypto, too. Back in February, PitchBook’s Robert Le <a href="https://blockworks.co/news/q4-deal-values-jump">noted</a> that the rebound in venture capital activity was pretty focused on “established” teams.&nbsp;



Oh, how time flies…



Updated April 30, 2025 at 11:35 am ET: Modified headline.



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Banking

Sygnum sees a 400% increase in average annual trading volume growth since 2020

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>.



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



Throughout much of the memecoin-fueled boom in Solana application revenue, the leaderboard has looked like this: pump.fun, Phantom, and an established group of so-called trading bots.&nbsp;



That stasis broke in recent weeks as a new competitor quietly climbed the ranks. Axiom, an online trading platform combining trading bot capabilities with Hyperliquid’s perpetual futures product, is now solidly in second place behind pump.fun in terms of Solana app revenue.



Last week, pump.fun saw $12.2 million in revenue, while Axiom was close behind with around $10.5 million, according to Blockworks Research. Phantom, with around $4.3 million, was a semi-distant third.&nbsp;



Axiom was co-founded by a pair of 22-year-old UC San Diego graduates, Henry Zhang and Preston Ellis. The computer science majors “had nothing really to do” in college, but they were both into crypto trading, so they built a couple of projects in their free time, Zhang told me.&nbsp;



Ellis was finishing up college, and Zhang was just starting as a software engineer at TikTok when the <a href="https://blockworks.co/news/solana-memecoins-all-time-high">Solana memecoin craze</a> began taking off. The pair decided to try building a platform that could rival the trading bot of choice, Photon. They built an initial product in mid-2024 and were selected into the winter batch for Y Combinator, the prestigious startup accelerator that counts Airbnb, Coinbase and Reddit as alumni. Zhang and Ellis said Y Combinator connected them with Jordan Fish, the crypto entrepreneur and online personality known as Cobie on X, who offered them advice — including that they should avoid opening up the checkbook for key opinion leaders (KOLs).



Trading bots are kind of like souped-up DEX aggregators that specialize in quickly and successfully landing crypto transactions. They’re popular among users for things like sniping — a term for buying up memecoins right after they are created — and tracking new token launches. Many are built on Telegram, although Axiom is only a web app.



It’s a crowded field, but Axiom has separated itself from the pack in recent weeks. In late February, the trading bots Photon, BullX, and Trojan combined for around 75% of Solana trading bot volume, according to a Dune <a href="https://dune.com/adam_tehc/trading-bots-on-solana">dashboard</a>. Today, Axiom has more than 50% of market share by itself.



Why does Axiom command so much revenue? Blockworks Research analyst Danny Knettel <a href="https://blockworks-research.beehiiv.com/p/bitcoin-yield-reimagined">told Donovan Choy</a> of the 0xResearch newsletter that Axiom’s secret sauce was combining the two most popular trading products of the moment — Solana memecoins and Hyperliquid perpetual futures. Knettel told me he’s heard rumors that other crypto teams are considering merging these two product offerings as well.



Zhang said Axiom’s rakeback program, where power users are given claimable fee rebates as opposed to the tier-based fee system on venues like Binance, is popular among users as well.



Then, of course, Axiom is running a points program, which tends to spur a short-term increase in usage. For what it’s worth, Zhang and Ellis told me they have no plans of launching a token — which tends to be the key ingredient in airdrop farming.&nbsp;



The pair also said they won’t be raising additional venture funding following Y Combinator’s seed check, as the business is already quite profitable.



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Hyperliquid

Meet Y Combinator’s memecoin bet that made $10M last week

Jess Houlgrave

The past twelve months have been a defining period for onchain UX. As the ecosystem continues to mature, we’ve seen a surge in innovation alongside some notable challenges. From solving liquidity fragmentation across chains, user experience challenges around gas to seamless wallet and app connectivity to working on ensuring that we can deliver better UX and better security, the past year has also been shaped by regulatory shifts, changing market dynamics and an influx of institutional interest from payments to RWA tokenization.



Reown’s State of Onchain UX Report takes an in-depth look at these developments, examining how key trends have evolved in response to, or independently of, the major events shaping web3. Have the challenges of fragmented onboarding been addressed? And if so, how meaningfully? Or do they persist despite technical breakthroughs? How have industry-wide conversations around decentralization influenced user expectations? By analyzing onchain UX through this lens, we can better understand the patterns emerging from an ever-changing onchain landscape.



Looking ahead, several UX themes stand out: Seamless wallet experiences, frictionless cross-chain interactions, and embedded compliance and security features ranging from experimental to expected. We’re seeing growing adoption of social logins, gasless transactions, and modular authentication layers, making the onchain world more accessible than ever.&nbsp;



<h2 class="wp-block-heading">Building for users</h2>



Building for the users isn’t just about shipping features, it’s about understanding where people are today, what’s holding them back, and how we can make their experience better. The State of Onchain UX report makes this clear: while adoption is growing, users still struggle with onboarding, security concerns, and cost barriers that limit how much they engage onchain.



For me, meeting users where they are means reducing friction at every step. People don’t want to completely change how they interact with wallets, apps, or chains, they want easy, fast experiences that fit into what they’re already doing. The report highlights that 48% of users juggle multiple wallets just to access different chains, and security concerns are on the rise despite more confidence in self-custody. That tells me we need to focus on making things simpler, safer, and more connected.



So how do we do that? Here’s what needs to happen:



<ol class="wp-block-list">
<li>Context specific wallets for everyday needs and long-term needs Users prefer different wallets for different use cases. One that’s user-friendly for everyday transactions like buying coffee or gaming, and another with enhanced security, which could be used for storing long-term savings.</li>



<li>Make security feel like a safety net, not a hurdle. Phishing attacks are up, and that’s a problem. But security UX still isn’t where it needs to be. If we can make transaction signing clearer and build in fraud protection, we can help users feel more in control.</li>



<li>Educate in ways that actually stick. More than half of users still aren’t sure how smart accounts work, even though they can make onboarding easier. That tells me we need to rethink how we introduce new concepts, with less jargon, and more hands-on guidance.</li>
</ol>



At the end of the day, technology alone isn’t enough. It’s about how we introduce it, how we guide users through it, and how we make it feel like second nature. If we get this right, adoption won’t just grow, it’ll stick.



This content is sponsored and does not serve as an endorsement by Blockworks. The veracity of this content has not been verified and should not serve as financial advice. We encourage readers to conduct their own research before making financial decisions.



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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>

Reown’s State of Onchain UX Report

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“The counterfeit of business is speculation. A man in business always gives value in return for his revenue, and thus performs a useful function.”



— Andrew Carnegie
</blockquote>



When asked about the competitive threat posed by newly formed Federal Steel, Andrew Carnegie scoffed that its real specialty was “manufacturing stock certificates,” not steel.



That dismissive comment was emblematic of the 1890s boom in industrial “trust” stocks, most of which Carnegie thought had little to do with business and everything to do with speculation.



There were exceptions — the big monopolistic trusts formed in things like oil, sugar and tobacco unsurprisingly turned out to be good investments.&nbsp;



But there were also trusts formed in things like rope, wallpaper and coffins that were essentially stock-promotion schemes that did not.



The 1893 collapse of the National Cordage Company — the “Rope Trust” — even triggered a widespread financial panic that brought down many other trusts that were similarly in the business of “manufacturing stock certificates.”



That outcome might be a cautionary tale for crypto, an industry still best known for manufacturing tokens (not value).



The vast majority of those tokens don’t do anything — and those that do mostly just represent different ways of trading useless tokens.



The crypto market remains highly self-referential like that, but the hope has always been that this would change in time: Build a new financial system and the assets and investors will come.



If so, it feels like they should be arriving any time now — the technology is now good enough, blockspace is cheap and plentiful enough, and the SEC is in remission.&nbsp;



There are hopeful signs that it might be happening.&nbsp;



There’s a notable <a href="https://app.rwa.xyz/treasuries">boomlet</a> of real-world assets moving onchain, for example — mostly thanks to the success of BlackRock’s tokenized money market fund, BUIDL (a product that is in many ways genuinely superior to its off-chain equivalents).



Stablecoin assets are also <a href="https://defillama.com/stablecoins">trending higher</a> and may only be getting started: Mastercard’s <a href="https://x.com/MastercardNews/status/1916896208187986114?t=7DKVU8CYZHfPf5bbyvVSvQ&amp;s=19">announcement</a> this morning that it’ll be facilitating payments with stablecoins may be the thing that finally brings crypto to the non-crypto masses.



From levels of $240 billion now, a recent <a href="https://x.com/jerallaire/status/1915466281479753824">report</a> from Citi predicts that stablecoin assets under management will surge to as much as $3.5 trillion by 2030.



(Note: I did the math and found out that 2030 is four and a half years away. Shocking, I know, but true.)



If there are anything like 3.5 trillion tokenized dollars onchain, investable assets will follow.&nbsp;



I have recently, for example, bought two <a href="https://collectorcrypt.com/marketplace/cards">Pokémon cards</a> and a <a href="https://www.baxus.co/?sortBy=priority%3Adesc">bottle of whiskey</a> onchain, simply because I had some spare dollars onchain and crypto makes it very easy to buy Pokémon cards and bottles of whiskey.



So easy that I now consider both those things investable assets — not having to either take delivery or store collectibles like that is a game changer.



Investing in cards and bottles is also more fun than making 4% in BUIDL or losing 100% in memecoins.



Hopefully, there will soon be more options for crypto investors to choose from.



Kyle Samani even believes there will be all the options: “Virtually all assets will trade on inherently global and permissionless systems like Solana,” he predicted in a <a href="https://multicoin.capital/2025/01/22/the-solana-thesis-internet-capital-markets/">recent report</a> on the future of crypto capital markets.



If so, that will include stocks and bonds, of course, but also — and more intriguingly — all-new kinds of crypto-native assets.



It’s still kind of hard to imagine what these will look like beyond the current offering of blockchain and DeFi tokens — which are almost all self-referentially leveraged to the trading of crypto.&nbsp;



But now that blockspace is so cheap and plentiful, people are trying new things.&nbsp;



<a href="https://x.com/timedotfun?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor">Time.fun</a>, for example, is an experiment in tokenizing people’s time; <a href="https://zora.co">Zora</a> is an experiment in using “content coins” to surface and prioritize information; TRUMP, a “celebrity coin,” is an experiment in tokenizing emoluments; <a href="https://www.story.foundation">Story Protocol</a> is an experiment in programable, tokenized IP; <a href="https://x.com/believeapp">Believe App</a> is an experiment that turns X posts into memecoins (or “idea coins”) that offer to fund the business ideas they loosely represent.



Like most experiments, these will probably fail.



But if crypto capital markets keep throwing spaghetti on the wall like this, some new and interesting things should eventually stick.&nbsp;



Importantly, they might not all be crypto things, either.&nbsp;



Wall Street has been doing less and less experimenting as of late: Tomasz Tunguz <a href="https://tomtunguz.com/ipo-size-2024/">notes</a> that only two companies with less than $100 million of revenue have IPO’d in the US since 2018.



Two!



That failure to offer investors new things to invest in is at least partly because the IPO process has gotten so expensive: Tunguz estimates that it can cost a $100 million revenue company as much as $26 million to list on a US stock exchange.&nbsp;&nbsp;&nbsp;



That is a prohibitively expensive way to raise capital.



Raising capital in crypto, by contrast, is almost infinitely cheaper.



In some cases, literally so: The token that Zora issued is “just for fun,” which means Zora has raised equity capital without having to sell equity — a weird trick that’s only possible in crypto.&nbsp;



That has not worked out very well for crypto investors so far.&nbsp; For most investors in most crypto tokens, returns have been pretty terrible.



Lots of people have gotten rich in crypto, of course, but not by creating or investing in useful things.&nbsp;



Instead, it’s mostly been from the manufacturing of tokens.&nbsp;



Andrew Carnegie would be unimpressed — businesses, he believed, should succeed by giving “value in return for the revenue” and not just offering new things to speculate on.&nbsp;



But he might be sympathetic to crypto markets because stock markets weren’t very serious in his time, either — not until he created the first modern stock by merging his Carnegie Steel Company into US Steel.



US Steel was the product of the kind of financial engineering Carnegie derided.



But it was also the first billion-dollar corporation, the first corporation to publish modern financial statements, and arguably the first to have truly public ownership.



Crypto capital markets are still in their stage of manufacturing tokens.&nbsp;



But their US-Steel moment may — finally — be near.



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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>

Markets

The time for permissionless capital markets is now

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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Lawmakers are scrambling to pass President Trump’s “big, beautiful” tax and spending bill by Speaker Mike Johnson’s Memorial Day deadline. Disagreements within the GOP, though, are poised to slow things down.&nbsp;



There are a few small but mighty groups of Republican lawmakers with some non-negotiables. They have threatened to derail the legislation should things not go their way. Main points of contention include overall spending and proposed clawbacks.&nbsp;



So-called budget hawks, including Chip Roy (Texas), Andrew Clyde (Georgia) and Lloyd Smucker (Pennsylvania) have indicated that they want bigger budget cuts to compensate for the tax revenue decrease.&nbsp;



The bill currently calls for a minimum of $1.5 trillion in spending cuts over a decade. Nonpartisan think tanks have estimated that extending Trump’s first-term tax cuts would decrease federal tax revenue by $4.5 trillion over a decade.&nbsp;



There’s also a coalition of Republicans concerned about plans to clawback funding and limit tax credits associated with Biden’s <a href="https://www.irs.gov/inflation-reduction-act-of-2022">Inflation Reduction Act</a>. Those against the proposal include Sens. Thom Tillis and John Curtis, who co-authored a letter insisting that the tax cuts allow for more investment in manufacturing and lower utility bills for Americans.&nbsp;



Still, House Ways and Means Committee Chair Jason Smith said this weekend that they’re “days, not months” away from finalizing tax plans. In contrast, Republican committee member Darin LaHood said an early June timeline is more likely.&nbsp;



Either way, this is the priority on Capitol Hill for the foreseeable future. So maybe don’t expect any crypto legislation getting through anytime soon.



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<ul class="wp-block-list">
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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>

Republicans aren’t on the same page about Trump’s ‘big, beautiful’ tax bill

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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We <a href="https://blockworks.co/news/us-equities-trade-tariffs-magnificent-company-earnings">wrote yesterday</a> about Big Tech earnings, but we’re also keeping an eye on results in the auto industry. General Motors this morning kicked off earnings season for the so-called Big 3, which also includes Stellantis and Ford.&nbsp;



In an uncommon move, GM released its Q1 report on Tuesday, but executives delayed its call until Thursday. The headline news from the release was that GM pulled its previous 2025 profit guidance, citing tariff policies.&nbsp;



GM is also pausing an intended $4 billion share buyback — a plan the board approved in February. The automaker’s net income decreased 6.6% from Q4, but revenue increased 2.3%.&nbsp;



Shares of GM opened lower on Tuesday (as expected), but gained as much as 2.8% following news that the White House will soften tariffs on the auto industry. The rally was short-lived, though, and GM shares had reversed the gains within the hour.&nbsp;



The Trump administration said Tuesday that while the current 25% tariff on auto imports will continue, the 25% levy on metals (including steel and aluminum) will not apply. In other words, the two tariffs will not be “stacked.” It’s definitely not bad news, but I understand why it wasn’t enough to boost investor confidence too much.&nbsp;



Coming up, Stellantis is scheduled to report tomorrow, and Ford’s Q1 call will be next week.



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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>

Trump’s auto tariff reprieve does little to help GM stock after earnings release

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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FDR had an eventful first 100 days after promising various reforms to combat effects of the Great Depression.&nbsp;



We’re in no way comparing Franklin to Donald, but we’ll keep up the political watchdog tradition of recapping a president’s initial actions within such a timeframe (and we’ll focus on crypto).



Clearly the president’s rhetoric and tariff policies have spurred market shocks that have impacted crypto prices.&nbsp;



But which actions and appointments have had/are set to have a longer-term impact on the asset class? And what’s left on the agenda? Here goes. First came the controversial <a href="https://blockworks.co/news/trump-more-than-a-memecoin">TRUMP memecoin</a>. Then, it took just three days after Inauguration Day for Trump to introduce his crypto-focused executive <a href="https://www.whitehouse.gov/presidential-actions/2025/01/strengthening-american-leadership-in-digital-financial-technology/">order</a>.



“The organization of an interagency Working Group and a clear imperative from the White House to prioritize stablecoin legislation suggests the legislative endgame is near,” said Troutman Pepper Locke partner Alexandra Steinberg Barrage. (More on legislation later).



As we moved into March, we got an executive <a href="https://www.whitehouse.gov/fact-sheets/2025/03/fact-sheet-president-donald-j-trump-establishes-the-strategic-bitcoin-reserve-and-u-s-digital-asset-stockpile/">order</a> for a strategic bitcoin reserve and a digital asset stockpile. The industry reaction <a href="https://blockworks.co/news/trump-btc-reserve-mixed-reactions">was mixed</a>.&nbsp;



Looking ahead, another executive order to watch for might be one addressing Federal Reserve <a href="https://decrypt.co/309392/trump-executive-order-end-biden-crypto-debanking-operation-chokepoint">master account access</a> for crypto players, Steinberg Barrage noted.&nbsp;



A few days after the reserve/stockpile order came the White House crypto summit — marking a milestone for the industry, but <a href="https://blockworks.co/news/crypto-summit-without-substance">lacking substance</a>.&nbsp;



Trump’s first crypto bill landmark came when he signed H.J. Res. 25 into law last month — <a href="https://blockworks.co/news/defi-broker-rule-saga-resolution-25">nixing an IRS rule</a> that opponents argued burdened DeFi players with <a href="https://blockworks.co/news/blockchain-association-defi-broker-rule">unrealistic</a> reporting requirements.&nbsp;



Let’s move on to note what Trump has appeared to facilitate more indirectly. After all, as Foley &amp; Lardner partner Patrick Daugherty told me, “Personnel is policy.” Thus, he argued, Trump’s picks to lead the SEC and CFTC — Paul Atkins and Brian Quintenz, respectively — have been his two most impactful crypto decisions so far.&nbsp;



“[The SEC] favors rulemaking and interpretation, rather than enforcement, as [its] primary regulatory tools,” explained Daugherty, who is also an adjunct digital assets law professor at Cornell and Northwestern.



Most of the SEC’s actions (<a href="https://blockworks.co/news/hester-peirce-reveals-sab-121-rescission">rescinding SAB121</a>, ending lawsuits) are covered <a href="https://blockworks.co/news/sec-actions-timeline">here</a>. Remember the agency’s roundtable on tailoring regulation <a href="https://blockworks.co/news/sec-crypto-round-table-execs">for crypto trading</a>? And there was a custody-focused one last week.



Looking ahead, the SEC is likely to address the uncertain application of the Howey and Reves cases to digital assets, the need for more crypto custodians, and the potential to revise what Daugherty called “rearguard disclosure mandates” that hinder registration.&nbsp;&nbsp;&nbsp;&nbsp;



“‘Come in and register’ must become a realistic opportunity rather than a false promise,” the law firm partner said.



As for the CFTC, it must gear up for the bigger role it will have in overseeing the industry, Daugherty noted. Quintenz, who has been working as a16z crypto’s policy head, “will assure alignment between the two agencies,” he added.



Seeing what Trump’s administration has done already in its first three-plus months, industry players continue to ask for more.&nbsp;



As the last line of a Monday DeFi Education Fund letter to crypto czar David Sacks notes: “The job&#8217;s not finished, and the stakes could not be higher.”



That <a href="https://section1960.defieducationfund.org">letter</a> was about what it called “unlawful DOJ overreach” in the prosecution against Tornado Cash co-founder Roman Storm.&nbsp;



“No one writing code in good faith should have to fear prosecution for the actions of strangers,” they wrote.



Daugherty said he expects Sacks — tasked with leading <a href="https://blockworks.co/news/trump-picks-crypto-czar">crypto and AI efforts</a> — to “promote these two high-tech industries as vehicles for economic growth in America, which is the foremost objective of the president’s economic program.”



The bigger elephants in the room? That would be the timeline around the market structure and <a href="https://blockworks.co/news/senate-advances-stablecoin-bill">stablecoin bills</a>, which when finalized, will delegate detailed rulemaking to regulatory agencies.



“The main role for the White House is to assure coordination among the agencies and to prod reluctant senators and representatives to agree upon bills that the president can sign,” Daugherty said.



There’ll be plenty more to monitor in the next 100 days and beyond.



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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>

Crypto movement in Trump’s first 100 days: ‘Personnel is policy’

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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An RTFKT buyer in Australia is suing Nike via a proposed class-action lawsuit, accusing the apparel giant of deceptive practices, unfair competition, unjust enrichment and unlawful trade practices with its numerous NFT collections.



The lawsuit, filed last week in the Eastern District of New York, alleges that Nike committed a “brazen rug pull” via its subsidiary RTFKT, pronounced “artifact,” which it acquired in late 2021.&nbsp;



“Nike used its iconic brand and marketing prowess to hype, promote, and prop up the unregistered securities that RTFKT sold,” the filing viewed by Blockworks alleges.



The 42-page filing argues in detail that what RTFKT sold across a range of different NFT collections were actually securities under US law. But it also makes the overarching argument that even if a court finds those digital assets not to be securities, there are still five counts in the lawsuit to reckon with. It also argues that the rug pull it says occurred is a “deceptive act” in and of itself.



Nike is accused of violating the New York Deceptive Acts and Practices Unlawful Act, the California Unfair Competition Law, the Florida Deceptive and Unfair Trade Practices Act, and the Oregon Unlawful Trade Practices Act.&nbsp;



It further alleges “Unjust Enrichment,” accusing Nike of further “enriching” itself with the NFT buyers’ funds.



The dispute is over a minimum of $5 million, but the filing does not specifically state a dollar amount of damages desired.&nbsp;&nbsp;



Nike made piles of cash from RTFKT. One <a href="https://dune.com/nakedcollector/nike-x-rtfkt">dashboard</a> found that the CloneX “Mintvials” generated over $80 million in revenue alone.



RTFKT trading activity peaked in 2022, but it had substantially subsided by 2023. The CloneX avatars made with artist Takashi Murakami were the most successful collection by far.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXefZ5fQ19DZOHqNJ4jLjGQCNGtQUT8YemoQgAacFFhhCdtjnc1SgMv7uzxsdK4W3U0hsgCT-G3Fzc2Of_RiguTItbRHRpCjd1JjeTeVgqkeZp6deUFwfw-zrP0fW7QLEYhpjUwwIA?key=gZlJo8brmifzEyhNd4yZUcTp" alt=""/></figure>



RTFKT then <a href="https://x.com/RTFKT/status/1863621178532773928">announced</a> it was shutting down in December 2024, just three years after Nike acquired it. No reason for the shutdown was provided.



RTFKT Head of Tech Samuel Cardillo declined to comment. Cardillo has publicly referred to himself as “the last man standing” at the Nike subsidiary.



Blockworks reached out to Nike as well as RTFKT cofounders Chris Le and Benoit Pagotto for comment. Le’s Linkedin <a href="https://www.linkedin.com/in/clegfx/">shows</a> that he left RTFKT and Nike in January 2025, but Pagotto’s <a href="https://www.linkedin.com/in/benitopagotto/">profile</a> still shows him as employed at Nike and RTFKT.



Last week, a day before the lawsuit was filed, the art for the CloneX RTFKT NFTs <a href="https://blockworks.co/news/cloudflare-rtfkt-clonex-nft-art-service-violation">disappeared overnight</a> due to an issue with its Cloudflare hosting plan. Cardillo later said the issue was due to an error, not an unpaid bill. The collection’s art was then subsequently restored. Cloudflare did not reply to Blockworks’ previous request for comment.



On Monday, Cardillo <a href="https://x.com/CardilloSamuel/status/1916892822671966482">said</a> the CloneX NFTs had migrated (off Cloudflare) to Arweave for “permanent storage.”



If this lawsuit progresses, it won’t be the only class-action suit about an NFT “rug pull.” The class-action lawsuit against Logan Paul’s CryptoZoo NFT game <a href="https://www.courtlistener.com/docket/66783398/holland-v-cryptozoo-inc/">remains ongoing</a> as well.



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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>
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