Ripple USD

Katherine Ross

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



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It’s still a tough market right now, as the post-White House summit euphoria wasn’t enough to carry us through the weekend.&nbsp;



But the mindset hasn’t changed for a lot of the folks I talk to — from analysts to venture capitalists — who still think the long-term outcome is bullish. And that’s led me to think about one group I haven’t really written about, outside of raise announcements: founders.&nbsp;



In this morning’s <a href="https://blockworks.co/podcast/empire/5fba0882-fc4f-11ef-9017-a37c51110493">episode of Empire</a>, Anthony Pompliano joined host Jason Yanowitz and the two discussed a variety of topics, though I, admittedly, perked up when listening to Pomp explain how he finds talent and operates as a founder.



Pomp said he looks for people who are running away from something rather than toward it. Basically, motivation is more built-in for folks who are seeking to either escape the norm or the situation they were in and build something different and perhaps better. At least, that’s the dream right?&nbsp;



“You want somebody who has a high propensity for action, you want somebody who is detail oriented,” and bonus points if they’re “borderline obsessive,” Pomp said.



When I spoke to Simon Dedic of Moonrock Capital last week, I asked him what advice he’s giving to founders. His big thing right now: telling folks to zoom out.



“Just focus on your vision, just keep building,” he added.&nbsp;



Ideally, the 5-10 year horizon should be the norm, and the payout when founders and projects get to that stage is larger than the pump we’re seeing now.&nbsp;



But another hurdle stands in the way for a lot of founders: chasing hype.&nbsp;



With crypto so narrative-driven at the moment, “VCs are often not better than the retailers out there,” Dedic told me. They’re also trying to capitalize on the hype of the moment and when we see market conditions that, well, suck, it makes everyone a bit more risk-averse —&nbsp;even if they’re long-term bullish.&nbsp;



The goal for founders who are actively building should be simple, Dedic noted. Create a solid project. Don’t get distracted by the fartcoins or random memecoin mania that don’t even have a five month timeline much less a five year timeline.&nbsp;



While both Pomp and Dedic spoke about founders and to founders, it seems to me that their way of thinking is relevant to anyone trying to survive in cryptoland. Just keep swimming, right?



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How founders should approach this market

Jack Kubinec

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



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The Solana world has worked itself into a frenzy over SIMD-0228, a proposal to change Solana’s inflation mechanism. It’s either a ploy to <a href="https://x.com/solblaze_org/status/1897466559112581409">destroy</a> Solana’s decentralization or will only <a href="https://x.com/MaxResnick1/status/1897675394976723301">fail</a> to pass due to CIA-style sabotage.



I was sure voting on the proposal would be pushed back, but as far as I can tell, voting is still slated to begin in Solana epoch 753 at around 8:30 pm ET.&nbsp;



Helius CEO Mert Mumtaz, Blockworks Research data lead Dan Smith, and yours truly broke the proposal down in this week’s <a href="https://www.youtube.com/watch?v=GTpHMBoTjuE">Lightspeed podcast roundup episode</a>. SIMD-0228 proponents say Solana is overpaying for security and market-based mechanisms are more efficient, while <a href="https://blockworks.co/news/solana-proposal-could-spook-institutions">detractors say</a> the reduction of issuance rewards could centralize the network’s power.&nbsp;



My editors tell me I need to add analysis to my reporting on the news, however, so I’ll give you my take.&nbsp;



Although network centralization is a concern — MEV tips will contribute proportionately more REV, so Jito will <a href="https://x.com/whosknave/status/1897010713031578050">have</a> relatively more power, for instance — what’s more important is that Solana doesn’t lose the scrappy pragmatism that made it so popular in the first place. Issuance is probably too high, and validator revenue should start coming from real value creation in the form of MEV and priority fees. SIMD-0228 should probably pass.



We’ll have more to say on that next week, but I think there’s an even more interesting conversation to be had around SIMD-0096, a move to stop burning half of Solana priority fees that was <a href="https://blockworks.co/news/solana-update-liquid-staking-tokens">implemented in February</a>. Since 100% of the fees now go to validators, Solana’s inflation has climbed a bit — from 3.7% to 4.6% on an annualized basis, Blockworks Research analyst Carlos Gonzalez Campo told me on this week’s <a href="https://youtu.be/GTpHMBoTjuE">other Lightspeed podcast episode</a>.&nbsp;



That’s a predictable outcome. But what I found interesting is how unpredictable parts of the response to SIMD-0096 going live has been.



If users and validators were perfectly rational, then users should have started paying fewer priority fees, Campo said. That’s because Solana removed what was essentially a 50% tax on fee revenue, so validators could charge half as much for fees while generating as much revenue as before. But so far, priority fees have stayed constant — perhaps indicating that competition between users isn’t putting downward pressure on priority fees.



On top of this, validator revenue from priority fees was proportionately lower after SIMD-0096 than it had been previously. Users made proportionately more use of MEV tips, and validators couldn’t get them to switch to paying priority fees instead. All of this is a little early to extrapolate absolute trends from, but it’s still interesting to note.  Campo offered an interesting goalpost for SIMD-0096’s success: a reduction in the number of transaction processing units on Solana. TPUs are out of protocol services for transaction inclusion, and their proliferation adds developer complexity and overhead cost. SIMD-0096 — which was first pitched as a <a href="https://blockworks.co/news/solana-validators-tackle-side-deals">way to prevent side deals</a> — could prevent new TPUs from coming to the network.



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Solana monetary decisions in the spotlight 

Ben Strack

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



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So the US has officially moved to create that long-awaited <a href="https://blockworks.co/news/us-crypto-reserve-clarification">strategic bitcoin reserve</a>? And a separate stockpile for other crypto assets?



Yes, sort of. Reactions are mixed as people read the fine print. First, some details you might already know:



Donald Trump signed an <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/">executive order</a> to create a Strategic Bitcoin Reserve (SBR) and a Digital Asset Stockpile (DAS). The latter sports the same acronym as Blockworks’ <a href="https://blockworks.co/event/digital-asset-summit-2025-new-york">upcoming event</a>!



The SBR is to be capitalized with BTC forfeited to the Treasury department via criminal/civil proceedings. The US won’t sell bitcoin in this reserve.&nbsp;



There’s not yet a plan to buy more BTC, leaving some disappointed. However, the EO notes that the Secretaries of Treasury and Commerce — currently <a href="https://blockworks.co/news/bessent-quarterly-refunding-announcement">Scott Bessent</a> and <a href="https://blockworks.co/news/trump-nominates-commerce-dept-leader">Howard Lutnick</a> — can “develop budget-neutral strategies for acquiring additional bitcoin.” Essentially ones that won’t burden taxpayers.&nbsp;



As for the DAS, that would include digital assets beyond bitcoin (none specifically named in the EO) also collected via forfeiture. The government would not buy more assets for this stockpile.



Many thought a bitcoin reserve announcement could be a catalyst to send BTC price to new heights. We did not see that immediately.



Compass Point analysts called the reserve and stockpile creation “a nonevent.” Based on price action around the reveal, they added, the market seems to agree with this view.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXff5mZ8NwfXYw0sLtLz_btJOSOKfK69WbW8gkaZ0UIt96Y2mW2j2XQtcH6F7wcTPjkA_orFA4E_-5GK0-wt_7cOyd1f0TdoyLoIGkcFdYvJQXy6YkkzSH1pm1_r8YR3n1fHSm9lEA?key=p3oZaioHcLKAKwOZOLdef7Mv" alt=""/></figure>



Bitcoin was trading around $88,200 at 2:10 pm ET — down nearly 2% from 24 hours prior.&nbsp;



“Since these accounts are created by an EO, they can be undone by a future EO,” Compass Point’s Ed Groshans, Joe Flynn and Ed Engel wrote in a Friday note. The elements making a reserve “durable” include legislation authorizing specific actions and appropriating funds for those actions, they argue. So they’re labeling the EO issuance “a dud” — at least for now.



“We will reassess the relevance of the SBR when Treasury and Commerce publish the strategies to acquire BTC.” &nbsp;



Despite this reasonable take, many still consider this a monumental step in legitimizing BTC and the broader asset class. Bitwise’s Ryan Rasmussen encouraged people to “zoom out,” detailing the potential ripple effect.&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">The end game was never “the U.S. government buys all of the world’s bitcoin.” A U.S. Strategic Bitcoin Reserve means… &#8211; Other countries will buy bitcoin &#8211; Wealth managers have no excuse &#8211; Financial institutions have no excuse &#8211; Pensions/Endowments have no excuse &#8211; Fear of the… <a href="https://t.co/iAoyeo3PYL">https://t.co/iAoyeo3PYL</a>&mdash; Ryan Rasmussen (@RasterlyRock) <a href="https://twitter.com/RasterlyRock/status/1897821084734648522?ref_src=twsrc%5Etfw">March 7, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Falcon X research head David Lawant pointed to a few other positives. One being that Trump’s order clearly put BTC in a separate category while still acknowledging the value of other digital assets (remember <a href="https://blockworks.co/news/trump-crypto-reserve-details">Trump’s mention</a> of ETH, SOL, XRP and ADA on Sunday?).



And the EO seems to shield the reserve from any backlash on taxpayer money usage, he added — noting the US could diversify its gold reserves into BTC and/or utilize the <a href="https://dnlt6.r.ag.d.sendibm3.com/mk/cl/f/sh/SMK1E8tHeGLdaArYqavpF5FRkQi7/LQ9OjXU3M7Du">Exchange Stabilization Fund</a>.



It’s unclear how much more we’ll learn during/after today’s White House <a href="https://blockworks.co/news/first-industry-crypto-summit">crypto summit</a> (happening now). Keep an eye on Blockworks’ X <a href="https://x.com/Blockworks_">account</a> (and <a href="https://x.com/strack_ben">mine</a> and <a href="https://x.com/caseywagnerr">Casey’s</a>) for updates.&nbsp;



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Reactions are mixed to BTC reserve, crypto stockpile 

Kate Irwin

This is a segment from The Drop newsletter. To read full editions, <a href="https://blockworks.co/newsletter/thedrop">subscribe</a>.



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The Axie Infinity team has unveiled Axie Infinity: Atia’s Legacy, a game on Ronin set in the Axie world of Lunacia.&nbsp;



In it, you can play with others and navigate your Axie around the fantasy world filled with treasure boxes, quests to complete, and little monsters to whack for XP.&nbsp;



The game looks cute and dynamic, filled with different weather environments, diverse challenges, and the ability to swap Axies as you navigate through the world. The pop-up conversations look very similar to Animal Crossing, and the Axie-battling vibe is a lot like Pokémon in how you can inspect your available Axies and choose up to four for engaging in battles.&nbsp;



Your Axies will share gear in battles and level up together. Gear quality can range from Common to Legendary, as is common in MMORPGs and battle royale games.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcAF453NK5QZcoyIpu7vBcrqNvuQbjpBUESQRf0XduTGGisACBy1VIgi11ncpKfH4fdqv0zgPESzkeqdU-tpVEhHEM1jltcgOQ7D-KWUWvrlc_ldT9IHpP-KNcKnWRwTpO5IRICtw?key=V1FbLbCHyaa8peWjs_Q2aJRa" alt=""/><figcaption class="wp-element-caption">Snagged a screenshot of Axies flirting&nbsp;</figcaption></figure>



Overall, the graphics look good for a mobile game, and it stays true to the charming, pastel Axie aesthetic. The voice acting is a bit corny, but maybe that won’t bother most players who are used to mobile games.



If you’re itching to play Atia’s Legacy like I am, you’ll have to wait. The Axie team is promising playtests “this year” for select Axie frens. We don’t know the exact launch date yet.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfq0ifLHx5idjajqgZpSfXQpubWic7mq17pgyZy5900aARtMXfQjVX_md2VZR3FH5Z6pXFkaqXpVQ_RPaADq3s_QKjPjl0Q_t0RrxjA52p8BWcNphYML9rgY0jFVRcB2JFHJZgr?key=V1FbLbCHyaa8peWjs_Q2aJRa" alt=""/></figure>



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcJXxuVTmPqq_cKAxf-LP_aKsxuRQhU3uMewa2wkRUoqukOwHJmkKLev8rv2D4eKQvvTSHozsA8-gBJKb9movB5I_gqyW9ouWoCgNjdFUeuWb7VlqwwOLdC50n5SQVDaA-LNKV1gQ?key=V1FbLbCHyaa8peWjs_Q2aJRa" alt=""/></figure>



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd3mZCSCwEKmp7d7fwjxAjpol85beWMbNotLVMMUOnluRtHgIc-T4YbXOpyFRNgV5dW1qC5r8Y-eW4pMw1ObGcSvaaVB3Ch3WfU8mYMAp3Mi0ipJ0mN-zRqsrKr0Ehh9cwIYkUA0A?key=V1FbLbCHyaa8peWjs_Q2aJRa" alt=""/></figure>



In the meantime, you can earn AXS tokens for referring friends to the game for the next 27-ish days after pre-registering yourself. Up to 25,000 AXS (about $88,250) will be split among the top 200 winners. You could also get a Mystic Axie NFT in addition to tokens. The more players who sign up, the more potential rewards you could get, according to a release I viewed from the team.



Overall, I’m optimistic about this one. I think Atia’s Legacy has potential to be more exciting and dynamic than the base game, which can feel repetitive.&nbsp;



Axie Infinity has rebounded a bit since June last year, where it saw all-time lows in unique active wallets (UAWs) not seen since three years prior. Now, activity is up a bit.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdA0PbuhYWJPSVNhcBBr4HY-27rIqJykGSi3ooPEMBJOUd8orzxKcivDMYlIpC3FwSfZlx9740_P_khn0eLklFcah5el_1vpAtOoSZqikFW6pW4EK9Zle5xVBdsf4TrdIgsK1q0?key=V1FbLbCHyaa8peWjs_Q2aJRa" alt=""/><figcaption class="wp-element-caption">Source: Axie Infinity UAWs, volume and transactions over time</figcaption></figure>



While UAWs don’t directly represent the number of users, it’s a sign that there’s more interest in the game franchise now than a year ago.&nbsp;



We’re seeing over 4.5 million transactions a month from just under 200,000 UAWs, compared to roughly 15,000 UAWs last March.



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Axie Infinity reveals Atia’s Legacy MMO, AXS reward pool

Donovan Choy

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



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It all starts with Ethereum. The L1 is too slow. Every node needs to redundantly re-execute transactions in a block to ensure validity, which limits scalability.



By 2020, the Ethereum community coalesced around rollups as the scaling solution. Vitalik’s 2021 landmark <a href="https://vitalik.eth.limo/general/2021/01/05/rollup.html">blog post</a> on rollups explains how optimistic and zk rollups can scale Ethereum.



Zk rollups are technologically superior for scaling but the tech was still too expensive to use and far behind (more later).&nbsp;



So optimistic rollups broke into the market first. Optimistic rollups assume all transactions are valid until someone challenges it with a fraud proof within a seven-day challenge period.



Optimistic rollups worked, but they came with hidden costs. The challenge period meant longer transaction finality before users could withdraw funds. Locked liquidity meant capital efficiencies and a generally poorer UX, especially with chain interoperability.



Meanwhile, zk was catching up. At ETHCC 2022, Polygon, zkSync and Scroll all announced zkEVMs, which enable Solidity devs to write code and prove the execution of the EVM — effectively allowing Ethereum to leverage zero knowledge technology.



By 2023, zk rollups started to gain real traction.&nbsp;



Why exactly are zk proofs better than optimistic fraud proofs? Namely because zk proofs are much smaller (~1-10 KB) compared to raw transaction data (megabytes in size).



By using zk cryptography to prove Ethereum transactions, these highly compressed proofs meant lower data availability costs and better scalability.


<div class="wp-block-image">
<figure class="alignright is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcaYbxtOzjbpRK42eo71K3_jY3qBdiRKhRs24uJR5rk1CZlLruHHG2HItGkRztgYxdpv3m7nG2JnXA0G4uDt2Unbpr9lQMAhq78XlRZkZVNptIU5yhKkmnR7yQxsWMtykJC-v0reA?key=WbP9tP2L_0tWPexXYxu-BaHn" alt="" style="width:361px;height:auto"/><figcaption class="wp-element-caption">How zero knowledge works in a nutshell</figcaption></figure></div>


Though zk was taking off, proof generation was still expensive. Based on zkstats.io, the average cost to generate a zk proof in December 2023 was $80.21.



Fast forward to 2025. Proof costs have dropped to $1.3 per proof, about a 98.4% improvement.



What changed?



Today, each of the core pieces of the zk rollup stack have been broken up.&nbsp;



Firstly, <a href="https://blockworks.co/news/scroll-announces-new-zkevm">zkVMs are here</a>. These specialized virtual machines speed up the zk development experience and make validity proof generation more efficient. Before zkVMs, developers needed to write complex, mathematical “circuits” to prove EVM execution.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">I believe RISC-V zkVMs will be the fastest technology to get commoditized. There won&#39;t be almost performance differences between the each implementation. One to two years max for this to happen.&mdash; Fede’s intern 🥊 (@fede_intern) <a href="https://twitter.com/fede_intern/status/1849455943538323898?ref_src=twsrc%5Etfw">October 24, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



ZkVMs like SP1, RISC Zero, Nexus and <a href="https://blockworks.co/news/scroll-announces-new-zkevm">OpenVM</a> today effectively democratize zk development for all developers (C++, Rust) without zk cryptographic expertise. In the past, zkEVMs only enabled Solidity development on zk rollups. Think of zkVMs as a more general concept than zkEVMs.



Second, the costs to generate proofs are going down because of market competition. Today, there are many competitive marketplaces operated by Risc Zero, <a href="https://explorer-testnet.prover.xyz/">Cysic</a>, <a href="https://www.lagrange.dev/blog/lagrange-deploys-first-production-ready-zk-prover-network-powered-by-coinbase-kraken-and-okx">Lagrange</a> and Succinct. Some are still in testnet, some are operational.



Zk L2s are also turning to <a href="https://youtu.be/TSLUpOpsPF0?t=524">proof aggregation techniques</a> to amortize verification costs. The way this roughly works is by batching many proofs inside of one, which makes the final proof faster to verify.



These marketplaces are also permissionless, meaning anyone with a GPU rig can sign up, post a bond and generate zk proofs. Previously, zk rollups used “centralized provers,” meaning they rented GPU/FPGA hardware from Google or Amazon.



Better proof systems are also constantly launching. These proof systems (examples: Groth16, Halo2-KZG, STARK, Plonk, Expander) algorithmically define the rules as to how zk proofs are constructed and verified. They’re getting better, which means zk proofs are getting smaller and faster to verify. This in turn means increased zkVM performance gains.



Finally, there are zk co-processors built on top of zkVMs. These things basically allow onchain apps that do not exist in a zk execution environment to leverage the wonders of zk technology. The way it does so is by moving computation offchain, therefore running asynchronous to the blockchain’s execution. This enables apps to compute complex statistics offchain, prove it with zk, then post that proof onchain.



Apps like Frax, Azuki, Etherfi and Gearbox are using Lagrange’s zk co-processor to get around the limits of the Ethereum L1.



So there you have it. That’s why zk is the endgame.



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A brief history of Ethereum’s relationship with ZK

David Canellis

Pete Rizzo

This is a segment from the Supply Shock newsletter. To read full editions, <a href="https://bitcoinhistorynl.beehiiv.com/">subscribe</a>.&nbsp;



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



Bitcoin doesn’t have an official mascot.&nbsp;



Still, for at least a few years, Dorian Prentice Satoshi Nakamoto was the closest thing Bitcoin had to a spirit animal — an unassuming everyman who became symbolic of Bitcoin’s power to change the world from humble beginnings.



Newsweek started it on March 6, 2014 with “<a href="https://www.newsweek.com/2014/03/14/face-behind-bitcoin-247957.html">The Face Behind Bitcoin</a>,” in which journalist Leah McGrath Goodman detailed a months-long investigation into potential candidates. But the article hinged on a misunderstanding.



Earlier attempts considered the Nakamoto name a pseudonym. Goodman instead searched for Satoshis hiding in plain sight.



Goodman found a number of people named Satoshi Nakamoto, dead and alive: “A Ralph Lauren menswear designer in New York and another who died in Honolulu in 2008, according to the Social Security Index&#8217;s Death Master File,” Goodman wrote.&nbsp;



Amazingly, tweets like these are still online.



<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">We found Satoshi Nakamoto. The mysterious creator of Bitcoin, unmasked: <a href="http://t.co/C9frgU1Iod">http://t.co/C9frgU1Iod</a> <a href="http://t.co/RPG8GaP4XB">pic.twitter.com/RPG8GaP4XB</a>&mdash; Newsweek (@Newsweek) <a href="https://twitter.com/Newsweek/status/441533270665097216?ref_src=twsrc%5Etfw">March 6, 2014</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Goodman eventually stumbled across a Satoshi in a database for naturalized US citizens. Dorian’s profile matched the background of someone who might’ve created Bitcoin: a brilliant, “obsessively private” physicist and engineer who boasted a keen interest in politics alongside a deep distrust of banks and government constructs.



Dorian, a Japan-born descendent of Samurai on his mother’s side and the son of a priest on his father’s side, hadn’t used his Satoshi birth name for 40 years, having legally changed it at the age of 23. He’d signed his name “Dorian S. Nakamoto” ever since.



When Goodman approached Dorian outside his home in southern California — after emails between the two had gone dark — he soon called the police. That Temple City home, by coincidence, was situated <a href="https://www.forbes.com/sites/andygreenberg/2014/03/25/satoshi-nakamotos-neighbor-the-bitcoin-ghostwriter-who-wasnt/">a few blocks away</a> from <a href="https://x.com/pete_rizzo_/status/1827692409859277163">Hal Finney</a>’s.



<h2 class="wp-block-heading">A perfect storm</h2>



Dorian spent much of his career working on classified projects for major corporations and the US military, and per Newsweek&#8217;s report, Dorian believed he would get into trouble if he spoke with Goodman.&nbsp;



Before Goodman was shooed away, Dorian responded to a question about Bitcoin: &#8220;I am no longer involved in that and I cannot discuss it. It&#8217;s been turned over to other people. They are in charge of it now. I no longer have any connection.&#8221;



Satoshi’s last known communication, an email to developer Mike Hearn, had occurred almost three years earlier.



Confusingly, all that tracks with what the real Satoshi might say — resulting in Newsweek running the piece as a cover story erroneously outing Dorian as Bitcoin’s inventor. Dorian later <a href="https://www.reddit.com/r/Bitcoin/comments/3nzqqh/comment/cvt06j5/?context=3">said</a> that he thought Goodman was asking about his previous work with Citibank.



The story sparked a media frenzy. Silk Road had just been shut down by the FBI in the months prior, and bitcoin was retracing from a monster all-time high of $1,242 after rallying 10,000% in one year.



<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">Satoshi Nakamoto chased by reporters, denies founding Bitcoin <a href="http://t.co/Ns8EeBQAIj">http://t.co/Ns8EeBQAIj</a> <a href="https://twitter.com/alschaben?ref_src=twsrc%5Etfw">@AlSchaben</a> gets the photo <a href="http://t.co/FD1q63Nfqc">pic.twitter.com/FD1q63Nfqc</a>&mdash; L.A. Times Photos (@latimesphotos) <a href="https://twitter.com/latimesphotos/status/441698256792199168?ref_src=twsrc%5Etfw">March 6, 2014</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div><figcaption class="wp-element-caption">Newsweek had effectively published the exact location of Dorian’s house, leading to uncomfortable scenes</figcaption></figure>



The media <a href="https://www.youtube.com/watch?v=juNwcMAPbzQ">mobbed</a> Dorian for days, leaving us with iconic <a href="https://x.com/latimesphotos/status/441698256792199168">photos</a> of reporters <a href="https://www.google.com/search?sca_esv=b4a9ab6bfcbd968f&amp;q=dorian+nakamoto+cameras&amp;udm=2&amp;fbs=ABzOT_CWdhQLP1FcmU5B0fn3xuWpA-dk4wpBWOGsoR7DG5zJBteutRhCIwSdaS7of3GY5DSBTK2sWFDm60bkTR4-igG_y2Alth1LHDKvT2rGaaYp4aDBB_sBSbD8l4dbLdP9JNZLoA4KWad-pUqxf6DY0sJyKggpx4OoG9DmiEMO1zL0cOYz99a3yLGPgvPc-98ypubgCNST&amp;sa=X&amp;ved=2ahUKEwiRpO2j-u-LAxXbgP0HHSSqLagQtKgLegQIDxAB&amp;biw=1920&amp;bih=912&amp;dpr=1.5#vhid=Rv01KdbB_pZagM&amp;vssid=mosaic">chasing</a> him around his neighbourhood and <a href="https://www.reuters.com/article/business/man-called-bitcoins-father-denies-ties-leads-la-car-chase-idUSBREA252D8/">across</a> LA.&nbsp;



Amid the chaos, Dorian lined up a sit-down conference with the Associated Press at their offices over a free sushi lunch with <a href="https://www.reddit.com/r/Bitcoin/comments/3nzqqh/comment/cvtgic5/?context=3">“lots of expensive varieties</a>,” in which he explained the confusion and formally denied anything to do with Bitcoin.



In a written statement, Dorian expressed difficulty in finding steady work as an engineer or programmer, and that prospects for gainful employment had been harmed due to Newsweek’s article.&nbsp;



He’d even recently cut off his internet service “due to severe financial distress,” having been recovering from prostate surgery and a stroke at the time.



<h2 class="wp-block-heading">Friends we make</h2>



The Bitcoin community rallied fast around Dorian, who initially pledged to sue the outlet over the ordeal.



Within the same week, advocate Andreas Antonopoulos <a href="https://www.reddit.com/r/Bitcoin/comments/1ztjmg/andreas_im_fundraising_for_dorian_nakamoto/">announced</a> a BTC fundraiser on Reddit as a “sorry for what happened to you.” Antonopoulus, in an update, said he’d successfully made contact with Dorian and would deliver control of the funds in person.



More than 49 BTC flowed into the donation wallet — a vanity <a href="https://blockchair.com/bitcoin/address/1Dorian4RoXcnBv9hnQ4Y2C1an6NJ4UrjX">address</a> that started with “1Dorian” — over the next two months, worth around $30,000 at the time. The chain shows almost a third of it was then directed to an in-between address before being forwarded to Coinbase starting in June 2014.&nbsp;



Another 17.5 BTC was sent to 1Dorian in December 2015 and the remaining bitcoin made its way to Coinbase in a similar manner in mid-2017.&nbsp;



A separate auction for <a href="https://cryptograffiti.com/products/nakamoto-2014">artwork</a> using Dorian’s likeness, a cryptograffiti piece made entirely of repurposed credit cards, later raised another 17.3 BTC ($5,500 at the time) for Dorian.&nbsp;



Combined with the Antonopoulos fundraiser, the BTC donations would be valued at about $7.5 million today, but it’s unclear how long Dorian has held.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdEN9Cb9xQyUeOjpqzq0SCrtjFKS_hvpZ8JG4kyMqmip117ERw3frwYYkyIBDJfj94ML-juPzxQBH1fFyEIpR9RGojiX61XeUlHuREu1UBVd6z5Xi13Po-6HRmB6qBwbAatBc-wbw?key=AWx_vgN63mZ2L2ghYEz38HSZ" alt=""/><figcaption class="wp-element-caption">In September 2014, the real Satoshi’s email and forum accounts were hacked — leading to a mysterious post on the P2P Foundation forum which referenced the Dorian fiasco (Source: <a href="https://blog.bitmex.com/satoshis-2014-email-hack/">BitMEX</a>)</figcaption></figure>



Antonopoulos initially said the bitcoin would be sold for US dollars to be given to Dorian, while Dorian in a Reddit AMA in late 2015 said that he “<a href="https://www.reddit.com/r/Bitcoin/comments/3nzqqh/comment/cvt3k06/?context=3">didn’t sell</a>” and that he planned to use the funds “<a href="https://www.reddit.com/r/Bitcoin/comments/3nzqqh/comment/cvud7b8/?context=3">as required</a>.”



Dorian ironically became the de facto face for Satoshi over the next five years or so, spawning <a href="https://www.reddit.com/r/Bitcoin/comments/1zpzr2/satoshi_nakamoto_according_to_newsweek/">memes</a>, t-shirts and other art.&nbsp;



Perhaps, it had something to do with Dorian’s embracing of the Bitcoin community after the media had caused so much trouble, even attending <a href="https://www.youtube.com/watch?v=RBs9TKSJjls">conferences</a> here and there.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc-BjzoVyF1jdrKQT349o50eoa_OV5QR7gvLZcaHddXrkIJxBxIEe_unkHwslKi-p00LazJNWWdk4CsYJ7ta-QL5Ub5tmuS-Z2p_ShSE4_VEyQkz6qs_dCkJSqN9yMdT8hpmBbGpg?key=AWx_vgN63mZ2L2ghYEz38HSZ" alt=""/><figcaption class="wp-element-caption">Dorian kept up his friendship with artist cryptograffiti for years, <a href="https://x.com/cryptograffiti/status/1555575972153266176">signing</a> prints as recently as August 2022. Cryptograffiti told me via DM: “Dorian is doing well. He&#8217;s trying to stay out of the public eye due to his unwanted celebrity.”</figcaption></figure>



Or, maybe it was his insightful <a href="https://www.reddit.com/r/Bitcoin/comments/3nzqqh/comment/cvtfmjc/?context=3">comments</a> about the state of modern society and the economy he’d made on Reddit — as well as <a href="https://www.reddit.com/r/Bitcoin/comments/3nzqqh/comment/cwmjtjt/?context=3">thoughtful</a> <a href="https://www.reddit.com/r/Bitcoin/comments/3nzqqh/comment/cvt7ess/?context=3">reflections</a> on the state of Bitcoin development — some which were so poignant that they might have well come from the creator of Bitcoin himself.



It’s often said that we’re all Satoshi. Dorian showed us how true that statement really is, only that clearly, some are more Satoshi than others.



<h2 class="wp-block-heading">The People’s Satoshi&nbsp;</h2>



They say a picture is worth 1,000 words. In the case of Satoshi Nakamoto, it might be more.&nbsp;



Ever since the enigmatic founder of Bitcoin left in 2011 both fans and onlookers haven’t had so much a clue as to his appearance. Artists were left to fill in the gaps.&nbsp;



A simple Google search reveals that images of Satoshi have hardly been consistent. In fact, they’ve evolved substantially over the years, with Satoshi’s story. As far back as 2013, there wasn’t really much of a mystery about Satoshi. He had only been gone a few years, and was commonly pictured as a <a href="https://www.oroyfinanzas.com/2013/10/satoshi-nakamoto-bitcoin/">younger Asian man</a>. As Wikileaks’ Julian Assange and Edward Snowden began associating with the movement, the iconic <a href="https://store.bitcoinmagazine.com/products/bitcoin-magazine-issue-1-may-2012?srsltid=AfmBOopsTjvx5YgVDA7y6S34mgz1Cyeallj8SD0jFAfaWRsQ9Z01NIhr">Guy Fawkes mask proved a fitting substitute</a>, one that spoke to the technology’s (alleged) advantages.&nbsp;



From 2014 on, it was Dorian’s visage that took the top spot, the <a href="https://www.theguardian.com/technology/2014/mar/07/satoshi-nakamoto-denies-inventing-bitcoin">flustered middle-aged computer scientist</a> who shooed reporters while covering his face. It, too, came and went. In the years to come, there was arguably an effort to make Satoshi more of an everyman. In Budapest, <a href="https://www.euronews.com/next/2021/09/17/hungary-s-bitcoin-fans-unveil-faceless-statue-of-mysterious-crypto-founder-satoshi-nakamot">Hungary</a> and <a href="https://bitcoinist.com/satoshi-nakamoto-statue-vanishes-when-viewed/">Lugano</a>, Switzerland, there are statues depicting a hooded figure in homage to Satoshi. Some aren’t fans, believing it lends itself to the “shadowy coder” trope. Yet, today, it’s perhaps Dorian’s picture that is most enduring —&nbsp;the revival due in no small part to Bitcoin’s sprawling meme-o-sphere, where Dorian’s lasting scowl has been embraced, recast as a kind of talisman for the disdain Bitcoin users still feel for the media and non-believers.&nbsp;



So, despite calls for Dorian to retain his privacy (after all, as David notes, he may own a now not insignificant sum of bitcoin) he can be seen on the internet daily, <a href="https://x.com/gaborgurbacs/status/1450955728517206020">refusing to raise prices</a>, or as a public facing brand for <a href="https://x.com/BTC_Archive">popular social media accounts</a>.



In this way, Dorian might be the most fitting Satoshi, in that his version is one that has been reclaimed, an image that, once wielded as a weapon, has been recast by advocates into a lasting reminder of their outsider status. We wouldn’t want it any other way.



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Celebrating Dorian Nakamoto, the Satoshi who wasn’t

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



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To end the first week of March, let’s look back at venture capital activity in February, shall we?



Perhaps we can sum it up to a shorter month, but overall venture capital funding in February was down slightly from January, though the number of companies raising was up marginally.&nbsp;



Last month, $1.11 billion was raised by 137 companies, though we saw $1.57 billion go to 132 companies to kick the year off, per TIE Terminal data.&nbsp;



DeFi paved the way last month, with 20 companies raising around $175 million. Perhaps that’s a sign of a trend of where money’s going, because DeFi also led deals in January, with 21 companies raising $339 million.



But it’s not just DeFi receiving the attention. There were notable raises from a couple of other firms, including Bitwise, which <a href="https://bitwiseinvestments.com/newsroom/bitwise-announces-new-70m-backing">raised</a> $70 million through an equity raise in a round led by Electric Capital.&nbsp;



And Raise, the gift card company looking to use its <a href="https://www.prnewswire.com/news-releases/raise-secures-63-million-to-transform-the-payments-and-loyalty-industry-with-blockchain-powered-gift-cards-302385340.html">$63 million round</a> to beef up its blockchain-based gift card offerings. I don’t choose favorites when it comes to VC rounds, but this one certainly caught my eye when it was announced late last month.&nbsp;



When comparing the raises (not just the gift card company) to January, the rounds are smaller. Phantom and Movement Labs both had rounds of <a href="https://phantom.com/learn/blog/phantom-series-c">$150 million</a> and <a href="https://fortune.com/crypto/2025/01/08/movement-labs-series-b-100-million-coinfund-brevan-howard/">$100 million</a>, respectively.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeckvFuhuGGU4OIXFgAetP83GnAcBhuIQ1lcy33bp5B-edGyjRLHcDPM5Vw8lMlMrA_yjFbwqFjtCxmPBO5ukKOtSjlmlBpxohFkQqrD060W2WDDjteYXSdpRD6ZXKY0zwRJtrFVg?key=B0nciK_1lzs4p909qPa9og2y" alt=""/><figcaption class="wp-element-caption">Source: The TIE Terminal</figcaption></figure>



When looking at the deal sizes so far this year, there is a noticeable drop.&nbsp;



I’m cautious to read too much into it yet, given the overall bullish environment and the fact that I’ve had plenty of conversations with VCs in which they affirm that they’re pretty active, but this is the trend we’re currently looking at.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe154ZRonGlv-msrj2TG0pVLh7HxIXbcxeoSPM4VTcZke1liYkomLBm9uBF4clRDcFiFyzeXq8Z5k3JcuOs3vNbpwGhgPeMvxQ5d7bYw7EOuFVdMxDtSbPrHj5gNTKdj24BPNjC?key=B0nciK_1lzs4p909qPa9og2y" alt=""/><figcaption class="wp-element-caption">Source: TIE</figcaption></figure>



As you can see, the number of larger deals seems to have peaked in December of last year, though we’re still seeing deals above $50 million — take Raise and Bitwise, for example.&nbsp;



The average deal size, if we’re looking this week, sits at $9 million. On the last day of February, it was slightly higher at $10 million.



We’re only two months into the year, so I’m cautious to call any of this data a trend yet, and we’re still a ways off from the peak of crypto VC activity, <a href="https://blockworks.co/news/crypto-funding-recovery-signs">which topped $23 billion in 2022</a>.&nbsp;



But consider my interest piqued, especially because PitchBook’s Robert Le told us last year that he expected more of a bull market in 2025.



Bring it on.



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Crypto projects raised $1.1B in February 

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



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President Donald Trump signed an executive order that establishes two things: a bitcoin strategic reserve and a digital asset stockpile.&nbsp;



The bitcoin reserve is expected to be made up of BTC {{BTC}} previously seized by the US government — roughly 198,000 BTC. Notably, crypto czar David Sacks said that Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent will be working on “budget-neutral strategies for acquiring additional bitcoin, provided that those strategies have no incremental costs on American taxpayers.”&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">Just a few minutes ago, President Trump signed an Executive Order to establish a Strategic Bitcoin Reserve. The Reserve will be capitalized with Bitcoin owned by the federal government that was forfeited as part of criminal or civil asset forfeiture proceedings. This means it…&mdash; David Sacks (@davidsacks47) <a href="https://twitter.com/davidsacks47/status/1897802280738734236?ref_src=twsrc%5Etfw">March 7, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Which, yes, is something but arguably still a pretty vague statement. Hopefully we’ll get some more information later today at the White House Digital Asset Summit (not to be confused with the Blockworks Digital Asset Summit, so if you bought a ticket, make sure you’re booked to go to NYC not DC).&nbsp;



The stockpile, on the other hand, is pretty clear… kind of.



It’s going to be made up of crypto (sans bitcoin) that the US government holds. What that basket will consist of is where we, again, don’t have answers. What we do have is a social media post from Trump last Sunday, which seemed to imply that SOL, ADA and XRP are going to play a part.&nbsp;



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/1jB1QtxDdGo?si=RualiMjKUifM6Qen" 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>







But what’s clear is that the US government will not be buying additional digital assets for the stockpile, which should ease the anxiety of some folks, including Empire host Jason Yanowitz <a href="https://blockworks.co/podcast/empire/0a240c6a-fb69-11ef-a62c-c7dd02b50e73">who discussed the government’s moves</a> with co-host Santiago Santos on today’s episode of Empire.



The big theme from Santos and Yanowitz’s conversation is disclosures. They want more of them, and I think it’s fair to say that a lot of crypto wants more of them, too. Speaking from my Wall Street background, it would be incredibly clutch for crypto to have its equivalent of Edgar to track disclosures (which is the SEC’s database if you want to nerd out and see what firms are doing), as Santos suggested.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcmfj2W-zst81UIw8kuojUKuTMpqQCKGcYiZdsSiAqj1zLUrCDWKqZUyKCgHQab51nazqIJkCrZzkjTZB7OMe_KLbOWK2qaH5SKDDhgmmwShsjriovNh9ghi2foKrdyIegf0t1V?key=B0nciK_1lzs4p909qPa9og2y" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://intel.arkm.com/explorer/entity/usg">Arkham</a></figcaption></figure>



So here are the questions going into the summit today: What assets are going to make up the stockpile? Is it just going to be any crypto that the US government has seized? And a bonus would be any details on how they plan to add to the reserve.&nbsp;



I’m sure there’ll be a lot more, too, but we’ll take what we can get around here.



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Does crypto need disclosures?

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



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Liam Heeger spent two years as a core engineer for Firedancer, the <a href="https://blockworks.co/news/lightspeed-newsletter-solana-firedancer-testnet">high-performance Solana client</a> being written from scratch by Jump. In January, Heeger announced he had left Jump to create his own layer-1 blockchain called Unto. The next day, news broke that <a href="https://blockworks.co/news/jump-sues-former-solana-client-engineer">Jump was suing Heeger</a> for violating his non-compete agreement by working on a new high-performance blockchain.



Jump and Heeger <a href="https://x.com/whosknave/status/1897396270639251537">settled</a> the case in late February, so I was finally able to catch up with Heeger and get more details on Unto. In short, the layer-1 will architect a new virtual machine to try and improve on Solana’s performance by an order of magnitude.



“We tend to agree with [Multicoin Capital managing partner] Kyle Samani. Incremental performance improvements don&#8217;t matter,” Unto co-founder Will Yoo said. “So we&#8217;re gonna need a 10x to be relevant.”



Heeger agreed, but added that he’s “not making any promises.”



Heeger helped push Solana’s virtual machine closer to its limits with Firedancer, but he isn’t building on the SVM partly because Solana “made a lot of design choices that they pivoted on really quickly,” he said. Unto plans to spend a lot of time designing the blockchain before beginning the coding process so that it can avoid some of these same forced pivots.



For that, Unto will likely have to raise more cash at some point. The San Francisco-based startup raised $2.5 million in seed funding from Framework Ventures. Jump’s lawsuit says the raise came at a $50 million valuation.&nbsp;



Heeger didn’t get too specific on how Unto’s new VM might look, but he said it won’t use either traditional proof-of-work or proof-of-stake for consensus. The chain will use a globally distributed validator set, so it will appear similarly to PoS — which is what Ethereum and Solana use for consensus — but Heeger aims to create something different.



“The key issue with proof-of-stake is that it incentivizes operators purely on increasing and maintaining their stake rather than the performance of the network and being an effective operator,” Heeger said.



Heeger also pointed out that in single leader based networks like Ethereum and Solana, the leader has a monopoly on blockspace for as long as they are producing a block. This is undesirable, and competition among block producers would lead to a better user experience, he added.



In any event, it doesn’t sound like Unto plans to do much media and BD in the near future. Over talking numbers or hiring KOLs, the layer-1 is looking to hire additional engineers and wants to prioritize getting some version of its virtual machine in front of people.&nbsp;



“The roadmap is we want to ship stuff,” Heeger said.



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Unto wants to 10x Solana’s performance — but no promises

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ETF issuers have, in recent months, plotted US products that would hold solana (SOL), XRP, litecoin (LTC) — even dogecoin (DOGE).



As the SEC mulls them, the pile <a href="https://blockworks.co/news/crypto-etf-plans-abound">keeps growing bigger</a>.



We saw two new assets make it into such proposals Wednesday. Bitwise <a href="https://www.sec.gov/Archives/edgar/data/2059135/000121390025020626/ea0232442-s1_bitwise.htm#a_003">filed</a> for an ETF that would hold Aptos (APT), while Canary Capital has <a href="https://www.sec.gov/Archives/edgar/data/2059208/000183988225013999/canary-s1_030525.htm">plotted</a> one focused on Axelar (AXL).



Developed by Meta’s Diem blockchain engineers, Aptos is a layer-1 blockchain that uses a smart contract programming language called Move.



Canary describes Axelar as a blockchain network that connects blockchains and financial infrastructure by offering interoperability and digital asset tokenization.



The market caps of APT and AXL hover around $3.6 billion and $400 million, respectively — a far cry from the others mentioned.&nbsp;



But size isn’t everything.&nbsp;



When investing in layer-1s, you’re searching for high-quality, differentiated technology, backed by a strong team, Bitwise CIO Matt Hougan told me in an email. “That&#8217;s Aptos to a T,” he added. “You have sub-second transaction finality, heightened security against certain smart contract vulnerabilities and parallel processing that supports giant throughput — all backed by a team that traces its origins to Diem.”



And why does Axelar stand out to Canary?



&#8220;I speak to developers a lot, and the dev team at Axelar is one of the most impressive I have met,” Canary CEO Steven McClurg shared with me. “Most projects build a community and market their coin before launching, but Axelar built real products and shipped [them] first.”



Bitwise also has filings for crypto ETFs holding SOL, XRP and DOGE. Canary has planned SOL and XRP products too — as well as ones focused on LTC and HBAR.



Some investors won’t want to hold a bunch of single-asset crypto ETFs, Bitwise CEO Hunter Horsley <a href="https://blockworks.co/news/bitwise-expansion-funding-regulation">said last week</a>. They could instead opt for crypto index funds (some early forms of those <a href="https://blockworks.co/news/crypto-etf-updates-signal-regulatory-evolution">are live</a>).&nbsp;



Remember <a href="https://blockworks.co/news/litecoin-etf-approval-odds-2025">the odds</a> the Bloomberg Intelligence guys gave for product approvals in this space? McClurg said he expects only two or three new crypto ETFs to launch in the first half of the year, not specifying which.&nbsp;



He added: “We are looking for the rising stars to put on the slate for the end of the year and into 2026.&#8221;



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More tokens named in new crypto ETF proposals

Felix Jauvin

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Often, macro is quite boring for a long time —&nbsp;and then it gets really exciting all at once.&nbsp;



The past couple weeks felt like one of those exciting moments as we’re clearly moving through a regime shift.



Let’s unpack everything that’s going on.



The <a href="https://blockworks.co/news/tariff-trade-overshadows-earnings-season">fear of tariffs</a> has led to a substantial <a href="https://blockworks.co/news/tariffs-impact-equities-volatility">frontrunning of imports</a>, leading to a cratering trade deficit — the exact opposite of what Trump is trying to achieve.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdOp5W2yp6ufPoQEQv9JxrRd8pDRrHIbxeDqqHYBIKoun5-a4b5P0F-ZKtCUpPHEzLeqEYQeNrk0eeQ_Hu4imoyg1pcfb9y5ERQas-G6ekzRyGs2khgK7Gzcw5P0hBm5-s3-tq4Sg?key=Lnfg30IpBKriUlzvlpdKBmZe" alt=""/></figure>



We’ve been able to track this tariff frontrunning through the ISM Manufacturing New Orders index.&nbsp;



As seen in the chart, there was a ratcheting up in order volume right up until the tariffs began to be implemented. With this week’s print, we’ve seen that order volume fall off a cliff:&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd-AEaZ_i2U0iQnLrG8CWVxar9d2Ruo7OU3Dbifpbhq9_LT0roS-eEE2DfmI1jMbDEsq4ajvibvj2N-Oaq68PaGSfOf9st8YMyOoVa28Ci-FQW5cJth-j9gvmZsZM0TYtd25epErw?key=Lnfg30IpBKriUlzvlpdKBmZe" alt=""/></figure>



<a href="https://blockworks.co/news/current-business-cycle-activity">As discussed previously</a>, this upswing in manufacturing was either the beginning of a new business cycle or simply a headfake due to tariff frontrunning. It’s now clearly evident it was tariff related.&nbsp;



As we move into the impacts of tariffs and the uncertainty associated with their implementation, we’re seeing the Atlanta Fed GDPNow Nowcast project a contraction in the economy.&nbsp;



Although primarily driven by the huge amounts of imports (net exports is a function of imports-exports, so when imports surge, GDP declines), we also see the impact of the uncertainty and import glut trickle into the broader economy:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfwLhmXwgQeol6wo7EFKDiIrUFtvZOxaSWy7PSVWvi-xv6BLQYIZ8SCBah_ful_yyMtiWRRX9_62rm7Pcw9_Q7ID4FZEWe7CGdAb-XqA9ApLOsGKDJtAAzwodzo9zVYP25begm-4g?key=Lnfg30IpBKriUlzvlpdKBmZe" alt=""/></figure>



The tariff dynamic is being complemented by DOGE’s federal government employee layoffs. We received the Challenger survey job cuts print today and it was huge:&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdlhzgUVHd78Ycm3jYEIYp9wM4g9YnW2dGEwRDQVoqYFzmeEe2Y8fk91MUFu4NELwifLSWkSkTfLBmbcXLI4EU3vRuNfOExCS8ATY3RhhslEG4TfPuBXeJUvife9YvZbY0XONB42w?key=Lnfg30IpBKriUlzvlpdKBmZe" alt=""/></figure>



The dominating factor was, of course, the DOGE layoffs. However, the uncertainty associated with Trump policies is also affecting the private sector:



“The Government led all sectors in job cuts in February. (62.242K), followed by retail (38.956K) and tech (14.554K). So far this year, employers have announced 221,812 job cuts, the highest year-to-date total since 2009.”



With the jobs report out tomorrow, everyone will want to understand how vast this deterioration in the labor market will be. Unfortunately, since the survey window for this jobs report was Feb. 9-15, it will not provide as clean a picture as one would hope as the job cuts have only just begun to trickle into the data.&nbsp;



Regardless, it&#8217;s clear the trend is toward deterioration —&nbsp;it’s just a matter of how much.&nbsp;



Putting that all together, here’s where we stand:



<ul class="wp-block-list">
<li>The fiscal retrenchment is real and the primary tailwind to the economy the last couple of years — fiscal dominance — is now reversing.</li>



<li><a href="https://blockworks.co/news/monetary-plumbing-takeaways?utm_source=mail.blockworks.com&amp;utm_medium=newsletter&amp;utm_campaign=meme-spirited">Monetary policy</a> remains in a state of pause and the Fed will not be proactive with any change in stance as it was in September. The Fed is in a reactionary tilt as it awaits clarity on the fiscal situation.</li>



<li>DOGE is having a meaningful impact despite the debate on cutting costs. The layoffs are meaningful and those new job seekers are entering a labor market with an abysmal hiring rate. </li>
</ul>



The combination of these factors leads to an extremely fragile economic outlook with no signs of change. With all that said, it’s no wonder that risk assets have been having a hard time lately.



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Economic crosscurrents are straining the growth outlook

This is a segment from The Drop newsletter. To read full editions, <a href="https://blockworks.co/newsletter/thedrop">subscribe</a>.



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Sam Altman’s World (formerly Worldcoin) is adding an important “Mini App” within its iOS and Android app called World Chat, which lets you “connect, chat, and send money” to people verified by the World Network.&nbsp;



And yes, based on the screenshots, you can send cryptocurrencies like USDC directly within your chat.



World Chat is in beta for now, but there are already over 100 other so-called mini apps on World. That’s a lot — I don’t think you’d be able to use all of them regularly.



“World Chat will be integrated with other Mini Apps to help drive even more growth and engagement in the ecosystem,” Tools For Humanity Chief Product Officer Tiago Sada said.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdHfNPpzAYQJD6ZmJgZG8ooOwkKx1rR3CmYgm4pEhla_TWr9ynhSdlwU33e_WCKZJ_DiJcIDiicbqYTTuIgGZIoCyS8DuWsuo72XHCBzI9Gj6eM0NeFfVuSL2KGqHoFF6Qt7lgRPg?key=ZqYPGVAWnuRSCovJH1DbwK2y" alt=""/></figure>



Tools For Humanity is the for-profit firm tied to World, but World also has the World Foundation (like most projects that launch a token).



Altman, who is also founder and CEO of OpenAI, has predicted that at some point, the internet as we know it will become overrun with bots — so much so that it’ll be hard to tell who is a real human.



Well, I think we all know that ship has already sailed. From bots on social media to AI agents that can get around CAPTCHAs, we’re already living in a very artificially intelligent world.&nbsp;



Downloading the World app on your phone will show you where you can get your iris scanned to prove you’re human and use the platform, including the World Network. From there, you can access mini apps and use its crypto rails.



Worldcoin is the native token for the World Network, a blockchain dedicated to ID verification. You go to one of those weird eyeball-scanning orbs, and you can get some tokens to ultimately sell or use on that blockchain.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdrgdXQhSqmNiZ8J_9EAT9uSDfPWRmx5aItfHwNTjiQw4YjwXZl5ewfcQe1bTTL5wfP2QOznhylfarttd2ZoAWdtdND-frKddtJmqJmFDiZLj4mGa-rbOdySLALHShYu6v07vl20w?key=ZqYPGVAWnuRSCovJH1DbwK2y" alt=""/><figcaption class="wp-element-caption">Worldcoin price over time</figcaption></figure>



I absolutely think that World Chat adds more utility to the World app, but Apple Cash within iMessage already exists, and so does Venmo and PayPal. World Chat’s crypto payments feature looks a bit like Strike in its simplicity. The competition will be tough, and some anons may not be comfortable sharing their eyes with Mr. Altman.



That said, World could have more international appeal and accessibility.&nbsp;



WhatsApp — the favorite chat app of my friends in Mexico and South Africa — doesn’t offer in-app payments. It’s hard for those based in the US to send small amounts of money globally, and crypto is an obvious solution. It’s also great that World Chat conversations are end-to-end encrypted, so at least you don’t have to compromise on privacy on that front.



In my view, Telegram is World’s biggest real competitor. Telegram has global reach and hundreds of millions of users, and you don’t need to verify your identity and can send and receive payments using bots and different APIs.&nbsp;



But Telegram’s massive size can also be its downside, as its CEO and founder Pavel Durov has admitted himself. Telegram has faced criticism over the number of alleged criminals using the app. Cybercriminals are able to anonymously hawk malware, phishing kits, or scam users on Telegram, often without getting caught.



World offers a vetted, bespoke solution to combat bots and unknown individuals. If you’re not verified with a World ID, you can still use the chat mini app. But your messages and name will appear gray and without a unique gem, so verified users will know you haven’t proven your humanity just yet.



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Sam Altman’s World is adding chat and payment features

Macauley Peterson

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



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The hard fork for the Pectra upgrade on Ethereum’s largest testnet, Holesky, saw the chain <a href="https://blockworks-research.beehiiv.com/p/pectra-hits-a-snag">split in two</a>. With validators scattered across two chains and slashing protections preventing an easy fix, the network became stuck in a state of non-finality.



Over the past week, developers have thrown everything at the problem. A coordinated slashing event was planned to purge the invalid chain and push Holesky back to finality. Yet, even with patches improving client synchronization, the validator set has remained below the 66% threshold needed for finality. While participation has climbed to 53%, developers now estimate that finality may not be reached until March 28.



The failure to finalize has sparked some debate among Ethereum’s core developers. Some, like CarlBeek, <a href="https://x.com/CarlBeek/status/1895145083990876494">suggested</a> in the aftermath of the bug that Holesky isn’t worth saving, and Ethereum should spin up a replacement testnet instead. Testnets are disposable, and forcing a broken network back to life could waste valuable dev resources.



Others strongly disagree. Holesky is supposed to be supported until 2027. <a href="https://blockworks.co/news/ethereum-foundation-leadership-shakeups">Newly appointed</a> EF co-executive director Tomasz Stanczak <a href="https://x.com/tkstanczak/status/1896873967270437003">stated</a> that making Holesky operational again is a &#8220;war mode test&#8221; for client teams. If Ethereum developers can&#8217;t restore Holesky, what does that say about their ability to maintain mainnet’s resilience?



For staking protocols like Lido, Holesky is mission-critical. Lido contributor Ivan Metrikin warned on today’s Consensus Layer call that without finalizing Holesky, testing staking integrations, monitoring and oracles become nearly impossible.



“For us, it’s really critical that it works,” Metrikin said, noting that on the plus side, Holesky will provide an opportunity to test Lido’s “bunker mode” in a production environment — a sort of silver lining.



In the near term, developers plan to fork Holesky as an additional testnet so as not to lose momentum for a Pectra mainnet launch. But to truly serve as a replacement, it would need to be as large as Holesky, with comparable validator participation, tooling and protocol deployments — an expensive and time-consuming process.



Another concern expressed on the call is that launching a new testnet would cause teams to abandon Holesky, turning it into a “second-class citizen.”



Still, this shadow fork is seen as a compromise to allow testing to proceed this month until Holesky is back on track. The shadow fork may end up serving as the primary testing ground for Pectra, as devs speculate that redistributing validator keys to fully restore Holesky could take up to a year.



It’s unclear how long teams will maintain this new shadow fork, but they did agree to spin down both Devnet 7 and the temporary <a href="https://blockworks.co/news/ethereum-devs-milestone-call">Mekong testnet</a>.



<h2 class="wp-block-heading">Wen Pectra?</h2>



The Holesky situation isn’t a direct risk to Ethereum — it was an edge case specific to the testnet — but it is <a href="https://x.com/ssaintleger/status/1897322751171658071">a bad look</a>.



And it will delay the Pectra mainnet upgrade slightly. Core developers on the call agreed not to move forward with setting a date for the fork until Holesky finalizes in a few weeks.



One positive sign is that Gnosis&#8217; Chiado testnet <a href="https://x.com/gnosischain/status/1897610623271465138">implemented</a> the Pectra fork, which was reportedly a success. The EVM-compatible Gnosis chain has historically proceeded to fork its mainnet a few weeks in advance of Ethereum.



For now, Ethereum Foundation researcher Alex Stokes — who moderated the call — signed off on an optimistic note when it comes to Holesky: “It’s been a lot of work and we’re in the middle of it, but we’ll get it back.”



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Ethereum devs push to save Holesky testnet

In a surprising turn of events, Democrats in Washington DC are increasingly embracing Bitcoin, according to Dennis Porter, president and co-founder of Satoshi Action Fund. Porter, a key figure behind efforts to establish strategic bitcoin reserves in <a href="https://bitcoinlaws.io/">over 30 US states</a>, believes that the decentralized nature of Bitcoin aligns well with core Democratic values. &#8220;I have for a long time [&#8230;], despite being told by many Bitcoiners that I was wrong, said that I believe Democrats will be more likely to be more pro-Bitcoin than Republicans,&#8221; Porter stated in an interview on Blockworks’ <a href="https://www.youtube.com/@SupplyShockPod">Supply Shock</a> Tuesday episode. Porter told host Pete Rizzo that Bitcoin&#8217;s decentralized structure makes it particularly appealing to Democrats. &#8220;The reason why you&#8217;ll have a lot of Democrats that are really <a href="https://blockworks.co/news/newest-crypto-faces-on-capitol-hill">interested in this technology</a> is because it&#8217;s a bottom-up technology that is completely decentralized. There&#8217;s no VC hedge fund or executive board profiteering off of the people beneath them. It&#8217;s 100% bottom up. The people control it,&#8221; Porter explained. 



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/WW_cKV0hdU4?si=1LYtjCekz-TV0HbZ" 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>







Elsewhere, Porter highlighted bitcoin&#8217;s potential to address global financial inequality, a cause often championed by progressive Democrats. &#8220;Bitcoin is a tool to be able to <a href="https://blockworks.co/news/central-banks-unbanked-looking-at-blockchain">bank the unbanked</a> and provide financial services for people all over the world who have been left behind,&#8221; Porter said. He emphasized that billions of people currently lack access to banking services or stable currencies, limiting their potential for economic growth and innovation.



The comments are notable given the Democratic Party’s continued efforts to oppose <a href="https://blockworks.co/news/donald-trump-day-one-actions">Trump’s initiatives</a> since his re-election. Trump has been a <a href="https://blockworks.co/news/tracking-trumps-crypto-footprint">strong supporter</a> of bitcoin and other crypto assets, most recently hinting at establishing a <a href="https://blockworks.co/news/trump-absurd-crypto-reserve">strategic crypto reserve</a> <a href="https://blockworks.co/news/us-crypto-reserve-clarification">this weekend</a>. Yet, Porter believes the Democratic Party&#8217;s current restructuring phase presents a unique opportunity for lawmakers to define their stance on bitcoin and digital assets. &#8220;Bitcoin is the most tightly regulated monetary asset in the entire world,&#8221; Porter argued. &#8220;The Bitcoin maxis, the most extreme Bitcoin maxis, were actually in favor of the most extreme form of regulation because it protected decentralization.&#8221; As the political landscape around cryptocurrencies <a href="https://blockworks.co/news/congress-crypto-regulation-updates">continues to evolve</a>, Porter&#8217;s insights suggest that the traditional partisan lines <a href="https://blockworks.co/news/crypto-bipartisan-usa-polarization">may be blurring</a> when it comes to bitcoin adoption. 



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Democrats are embracing Bitcoin despite Trump, says lobbyist

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



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If you ask Simon Dedic of Moonrock Capital what he wants to see in crypto, there’s one big item on his list: more consumer apps.



In the last year, we’ve seen a <a href="https://blockworks.co/news/crypto-fundraising-capital-allocation">slew of investments</a> in infra projects — and <a href="https://blockworks.co/news/crypto-infrastructure-bloat">we’ve even asked the question ourselves over at Blockworks</a>: Are we building too much infrastructure?



While Dedic would prefer to see more investments in consumer apps, he told me he wouldn’t be surprised if infrastructure remains a focus, at least on the venture capital side.&nbsp;



“I just think it&#8217;s still kind of the case that infra plays are very easy for VCs,” he said. It’s what the space is currently used to, projects pitch their infrastructure — and they’re notably important to keep building on crypto, of course — and VCs are ready to put their money where their mouths are.&nbsp;



But the whole idea of building infra first and then gaining adoption through consumer apps is a backwards take if you ask Dedic. Why not do both?&nbsp;



“It’s something that can definitely evolve in parallel,” he noted. Remember how we <a href="https://blockworks.co/news/inversion-chain-avalanche">made the internet comparison</a> a couple of weeks ago with Empire’s Santiago Santos? Well, it’s back. Dedic’s point is that there wasn’t, say, a 20-year time commitment building the internet before emails were created. The internet had a bit of a lead, and then the technology was capitalized on so that we could all have inboxes in our pockets.&nbsp;



If you ask Dedic who should lead the charge, he thinks it’s up to VCs to a certain extent.&nbsp;



“I think it&#8217;s also kind of the responsibility of VCs to … take care of users getting into the space,” he continued. “And not just funding VC circlejerk infra rounds, right?”



The good news is that we’re starting to see this play out a bit, at least in Dedic’s opinion. And, speaking of consumers, I also picked Dedic’s brain on SocialFi given Kaito’s success.



For him, it’s about the project focusing on utility catered to users.&nbsp;



“One of the big problems that <a href="https://blockworks.co/news/socialfi-web3-social-media">SocialFi space</a> had so far [was its focus] on speculation and financialization of everything,” he said. Instead, it should be a feature, not the focus.&nbsp;



It’s one of the areas he’s “super bullish” on, but the narrative hasn’t yet taken off. Projects like Farcaster — in comparison to something like Kaito — are “too idealistic.” And, honestly, just too close to what we already have in a platform like X, which is a fair critique.&nbsp;



What would Dedic love to see in the space? Well, it’s simple: new social experiences on crypto rails.&nbsp;



Oh, and making the entry barrier “as low as possible,” to actually onboard the masses. After all, we want everyone to use crypto, right?



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



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Consumer apps can ‘evolve in parallel’ to infrastructure: Moonrock Capital

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



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Here’s a fun exclusive for you this morning: Seismic, an encrypted blockchain, raised $7 million in a round led by a16z Crypto, with participation from Polychain, Alliance and 1kx, among others.&nbsp;



This was the first fundraising effort for founder Lyron Co Ting Keh, given that Seismic was his first startup. The idea, he said, came from wanting to start his own company.&nbsp;



As he spoke to various app developers, it became clear that “you need encryption to be in the foundation of the chain and not just built onto it. And so we tried for many months to build on it, on the chain, but we couldn&#8217;t get any of these nice properties that we wanted,” he explained.&nbsp;



One of the bottlenecks in building on big L1s is creating “apps with investment vehicles that are tailored to long term positions. Apps where social experience is built into everyday payments,” Co Ting Keh continued.&nbsp;



I know what you’re thinking: Co Ting Keh is entering a crowded space, but Seismic’s goal is to solve for forced transparency and limited scalability, two notable problems in crypto.



“Forced transparency [is as] big of a change as limited scalability, if someone were to solve this, and then it&#8217;s something that is on the brink of consensus, and not consensus opinion right now, where most people agree that, ‘hey, these are two problems, and we&#8217;ve been talking about them for the last decade,” he said.&nbsp;



“When I view the landscape of Seismic [among] blockchains right now, when I view it in the future, or where I&#8217;m looking to work, [there is a] distinction between transparent and encrypted blockchains.”&nbsp;



The big question, of course, is when will Seismic launch its mainnet? Co Ting Keh told me that they have yet to miss an engineering deadline, and are currently aiming for the end of the year. The team — which includes six engineers and Co Ting Keh — plans to release the developer testnet in roughly a month.&nbsp;



The funds will be allocated to the mainnet launch, he added.



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



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



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



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<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: The newsletter for crypto collectors and traders, covering games, tokens, apps, memes and more.</li>
</ul>

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