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Byron Gilliam

This is a segment from The Breakdown newsletter. To read full editions, <a href="https://blockworks.co/brand/the-breakdown">subscribe</a>.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“The value of any stock, bond or business today is determined by the cash inflows and outflows … that can be expected to occur during the remaining life of the asset.”



— Warren Buffett
</blockquote>



When Warren Buffett explained that the value of every stock, bond or business is a function of its future cash flows, he was paraphrasing John William Burr, who formally articulated the “discounted cash flow” (DCF) method of valuation in his 1938 book The Theory of Investment Value.



Burr didn’t invent the ideas behind his calculations, however.



The <a href="https://www.ausimm.com/bulletin/bulletin-articles/some-surprising-facts-about-the-history-of-value-within-the-mining-industry/">first recorded instance</a> of discounting future cash flows to present value dates to 1773, when an engineer, Edward Smith, estimated the “present worth” of a coal mining operation based on its future stream of income.&nbsp;



In fact, the logic of present value has been used even longer than that.



With the publication of his Liber Abaci in 1202, Leonardo Pisano (better known as Fibonacci) is <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3473153">credited</a> as the “first to develop present value analysis for comparing the economic value of alternative contractual cash flows.”



823 years later, that’s still the best way to do it: Discounted cash flow is as close as you can get to a fundamental truth in the art of financial valuation.



It rarely feels that way, however, which is confusing — the best argument against DCF is that it doesn’t match our lived experience as investors.



Stocks, for example, trade up, down and all around for reasons that are entirely unrelated to future cash flows — even in hindsight, it’s impossible to discern any cash-flow logic in the price charts.



John Maynard Keynes is right to call stock market investing a “<a href="https://en.wikipedia.org/wiki/Keynesian_beauty_contest">beauty contest</a>” that’s unrelated to fundamentals — and there’s no disputing Robert Shiller’s <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=262076">findings</a> that stock prices are far more volatile than can be explained by subsequent changes in dividend payments.



But I draw the line at Austrian economist Carl Menger’s <a href="https://www.econlib.org/carl-menger-on-value/">conclusion</a> that “value does not exist outside the consciousness of men.”



Inferring value from price movements (and human behavior) is like concluding the stars revolve around Earth — it only looks that way from where we stand.



It’s true that DCF can’t be proven in a mathematical sense — it isn’t a physical law of the universe.



But it’s as close to a law as we can get in finance, however unrelated it is to how asset prices move in the real world.&nbsp;



We can pseudo-prove this with a thought experiment.



Imagine, for example, you were asked to bid for two assets: Asset A, which is guaranteed to pay holders $10 a year for the next 10 years, and Asset B, which may or may not pay you an unknowable amount of money at some unknowable time.



Which would you offer money for?



Asset A, of course, because you could calculate how much to offer by putting its predictable stream of future cash flows into an excel model and discounting them back to a present value.



You could do that for Asset B, too, except that you’d have to guess at all the model’s inputs, which makes it much less useful in practice.



In theory, however, it’s still the mental model to use for understanding why financial assets have value.



Asset A in the above example is a bond, of course, and Asset B is a stock — which is why people rarely use DCF models for stocks.



DCF models require too many guesses about things that will happen too far in the future (out to 10 years, typically, and even that’s too short to really know).&nbsp;



Instead, we like to look one, two or three years out, guess at just one thing — say, earnings — and pick a somewhat arbitrary multiple of that guess to arrive at a price target.



But a price target is a forecast of where a stock will trade, not what it’s worth.



Valuation metrics like price-to-earnings, price-to-sales, price-to-EBITDA — these are all stand-ins for the unknowable discounted cash flow valuation of a stock.



However you want to think about it, what any stock is worth remains the present value of its future cash flows, which are annoyingly unknowable.



This is why hardly anyone actually values stocks this way — not even Warren Buffett builds DCF models.



&#8220;Warren often talks about these discounted cash flows,” Charlie Munger once <a href="https://nvariant.substack.com/p/why-warren-buffett-never-calculates">noted</a>, “but I’ve never seen him do one.”&nbsp;



That’s because Munger and Buffett both worried that the “false precision” of a DCF model was likely to lead them astray — if the value of an investment &#8220;doesn’t just scream out at you,” Buffett says, you shouldn’t invest.



In other words, you should know that the value of a financial asset is a function of its future cash flows — but you shouldn’t try to calculate it.



For investors, DCF is less of a practical playbook and more of a state of mind.



<h2 class="wp-block-heading">But crypto is different, right?</h2>



On the most recent <a href="https://youtu.be/RzT7-3jAHyM?si=7uFKiqomkrNect37&amp;t=276">episode</a> of the Empire podcast, crypto investor Tom Dunleavy predicted that the fees people pay to use layer-1 blockchains like Ethereum “are effectively going to zero.”



That made me double-check the title of the podcast — “The Bull Case for Ethereum” — because that sounds like the ultimate bear case for a cash flow-minded investor like myself.



But Dunleavy thinks I’m doing it wrong: When valuing a layer-1 token like ETH, “revenue and cash flow is the exact wrong way to think about it.”



Instead, L1s should be valued “as a percentage of assets that will come onchain at some point in the future.” (“Theoretically,” he adds.)



He might be right about that, I don’t know — and he might also be right that the price of ETH will be correlated to the amount of assets Ethereum hosts (although that remains speculative).



But to argue that the value of ether is based on anything other than its future cash flows is to argue that ether is exempt from Buffett’s dictum about stocks, bonds and businesses.&nbsp;



Lots of people think it should be.



The “Ethereum investor” Ryan Berckmans, for example, <a href="https://youtu.be/RzT7-3jAHyM?si=tW7SQRkto5g82OKE&amp;t=707">argues</a> the case for ether by refuting the idea that it’s a business selling blockspace: “What Ethereum sells is freedom and global prosperity.”



Maybe so — but how else would you measure an investment in freedom and prosperity if not by forecasting how much people will pay to access it?



Berckmans may have implicitly conceded the point later in the podcast: “Value accrual will happen, yes, through fees in the long term.”



That about sums things up for me: Buy a crypto token for any reason, sure — freedom, prosperity, vibes — but the only way to invest in a token is on the assumption that its current price is justified by its future cash flows.



In the meantime, no one says the price of that token will be correlated to REV or any other financial metric — and crypto assets with no prospect of future revenue (like bitcoin) are free to be priced however people choose to price them.&nbsp;



But I’d argue that any asset that collects fees from users (as ETH does) is a financial asset and therefore subject to Buffett’s dictum that cash flows determine value.



If so, crypto investors might want to get into more of a DCF state of mind.



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<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



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



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



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



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



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



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

The Breakdown Newsletter

Should crypto cash flows be discounted?

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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Keep your hands and arms inside the rocket ship for the duration of our flight, ladies and gents.



Bitcoin surged to a new <a href="https://blockworks.co/news/bitcoin-hits-new-high-109000">all-time high</a> of $109,400 today, just nine days after the US and China reached a 90-day trade truce, cooling off global jitters. That&#8217;s a rather major macro signal, yeah?



The sort of crypto bellwether that deserves front-row attention, especially because SOL has held steady across a choppy weekly chart instead of ripping in tandem. That says something about current flows and investor focus, methinks.



Solana&#8217;s price is essentially unchanged on the week, sitting at $167.34 (-0.3%) with a volatile but range-bound seven-day chart.



BTC&#8217;s breakout, meanwhile, caps a pretty remarkable macro pivot. Just six weeks ago, reciprocal tariff threats from el presidente de los Estados Unidos rattled the US equity markets. Now, with a temporary trade deal in effect, traditional markets are stabilizing and capital is flowing back into high-beta assets.



Bitcoin, the ultimate crypto liquidity sponge, has responded promptly, pushing past its December 2024 highs to confirm a fresh leg higher. But while the biggest of dogs rallies on macro clarity, Solana&#8217;s setup remains more idiosyncratic.&nbsp;



The network <a href="https://app.blockworksresearch.com/analytics/solana">remains a hive of activity</a>, with daily active addresses rebounding above five million, and over 30,000 new tokens launching per day. DEX volumes remain anchored by serious flows, with SOL-USDC still the top traded pair and Raydium and Jupiter handling the bulk of liquidity.



Meanwhile, liquid staking tokens like mSOL and jitoSOL continue gaining TVL, and reverted transactions (failed txs) — often seen as noise — are increasingly concentrated among mid-sized wallets. To my eyes, though, that&#8217;s a decent sign of rising speculative experimentation rather than any dysfunction.



Staking yields on Solana remain high (7.82% APY), and over 65% of the supply is staked, including almost $2 billion through Marinade. And don&#8217;t forget to toss in that we&#8217;re looking at around $5 billion weekly DEX volume, immaculate stablecoin transfer strength and progress within the network&#8217;s ever-maturing validator ecosystem.



What I&#8217;m getting at is that Solana seems to be consolidating a different kind of high: regulatory progress, institutional trust and infrastructural maturity. Will the price of SOL have its turn? Sure. Probably. Something something, altseason. Don&#8217;t quote me.



But for now, the network continues to sugar ball its metrics, waiting its turn, with eyes mostly on BTC&#8217;s next move to $120,000 (Please? Thanks) and beyond.



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<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</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>

Bitcoin hits all-time high while Solana holds steady

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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US spot bitcoin ETFs notched combined net inflows of nearly $1 billion on Monday and Tuesday.&nbsp;



As for the next crypto ETFs hitting the market, some launches are imminent. As in, this week. Others will take a while longer.



Volatility Shares is set to introduce two XRP futures ETFs on Thursday — a standard one and a version that offers 2x daily exposure.



The impending launches will follow Teucrium’s XRP futures ETF launch in April. That fund has ~$120 million in assets under management. Then, CME Group this week made XRP futures available for trading — with more than $19 million in notional volume traded the first day.



But as for spot products, the SEC said in a Tuesday <a href="https://www.sec.gov/files/rules/sro/nysearca/2025/34-103090.pdf">filing</a> that it wants more time to consider Grayscale’s proposed XRP ETF. This comes after the SEC last week <a href="https://www.sec.gov/files/rules/sro/nysearca/2025/34-103030.pdf">delayed</a> its decision on the firm’s planned solana ETF.



The SEC noted in a separate <a href="https://www.sec.gov/files/rules/sro/nysearca/2025/34-103086.pdf">filing</a> Tuesday that it “finds it appropriate to designate a longer period” to consider allowing Bitwise’s ether ETF to stake its ETH.



Industry watchers have <a href="https://blockworks.co/news/execs-das-crypto-futures-etfs">expected these delays</a> on additional spot crypto funds, as we’ve seen the SEC historically take the full 240 days it’s allotted to rule on a 19b-4 of this type.



As for changes to existing ETFs (i.e. permitting staking), SEC Commissioner Hester Peirce <a href="https://www.sec.gov/newsroom/speeches-statements/peirce-journey-begins-020425">said</a> in February “the commission may have to make progress on custody and other issues” first.&nbsp;&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">Lotta questions. Replying here: The SEC *typically* takes the full time to respond to a 19b-4 filing. Almost all of these filings have final due dates in October. Early decisions would the action that&#39;s out of the norm. No matter how &quot;Crypto-friendly&quot; this SEC is There&#39;s no…&mdash; James Seyffart (@JSeyff) <a href="https://twitter.com/JSeyff/status/1924909692318580894?ref_src=twsrc%5Etfw">May 20, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



So while the SEC could theoretically allow various proposed crypto ETFs to start trading at any time, investors might want to watch dates in July and October most closely.



Final SEC deadlines for spot products holding litecoin, SOL, XRP, dogecoin and cardano come in October, according to a Bloomberg Intelligence <a href="https://x.com/EricBalchunas/status/1917444433282490606">chart</a>. The SEC’s 240-day windows for polkadot, HBAR and Avalanche proposals close in November and December.&nbsp;



Before that, segment observers expect the SEC to decide in July whether crypto index ETFs can expand the assets they hold beyond BTC and ETH.&nbsp;&nbsp;If you recall, Hashdex CIO Samir Kerbage <a href="https://blockworks.co/news/hashdex-crypto-etfs-index-sec-interview">told me</a> the diversification that would unlock is where the “biggest opportunity” lies.



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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>

ETFs

As crypto ETF deadlines come and go, watch July and October

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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It’s been an eventful day so far.&nbsp;



Bitcoin hit a new record high of $109,888 this afternoon, right as a weak US 20-year Treasury auction sent stocks plummeting.



Yield on 20-year notes hit 5.1% after today’s sale showed weaker-than-expected demand. The 30-year also rose 11 basis points to surpass 5% yield. The yield on the 10-year moved higher to 4.6%.&nbsp;



The auction results come days after Moody’s downgraded the US from a triple-A rating to Aa1 last week. Given the relatively quiet economic calendar this week, it’s not surprising that US equities moved so much on today’s auction.&nbsp;



The S&amp;P 500 slid 1.2% around 1 p.m. ET on the auction results, while the Nasdaq Composite shed 1.4%, erasing gains from earlier in the session.&nbsp;



Bitcoin pulled back slightly after it approached $110,000, but was still up about 1% over 24 hours at 2 p.m. ET.&nbsp;



What is surprising, though, is to see bitcoin — consistently trading like a risk asset this year — on the rise despite increasing bond yields. A sell-off in Treasury notes typically coincides with a risk-off sentiment. And today, BTC traded like a safe haven.&nbsp;



Before you get too excited, Noelle Acheson, author of the Crypto is Macro Now newsletter, cautions against calling this a “decoupling.” I’d have to agree.&nbsp;



“More likely, we’re seeing building concern about a bond market ‘event’ triggered by Japan,” she wrote today. “The yield on its 30- and 40-year government debt has shot up over the past few days, and is now at record highs.”&nbsp;



Yields on Japanese 30-year bonds hit a new high of 3.2% during Asian trading on Wednesday, according to London Stock Exchange data. Japan’s 20-year auction on Tuesday showed the weakest demand for the offering in more than a decade.&nbsp;&nbsp;



The bond moves imply the Japanese yen is gaining strength against the dollar, 10T Holdings founder Dan Tapiero <a href="https://x.com/DTAPCAP/status/1925017134478065695">said</a>. That could explain bitcoin’s rally.&nbsp;



It’s hard to say, though, just how long this trend will last.&nbsp;



Like I said, there isn’t much macro data to trade this week, but risk assets still face headwinds. The ongoing trade war has analysts pulling back on S&amp;P 500 earnings expectations for the rest of the year. Plus, tariffs could still deliver a blow to the labor market and second quarter GDP — and so far, the Fed isn’t budging on interest rates.&nbsp;



On the point about earnings projections, I’ll concede that estimates do typically decline later in the year; but the slashes this time around are pretty significant. Since the beginning of Q2, analysts have reduced their projected earnings growth rate for the S&amp;P 500 from 8.9% to 4.8%, <a href="https://advantage.factset.com/hubfs/Website/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_051625A.pdf">FactSet</a> data shows.&nbsp;



Tomorrow’s initial jobless claims will give us our next labor market update. First-time filers for the week ended May 17 are expected to come in at 230,000, a slight increase from the week prior.&nbsp;



Of course, if BTC isn’t trading like a risk asset, HODLers don’t have to worry about these potential headwinds.



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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>



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US stocks slipped while bitcoin rallied on higher Treasury yields

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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Crypto gaming studio VOYA Games has raised $5 million in funding in a round led by 1kx and Makers Fund, with RockawayX also investing.



Angel investors Jeff Zirlin, who cofounded Sky Mavis, and Sebastien Borget, cofounder and COO of The SandBox, also participated in the round (Zirlin is also a partner at 1kx).&nbsp;



“Our goal is to build a token ecosystem where games are connected through a shared player economy and culture,” said VOYA Games CEO and founder Oliver Loffler.&nbsp;



The studio plans to use the funding to release its upcoming game, Craft World, and set up the company for its long-term goals.



Craft World is billed as a “casual resource management game” with NFT items, where humans live with dinosaurs after a meteor hit Earth. Players must farm for resources to build structures. The game is currently in its testnet phase, powered by an unspecified blockchain stack, and has seen over <a href="https://play.google.com/store/apps/details?id=com.angrydynomiteslab.craftworld&amp;hl=en_US">100,000 downloads</a> on Android already. VOYA says more than 240,000 players have registered so far, and it has seen over 1.1 million testnet trades between players.&nbsp;



“They’re building a Web3 gaming ecosystem that prioritizes openness and ownership, treating the game world more like a public good than a closed economy,” said the pseudonymous 1kx partner known as Peter Pan.



The game uses Dyno Coin, a utility token players use to buy NFT items and craft. The team <a href="https://voya-games.gitbook.io/voya-games-litepaper/dyno-coin">says</a> it’s not intended to be a speculative token, and it currently does not appear on crypto exchanges.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcV7V-B1foIg0LQIRgUC4kD8I_doUOR63GtmN0l81MvPgOO5dU6ctBEZYYTh4iikZDsbbUGTuQ7D8FgP-oR-s3hDAcnH_n8NGiK0oWr-xgMXayjfZKfxCqewAari9zU4mndv-CxuQ?key=58OEzndPAZeN-rmaPDPQqw" alt=""/><figcaption class="wp-element-caption">A look at the pixelated aesthetic of Craft World.</figcaption></figure>



Craft World is expected to fully launch by the end of this year and will release for iOS, Android, and on the web as a browser game.&nbsp;



VOYA Games was founded in 2023 and is <a href="https://x.com/rev1x0/status/1925180218085454211">tied to</a> Angry Dynomites Lab, which released two pixelated dinosaur NFT collections on Ethereum back in 2022. Loffler previously cofounded Kolibri Games, a mobile gaming studio with games like Idle Miner Tycoon: Gold &amp; Cash, which has over 100 million downloads on Android alone. Kolibri was acquired by Ubisoft in 2020.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcl8s5Z6gXgi0Nkn-K1RAjSs-Fhu40TV_pYi6AjAroIu4YNFvDZYqlN97YcQ0IlZoqBzP3L8h8_8a1TcVmsx4fq-Ebd80PSIGg3RW1mqq7Jflrp4AggIQyQ_EDPd-wVFdWBZ3crpg?key=58OEzndPAZeN-rmaPDPQqw" alt=""/></figure>



Mobile games have continued to make up a significant portion of the crypto gaming market. Game7 research found that mobile games made up 29% of game launches last year, with an additional 20% being Telegram games (which are also primarily mobile games).&nbsp;



That means about half of crypto games have a mobile-first focus, and that doesn’t include the over 26% of crypto games that are launching in a browser, which can also be mobile-first titles.



Mobile games can be cheaper and easier to build than ambitious PC titles while having more opportunities for monetization via quick in-app purchases. They also <a href="https://www.businessofapps.com/data/mobile-games-revenue/#:~:text=Even%20though%20mobile%20games%20still,over%2055%20percent%20in%202023.">generate more revenue</a> than PC titles overall and have more players. Plus, mobile games have the additional advantage that their audiences are more used to monetization strategies like microtransactions and paid tiers of access. 



“Development costs for resource management games are comparatively low. This allows us to release updates quickly and frequently, enabling us to identify and address issues early based on player feedback,” the VOYA Games team <a href="https://voya-games.gitbook.io/voya-games-litepaper/craft-world/why-craft-world">wrote</a> in its litepaper.



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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>



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Capital Raise

Crypto gaming startup Voya Games gets $5M for dinosaur-themed crafting sim

Macauley Peterson

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



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Today’s launch of Circles v2 is a reassertion of crypto’s community-first ideals. Originally launched in 2020 as an experiment in universal basic access (UBA) to currency, Circles is now back with a refined product, a stronger economic model and a renewed mission: to build a fairer alternative to centralized identity-driven distribution schemes like <a href="https://blockworks.co/tag/worldcoin">Worldcoin</a>.



It’s a project out of the <a href="https://blockworks.co/tag/gnosis">Gnosis Chain</a> orbit, and co-founder Martin Köppelmann recently <a href="https://www.youtube.com/watch?v=BO0U_MNwUBo">told</a> a room of supporters that getting the concept live was a 10-year process. “Circles is a quite big and radical idea, and it tries to question, well, how does money work and can we create a better version of money?” Köppelmann said.



At its core, Circles offers an egalitarian money system. Every participant in the network mints the same number of Circles tokens (CRC) — one per hour — for as long as they are active. Unlike Bitcoin, where early adopters gain an irreversible head start, or Worldcoin, which promises global coverage while reserving massive allocations for insiders and investors, Circles maintains balance by design.



Circles is governed by four simple rules:



<ul class="wp-block-list">
<li>Universal access lets anyone join and mint currency once they receive trust from three existing users — no biometric scans or privileged entry.</li>



<li>Distributed issuance means every human mints one CRC per hour, creating a continuous and equal flow of new money without insiders or early adopter advantages.</li>



<li>To keep the currency circulating, Demurrage applies a 7% annual decay on all balances, encouraging spending over hoarding.</li>



<li>And the Rule of Trust restricts transactions to users connected by mutual trust links, making the system socially curated and resistant to bots or <a href="https://app.blockworksresearch.com/glossary/#sybil-attack">Sybil attacks</a>.</li>
</ul>



With v2, Circles addresses two of its biggest historical shortcomings: usability and liquidity. A new Metri wallet — built on the same technology as <a href="https://blockworks.co/tag/safe">Safe</a> — brings a modern, mobile-first interface that feels more like Venmo or Revolut than a Web3 science project.



Users can browse trust connections, join local groups, and spend or trade their Circles. New functionality allows users to optionally back their personal Circles tokens with stablecoins via decentralized AMMs like Balancer. This creates market-based price discovery for what was once a purely social currency.



Where Worldcoin relies on iris scans and a globally centralized (albeit encrypted) registry, Circles builds organically through a web of social connections. To begin transacting, a new user must be trusted by at least three existing users. With over 100,000 historical accounts from Circles v1, new adopters can bootstrap into existing networks quickly while maintaining the project’s local-first ethos.



&#8220;Groups&#8221; are collections of users who can co-mint, coordinate spending and set shared policies. Groups can now issue their own sub-currencies backed by pooled CRC and even assign real-world goods or services to these tokens.



For example, in early pilots, local vendors in Berlin and Bali accepted Circles for groceries, drinks and services. These group dynamics provide a decentralized scaffolding for what similar projects like <a href="https://colu.com/">Colu</a> once tried to do: bootstrap hyperlocal currencies for urban neighborhoods. Unlike Colu — which subsequently pivoted away from crypto entirely — Circles doesn&#8217;t rely on grants or external incentives. It’s designed as a self-sustaining network rooted in personal issuance and mutual trust.



There’s also no VC backing or OpenAI distribution potential, something which Köppelmann likes to see as a strength. “In Circles, there is no owner of the protocol, no team or investors that get 30% of the whole thing — that does not exist,” he said.



At a time when Worldcoin has reignited global debates over digital identity and data privacy, Circles quietly offers an alternative — one without privileged insiders, biometric scanning or opaque governance.



It’s going to be an uphill slog — bootstrapping liquidity, navigating UX hurdles and scaling trust networks are thorny challenges. But, in a sense, Circles v2 is a provocation to the broader crypto ecosystem: What if currency wasn’t about scarcity and speculation, but abundance and participation?



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0xResearch Newsletter

Circles V2 reimagines fair money for all

David Canellis

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



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



Bane, the Batman villain, was famously born in the darkness. Molded by it.&nbsp;



Bitcoin’s deepest darkness was, arguably, the year 2014.&nbsp;



Ross Ulbricht had just been nabbed and was awaiting trial. Rolling, related FBI and DEA raids led to numerous high profile bitcoin seizures, including the January arrest of Charlie Shrem for allegedly assisting in the laundering of coins linked to Ulbricht’s Silk Road.



Then a meteor struck: Mt. Gox went belly up in February. Gox’s market share had been shrinking, from over 70% in late 2013 to about a third when it suspended withdrawals, but the Bitcoin world was still rocked.



Marc Andreessen wasn’t worried.



<h2 class="wp-block-heading">On This Day</h2>



Exactly 11 years ago, the Washington Post ran a prescient <a href="https://www.washingtonpost.com/news/the-switch/wp/2014/05/21/marc-andreessen-in-20-years-well-talk-about-bitcoin-like-we-talk-about-the-internet-today/">interview</a> with Andreessen. His venture fund Andreessen Horowitz had <a href="https://www.coinbase.com/en-nl/blog/coinbase-raises-usd25-million-from-andreessen-horowitz">led</a> Coinbase’s $25 million funding round about six months earlier, which at the time was the largest fundraise in Bitcoin history to date.



“In 20 years, we’ll talk about Bitcoin like we talk about the internet today,” Andreessen said. It might be an old adage now, but the sentiment was a big deal in 2014. After all, it had come from one of the original architects of the 90s internet boom. Who else would know better?



Bitcoin’s perception in the media was weighing heavily on its prices. BTC/USD had retraced by 60% from its November 2013 bull run peak, from over $1,100 to around $440 as the Andreessen piece was published.&nbsp;



The price of bitcoin would go on to fall by another 50% over the next seven months.



Granted, there was more going on in the world of tech outside of Bitcoin. The world was still processing Edward Snowden’s revelations about the NSA’s wide-reaching internet surveillance, which all told took more than a year to fully sink in.



<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" width="912" height="625" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/andreesson.png" alt="" class="wp-image-102771" style="width:634px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/andreesson.png?w=912 912w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/andreesson.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/andreesson.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/andreesson.png?w=375 375w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/andreesson.png?w=381 381w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/andreesson.png?w=320 320w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/andreesson.png?w=80 80w" sizes="auto, (max-width: 912px) 100vw, 912px" /><figcaption class="wp-element-caption">We’re now more than halfway to Andreessen’s predicted future.</figcaption></figure>



Trust in US tech had been “seriously damaged,” Andreessen said, which alongside the resulting “balkanization of the internet,” had led to standstill in public policy over how internet technologies should evolve.&nbsp;&nbsp;



“Governments are very worried about what citizens are going to be able to do with these new technologies,” Andreessen said. “Citizens are very worried about what governments are going to do, and everybody&#8217;s worried about what businesses are going to do. It&#8217;s this three-way dynamic that&#8217;s playing out.



“And so for any of these individual issues, it&#8217;s not just ‘What is one leg of this triangle going to be doing?’ It&#8217;s, ‘What are all three of them going to be doing, and how will the tension resolve itself?’”



The answer was Bitcoin.&nbsp;



“I have a lot of friends who are programmers. The programmers have always gone like, ‘Those [Bitcoin] guys are crazy.’”



“And then, almost 100% of the time, they sit down, read the paper, read the code — it takes them a couple weeks — and they come out the other side. And they&#8217;re like: ‘Oh my god, this is it. This is the big breakthrough. This is the thing we&#8217;ve been waiting for. He solved all the problems. Whoever he is should get the Nobel prize — he&#8217;s a genius. This is the thing! This is the distributed trust network that the internet always needed and never had.’”



Some of the interview borders on blockchainism, even if Andreessen was suggesting that some eventual use cases would be underpinned by data written to the Bitcoin ledger: “Digital stocks. Digital equities. Digital fundraising for companies. Digital bonds. Digital contracts, digital keys, digital title, who owns what — digital title to your house, to your car…digital voting, digital contracts, digital signatures. You&#8217;ve got unique pieces of digital content.”&nbsp;



“And, by the way, if we had had this technology 20 years ago, we would&#8217;ve built it into the browser,” he said, referring to Netscape.



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/iir5J6Z3Z1Q?si=ntKCl3vTHdlhFrdw" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>







This 40-minute panel alongside Balaji Srinivasan gives a deeper window into how Andreessen thought about Bitcoin in 2014.



Bitcoin <a href="https://www.youtube.com/watch?v=4CdPv-herxA">may or may not be</a> an appropriate venue for all that activity. Still, Andreessen got something very right more than a decade ago, when journalist Brian Fung asked: “Is this, like, a billions-of-dollars kind of industry?”



“Yeah,” Andreessen replied.



“Trillions…?”



“Yeah!” he said. Before laughing like Mr. Burns. Almost six years later exactly, in April 2021, Bitcoin achieved a $1 trillion market cap for the first time.&nbsp;



Now, we just need to wait another nine years to confirm that Andreessen was right about the rest. See you then!



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Andreessen Horowitz

Where is Satoshi’s Nobel Prize? It’s been 11 years since Andreessen made his case

AIOZ Network announces the launch of <a href="https://aiozai.network/?utm_source=blockworks">AIOZ AI</a>, the first decentralized AI model and dataset marketplace built entirely on DePIN. As the foundational layer of AIOZ’s infrastructure, DePIN powers a global network for AI computes, storage, streaming, and IPFS pinning service, enabling AI to be developed and deployed in a decentralized environment with greater transparency, control, and ownership. 



With this release, developers, researchers, and enterprises can upload, purchase, store, and monetize AI models and datasets across a distributed environment. AIOZ AI processes tasks through DePIN Compute, giving contributors ownership, transparency, and control over how their AI assets are used.



&#8220;With AIOZ AI, we’re introducing a new foundation for decentralized AI. Built on DePIN, this platform empowers developers to share, monetize, and eventually tokenize their AI assets, from models to datasets and applications,” said Erman Tjiputra, Founder &amp; CEO of AIOZ Network. “It’s part of our broader vision to create a unified infrastructure where people can store, stream, and compute in a decentralized way, with ownership and value returning to the contributors of the network.”



<h2 class="wp-block-heading">DePIN: The Foundation of a Decentralized AI Economy</h2>



AIOZ AI is built on DePIN Compute, a decentralized infrastructure that transforms how AI models are processed, stored, and monetized. The platform empowers users to upload models and datasets, unlock potential rewards when their assets are used, and access a growing ecosystem of decentralized AI applications.



AI inferencing and compute tasks are executed on AIOZ’s DePIN . This decentralized infrastructure ensures secure, permissionless access to AI processing while giving contributors a share in the network’s growth.&nbsp;



The AIOZ AI marketplace introduces an initial collection of AI models, datasets, and compute resources, giving early adopters access to a growing decentralized AI ecosystem.



<h2 class="wp-block-heading">AIOZ AI Roadmap and Ecosystem Vision</h2>



The launch of AIOZ AI marks the first step in building a decentralized AI ecosystem powered by DePIN Compute. V1 introduces foundational marketplace features, user accounts, payments, and the ability to upload, purchase, and monetize AI models and datasets, with built-in community features like voting and discussions.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcDKJsSDWzFnY6xwInX5I8ylnpeHWzadO1wI48eEyp4uiWc8ei89arHmIrQYaPd5bLMc7nGVTgEMgIWF-ugIpcdAkpVBh9MNXNyIPpgDxn9Pk3LU2PSi9hfVUQEX6b9QBNw-OZ0Qg?key=iyk4CTkiRldQ_XjIFosriRMt" alt=""/></figure>



V2 will expand developer functionality by enabling larger file support, Git-based uploads, and API access via SDKs in Python, Go, and Node.js. V3 will integrate DePIN-based AI inferencing, allowing developers to unlock potential rewards from verified model usage and compute tasks. V4 will introduce decentralized training, enabling models to be DePIN-trained and showcased in real-world applications.



AIOZ AI is part of a broader DePIN-powered infrastructure developed by AIOZ Network. Alongside AI compute, the ecosystem includes AIOZ Stream for decentralized video and audio delivery, AIOZ Storage for S3-compatible Web3 data storage, and AIOZ Pin, an IPFS-based layer securing immutable assets like NFTs.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd-7mklRux7nLFm8d3TP-cASWdrd8pvbZjS0q3bW2Fc3zcmp1OupjBfrAbNv-22w3kli6j8PQmBtWquEnukw17t55iwDV4AR5yOctgYJA5pkc-E-kmdViRjYtp-Jhsllc6A2uXXPg?key=iyk4CTkiRldQ_XjIFosriRMt" alt=""/></figure>



Together, these components form a unified foundation for AI compute, content streaming, and digital storage, enabling a people-powered internet and defining the future of decentralized infrastructure.



<h2 class="wp-block-heading">Driving Adoption Through the AIOZ AI Challenge</h2>



To support the launch of AIOZ AI and accelerate developer adoption, AIOZ Network is introducing the AIOZ AI Challenge, a recurring competition series designed to spotlight AI talent and grow the platform’s model and dataset library.&nbsp;



The first wave of challenges will roll out after the platform’s public release and run throughout 2025, providing participants the opportunity to build, submit, and refine AI models based on a defined technical framework.



Submissions will be evaluated on performance, utility, and innovation, with leading models incentivized with potential tokens rewards and highlighted in the marketplace for greater discoverability. A public leaderboard will highlight top contributors, who may also gain early access to advanced features, future SDK integrations, and participation in exclusive collaborations.



<h2 class="wp-block-heading">Join the Future of AI with AIOZ Network: Power AIOZ AI by Running AIOZ DePIN</h2>



AIOZ AI runs on a decentralized backbone of contributors. By contributing to the AIOZ DePIN, you help drive AI model training, tasks inferencing, data storage, and unlock the potential for token rewards. No matter your background — tech enthusiast, AI developer, or blockchain believer — your contribution fuels a cutting-edge, community-powered AI ecosystem.



Everything Intelligence. AIOZ AI.



Be the future redefining how AI is built and delivered.



Start your journey today at <a href="http://aioz.network/aioz-depin/?utm_source=blockworks">aioz.network/aioz-depin</a>



<h2 class="wp-block-heading">About AIOZ Network: Powering Web3 Infrastructure Through DePIN</h2>



AIOZ Network is pioneering the future of decentralized infrastructure by advancing DePIN across AI compute, media delivery, and distributed storage. AIOZ Network enables AI processing, content streaming, and secure data storage through a globally distributed network of over 200,000 contributors. The AIOZ ecosystem includes AIOZ AI, a decentralized compute and AI asset marketplace; AIOZ Stream, a platform for live and on-demand video and audio content; AIOZ Storage, an S3-compatible decentralized storage solution; and AIOZ Pin, a distributed IPFS pinning layer designed to store immutable content such as NFTsand digital assets.







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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AIOZ Network unveils AIOZ AI: A decentralized AI marketplace and compute network powered by DePIN

Bitcoin hit a new all-time price peak of $109,500 Wednesday morning, according to Coinbase.&nbsp;



The asset was trading around $108,839 at 11:42 am ET — up 3.4% on the day and 4.5% higher than a week ago.&nbsp;



Bitcoin’s previous price record came in January when the largest cryptocurrency breached $109,000 for the first time on the eve of President Donald Trump’s inauguration.&nbsp;



The price had spent portions of the last few months hovering in the $80,000 to $90,000 range as macroeconomic conditions and new tariff policies have weighed on riskier assets. BTC had spent most of the previous two weeks above $100,000.&nbsp;&nbsp;



<a href="https://blockworks.co/price/btc">Bitcoin</a>’s current run-up comes as Treasury yields and oil prices are on the rise, though, which typically signals a risk-off appetite.&nbsp;



Current traders may be treating bitcoin as the “safe-haven” asset proponents have claimed it to be for years, but analysts warn that this is probably not a true decoupling.&nbsp;



“More likely, we’re seeing building concern about a bond market ‘event’ triggered by Japan,” Noelle Acheson, author of “Crypto is Macro Now,” wrote in a note Wednesday. “The yield on its 30- and 40-year government debt has shot up over the past few days, and is now at record highs.”&nbsp;



Yields on Japanese 30-year bonds hit a new high of 3.2% during Asian trading on Wednesday, according to data from the London Stock Exchange. The move implies the Japanese yen is gaining strength against the dollar, 10T Holdings founder Dan Tapiero said, which could explain bitcoin’s rally.&nbsp;



Joel Kruger, a currency strategist at LMAX Group, told Blockworks on Tuesday that bitcoin had “impressively” recovered after <a href="https://blockworks.co/news/us-equities-bitcoin-losses-yields-deficit">Moody’s US credit downgrade</a> had the crypto market starting the week under pressure. That rebound was in part due to “a broader risk asset stabilization and healthy demand from medium and longer-term players into dips,” he noted.



“Meanwhile, positive regulatory developments, including the US Senate advancing a stablecoin bill and Coinbase’s S&amp;P 500 inclusion, are reinforcing mainstream acceptance, countering macro pressures from cautious Federal Reserve commentary,” Kruger added.



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Bitcoin

Bitcoin hits new all-time high above $109,000

Katherine Ross

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



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Last night, the SEC <a href="https://www.sec.gov/newsroom/press-releases/2025-75">announced</a> it was suing Unicoin and its executives, alleging that the team violated securities laws in its $100 million token raise. Specifically, the SEC named CEO Alexander Konanykhin, general counsel Richard Devlin and former CIO Alejandro Dominguez, as well as former board chair Maria Moschini, in the suit.



In the 77-page <a href="https://www.sec.gov/files/comp-pr-2025-75.pdf">lawsuit</a>, the SEC says that Unicoin and its executives made “false and misleading statements and material omissions” on various public forums.&nbsp;



The team, the SEC claimed, told investors that its token would be backed by real-world assets, but the defendants “never actually intended for Unicoin tokens to be backed by any assets.”



Konanykhin, in the documents, is accused of selling his Unicoin Rights Certificates “months after receiving them from the company,” for more than $2.6 million.&nbsp;



In April, Unicoin said, in a letter to investors, that it <a href="https://unicoin.com/news/unicoin-ceo-rejects-secs-attempt-to-settle-enforcement-probe">rejected</a> a settlement attempt by the SEC after being made aware of the regulatory agency’s probe. The letter claimed that the investigation has racked up “multi-billion dollar damages” to both investors and token holders.



Konanykhin told <a href="https://decrypt.co/315652/sec-charging-miami-crypto-company-unicoin-fights-back">Decrypt</a> in April that he plans to fight the allegations. There are still a lot of legal processes to go through, but so far it looks like Konanykhin might get his day in court.



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Empire Newsletter

SEC sues Unicoin and executives for violating securities laws

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



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<a href="https://blockworks.co/tag/vaneck">VanEck</a> is planning to launch the VanEck PurposeBuilt fund next month, which will focus specifically on Avalanche.



The goal is to have a dedicated fund that can focus on projects building on Avalanche, and it’ll be managed by VanEck’s Digital Assets Alpha Fund.&nbsp;



I asked Pranav Kanade, portfolio manager for the Alpha fund, why the firm decided to focus on <a href="https://blockworks.co/tag/avalanche">Avalanche</a>: “Increasingly, the best builders want to own the full stack with minimal value leakage, and Avalanche’s L1 architecture makes that possible. The Avalanche team has also backed this with strong business development efforts that are delivering results,” he explained.



“At the same time, earlier-stage teams looking to test for product-market fit can launch on the C-Chain, which is competitive with the best high-throughput <a href="https://blockworks.co/tag/evm">EVM</a> chains. The Avalanche ecosystem offers solutions for builders across their entire lifecycle.”



The team doesn’t plan to launch any other funds with another ecosystem at the moment, Kanade added.&nbsp;



The fund will invest in liquid tokens and projects backed by venture capital, which could include a variety of sectors, including gaming, financial services, payments and AI.&nbsp;



It’ll aim to invest typically “around or after a Token Generation Event, with a fundamentals-first strategy focused on long-term outcomes.”



Any unused capital will be deployed onchain through real-world asset products on Avalanche, which could include tokenized money markets to ensure liquidity is maintained, a <a href="https://www.globenewswire.com/news-release/2025/05/21/3085546/0/en/VanEck-Prepares-to-Launch-PurposeBuilt-Fund-to-Invest-in-Real-World-Applications-on-Avalanche.html">press release</a> said.&nbsp;



As for how the fund itself came about, Kanade explained that the Avalanche team “liked our investment strategy.”



“We brainstormed a structure that would work well for both sides. Today’s best founders in the token space often face a &#8216;discovery&#8217; problem — it&#8217;s easy to get drowned out by the speculative noise around <a href="https://blockworks.co/tag/meme-coins">memecoins</a> and vaporware,” he added. “We wanted to support a more mature approach to capital allocation, and Avalanche shared that vision. With many of the strongest founders already building in Avalanche, this was a natural direction for us.”



The team isn’t confirming the size of the fund at this time. But the announcement overall is just yet another sign of the times, as we continue to see a trend of capital going towards builders who are focused on other opportunities outside of infrastructure.&nbsp;



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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>

VanEck plots launch of Avalanche-focused PurposeBuilt fund

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Trust is one of the greatest economic forces on Earth.”



— Charlie Munger
</blockquote>



<h2 class="wp-block-heading">What money will the world trust next?</h2>



The Spanish dollar (a.k.a. pieces of eight, a.k.a. Spanish peso) was the first global currency.



From the 16th through 19th centuries, silver coins minted by the Spanish government circulated on all six of the world’s inhabited continents, and were legal tender on five of them (parts of Europe, Africa, Asia, and both Americas).



In many of those places, they were so welcome you could even cut them into halves, quarters, or eighths and spend the pieces as change (hence the name “pieces of eight” for a whole coin).



The Spanish dollar wasn’t quite a global reserve currency, but that’s only because central banks didn’t yet hold reserves.



But it served as a store-of-value reserve for private savers around the world — and that makes today’s US dollar the institutionalized, fiat-era successor of the Spanish dollar.&nbsp;



Both global currencies served the same function: to reduce friction in international trade by providing a near-universal medium of exchange, unit of account, and store of value.



Today’s global reserve currency pays homage to its predecessor in both name and symbol — the &#8220;$&#8221; dollar sign is thought to have evolved from the mark for the Spanish currency (the dollar sign is still also called “the peso sign” for that reason).



But the debt goes deeper.



The first US dollar, established as the basic currency unit of the United States in 1792, was a silver coin deliberately designed to have roughly the same metallic content as a Spanish dollar: ~24 grams of pure silver (plus about two grams of copper to make it more durable).



The US government did not mint nearly enough of them to go around, however, so Spanish dollars continued to circulate widely alongside US dollars — the two dollars were treated as interchangeable in daily transactions for many years, with the Spanish dollar even remaining legal currency in the US until 1857.



That was natural enough, since both dollars had the same metallic content.



But the lesson of the Spanish dollar is that it wasn’t just about the metal.



Instead, the Spanish dollar became the first world currency because people trusted its issuer.



Dozens of countries issued silver coins in the 17th century, but the Spanish dollar found favor because it came from highly standardized royal mints in the Spanish colonies — and because it was backed by a powerful empire that enforced quality control and valued the integrity of its currency.



People didn’t weigh every Spanish dollar they received, for example, or inspect its purity — if it came from a Spanish mint, they trusted that it had both the quantity and the quality of silver that the Spanish government said it did.



After Latin American countries won independence, however, Spain lost control of the silver mines and nearby minting facilities that had supplied the world with Spanish currency.



The newly independent countries of Latin America continued to mint nearly identical silver dollars — but political instability led to inconsistent minting, intentional debasement, and even counterfeiting at poorly supervised provincial mints.



Partly as a result, merchants and bankers around the world began favoring money from more reliable issuers like Britain and the US — not because they had more silver, but because they had more trust.



There’s a lesson in that.&nbsp;



The British pound sterling became the next global currency, backed by its convertibility into gold and also the trust in British institutions — you couldn&#8217;t melt down a pound note, but people trusted the Bank of England to exchange it for about 7.3 grams of gold on demand.



But global currencies came to be valued for more than their metal — trust in a government’s credit, a central bank’s stability, and the liquidity of its financial markets soon became equally as important.



In the 19th century, the British pound sterling — backed by gold, sensible British governance, and London’s advanced banking system — overtook the Spanish dollar as the preferred medium for large-scale finance and reserves.



The next global currency, of course, did away with the metallic backing altogether: the US dollar is backed only by our faith in the Federal Reserve, the US government, and US financial markets.



But maybe not for long.



The US still has the world’s largest economy, deepest financial markets, and strongest property rights — but erratic government policy and heated rhetoric is making people question how much they should trust the US dollar.&nbsp;



So much so that many are rethinking where to place their trust next.



Ken Rogoff thinks it could be China’s renminbi.



“There are a lot of countries,” he told the <a href="https://www.youtube.com/watch?v=6ZiZpi6AEko">Monetary Matters podcast</a>, that “don&#8217;t trust the United States. They would just rather deal with China. They understand China&#8217;s business, they know what China wants … They&#8217;d rather China had [their information] than Donald Trump.”&nbsp;



The consequence, he says, is that you might soon find yourself in “some African city” that used to love US dollars and “you&#8217;ll pull out your dollars and they’ll go, ‘What are those? Where are the renminbi?’”



That will be quite a change.



Others think the change will be even bigger — that the next global currency won’t be issued by a government at all: Bitcoin is a “trustless” form of money that many believe will transcend the trust issues that undid the Spanish dollar and British pound, and now bedevil the US dollar.



It would make for a natural evolution: Spain was trusted to mint silver money &gt; the US was trusted to issue fiat money &gt; bitcoin will be trusted to create magic internet money.



It would still have to be trusted, though, because “blockchain applications are never fully trustless,” as Vitalik once commented in a <a href="https://link.mail.beehiiv.com/ss/c/u001.5yMUnFGBFiy9jJgiqJ8glTwYwDK1WrHmNhjzb73bFcyN3Wug4KKcSaB61qXlbbgU673lKFNaG8UyC9r-cmdBqxpVQmZIp4VJ36wmCQea6ZUVbbGm21Wc3P23kznR7qdZ-YFKglKGhzmF-gJFnPxj6G8Jjh1oTyhPZHuHcCTfr9PLQ1xjfkBV9HNPIV7IwBlfV503InqTPw0_fApLYjyeji9B2BrDKcfDsOLOzMH6C2_Pum3aG3FOy-hq0Vom8hxACgn15jBK2vVeFJzCyC4udw/4b0/VM7QRPOfTCSvaniBjUngSg/h2/h001.WV4G0zgA_PACYHj6wO3r1-jWSHmWkvRuwjcogx_6EL8">blog post</a>.&nbsp;



Bitcoin’s $2 trillion market cap is evidence that it’s already trusted by an astonishing number of people — but I’m not sure it will ever be trusted by the much greater numbers required to make it a global reserve currency.



Because history shows that people trust governments to issue their money.



But it also shows that the US dollar wasn’t the first global currency — and probably won’t be the last, either.



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

An uneasy world may soon look for its next ‘global money’

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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Starting in June of 2022, Solana Spaces operated a brick and mortar store for Solana-branded merchandise and user onboarding in New York’s Hudson Yards development. The venture’s biggest financial backer then was FTX, and it (along with a second store in Miami) <a href="https://decrypt.co/121863/solana-spaces-closing-stores-in-nyc-and-miami">folded</a> in early 2023 following the exchange’s implosion.



This week at Solana’s Accelerate conference, Solana Spaces returned as a pop-up store with a new core team. The project doesn’t have FTX backing, but the reboot began with a very “2025” source of funding — a memecoin.&nbsp;



Solana Spaces season 2 has more limited ambitions than the original, running pop-up stores for crypto merchandise alongside crypto conferences. For the faithful who descended on the New York pop-up, there was a general sense of pleasant surprise that a memecoin team pulled off a brick-and-mortar store activation.



The lower east side pop-up was bustling with crypto natives on Tuesday morning. Merch was on sale from a variety of Solana-based projects and NFT collections. I purchased a mug and checked out by paying with stablecoins from the Phantom app on my iPhone.&nbsp;



When another customer came up to check out, Amol Gharte — a Solana Spaces core team member who was working the register — didn’t have the item’s price handy and joked that he could make one up.



“It’s all made up anyway,” the customer responded, and Gharte and I shrugged and nodded our heads at the vague declaration. A second customer stepped up to pay but somewhat sheepishly pulled out a credit card, explaining that he wanted to get credit card points from the purchase.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeguOGCVPG75tSFwgJsfh0IiJacxE54B_7EJLZ12By9nBeX9kIadmIP3vYLi4lsT4RQ7Icv3BFgwjDCLp28-Xds-lF-A8bScXcYVwA9tl9U-H1hTGgRqS-fJZIOBZ-F9mQKJOHP?key=-IwutMucqNNqfC1Y2f6sRg" alt=""/></figure>



A fan of the old Hudson Yards store launched a memecoin called STORE in January which briefly eclipsed $12 million in market capitalization, according to DEX Screener data. Some early buyers of the token — which is now closer to $3 million in market cap — came together to try and revive Solana Spaces, Gharte told me. He added that the Solana Spaces team hasn’t sold its tokens and has self-imposed a vesting period.



The project is partly self-funded but also has inked sponsorship deals and received grant funding from the Solana Foundation, Gharte said.



The vision for Solana Spaces is to continue running pop-ups during crypto conferences, where Spaces gives crypto teams a place to sell their merchandise, and Solana Spaces collects 20% of the profit, Gharte said. He estimated 70% of sales volume is paid with credit cards compared to 30% in stablecoins.



I found Vibhu Norby, who was founder and CEO of the original Solana Spaces before building a Jupiter-acquired NFT app named DRiP, steaming a cloth banner in the back of the store. He told me he was “skeptical” when he saw a memecoin community crop up around reviving his deprecated business, but he gave the team some initial capital, support and introductions, and he hoped they could figure it out.



Norby told me he was initially drawn to starting Solana Spaces by a belief that blockchain communities can form network states, a Balaji Srinivasan-coined term for digital communities forming their own real-world communities. Norby added that in crypto, traditional identity markers tend to be replaced by things like profile pictures or merchandise.&nbsp;



“To me, there is a higher meaning to it. It’s not just a merch shop. Here you come and you find your home, and you walk away with a piece of that,” Norby said.



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conference

Solana Spaces comes back to life in NYC

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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President Trump today made a visit to Capitol Hill for the House GOP Conference Meeting in hopes of convincing Republican holdouts to support his “big, beautiful” tax bill.&nbsp;



Despite ongoing fighting within the GOP, Trump told reporters before the meeting that the party is more unified than ever.



“This is really just a pep talk,” he said this morning. “We have a very unified House and we have a very unified Senate.”&nbsp;



Trump added that Republicans who don’t get on board could face an uphill battle in midterm elections.&nbsp;



The bill seeks to extend Trump 1.0-era tax cuts, increase defense and border security spending, and cut Medicaid and food stamp programs, among other things. It’s really the bulk of Trump’s agenda wrapped into a single legislative wrapper.&nbsp;



The proposed legislation also covers state and local tax (SALT) deductions. The current draft raises the cap on deductions to $30,000 for individuals earning less than $400,000. It’s a point some Republicans have been concerned about, but negotiations are apparently underway.&nbsp;



The House Rules Committee is slated to vote on an updated version of the bill tomorrow morning. The new draft cuts federal funding to states providing Medicaid and other government coverage to immigrant children and pregnant people, according to the <a href="https://www.washingtonpost.com/politics/2025/05/20/trump-presidency-news/">Washington Post</a>.&nbsp;



Trump has said he hopes to get the bill over the finish line by Memorial Day, so we’ll be keeping an eye out. Expect market volatility to pick up should further signs of disagreements within the party surface.



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congress

Trump heads to House to push “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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May has brought more crypto M&amp;A, long-awaited US public listings, a milestone S&amp;P 500 entrance and a bitcoin price surge. And we’re only two-thirds through the month.



In this environment, <a href="https://blockworks.co/news/vaneck-crypto-equity-etf-entrant">crypto equity diversification</a> is the name of the game. That’s according to Matthew Sigel, who is managing VanEck’s new Onchain Economy ETF (NODE).



“Thanks to tailwinds from the bitcoin price and the financial deregulation [from the] Trump administration and SEC, equity capital markets are wide open right now for anything crypto related,” Sigel told me. “That includes SPACs, IPOs and M&amp;A. Expect much more capital formation in the space over the next month if bitcoin holds up.”



Though BTC has not yet reached the peak of ~$109,000 it hit in January, its level above $106,000 was the asset’s highest weekly close. BTC hovered around $105,800 at 2:30 p.m. ET.&nbsp;



All’s to say, BTC is holding up fine for now. So too is Coinbase stock (up +2% over the past five days), despite news of a security exploit and an SEC investigation — countering more bullish updates of its <a href="https://blockworks.co/news/coinbase-deribit-deal-focus-derivatives">pending Deribit acquisition</a> and inclusion in the S&amp;P 500.&nbsp;



Various Wall Street analysts called COIN’s initial dip on the breach news a tad overblown, with Oppenheimer and Cantor Fitzgerald reaffirming buy ratings. An IMD report, which measures companies’ <a href="https://www.imd.org/news/future-readiness/future-readiness-indicator-2025/">readiness</a> for long-term trends, ranked Coinbase fifth in financial services — behind JPMorgan Chase and ahead of insurance giant Progressive.



The crypto exchange’s leapfrogging of financial players like HSBC and UBS is “because tokenized asset custody counts toward both growth expectations and innovation yield, two factors where many universal banks lag,” the report notes.



On the diversification point, Sigel is putting investor money where his mouth is. NODE invested in about 70 securities out of the gate — above its guidance of 30-60 and with a bunch of ~1% positions.



After VanEck’s spot bitcoin ETF, top holdings include COIN, Robinhood (just acquired Canada-based WonderFi), Galaxy Digital (<a href="https://blockworks.co/news/galaxy-defi-technologies-nasdaq-us-listings">listed on the Nasdaq</a> last week), Mercado Libre and Strategy.



Speaking of MSTR, the Michael Saylor-led firm bought 7,390 more bitcoin last week (and now holds 576,230 BTC in total). Other companies continue doing the same.&nbsp;



Metaplanet has accelerated its bitcoin buys, revealing its latest purchase of 1,004 BTC on Monday. The company has nearly doubled its BTC stack over the last seven weeks (from 4,046 on March 31 to 7,800 BTC).



Nasdaq-listed DigiAsia indicated in a Monday news release that its board of directors approved a plan to create a bitcoin treasury reserve. It’s seeking a $100 million capital raise to build a BTC position and execute “crypto-based yield strategies to optimize treasury performance.”



Many of the newly-forming “bitcoin balance sheet companies” are too small for institutional equity investors and will need to do follow-on deals to grow, Sigel said.&nbsp;



“It will be interesting to see how many of these deals can get done if bitcoin takes a pause for any reason,” he added. “What a super high volatility part of the market.”



As for bitcoin’s outlook, YouHodler markets chief Ruslan Lienkha noted that BTC’s latest price action — holding above $100,000 for 11 days and counting — “appears to be a consolidation phase, marked by accumulation, potentially setting the stage for another leg higher that could lead to a new all-time high.”



Bitcoin ETF <a href="https://farside.co.uk/btc/">inflows</a> remain strong, with $667 million entering the US products yesterday. Lienkha views the $90k-$110k as “a psychologically and technically important price corridor” that BTC would be supported at, even following a retreat from a possible new peak.



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Equity capital markets ‘wide open’ for crypto as BTC hits $106k

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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How should blockchains be valued?



In crypto’s very short history, there have been many attempts to definitively answer that question.



One <a href="https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/Bitcoin-Ringing-The-Bell-For-A-New-Asset-Class.pdf">early approach</a> drew from monetarist economic theory, applying the MV = PQ equation. That idea has largely fallen out of fashion as hundreds of chains have come onto the market with their own “money.”



Then there was the Bitcoiners’ stock-to-flow ratio, based on the assumption that scarcity — measured by the ratio of existing supply to annual issuance — directly drives value. This framework too has lost credibility due to Bitcoin’s volatility and the model’s repeated breakdowns post-2021.&nbsp;



When smart contract platforms blew up in 2020, some investors turned to total value locked (TVL) to market cap ratios, a rough analog to price-to-book in traditional finance. But TVL was too easily gamed, offering little in the way of reliable fundamentals.



Staking yields on proof-of-stake chains introduced a new narrative: L1 tokens could be valued like yield-bearing assets using discounted cash flow (DCF) analysis. While attractive in theory, this framework, too, cannot account for the sky-high valuations of L1 tokens.



As far as I can tell, most of these valuation theories have pretty much fallen out of favor with professional crypto investors today.



<h2 class="wp-block-heading">REV (real economic value)</h2>



Today, a growing class of investors are grappling onto REV (real economic value) to explain the value of blockchains.



What is REV?



REV is the total economic demand to transact on a given L1.&nbsp;



REV = Transaction fees + maximal-extractable-value (MEV) tips



Or <a href="https://www.blockworksresearch.com">Blockworks Research</a>’s technical definition:&nbsp;



“Network REV (Real Economic Value) is a standardized metric that tracks blockchain value accrual generated by user activity. REV consists of both in-protocol transaction fees and out-of-protocol tips that users pay for transaction execution, so it measures the monetary demand to transact onchain.”



REV notably does not include “issuance,” the inflationary emissions with which every blockchain pays its validators.



(That metric is <a href="https://dba.xyz/l1-l2-token-value-capture/">TEV</a> i.e. “total economic value.”)



As such, REV rejects the <a href="https://blockworks-research.beehiiv.com/p/3-blockchain-metrics-that-suck">thinking</a> that blockchains should be treated as traditional businesses with formal “revenue and cost” income statements.



<h2 class="wp-block-heading">REV today</h2>



The below chart is what REV looks like today for the major chains. Ethereum dominated REV in 2020-2021 (remember $100 gas fees?), but Solana is in the lead today.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd_rGG94_dsGmWat7pDSXrALdwCM15a8rcAGCihFql6LZ8wJlUJ5Q-5lq4hswN3mtb7cZkLJ9EIIWNoGqWkO4bmXJ9o-Ufm9V52a27oHtIcAL6zHV9owPGW0OBO8SEH40oZ6IGq?key=q8A3jW_-tutcDD5c855TEw" alt=""/></figure>



The core idea behind REV is that investors can apply a price ratio to it, enabling a comparable apples-to-apples price multiple across blockchains for forward-looking earnings.



Here’s what it looks like in practice when applied to the all-time-highs fully diluted valuations of the major L1 tokens:&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXepF1YGNehUJgfMxeCDtczvtjAg84lPDbG-mGebYqdPY8lozRPEwbKjfclgR8gNz7dh802NP4Z7ZISvfdOS7oioQZZKQrvM-MfimC_4ua20VAAqAgrS7t51s1PI0FOqroP-NZy99g?key=q8A3jW_-tutcDD5c855TEw" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://x.com/0xBreadguy/status/1923792248099176922">0xBreadGuy</a></figcaption></figure>



Based on the above chart, REV partially explains the valuations of chains like Ethereum and Solana, whose REV-to-ATH multiples of ~26 remain within a plausible range relative to fees paid by users onchain.



However, newer chains like Aptos with a 6,368.8x multiple, likely driven by speculative momentum, still seemingly defies fundamental valuation.



I asked Blockworks Research’s <a href="https://x.com/smyyguy">Dan Smith</a> about this.&nbsp;



“Aptos is a two-year-old startup with a similar TAM to every other chain, so even if investors attribute a 1% of winning its vertical, its valuation on a probability-adjusted basis remains high. This is similar to suggesting a&nbsp; pre-revenue startup cannot have a valuation since there is no revenue. It’s all about your future REV,” he said.



<h2 class="wp-block-heading">REV criticisms</h2>



REV is not without its critics.&nbsp;



Criticisms have tended to fixate on the “MEV” component of REV, questioning the assumption that blockchains have an equal ability to capture MEV.



As DefiLlama’s 0xngmi points out, blockchains differ in their protocol architectures and transaction ordering policies, which means MEV is not captured similarly.



<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">imo the issue with REV (chain fees + mev bribes) as a metric is when it&#39;s used to compare very diff chains: &#8211; FCFS rollups have no MEV bribes &#8211; Ethereum has widespread usage of MEV-protected RPCs and swaps (cowswap, 1inch fusion&#8230;) &#8211; Solana has bribes + low MEV protection So if…&mdash; 0xngmi (@0xngmi) <a href="https://twitter.com/0xngmi/status/1891211415769231784?ref_src=twsrc%5Etfw">February 16, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



For example, <a href="https://blockworks.co/tag/arbitrum">Arbitrum</a> ordered its transactions on a first-come-first-serve (FCFS) basis up until a month ago, when a market-ordering mechanism was introduced with <a href="https://blockworks.co/news/arbitrum-timeboost-live-dao-revenue">Timeboost</a>. Under the old FCFS policy, Arbitrum’s REV would be lower than in a post-Timeboost era. From a REV perspective, Arbitrum was “leaving money on the table.”



Secondly, REV fails to explain bitcoin’s $2.1 trillion valuation, as Block Analitica’s monetsupply points out.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeSwq7hUngajPNfGqoG9FECncpF9_OsB48tJ2-_TX5vk1edIgwamQdMOYZ1Is34Kn_mu_2aDSFEozXFh-I4itGRVURsI5xpss3CsTnXNvv8-CoFF5UZ-LyYHpvvBKvkiP8ar1TK?key=q8A3jW_-tutcDD5c855TEw" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://x.com/MonetSupply/status/1923898388140966113">X</a></figcaption></figure>



The all-time high price to REV multiple for bitcoin would be a staggeringly high 10,096 (annualizing bitcoin&#8217;s Q1 2025 REV of $208 million), far above the same for SOL or ETH at ~26.



Paradigm’s Matt Huang, however, sees this as an exception for BTC, mainly because bitcoin never wanted to be a smart contract platform and is largely seen as a monetary store-of-value asset today.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeZSg9vfPtXwmgVQYGjubGX7fCzWmjAdyiu33fN25TnHOI8-JGq4uInST2Rzpt2KR6yD3rQEVazKc86amDnI760ai6zuANWszkdDAfVopvm1mnZaduWjhW5XXnxjQmk-H4iOaJK2w?key=q8A3jW_-tutcDD5c855TEw" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://x.com/matthuang/status/1923785692553138338">X</a></figcaption></figure>



What I think <a href="https://x.com/ryanberckmans/status/1924316558651789323">REV critics</a> have largely pushed back against is not the usefulness of REV as a metric per se, but a perceived overemphasis on REV as a way to value blockchains.



Blockworks Research’s Dan Smith <a href="https://x.com/smyyguy/status/1924444236239290756">acknowledges</a> that while chains should maximize for REV, that is not the same as optimizing for MEV extraction.



“The intent of REV is to track the amount of dollars paid for transaction execution, as that is not currently being done properly. For instance, Token Terminal or DefiLlama counts only the burn, which is objectively incorrect,” Smith said.



“It’s all about future REV, not today’s REV.”



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