Bittensor

Byron Gilliam

This is a segment from The Breakdown newsletter. To read more 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">
“I don&#8217;t know what&#8217;s going to happen tomorrow and I can&#8217;t relive yesterday, but I live in the moment if I can.”&nbsp;



— Ozzy Osbourne
</blockquote>



Stock markets made new highs again this week, but the mood is hardly celebratory — possibly because it feels like investing is about to get much harder.



How do you invest for the long term when 1) AI might change everything and 2) the US government is $38 trillion in debt (and counting)?



This week, Jim Cramer said the ballooning national debt made him “worried for his kids” — so much so that he took the unthinkable step of recommending bitcoin as a hedge against monetary debasement.



Quite the reversal for someone who said as recently as 2022 that he “would not touch crypto in a million years.”



(Note: 2022 was three years ago.)



I get it, though.



Watching yesterday’s <a href="https://x.com/JustinWolfers/status/1948519156661583974">surreal exchange</a> between President Trump and Fed Chair Powell, both in hard hats, made me despair for the long-term health of my investment portfolio.&nbsp;



What investments can you rest easy with when the world’s only risk-free asset — US Treasurys — no longer seem free of risk?



You could buy gold, of course, and that has been working lately: The original inflation hedge is up 40% over the past year.



But an inflation hedge is all gold usually is: Over the last 2,000 years, its real, inflation-adjusted return is approximately 0%.



That will maintain your purchasing power, which is nice, but it won’t help you retire.



Also, you don’t want to be hiding in gold when they start mining it <a href="https://www.astroforge.com">from asteroids</a> or creating it in <a href="https://www.ft.com/content/06f91e0d-3007-40bd-b785-86fef4890809">fusion reactors</a>.



Is bitcoin a better hiding place then?



That, too, has been working: The newest inflation hedge is up 80% over the past year, cementing its reputation as digital gold.



But it’s hard to have a 50-year view on such a new asset.



On that kind of timeline, people as smart as Cliff Asness and Matt Levine can <a href="https://www.youtube.com/watch?v=lhCL4R3JFOc">think</a> that “most of the probability” for bitcoin is “zero.”



Finding investments where most of the probability is not zero is not as easy as it used to be.



Land has been a reliable safe haven over the centuries — they’re not making more of it, as they say.



But in an age of demographic collapse, we might need less of it.



It’s <a href="https://www.2oceansvibe.com/2025/06/18/japan-now-has-over-9-million-empty-homes-due-to-declining-population/">estimated</a> that by the year 2038, one-third of the homes in Japan will be abandoned for lack of anyone to live in them.



I’m not sure land will hold its value when the entire developed world looks like Japan a decade or two from now.



Still, if we’re headed toward monetary debasement in this decade, a portfolio of gold, bitcoin and land is probably a good bet.



But what if this decade turns out to be surprisingly good?



If the real story over the next 10 years or so turns out to be an AI-driven boom in productivity, a portfolio of gold, bitcoin and land might doom you to decades of underperformance (and declining purchasing power).



That is what the researchers at Epoch AI expect: They <a href="https://epoch.ai/gradient-updates/ai-and-explosive-growth-redux">estimate</a> that “even when AIs have only automated 30% of all economically useful tasks, economic growth rates may exceed 20%.”



20%!!!



It’s hard to fathom a world of 20% GDP growth — the US government might even manage to balance its budget in that scenario.&nbsp;



But even that unthinkable outcome may be understating the upside.



The Economist <a href="https://www.economist.com/briefing/2025/07/24/what-if-ai-made-the-worlds-economic-growth-explode">noted</a> this week that growth theorists who attempt to model the progress of technology “have long posited that if ideas beget more ideas with sufficient velocity, growth should increase without limit.” (Emphasis added.)



Sam Altman seems to think that’s where we’re headed: He <a href="https://blog.samaltman.com/the-gentle-singularity">believes</a> AIs will be capable of begetting ideas as soon as next year, and that “2027 may see the arrival of robots that can do tasks in the real world.”



That would put markets on a crazy train to who knows where.



If investors sense that labor will soon be automated out of existence, there will be a mad scramble to secure the largest possible share of the post-labor economy.



“What should you do if you think an explosion in economic growth is coming?” <a href="https://www.economist.com/briefing/2025/07/24/what-if-ai-made-the-worlds-economic-growth-explode">The Economist asks</a>. “The advice that leaps out from the models is simple: own capital, the returns to which are going to skyrocket.”



But not just any capital.



20% growth would likely mean 20% interest rates too, which would destroy the value of your gold, bitcoin, land and any stocks not directly involved in the AI productivity boom.



You’ll have to choose carefully, and maybe sooner than you’d expect.



It’s exhausting to think about. And maybe we shouldn’t.



This week, Anthropic <a href="https://www.perplexity.ai/page/anthropic-research-reveals-ai-nTyemJTvTTGRYTnTHxe4EQ">publicized</a> its findings that AI models suffer from “inverse scaling” — which is to say an AI model that’s given more time to think tends to produce worse results.



AIs think pretty much like humans do, so we too probably suffer from inverse scaling.



If so, now may be the time to follow Ozzy’s advice — in investing and everything else — and try our best to live in the moment.



Let’s check the charts.



AI automation and GDP growth:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfH2qmLItgtT8ZklT3rIsjlFdp35eVT0O-lkzSSMYBS2I7XrU4uTxV8sPpUUuZNgDIgDJNxnUip3IE-MnAdq2g1nK_h20xr0fcaUhPw5eLdT2UirXj80i3-fjufzZOTkJNt1UR4?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



Pick your level of AI automation (the X-axis) and this chart from Epoch AI will tell you what level of GDP growth to expect. The TL;DR is that “the fraction of labor tasks automated by AI doesn’t need to be very high to yield very large growth impacts.” Per the chart, if only 20% of tasks are automated, they expect GDP to grow at an unfathomable 10% per year.



Revenge of the dorks:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfGzs_Ic4PfCblfwVv2SLk3uV4cIPaGGE4ei6wziu9zZK_SjTVmQghVjyiKh_4TtgAj8wtybkg6d6g0eRjYztldPjxYH-2d8iIwcYJ6Vith216yVykjVubWuskRh99xhwXiuQAYzQ?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



The Reddit gang is back and this time they’re betting on Dunkin Donuts, Opendoor, Rocket Companies and Kohl’s. Why those four? I doubt even an all-knowing AI could make sense of it. But if you think AI is about to take all the jobs, rolling the dice one last time in memestocks may be less irrational than it seems.



There’s a lot of dice rolling right now:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdWzt4H0_qOfRJGkr6CkkdJDnJfWvm2cRInRL9AtvyPArZMWC47l4zFZo1aFxKjJGhPvXrMqXz7AnbOMLYregsxhDQ6tJcWmY1uZG5VQ9456Tl1TXyCIlW3AGzuY9W88VimZ8yf6w?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



Data from Goldman Sachs shows that, as a percentage of overall activity, trading volumes in the most speculative stocks have rarely been higher than now. As an <a href="https://x.com/MikeZaccardi/status/1948765446322172298">indicator</a>, that is generally bullish before it’s bearish.



Tariffs have not slowed China’s export boom:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdLvt7-Iqe_f0v83nFvtwV-HwUJ1R2BWhUY5HqMe-W74jliMvScOVBs_wja66Iz2l05DBNcc4mFYuV9ZvzCbQF7StYPmSDXf_-Y5qW7VqkN937GceeQcZI5PApLhILS4Mjh5pPa8g?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



The more obvious reason for equities being at all-time highs is that the Liberation Day tariffs were not nearly as disruptive to the global economy as generally feared. China’s exports, for example, continue to boom. That show of strength may be why President Trump is <a href="https://www.wsj.com/economy/trade/trump-china-trade-dealmaking-995d7717?gaa_at=eafs&amp;gaa_n=ASWzDAhRbI_gSMPUJ4LK_077KY05Ndu0WoHsiR_tr4kaKml2BGZmEvt5uTk7io0POT0%3D&amp;gaa_ts=6883d7f6&amp;gaa_sig=8VwkSZsudBXfFLAQLPJkSajI1AzfeEKgEBriqIeolX2rtJOToF1-2UxGGazaL6AtHTMFNkzVFDXK3T7B5Mg6Ug%3D%3D">reportedly</a> more willing to make concessions to get a deal done.



China is flooding the world with cars:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdKA_ht_E1oXcF8sMBRoxpOuezEYJWo0ygYhbC_E9C6-2sy-NDo3uQsHVZH4c3EJP6AvEMbkXbIg1uBzSSPk7v4K8DAMd3y3T1cbFxkux2OMgIPNfxAVh-LfAJfDkZN_KcP8jjZ5w?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



I’m glad we still have an auto industry in the US, but if I could buy a high quality EV for <a href="https://insideevs.com/features/761423/byd-seagull-drive-in-china/">$8,000</a>, I would.



Humans remain in demand:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcBRV7lZ8T_Sg7JLVy_rIQtdcxKSXk_Ce5TVIWNxHjdyKGMgHHKy7bhLHQnrbilY8L1MYXpKVvP3_oJaGoll43kMGwB8Fg-dDUyVQtUqDdT_KXQLxkuxf52lZdBv3BJnmOR4SON?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



The Atlanta Fed’s wage tracker shows US wages growing at 4.2% — still well in excess of inflation (however measured).



Robots are not taking the jobs yet:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeqxst8YNwHavnhnns88ZaE7j4y2lz08bCbio_WyK3p0Ul9nu93_IHZHMY01g3T7aM0-Fw13veA1DdQk0X8l-NelrPFL_RwaoIpdSxUebApwneEnGDojrSPiVXNRNZCegmG8in-gw?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



Against the popular narrative, the FT’s data analysts find that “US jobs at high risk from generative AI have not been more likely to shed young workers since ChatGPT launched.” (So far.)



False alarm:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcUqoOL8gQ7qgbUVpI1AMTmH7P9Vw4JMxAtbh5obXms-ErqsHFiSinS0ow3wciQ3FRO-O1M5pyAWRIC5HFswa-1NkpIoFjJSqhzGcQEMcXSvCjuL96b7eZYNjc9B7dr2FRE0en_Ug?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



<a href="https://polymarket.com/event/us-recession-in-2025?tid=1753471341405">Polymarket</a> bettors believe that the odds of the US going into recession this year are down to just 18%.



Comfortably familiar:&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfHu7g8HZ3b3lZYDVnKEp7ddjh17Gyolke0O8x0TVaNaatyqFlR7eB1y0qBGuO47g2RBPcrnpSkEvzgkLDN9nVi0VUE4rLuS0ZsDuZWvvC9diO1lOZ2gyth_BvD4BaTlWw_Wm-RTQ?key=SJg8csv72Yn-2Se_zRC_RA" alt=""/></figure>



The US economy is on pace to grow 2.4% in Q3.&nbsp;



Could we soon be growing at 10x that?



It’s thinkable — but a long way from predictable.



Have a great weekend, productive readers.



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



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The Breakdown Newsletter

Friday charts: Crazy train investing

Ben Strack

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



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Given the recent GENIUS Act signing and certain firms soon reporting Q2 earnings, it’s as good a time as any for a crypto stock update.&nbsp;



After the stablecoin-focused bill became law, Compass Point analysts downgraded Circle stock from neutral to sell.



Their CRCL price target declined from $205 to $130, according to a Monday note.&nbsp;&nbsp;



Analysts Ed Engel and Abdullah Dilawar anticipated the rally leading up to the <a href="https://blockworks.co/news/genius-act-passes-house">GENIUS Act signing</a>, but predicted the “sell-the-news” drop that came. Shares of CRCL were trading around $195 at 1:30 p.m. ET — down 14% in the last five days.



Competing stablecoins products from traditional banks and fintechs will also put pressure on CRCL’s premium valuation, they argued.&nbsp;



While CRCL&#8217;s $53 billion market cap (when the note was published) implied long-term expectations of ~25% market share and ~30% EBITDA margins, the $130 price target assumes 15% longer-term market share and 20% EBITDA margins.



Circle is set to report its second quarter earnings during an Aug. 12 webcast.



Moving on, Jefferies kicked off its coverage of Galaxy Digital on Tuesday with a buy rating and a $35 price target. I missed this while in court at the <a href="https://blockworks.co/news/roman-storm-government-may-rest-case">Roman Storm trial</a>.



GLXY’s stock price was just above $30 at 1:30 p.m. ET — up about 12% this week.&nbsp;&nbsp;



Being a “comprehensive provider for institutions seeking digital asset exposure” gives Galaxy an edge over more specialized peers like prime brokerage FalconX, liquidity provider Cumberland, market maker Wintermute and bitcoin-focused firm NYDIG, Jefferies analysts argue.&nbsp;



The GENIUS Act could open up new stablecoin-related business opportunities (like custody or issuance partnerships), they added. <a href="https://blockworks.co/news/us-house-passes-clarity-act">The CLARITY Act</a> would likely contribute to “incremental” revenue opps as institutional players enter the segment.



Beyond that, roughly two-thirds of Galaxy’s enterprise value stems from its data center business, according to Jefferies. The company bought Argo Blockchain’s Helios mining facility in 2022 and is hosting CoreWeave AI and HPC operations there.



We’ll be listening to what Mike Novogratz has to say during Galaxy’s Aug. 5 earnings call.&nbsp;



Before Circle and Galaxy report their earnings next month, Coinbase will share its Q2 results on July 31.&nbsp;



Compass Point analysts, in a July 16 note, increased their Coinbase price target from $195 to $330 (COIN shares traded for ~$395 this afternoon). But it reiterated its neutral rating, rather than opting for “buy.”



Headwinds for the crypto exchange include US trading activity moving toward US ETFs, CME futures and decentralized exchanges. Monthly data from competitors like Robinhood and Exodus affirms weak Q2 trends to that end. 



<img loading="lazy" decoding="async" width="624" height="321" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdFahGeN_g-af1h7aDPB_19dbDWe4Q0Y8_jK2pMIbNrIcSHdgL7qLbLLhRPpdk6CudaYGu26OGYr9Cdruyy-5G6LEOL6r6f1xVtKCc0HI2psZCas-B2-02kh4isBcqbXTN1r8CzwA?key=MFFChMm_9dlxyWTwVrYrqw">



Compass Point analysts estimate that Coinbase’s transaction revenue decreased 45% quarter over quarter.



“We&#8217;re hesitant toward shorting COIN during a crypto bull market and potential for Fed rate cuts — either from Powell or his successor,” Engel and Dilawar wrote. “However, if rate cuts and CLARITY act are postponed beyond 3Q25, this could pressure COIN&#8217;s valuation amid deteriorating fundamentals.”



Before you go enjoy your weekend (after reading the rest of this newsletter, of course), I’ll mention one other crypto-linked stock that just turned heads with its latest hire.&nbsp;



Nasdaq-listed SharpLink Gaming today <a href="https://x.com/ethereumJoseph/status/1948720039370092831">named</a> Joseph Chalom, BlackRock’s former head of digital asset strategy, as its co-CEO.&nbsp;



You might recognize the SharpLink name. It’s that <a href="https://blockworks.co/news/bitcoin-treasury-strategies-sharplink-eth">Joe Lubin-led company</a> that all of a sudden got really into Ethereum. It held 360,807 ETH, as of July 20. (For more on crypto treasury strategies, consider reading <a href="https://blockworks.co/news/companies-holding-crypto-phase-one">this</a>).&nbsp;&nbsp;



Sharplink’s stock is up about 110% from a month ago, but has dropped roughly 30% in the last week. Crypto equities remain a segment we’ll be watching closely.&nbsp;



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Circle

Crypto stock outlooks fluctuate after GENIUS, ahead of Q2 reports

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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From BOB’s breakthrough hybrid rollup design to VeChain’s TradFi-powered comeback, this week brought a wave of architectural pivots and regulatory advances.



<h2 class="wp-block-heading">1. BOB rules</h2>



BOB (Build on Bitcoin) just <a href="https://bob.build/blog/hybrid-zk-rollup">deployed</a> a first-of-its-kind rollup that uses zero-knowledge proofs for fraud resolution within an optimistic rollup framework.&nbsp;



Built with <a href="https://risczero.com/blog/RISC-Zero-OP-Kailua">OP Kailua</a>, a new OP Stack extension by RISC Zero and <a href="https://blockworks.co/news/risc-zero-launches-boundless-testnet-base">Boundless</a>, the system enables cheaper, faster fraud challenges — finalized in minutes rather than days.



This novel approach could catapult BOB to Stage 1 and Stage 2 status on <a href="https://l2beat.com/scaling/summary">L2Beat</a>, setting a new bar for trust-minimized <a href="https://blockworks.co/news/unlocking-bitcoin-defi-potential">Bitcoin DeFi</a>. Anyone can challenge a transaction with just 0.5 ETH, drastically lowering the entry point for rollup participation. It’s a breakthrough that combines zk finality with the accessibility of optimistic design.



<h2 class="wp-block-heading">2. Summer Optimism</h2>



Optimism’s Upgrade 16 just went live — and not a moment too soon.&nbsp;



L2Beat is <a href="https://x.com/l2beat/status/1935615549809054043">preparing</a> to downgrade any rollup lacking robust fraud-proof governance back to Stage 0 status. The <a href="https://gov.optimism.io/t/successful-upgrade-superchain-upgrade-16-optimism-mainnet/8673">upgrade</a> enables native cross-chain messaging and new bridge contracts, plus a higher gas ceiling (from 200m to 500m) to accommodate rising demand. With chains like <a href="https://blockworks.co/tag/base">Base</a> and <a href="https://blockworks.co/news/kraken-ethereum-layer-2-superchain">Ink</a> relying on the OP Stack, preserving Stage 1 classification is critical.&nbsp;



If Superchain wants to lead, decentralization can’t remain theoretical. It has to get real.



<h2 class="wp-block-heading">3. Much OS, very zk</h2>



In truly-the-funniest-outcome news, Dogecoin devs are <a href="https://github.com/dogecoin/dogecoin/discussions/3869">floating</a> a radical idea: integrate zero-knowledge cryptography directly into the base chain via a system dubbed DogeOS. The goal is to make Dogecoin more than a meme by enabling verifiable computation and smart contract-style capabilities.&nbsp;



If adopted, DogeOS would be one of the first native zk enhancements on a major proof-of-work chain, bringing new utility to a network historically known more for vibes than engineering prowess.



The proposal’s still in early stages, but it marks a notable shift toward tech seriousness in the Doge ecosystem.



<h2 class="wp-block-heading">4. Stablecoin alliance</h2>



<a href="https://blockworks.co/tag/anchorage-digital">Anchorage Digital</a> and <a href="https://blockworks.co/podcast/0xresearch/ea8714c8-1c84-11f0-b77f-a3c6884d9409">Ethena Labs</a> are <a href="https://www.anchorage.com/blog/anchorage-digital-partners-with-ethena-labs">teaming up</a> to launch the first stablecoin built specifically for the US under the <a href="https://blockworks.co/news/genius-act-passes-house">new GENIUS Act</a>. USDtb, currently issued offshore, will now be minted by Anchorage’s federally chartered crypto bank.



Anchorage’s stablecoin platform is designed for institutional-grade compliance and programmability, and Ethena’s USDe has already become the <a href="https://defillama.com/stablecoins">third-largest</a> stablecoin in DeFi by TVL. With this move, USDtb becomes a vehicle for mainstream financial integration, in addition to its DeFi-native appeal.



<h2 class="wp-block-heading">5. Expanding the polycule</h2>



Polymarket acquired <a href="https://blockworks.co/news/polymarket-qcex-acquisition">QCEX</a>, a CFTC-registered exchange, effectively clearing a regulatory path into the US market. For longtime observers, this was inevitable.&nbsp;



“Prediction markets are gradually reshaping how people engage with real-world events,” Chiliz’ Max Rabinovitch told Blockworks.&nbsp;



Sports betting is a huge opportunity for the onchain prediction market, particularly after <a href="https://www.nytimes.com/athletic/6481190/2025/07/10/sports-betting-trump-bill-tax/">provisions</a> in the giant <a href="https://blockworks.co/news/crypto-bills-in-congress">spending bill</a> nicknamed the “One Big Beautiful Bill Act” stand to neuter professional sports gambling. As regulatory clarity improves, Polymarket and others could bridge traditional markets with decentralized prediction infrastructure.



<h2 class="wp-block-heading">6. The cross-chain&nbsp;spin cycle</h2>



Centrifuge just <a href="https://centrifuge.io/blog/centrifuge-v3-multichain-launch">launched</a> v3 across six chains (Ethereum, Base, Arbitrum, Avalanche, Plume and BNB Chain), creating the most interoperable RWA infrastructure to date. Powered by <a href="https://blockworks.co/tag/wormhole">Wormhole</a>, this version enables fund managers, DAOs and fintechs to launch fully customizable onchain products with native chain abstraction. The platform has already <a href="https://blockworks.co/news/janus-henderson-clo-token-1b">secured</a> a $1b allocation from Janus Henderson via Grove. With v3, Centrifuge is bridging DeFi-native capital and institutional-grade financial products in one unified stack.



<h2 class="wp-block-heading">7. Might as well Jump</h2>



<a href="https://blockworks.co/news/solana-chain-running-pure-firedancer">A new L1</a> from ex-Citadel and Jump traders has gone live with a 40ms block time and a fully integrated trading stack.&nbsp;



Built on SVM with enshrined dapps like Ambient and Fluxbeam, Fogo positions itself as a performance-maximized, Hyperliquid-style platform — but ostensibly without sacrificing decentralization.&nbsp;



While the tech stack is fresh, the competitive field is anything but empty. Newcomers like Lighter, <a href="https://blockworks.co/news/ostium-dex-points-rwa-arbitrum">Ostium</a>, Reya and Main.Exchange all want a piece of the perps pie. Fogo’s bet? That TradFi-grade latency and native infra will pull top traders into its orbit.



<h2 class="wp-block-heading">8. VeChain staking program </h2>



2017-era ICO darling VeChain is reintroducing itself to the world with a $15m <a href="https://www.prnewswire.com/news-releases/vechain-launches-15m-stargate-staking-program-following-sec-crypto-guidance-302186226.html">staking program</a> and a suite of TradFi partnerships. <a href="https://blockworks.co/tag/bitgo">BitGo</a> is onboard for custody, <a href="https://blockworks.co/tag/franklin-templeton">Franklin Templeton</a> is <a href="https://cointelegraph.com/news/franklin-templeton-benji-vechain-enterprise-payments">integrating</a> BENJI and validator management now includes <a href="https://blockworks.co/news/keyrock-launches-us-entity">Keyrock</a>.&nbsp;



The newly launched StarGate staking system uses NFTs to simplify compliance and reward participation — right as the SEC is pondering staking clarity. It’s all part of VeChain’s “Renaissance” <a href="https://x.com/vechainofficial/status/1877403277564014950?lang=en">upgrade</a> aimed at modernizing tokenomics, improving developer UX and getting institutions back onchain.&nbsp;



Can a legacy L1 regain relevance in the age of limitless appchains and well-funded competitors? Watch this space.



<h2 class="wp-block-heading">9. Going Ape</h2>



GameSquare (Nasdaq: $GAME) has <a href="https://www.prnewswire.com/news-releases/gamesquare-acquires-iconic-cowboy-ape-cryptopunk-from-defi-pioneer-robert-leshner-302513150.html">acquired</a> CryptoPunk #5577 — <a href="https://cryptopunks.app/cryptopunks/details/5577">the “Cowboy Ape”</a> — from Robert Leshner in a $5.15 million equity deal. It’s the first NFT-for-equity treasury play by a public company, and part of GameSquare’s larger strategy is to integrate digital assets across brand, treasury and yield products.&nbsp;



Leshner, meanwhile, has recently attempted a contested takeover of Liquor House (LQR), which <a href="https://www.reuters.com/markets/deals/liqour-house-adopts-poison-pill-defend-against-robert-leshner-bid-2025-06-14/">stalled</a> after a poison pill defense.&nbsp;



With this move, he exits one of the most iconic Punks and joins GameSquare’s cap table instead.



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0xResearch Newsletter

ZK breakthroughs, onchain comebacks and stablecoin shakeups

David Canellis

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



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Bitcoin news (and crypto news more broadly) has clearly defined tropes. But they aren’t static.&nbsp;



Tropey headlines tend to play on our base instincts. Fraud stories were historically a go-to for legacy and mainstream outlets looking for a quick hit about crypto — “Bitcoin Thief Allegedly Bought Royalty Rights to Rap Songs, Has Middling Taste” from <a href="https://www.vice.com/en/article/bitcoin-thief-allegedly-bought-royalty-rights-to-rap-songs-has-middling-taste/">VICE</a> in 2019 is a prime example.&nbsp;



That story, and others like it, had <a href="https://blockworks.co/news/crypto-fraud-financial-scam">less to do with Bitcoin</a> and more to do with crime, but the crime itself wasn’t particularly interesting. Bitcoin brought the novelty factor to an otherwise-dull low-level crime. Consider your click harvested!



Over time, those types of stories have given way to a trope more relevant to bitcoin holders: “Old whale moves coins for the first time in ages.”



The most recent iteration has played out this month. Across two weeks, an address dormant since 2011 transferred a total of 80,009 BTC ($9.3 billion) to Galaxy Digital.&nbsp;



Come this morning, Galaxy had directed more than 10,000 BTC ($1.2 billion) to a number of exchanges across an eight-hour period.&nbsp;



The price of bitcoin slid nearly 2.5%, from about $118,000 to under $115,300, before recovering slightly.



<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">Update:<a href="https://twitter.com/hashtag/GalaxyDigital?src=hash&amp;ref_src=twsrc%5Etfw">#GalaxyDigital</a> has transferred nearly 30,000 <a href="https://twitter.com/search?q=%24BTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$BTC</a>($3.5B) out today, most of which went directly to exchanges and were sold. Then <a href="https://twitter.com/hashtag/GalaxyDigital?src=hash&amp;ref_src=twsrc%5Etfw">#GalaxyDigital</a> withdrew 1.15B <a href="https://twitter.com/search?q=%24USDT&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$USDT</a> from exchanges.<a href="https://twitter.com/hashtag/GalaxyDigital?src=hash&amp;ref_src=twsrc%5Etfw">#GalaxyDigital</a> still holds 18,504 <a href="https://twitter.com/search?q=%24BTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$BTC</a>($2.14B).<a href="https://t.co/bVtNwP2iXI">https://t.co/bVtNwP2iXI</a> <a href="https://t.co/Wv1cD3aHbf">pic.twitter.com/Wv1cD3aHbf</a>&mdash; Lookonchain (@lookonchain) <a href="https://twitter.com/lookonchain/status/1948665986573631687?ref_src=twsrc%5Etfw">July 25, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Around the same time, a separate whale awoke to <a href="https://news.bitcoin.com/2011-bitcoin-whale-wakes-after-14-years-moves-470m-but-why-now/">move</a> almost 3,963 BTC ($462.5 million) between addresses, although at this point it doesn’t appear to have made it to any exchanges.



We don’t usually get any closure when these types of transfers happen. In the past five years or so, there have been at least a dozen other instances of dormant Bitcoiners awakening to shuffle coins amounting to over 195,400 BTC ($22.8 billion) when combined, by my very quick count.



Of that dozen, only three are believed to have led to coins actually being sold on exchanges, including this morning’s situation with Galaxy. The possibility does exist that each of the others were peer-to-peer, over-the-counter sales, but we’ll never know for sure.



Still, the “dormant whale moves bitcoin” trope is the perfect blend of feel-good and abject terror.&nbsp;



We’ve all heard the horror stories about <a href="https://www.bbc.com/news/articles/c74zel3ng1vo">lost private keys</a> to bitcoin fortunes, and maybe even lived a few of them ourselves. Hearing about old coins being accessed for the first time in a&nbsp; decade is the great antidote.



Meanwhile, the notion that the 30% of all coins which haven’t <a href="https://cryptoquant.com/asset/btc/chart/network-indicator/utxo-age-bands-percent?window=DAY&amp;priceScale=log&amp;metricScale=linear">moved</a> in at least five years — almost six million BTC, worth $696 billion — might one day be suddenly sold is a little scary, depending on how heavy one’s bags are.



Which makes for perfect clickbait, no matter how scant the details.



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Bitcoin

Bitcoin whales are waking up — it’s perfect clickbait

Katherine Ross

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



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



“Animal spirits are definitely back in the market,” Empire co-host Jason Yanowitz told Dragonfly’s Rob Hadick on <a href="https://blockworks.co/podcast/empire/7900066a-68de-11f0-80af-3b985c1e852b">this week’s Round Up</a>.&nbsp;



If you’re not super familiar with the term, it’s basically saying that human emotions and behaviors are driving the market action rather than fundamentals or technicals.&nbsp;



Hadick noted that the rise of animal spirits is interesting given that retail “hasn’t been back in a long time.” And folks are eager to invest.&nbsp;



But it looks like, to Hadick’s eye, that the frothiness is coming down, and he wouldn’t necessarily be surprised to see either a bottom or less volatility happen in the next few weeks. He also noted that, seasonally, August is not great for markets, which could have an impact on crypto.&nbsp;



Now let’s take a look at pump.fun after, well, not such a fun week for the token.&nbsp;



Hadick noted that there was concern about liquid fund demand even before this week, because he’d heard that the team “had told people they were going to raise $250 million from the liquid funds and then the rest was going to be to retail. And then when they released the tokens, it looked like it was more like $770 million to liquid funds.”



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="Don’t Overtrade The Retail Cycle | Weekly Roundup" width="1024" height="576" src="https://www.youtube.com/embed/ATnR23lHUzA?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>
</div></figure>



“That alone had raised people&#8217;s concern that there just wasn&#8217;t liquid fund demand anymore. Everybody had gotten filled on the demand they had. And so when it launched, there was an expectation that frankly [with] everybody there, there was no buyer left who had real size. And I think we&#8217;ve seen that play out pretty significantly,” he said.



And then there’s the fact that pump.fun founder Alon Cohen said that the airdrop wasn’t coming anytime soon in an <a href="https://www.twitch.tv/threadguy">interview</a> with Thread Guy earlier this week.&nbsp;



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXehh3wDomdeGnrAw1sQ7pS2znQjYUBExU8TMO1kivOxhLSFT5udJVivsoihggBpO0DMmsPfnBN8Wd9zvJWPUhgVLLj7hkXOPIyFaSa3yo99hS0wmbMZnkXsqUdMVnKC6YFQYv95iw?key=KW6dZVYy0C2VEe-QoFiT_A" alt="" style="width:619px;height:auto"/><figcaption class="wp-element-caption">A look at the price action of Pump’s token, courtesy of Blockworks Research</figcaption></figure>



And, as folks recalibrate their expectations, Hadick noted that there seems to be more interest in pump.fun competitors like Bonk than in the OG launchpad. It doesn’t help that there could be a Bonk airdrop, Hadick believes.



“ Bonk is sharing more revenue with the creators. And so there is more demand…or there&#8217;s more incentive from the creators themselves,” Hadick noted.



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Empire Newsletter

Animal spirits are ‘back in the market:’ Empire

This is a segment from The Breakdown newsletter. To read more 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">
&#8220;I woke up and realized life is great and people are awesome and life is worth living.&#8221;&nbsp;



— Hulk Hogan
</blockquote>



<a href="https://x.com/iampaulgrewal/status/1947394411119448175">Blockchain common stock</a>



In its recent S-1 filing, Figma disclosed that it authorized the issuance of “blockchain common stock,” which it describes as “shares of our capital stock in the form of blockchain tokens.”



Figma is a SaaS company that has no vested interest in crypto, so it seems significant that it’s seriously considering issuing equity in the form of tokens.



That deliberate phrasing matters because equity in the form of tokens is fundamentally different from the “tokenized equity” that people have recently gotten excited about.



The tokenized stocks offered by Robinhood and others are less than they seem: just an onchain receipt for something that remains resolutely off-chain.



Blockchain common stock, however, is issued natively onchain: The token is the equity.



This removes counterparty risk and off-chain dependencies; enables composability (for use in DeFi), programmability (governance or compliance, say, via smart contracts); and potentially broadens access to anyone with a digital wallet.



All of which together should lower the cost of capital formation.



Tokenized stocks are a new form of recordkeeping, but blockchain stocks are a new form of capital markets.



<a href="https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-president-donald-j-trump-signs-genius-act-into-law/?utm_source=chatgpt.com">BSA applies to stablecoins (sort of)</a>



Under the heading “Combating Criminal Activity,” a White House statement declares: “The GENIUS Act explicitly subjects stablecoin issuers to the Bank Secrecy Act, thereby clearly obligating them to establish effective anti‑money laundering and sanctions compliance programs with risk assessments, sanctions list verification, and customer identification.&#8221;



It’s overselling it. The Bank Secrecy Act will only apply to the institutions that mint and redeem stablecoins with the issuer — once the tokens are in circulation, they won’t be any more subject to compliance checks than they are now. (Which is not at all, basically.)



It’s like a bar that lets everyone drink as long as the person buying has an ID: KYC one, serve all.



It’s unlikely North Korea was planning to mint USDC with Circle, so applying the Bank Secrecy Act to stablecoins doesn’t make them as compliant as bank deposits.



This is part of what makes stablecoin payments so much cheaper than bank transfers: far fewer compliance people to pay.



<a href="https://www.wsj.com/finance/regulation/banks-pig-butchering-fight-fraud-92c06642?st=XMuwiC">You can sue your bank for doing what you told them to</a>



The Wall Street Journal’s heartbreaking story of an elderly couple losing their entire life savings — over $5 million — to a crypto investment scam is a reminder of why bank transfers are so expensive.



The victim had to switch banks multiple times before he finally found one that would allow him to make transfers as large as $300,000. “It’s his money,” the bank reasoned.&nbsp;



At one of his previous banks, a compliance officer froze his account over a $1,000 transfer because “the name on the Zelle account where he was trying to send money didn’t match the name in the email address he was given.”



The victims are now suing the bank that allowed the transfers, arguing that it should have recognized their customer was being defrauded.



The story suggests most banks probably would have saved the victims from themselves, but that level of compliance is expensive.



<a href="https://arxiv.org/pdf/2507.01963">Memecoins are even scammier than you thought</a>



A recent academic study reports that 82.6% of the 34,000 memecoins examined showed evidence of “extensive use of artificial growth strategies designed to create a misleading appearance of market interest.”



Strategies include wash trading, rug pulls, pump-and-dump schemes and the newly discovered “Liquidity Pool-Based Price Inflation” (or LPI).&nbsp;



LPI is where manipulators exploit the constant product formula (x*y=k) of low-liquidity pools on decentralized exchanges to send tokens higher with a shockingly small amount of money: The study finds that, on average, it takes just $54 to send a memecoin 500% higher.



It works for big ones too, because the liquidity in these pools are so low: 88.1% of coins with market caps above $1 billion had just 0.1% of their reported market cap in the pools.



“These findings reveal that manipulations are widespread among high-performing memecoins and suggest that their dramatic gains are often likely driven by coordinated efforts rather than natural market dynamics.”



If you’ve made money in memecoins then, it’s probably because you just happened to be on the right side of the manipulation.



<a href="https://www.prnewswire.com/news-releases/gamesquare-acquires-iconic-cowboy-ape-cryptopunk-from-defi-pioneer-robert-leshner-302513150.html?tc=eml_cleartime">The first NFT treasury company?</a>



GameSquare, which has a $141 million market cap, has issued $5 million of stock in return for a CryptoPunk NFT as part of “a differentiated treasury management strategy.”



Pretty smart: Crypto is undermining traditional finance from the inside.



<a href="https://www.msn.com/en-us/money/economy/cantor-fitzgerald-offers-to-buy-the-rights-in-potential-refunds-from-companies-that-have-paid-trump-s-tariffs/ar-AA1J1A4I">There’s at least a 30% chance tariffs will be repealed and refunded&nbsp;</a>



Wired reports that Cantor Fitzgerald is paying 20% to 30% for the right to collect a refund on the new tariffs that a US importer has paid since April 2.&nbsp;



Cantor has reportedly told customers they have “the capacity to trade up to several hundred million of these.”



By “trade,” I imagine it means “buy,” so the 20% to 30% it’s offering is one indication that the president’s post-Liberation Day tariffs will be repealed and refunded.



Cantor’s offer probably understates the odds, since it has to add in something for the time value of money, collection risk and its own risk-adjusted return.



Either way, Cantor is in a good position to judge because it’s run by the two sons of the pro-tariff Commerce Secretary Howard Lutnick.



(Lutnick&#8217;s sons, Kyle and Brandon, are both in their 20s, so it’s fair to suspect he still keeps tabs on the company.)



That is an obvious conflict of interest, but maybe a useful one: Market prices are more informative when insiders are allowed to trade.



<a href="https://www.coingecko.com/en/coins/xrp">XRP hits an all-time high</a>



Ripple’s XRP token now has a fully diluted value of over $300 billion.



This seems like a lot given the still <a href="https://messari.io/report/state-of-xrp-ledger-q1-2025">modest amount of activity</a> on the XRP Ledger more than a decade after its launch.



A decade seems like plenty of time to execute on any business plan, and Ripple has so far failed to replace SWIFT as the settlement layer for cross-border payments.



Maybe it was just early and now is the time. (You can do a lot with a $300 billion market valuation.)



In other asset classes, however, “early” is almost always synonymous with “wrong.”



I take the new highs in XRP as evidence that in crypto, you can be wrong for an unusually long time.



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Thursday links: Blockchain stocks, barroom compliance and NFT treasuries

Jack Kubinec

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



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Solana is $200! Wait, no it’s not. Wait, yes it is. Wait, no it’s not.



We’re more than halfway into what may prove to be Solana’s most memorable year to date. And my, how fast the year is going by! 



Before it slips away altogether, here are my five biggest Solana moments of 2025 thus far:



<h2 class="wp-block-heading">5. Raydium spins up its own launchpad</h2>



In February, news slowly trickled out that the Solana memecoin cash cow pump.fun was going to be ending its unofficial partnership with Raydium and <a href="https://blockworks.co/news/pumpdotfun-ditching-raydium-rumor">launching an AMM</a> of its own.



This closed what had been a very lucrative pairing for Raydium, which had made tens of millions of dollars from pump.fun tokens to that point.



So, Raydium swung back and <a href="https://blockworks.co/news/raydium-launching-pumpfun-version">created a memecoin launchpad</a> of its own. After a slow start, the gambit seems to be working: Raydium-supported letsbonk.fun <a href="https://app.blockworksresearch.com/analytics/solana/?dashboard=339">raced</a> to over 50% of launchpad market share two weeks ago.



<h2 class="wp-block-heading">4. Pump.fun announces a token</h2>



When I started hearing pump.fun wanted to raise $1 billion by selling a token, first I went “What?”, and then I went, “Huh?”



Sure enough, <a href="https://blockworks.co/news/pumpdotfun-token-sale">we first reported</a> that the ICO would be carried out at a $4 billion valuation. Many complained that the action was extractive from a business that has already generated nearly a billion dollars in trading fees.&nbsp;



But the market didn’t mind too much: pump.fun exceeded $1 billion in private and public sales for PUMP when all was said and done.



<h2 class="wp-block-heading">3. SIMD-228 defeated</h2>



In January, Multicoin Capital’s Tushar Jain <a href="https://www.youtube.com/watch?v=Oyb7I-Ptayw">came on Lightspeed</a> to pitch SIMD-0228, a proposal to cut Solana’s token inflation rate and introduce a market-based inflation mechanism.&nbsp;



This was the most voted-on Solana proposal ever, and a number of smaller validators were concerned about tighter margins stemming from fewer inflation rewards. Others expressed worries about uncertain outcomes the proposal may have created.



In the end, somewhat surprisingly, the proposal — which had support from several key figures in Solana — <a href="https://blockworks.co/news/what-simd-0228-failing-means-for-solana">failed to pass</a>.



<h2 class="wp-block-heading">2. Trump launches a memecoin</h2>



It’s tough to top this one. On Friday night before his inauguration, the incoming POTUS <a href="https://blockworks.co/news/trump-memecoins-rock-solana">launched a memecoin</a> on Solana.



Solana experienced severe congestion as traders raced to buy the coin, and SOL climbed to an all-time high. The token had interesting downstream effects, like <a href="https://blockworks.co/news/solana-stablecoin-supply-soars">suddenly spiking</a> Solana’s USDC supply.&nbsp;



Solana folks generally take pride in the fact that although many of us wish he had not launched a memecoin at all, at least Donald Trump launched his memecoin on Solana.



<h2 class="wp-block-heading">1. Alpenglow</h2>



At the Solana Accelerate conference in May, Anza announced Solana’s biggest upgrade ever: Alpenglow.



Interestingly, this project <a href="https://www.youtube.com/watch?v=KN5Novxjybs">got started</a> when researchers wrote a paper exploring some problems with Solana consensus, and Anza hired them to come fix it.



The end result <a href="https://blockworks.co/news/solana-alpenglow-next-gen-consensus-layer-speed">claims to be</a> a 100x <a href="https://www.helius.dev/blog/alpenglow">reduction</a> in block finality and the end of <a href="https://blockworks.co/news/solana-proof-of-history">proof-of-history</a> as we know it. It could be live as soon as December, making Solana run ever faster. 



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History

5 biggest Solana moments of 2025 (so far)

Felix Jauvin

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



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This morning, I had the good fortune of interviewing Jens Nordvig.



The interview will be <a href="https://www.youtube.com/@ForwardGuidanceBW/videos">out tomorrow</a>, but I wanted to give a teaser around something incredibly important: Fed independence.



Nordvig is the founder of Exante Data and was previously managing director at Goldman Sachs, senior investment associate at Bridgewater, and head of fixed income research at Nomura.&nbsp;



At this point, everyone knows that President Trump <a href="https://blockworks.co/news/trump-criticizes-fed-chair-powell">doesn’t like</a> Jerome Powell very much and thinks interest rates should be <a href="https://blockworks.co/news/inflation-data-trump-tariffs-july">meaningfully lower</a>.&nbsp;



Specifically, the lens of criticism has shifted from the traditional dual mandate of the Fed — stable prices and maximum employment — toward what fiscal authorities view as a more relevant mandate, managing the debt load of the US government. One of the key arguments being made is that the Fed should lower interest rates so that interest payments on US debt come lower, thereby lowering the fiscal deficit.&nbsp;



This subordination of monetary policy to fiscal priorities of debt load management is what I view as the more correct definition of fiscal dominance.&nbsp;



Fiscal authorities set policy, and monetary authorities are there simply to make it the least painful. Nothing more, nothing less.



The last time that this happened was in the 1940s, when the Fed formally employed yield-curve control to cap rates at certain levels and its primary purpose was to buy US debt and manage the debt load. This regime ended in earnest with the Fed Treasury accord of 1951, which reinstilled Fed independence. Ever since those accords, we’ve been in an era of monetary dominance.&nbsp;



We are now in the early innings of this transition.



The primary risk associated with <a href="https://blockworks.co/news/fed-independence-in-question">dwindling Fed independence</a> is the potential for inflation expectations to become unanchored. In simple words, this looks like inflation concerns being instilled in society and a common realization that the Fed cannot get a meaningful handle on those inflation expectations.&nbsp;



In practice, the traditional goal of central banks having a 2% target for inflation serves as a codified intention to prevent inflation expectations becoming unanchored.



Unfortunately, this slow but steady erosion of Fed independence by the Trump administration is already beginning to percolate into inflation expectations, and the risk of these becoming unanchored is increasing meaningfully.&nbsp;



Jens brought a fascinating chart to our discussion that highlights this emerging dynamic.&nbsp;



The chart below shows the cumulative and predicted changes in five-year US breakeven rates, both as predicted by changes in oil and independent variables:



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXesmf-ygloOZuq3KuyehPt-4RyrujDC5xiAuKLpbd7cc5KU_Yebh1W4kEuk_RE2hMaUKRDzCZNLA58f2O0_P-Re2LvB-W_tAj_LII3UBcJj3aQN9_pFghBpfC1sMR3UkbzquQcZ?key=b5MFdWxy17gqX0PVMAkv4g" alt="" style="width:649px;height:auto"/></figure>



Typically, breakevens track the price of oil since it’s the largest driver of inflation. What’s concerning right now is that breakevens are surging while oil is hardly moving and, if anything, is declining.&nbsp;



In Jens’ view, this is a distillation of the market beginning to price-in, and become concerned with, inflation expectations becoming unanchored as Fed independence erodes. 



With <a href="https://blockworks.co/news/fomc-june-powell-term-end">Powell’s term ending</a> in the winter of 2026, keep an eye on this market and whether this concern accelerates. The bedrock of the financial system depends on these expectations remaining well-anchored.



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Federal Reserve

How inflation breakevens signal eroding Fed independence

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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Ethereum’s validator exit queue surged past 475,000 validators this week, pushing the unstaking wait time to nine days — the second-longest in Ethereum’s post-Merge history. Galaxy Digital Research <a href="https://www.galaxy.com/insights/research/why-eth-unstaking-queue-swelled">attributes</a> the spike to a cascading unwind in liquid staking token (LST) leverage. Its report traces the stress to one trader’s large capital rotation: “This volatility was driven by a sharp reduction in ETH supply on Aave, initiated by large withdrawals from the platform by a wallet tagged to the HTX exchange [formerly Huobi].”



That liquidity removal sent Aave’s ETH borrow rates <a href="https://x.com/JackMandin/status/1947799861308625353">soaring</a> from ~3% to over 18%. The result? Negative carry for stETH loopers — users who recursively borrow ETH to buy more stETH.



Galaxy notes that when rates jumped over 10%, leveraged positions became unprofitable, prompting a mass unwind.



This unwind played out through two channels. Some loopers sold stETH on AMMs, pushing the peg down by 30-60 basis points. Others opted for validator redemption, leading to the massive queue buildup. Although May’s <a href="https://blockworks.co/news/ethereum-pectra-fork-live">Pectra upgrade</a> lifted the fixed churn cap — raising today’s allowance to roughly 12 exits per epoch — the wave of withdrawal requests still overwhelmed that higher limit, pushing the queue out to more than nine days.



That delay created a feedback loop: With redemption time rising, arbitrageurs now require higher yields to justify holding depegged stETH. As Cork Protocol’s Robdog.eth <a href="https://x.com/robdogeth/status/1948033585404878957">explained</a>, “the annualized yield of [buying stETH at a discount and redeeming] with a nine-day delay is 25%, which…is fairly profitable. If the queue becomes 18 days instead of nine, the arbitrage take rate becomes 100-110 bps.”



Importantly, the unwind hasn’t tanked ETH itself. ETH spot ETF flows <a href="https://farside.co.uk/eth/">remained strong</a>, with $300 to $600 million in daily inflows over the past week. That demand absorbed much of the selling pressure.&nbsp;



“Investor appetite for the two biggest blockchains is undeniable,” Dom Harz, co-founder of hybrid L2 BOB, told Blockworks. “ETH is outperforming the original blockchain so far this month.”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfivuARuM424RwyJgUamU2U68uPF9STzHaJ57yzzDRZdc389VL40PgeyvrNmRhqrZRNmM8eOFkCnG4Jilgb8jRV-FLgNl2SBk58QSTENvX1O8Q8C_O9tOIgO4tpCkD9m_KqtjDOYQ?key=B-5jFzKQMHOXbOEGFSWq6A" alt=""/></figure>



Source: <a href="https://blockworks.co/analytics/crypto-etfs">Blockworks Research</a>



Some traders have speculated that the depeg may also reflect spot ETH scarcity at OTC desks as institutional <a href="https://blockworks.co/news/year-old-us-ether-etfs">demand via ETFs intensifies</a>. Wintermute’s CEO <a href="https://x.com/EvgenyGaevoy/status/1945596541193818187">noted</a> a week ago that its books were “virtually out of ETH,” prompting concerns that funds are sourcing ETH by dumping stETH. While plausible at the margin, onchain flows and redemption patterns suggest leveraged stETH loop unwinds remain the dominant driver, with OTC demand playing, at most, a secondary role.



Still, the event underscores a chronic weak point in Ethereum’s liquid staking stack. The <a href="https://dune.com/oasisapp/steth-eth-peg-history">stETH/ETH peg</a> remains around 0.995, while onchain AMM liquidity for stETH dropped from $280 million to $180 million. Most major lending protocols (like Aave and Maker) use stETH’s redemption oracle, not market price — shielding users from immediate liquidations. But if the queue stretches further, slow-burning interest accrual could start forcing more severe deleveraging.



Galaxy Research frames this episode as a warning shot. “[T]his episode highlights the continued fragility of the ETH liquid staking and restaking ecosystem,” the report notes. It calls for design improvements like peer-to-peer exit markets, rate smoothing and fixed-term vaults to reduce reliance on redemption queues.



The loopers, meanwhile, are caught in what one analyst called a “trilemma”: Accept a 5-6% loss by selling at a discount, wait nine-plus days while paying high interest, or hold and pray rates fall.&nbsp;



Said Robdog.eth: “These guys thought the stETH looping trade was free money and now they are stuck between a rock and a hard place.”



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Ethereum stakers face 9-day wait as stETH loops fall into the red

The US government expects to rest its case against Tornado Cash co-founder Roman Storm on Thursday following yesterday’s anticipated testimony from an expert witness.



The defense is set to counter the prosecution’s efforts to show Storm could have better guarded against “bad actors” using Tornado Cash — the crypto mixer used for transaction privacy around which this case centers.



IRS Criminal Investigation special agent Stephan George took the stand to share findings that appeared to link a portion of the funds stolen from Hanfeng Lin to Tornado Cash.&nbsp;



Lin testified last week that a fraud recovery service told her to contact Tornado Cash about retrieving her funds. The defense was <a href="https://www.therage.co/tornado-cash-mistrial-hangfeng-lin/">reportedly</a> considering a mistrial motion after a subsequent witness, FBI Special Agent Joel DeCapua, didn’t link Lin’s funds to Tornado Cash — putting the relevance of Lin’s testimony in question.



But George said Wednesday he used public blockchain data — along with Chainalysis Reactor and TRM Labs — to find that a portion of Lin’s stolen funds that left Crypto.com ultimately went to Tornado Cash in November of 2021. 



He used an accounting method known as Last In, First Out (LIFO) — which assumes the disposal of crypto acquired most recently. When defense attorney Keri Axel challenged LIFO during cross-examination, George defended the method as a generally accepted accounting principle that the IRS “respects.”



Axel’s cross-examination of George was set to continue Thursday morning.&nbsp;&nbsp;



While the possibility of a mistrial was briefly mentioned in court Tuesday, the defense did not immediately comment about whether that’s still being considered.&nbsp;



&#8220;It&#8217;s usually not the situation that a trial is declared a mistrial merely because a witness&#8217;s testimony is not entirely germane,” Patrick Gruhn, a former partner at Crypto Lawyers LLC and FTX’s ex-head of Europe, told Blockworks. “Courts generally expect a lot more — egregious misconduct or prejudicial facts against the jury — before they suspend a trial.”



Though George linking Lin’s funds to Tornado Cash was an attempt by prosecutors to clear up a point of contention that arose, the charges against Storm go well beyond that.&nbsp;



At the heart of this case is whether Storm essentially helped criminals — such as North Korean state-sponsored hackers, The Lazarus Group — hide stolen funds, as the government alleges. He is charged with conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money transmitting business.



Key questions of the case, as shared in opening statements last week, include whether Tornado Cash was immutable and if the developer is responsible for how software is used.



Defense attorney Keri Axel said in her opening statement: “It’s not a crime to make a useful thing that is misused.”



Read more: <a href="https://blockworks.co/news/roman-storm-trial-opening-statements">‘He lied’: US government makes opening plea to jury in Roman Storm trial</a>



After the jury left the courtroom on Wednesday afternoon, the prosecution told Judge Katherine Polk Failla that it had two witnesses remaining and could wrap up by Thursday morning.&nbsp;



Though the defense had not finalized its slate of witnesses before the court let out on Wednesday, Storm’s attorneys said they could rest their case as soon as Monday. Storm has not yet decided whether he will take the stand, they added.



“I assume you don’t have a hacker testifying,” Failla quipped. “That would be interesting.”&nbsp;



<h2 class="wp-block-heading">Hacker takes the stand</h2>



The prosecution did put a hacker on the stand on Tuesday. That was Shakeeb Ahmed, who is currently serving a three-year sentence after <a href="https://www.justice.gov/usao-sdny/pr/former-security-engineer-sentenced-three-years-prison-hacking-two-decentralized">pleading</a> guilty to computer fraud last year. Ahmed, a former technical lead in Amazon’s bug-bounty program, detailed how he stole $12 million worth of crypto from exchanges Crema and Nirvana in 2022.



He put his own funds into a Tornado Cash pool to “anonymize” them before using a third party — known as a relayer — to withdraw them. He then went on to hack the Crema exchange. He did not use Tornado Cash at any point leading up to, or after, he hacked the Nirvana exchange.



The defense, during cross-examination, made clear to the jury that Ahmed never put stolen funds into Tornado Cash.&nbsp;



“You didn’t use Tornado Cash for the [hack] proceeds?” defense attorney David Patton asked.&nbsp;



“Correct,” Ahmed said.



Patton also asked whether Ahmed ever communicated with Storm and the other Tornado Cash founders, or conspired with them to commit crimes.



“I did not,” Ahmed noted.



<h2 class="wp-block-heading">Questioning Tornado Cash’s design choice</h2>



The prosecution sought to establish, through another witness, that Storm — along with Tornado Cash co-founders Roman Semenov and Alexey Pertsev — could have made changes to the protocol to guard against bad actors using it.&nbsp;



The Office of Foreign Assets Control (OFAC) deemed the Lazarus Group responsible for the $625 million Ronin Bridge hack in March 2022 and sanctioned the entity. Tornado Cash <a href="https://x.com/TornadoCash/status/1514904975037669386">said</a> the following month that it was using a Chainalysis oracle contract “to block OFAC-sanctioned addresses from accessing the dapp.”



Philip Werlau, an investigator at AnChain.AI, testified that — while that blocked sanctioned entities from using Tornado Cash’s web application — founders did not implement this control for deposits made via its Command Line Interface (CLI).&nbsp;



“If there are two doors to a building and you only close one, you’re not preventing access,” Werlau said.



Werlau also explained how Tornado Cash could have maintained an offchain registry with users’ personal info collected through a username-password system.



Anticipating this testimony, defense attorneys noted to the judge earlier that day that while Tornado Cash could have been designed differently, that doesn’t mean what Storm built was illegal.



This sentiment came out during the cross-examination, when defense attorney Brian Klein raised his voice — asking Werlau if one reason to make pools immutable would be to make them less subject to hacks. That could reduce the ways a pool could be attacked, Werlau acknowledged.&nbsp;



Klein then asked Werlau if he provides personal info when he uses the Ethereum blockchain.



As Werlau paused to think, Klein rephrased, almost shouting: “There’s nothing like the registry you proposed, is there?”&nbsp;



“That is correct.”



Werlau, seemingly uncomfortable with the confrontation, looked up at the clock. A break for lunch was not far off.&nbsp;



<h2 class="wp-block-heading">The scene and the stakes</h2>



This writer sat 20 or so feet from Storm over the last two days, even passing him during breaks en route to the bathroom and elsewhere. The Tornado Cash founder appears calm, but walks with pace.



Sitting next to Axel on the courtroom’s left side, Storm often gazes toward the judge, stand and jury, stone-faced, blinking infrequently behind his glasses. Occasionally, he will scribble something on a Post-It and hand it to a member of his defense team. This writer did not once see Storm roll his eyes or shake his head.&nbsp;



Trial attendance ranged from roughly a dozen to two dozen people on Tuesday and Wednesday — meaning there are plenty of empty seats.&nbsp;



While not as high-profile a case as the Sam Bankman-Fried trial, Blockchain Association legal head Marisa Coppel noted its outcome will shape how developers, regulators and policymakers navigate the future of crypto innovation.



“A conviction could set a dangerous precedent by criminalizing the act of writing and publishing open-source code, amplifying fears among US developers and pushing innovation offshore,” she told Blockworks. “An acquittal, by contrast, may reaffirm that software creation alone isn’t a crime and could help restore confidence in building decentralized tools.”



Keep an eye on Blockworks for more <a href="https://blockworks.co/tag/roman-storm">Roman Storm trial updates</a>. 



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Cybersecurity

Hacker, IRS agent take Storm trial stand as government winds down case

This is a segment from The Breakdown newsletter. To read more 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">
“Anything that won&#8217;t sell, I don&#8217;t want to invent. Its sale is proof of utility.”



— Thomas Edison
</blockquote>



The first idea that put Helium co-founders Amir Haleem and Shawn Fanning (of Napster fame) on the long road to building a decentralized, crypto-powered mobile network had nothing to do with decentralization, crypto or mobile networks.



Instead, they were looking for a way to keep track of the very expensive drones they kept losing over windy San Francisco.



It’s not surprising that it turned into something else — the tech industry has a rich history of unintended consequences resulting from such brainstorming.



YouTube was launched on Valentine’s Day, 2005, as a video-based dating site: “Tune in, hook up.”&nbsp;



Shopify began as a website selling snowboards.



Instagram was originally a location check-in app called Burbn.



This is why it’s commonplace for VCs to say that they invest in founders, not ideas.



They have no alternative, really.&nbsp;



“In the beginning of a startup,” Marc Andreessen notes, “you know a lot more about the team than you do the product, which hasn’t been built yet.”



The job of early-stage funding is to give founders room to wander their way to a product.



In the case of Helium, that wandering process was funded by crypto enthusiasts.



Founded way back in 2012, Helium has long been one of the few examples crypto enthusiasts could cite as evidence the industry might produce something other than yet more ways to trade crypto.



For most of that time, it remained an aspirational example.&nbsp;



Helium’s original business plan (inspired by those lost drones) was to use crypto tokens to crowdsource the buildout of a wireless network for sensors, trackers and other “internet of things” gadgets.



It succeeded: The network is up and running. 



But it hasn’t generated the kind of revenue that Thomas Edison would say proves its utility.&nbsp;



Also, the internet of things isn’t much of a topic anymore.



Helium’s pivot to mobile services, however, is becoming more and more of one — and recent sales are proof that the network which has been built has utility.



In a recent <a href="https://app.blockworksresearch.com/flashnotes/helium-halving-tailwinds#forward-outlook">report</a> for Blockworks Research, <a href="https://x.com/0xMetaLight">Nick Carpinito</a> cites the “explosive growth in Data Credit (DC) burn” as a reason to be optimistic about both Helium and its token, HNT.



Data credits are how users pay to access the Helium network, so their “burn” is one measure of how useful they think the network is.



They appear to be finding it more and more useful: “The monthly DC burn rate attributed to mobile usage recently surged from ~$189,000 in early March 2025 to ~$361,000 in June 2025,” Carpinito wrote.



Most of that comes from carriers like AT&amp;T and T-Mobile which pay to route traffic through Helium hotspots when their customers lose signal indoors.



This is a cheaper, more effective way for the carriers to provide coverage in buildings that their cell towers struggle to penetrate. It’s a rare example of real-world companies paying to use something built with crypto-based incentives.



But it’s not just about token incentives.&nbsp;



When a customer of, say, AT&amp;T connects to the Helium network, a Solana-based smart contract keeps a record of how much data is transferred and then facilitates payment (in the HNT token), between two crypto wallets.



Sometimes this is facilitated by Nova Labs, the company that developed the Helium network, but the smart contracts are open to anyone who wants to integrate directly with the network, as I’m told Telefonica is now doing in Mexico.



This, I think, is crypto at its best: enabling all-new economic activity, incentivized with tokens, that’s managed on a blockchain and accessible to anyone.



<h2 class="wp-block-heading">You can’t beat free</h2>



In his note for Blockworks, Carpinito focuses mostly on carrier offload as a source of growth for Helium.



But Frank Mong of Nova Labs, the company that developed the Helium network, seems more excited about the plans that Helium Mobile offers to individuals.



In a recent conversation, Mong (who also related the above drone anecdote to me) highlighted that Helium Mobile has recently been adding as many as 2,000 subscribers a day.



Importantly, the cost to Helium Mobile of acquiring these customers has been unusually low: just $10 to $15 per customer, according to Mong — vs. the $100+ that it costs its traditional competitors.



“There’s magic here,” Mong told me.



It’s not hard to figure out the trick, though: Helium offers a free mobile plan.



(It might even be less than free, after earning rewards for data sharing.)



I assume that’s a loss leader for Nova Labs, which runs Helium Mobile, but those are all customers who can be upsold on paid plans or monetized in other ways.



Mong’s near-term ambition is to get to a million such customers using the Helium-branded network, and also a million gateways providing the WiFi they connect to.



That would still be small, relative to telco giants like AT&amp;T and T-Mobile, but huge by crypto standards.



Mong is not measuring Helium as a crypto business, however.



“I think we can dominate the telco industry,” he told me.



And maybe other things too.



“Our aspirations are bigger than providing internet access,” Mong told me.



He wouldn’t be pressed on specifics, which is wise: The history of tech startups demonstrates that they rarely go where their founders expect them to.



Also, this is crypto: You can just build a network and see what people do with it.



Helium has invented something that sells (to paraphrase Edison), and that is much needed proof that crypto can have real utility.



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How Helium demonstrates crypto’s utility

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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Ether ETFs <a href="http://v">launched in the US</a> one year ago today. Time flies.&nbsp;



While these products (unlike bitcoin ETFs) struggled to find consistent inflows out of the gate, this month has been a different story.&nbsp;



The ETH funds have attracted $3.6 billion of net capital from July 1 to July 22, Farside Investors <a href="https://farside.co.uk/ethereum-etf-flow-all-data/">data</a> shows.&nbsp;



The segment’s $2.1 billion of inflows last week was nearly double its previous record of $1.2 billion. As CoinShares’ James Butterfill pointed out in a Monday <a href="https://blog.coinshares.com/volume-243-digital-asset-fund-flows-weekly-report-391af81ba1ba">report</a>, the past 13 weeks of inflows represent 23% of the ETH products’ AUM.&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">2/ The daily flow data reveals sustained demand. The peak was reached on July 16 with a record $726.6 million single-day inflow. This momentum was maintained with multiple days exceeding $400M, showcasing consistent institutional accumulation throughout the month. <a href="https://t.co/lONtGlgrDh">pic.twitter.com/lONtGlgrDh</a>&mdash; Blockworks Research (@blockworksres) <a href="https://twitter.com/blockworksres/status/1947340860397596978?ref_src=twsrc%5Etfw">July 21, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Institutional demand — rather than just speculative trading — has helped fuel the latest inflows. Corporate treasuries have added more than 600,000 ETH to their balance sheets this month alone, according to Blockworks Research.



Perhaps you remember that Nasdaq-listed SharpLink Gaming in May revealed its <a href="https://blockworks.co/news/bitcoin-treasury-strategies-sharplink-eth">ether treasury strategy</a> (and named Ethereum co-founder Joseph Lubin its board chair). The company’s ether holdings were 360,807 ETH as of July 20 — up 29% from a week prior.&nbsp;



BitMine last week said it held roughly $1 billion of ether and has a goal of acquiring and staking 5% of the overall ETH supply.



Globe 3 Capital CIO Matt Lason previously told me that ETH’s combination of scarcity, deflation and yield makes it an ideal asset for a treasury strategy. SharpLink’s ETH staking rewards rose to 567 ETH since it launched the strategy on June 2.



Bitwise CIO Matt Hougan highlighted in a Tuesday <a href="https://experts.bitwiseinvestments.com/cio-memos/the-ethereum-demand-shock">memo</a> that ETPs and public companies have combined to buy 2.83 million ETH (worth ~$10 billion today) since mid-May. That’s 32x the increase in ETH’s supply over that span, he said.



So it’s not surprising that ETH’s price has jumped about 60% over the last month.&nbsp;



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXevEo7hM-FXkZlPcC2j3WZ7m2Jiw0dvDGLxU-tlbIAjgMmuIp58kfBiqm1R2_bfPhf6d-sieoJJuxwlZJqEhi0kUgi_dHRzSYhIGmpwZ6ZtYBSa-1S3W7HiPMj2vpydkUfNwFqr4A?key=O5qHqyCJouBz0zEbfzJuRA" alt="" style="width:558px;height:auto"/></figure>



Because we mentioned staking before, we should note that various asset managers have filed with the SEC to allow their ether ETFs to stake a portion of the underlying holdings. BlackRock joined that movement last week, and the world’s largest asset manager typically gets what it wants from the SEC — perhaps because of clout, or knowing when the regulator is ready to approve its proposals. Maybe both.



SEC Commissioner Hester Peirce <a href="https://blockworks.co/news/hester-peirce-on-sec-priorities">asked for patience</a> in the SEC greenlighting modifications such as staking and in-kind creations and redemptions. Still, a number of segment observers expect those approvals are imminent.



Investors remain underweight ether ETFs, Hougan wrote in his memo. While ETH has a market cap that’s roughly 20% of bitcoin’s, ETH ETPs have just 12% of the assets that BTC products do.&nbsp;



“With all the excitement surrounding stablecoins and tokenization — which are primarily built on Ethereum — we think that will change, and that we’ll see billions in flows in the next few months,” Hougan added.



As for the next crypto ETFs <a href="https://blockworks.co/news/crypto-etf-launch-timelines-sec">we expect to see</a>, there was movement yesterday. Sort of.&nbsp;



The SEC approved Bitwise’s crypto index fund proposal. But like it did with the Grayscale Digital Large Cap Fund (GDLC), the order was stayed. This perhaps <a href="https://x.com/JSeyff/status/1947781219372175471">signals</a> the regulator will wait to roll out a comprehensive framework — about including digital assets in the ETF wrapper — before letting these convert to ETFs and list.



Oh, and also: 21Shares <a href="https://www.sec.gov/Archives/edgar/data/2061627/000121390025066691/ea0248711-s1_21shares.htm">filed</a> for an Ondo ETF yesterday. The Ondo name should ring a bell, as we’ve talked about them getting set to launch a tokenization platform (here’s my <a href="https://blockworks.co/news/stablecoins-iceberg-rwas-mature-ondo">Q&amp;A</a> with Ondo CEO Nathan Allman from last month).



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</ul>

ETFs

Now 1 year old, US ether ETFs hit their stride

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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With days to go before the new trade policy deadline takes effect, the US struck a deal with Japan.



President Trump announced the deal — a 15% tariff rate on Japanese exports to the US — late last night via a Truth Social post. The rate is lower than the previously proposed 25% levy and also applies to cars and auto parts.&nbsp;



A <a href="https://x.com/Scavino47/status/1947838342285996172">photo</a> shared on X by Dan Scavino, Trump’s deputy chief of staff, suggests officials were making changes to the policy up until the last minute. The document in the picture had been edited by hand, with $400 billion crossed out and replaced with “500.”&nbsp;



The new figure appears in-line with the message both sides are touting: The agreement includes $550 billion in investments and loans from Japan to the US. Trump added in his Tuesday post that the deal will result in hundreds of thousands of jobs.&nbsp;



Domestic auto manufacturers may not be as happy with the deal, though.&nbsp;



With Japan auto exports now taxed at 15%, it’s more expensive for US makers like Ford and GM to import vehicles and parts from countries such as Mexico (25% levy) than it is for Japanese automakers to send vehicles to the US. Check out <a href="https://blockworks.co/news/automakers-impact-tariffs-july-2025">yesterday</a>’s edition for a recap on how tariffs are already hitting car makers’ bottom lines. 



The White House has not yet commented specifically on how the new Japanese deal will impact cars, nor has it shared any information about the status of other negotiations. We’ll be listening, though.



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automakers

Japan, US strike trade deal that leaves US car makers out

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 comes in waves. And like surfing, it’s entirely possible to paddle too early and miss out altogether.



Some of the biggest phenomena in crypto have caught their respective waves with precision.



<h2 class="wp-block-heading">Markets change&#8230;</h2>



Yuga Labs rolled out Bored Apes in April 2021, as bitcoin and ether were headed to their first major peak of that bull market cycle.



More recently, pump.fun nailed it when it deployed in January 2024 — just as SOL was about to double in price in two months on the back of bitcoin ETFs.



Both companies are now case studies in capturing and monetizing the attention of mass-market crypto consumers, even if it’s difficult to say how many individuals were directly involved with either one.



Only around 5,500 addresses have ever <a href="https://opensea.io/collection/boredapeyachtclub">owned</a> a Bored Ape NFT, and less than 12,000 have <a href="https://opensea.io/collection/mutant-ape-yacht-club">held</a> the cheaper Mutant Apes. ApeCoin, the token meant to tie the room together, is found in many more wallets — more than 182,000 at current <a href="https://etherscan.io/token/0x4d224452801aced8b2f0aebe155379bb5d594381">count</a>, and that’s not including an untold number of exchange accounts containing APE.



Pump.fun’s active daily address count is nearly double that, ranging between 260,000 and about 500,000 trading addresses right now, per <a href="https://app.blockworksresearch.com/analytics/pumpfun?dashboard=125">Blockworks Research data</a>. Although, again, it’s unlikely that individual users map one-to-one with active addresses, so the true number is likely smaller.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcmWB1sHXqcE5YosTVf1N4yqsPQBz9FrajJSm54XisaT9DNbG5Z1IFl7ca9_KRUOoMpODPex98nHq5ckFRwhBKFaZw_EHH5KfrC-SgInUJYpuR69Wnd-WEDvHaMlXy_NYxTCKqiPg?key=tCochVUj4dML2tZ1qIVRrA" alt=""/><figcaption class="wp-element-caption">Pump.fun has, so far, made it through 15 months of bull market.</figcaption></figure>



In any case, this is about the maximum size of the playing field on which any consumer crypto app vies to compete, fielding around half a million active addresses per day at best. That’s excluding traditional crypto exchanges, whose active userbases stretch into the millions.&nbsp;



(Coinbase <a href="https://s27.q4cdn.com/397450999/files/doc_financials/2024/q4/Coinbase-Global-Inc-2024-10K-for-IR.pdf">reports</a> about 10 million active users per month, which averaged out over 30 days is actually quite similar to the lower end of pump.fun’s daily active address count, although the two aren’t directly comparable.)



Best case scenario: the playing field grows between the waves of the crypto market. It would be good news for the VCs and other investors who’ve bet that the world has enough blockchains and could now do with more useful apps running on top of them.



Until then, timing will be everything, and the ecosystem may be limited to serving niche communities of early crypto adopters. In such an environment, the consumer apps that make it will capture the attention of crypto’s <a href="https://www.youtube.com/watch?v=hMrlrbAACeM">hot ball of money</a> and maintain it long enough to make stake holders comfortable (and, perhaps more preferably, profitable). Will they persist between cycles? Has Bored Apes?



<h2 class="wp-block-heading">&#8230;but Blockchains are forever</h2>



Blockchains and cryptocurrency can do more. I’ve previously subjected you to <a href="https://thedrop.beehiiv.com/p/universal-based-income?utm_source=thedrop.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=universal-based-income&amp;_bhlid=34e159e0ef9c7077a65f0e9cef709023ba1b8826">some thoughts on tokenomics</a> within the context of World, and the role that well-designed, hyper-utilized token experiments could play in humanity’s future.



Zoom out. By their very nature, properly decentralized blockchain networks are intended to be immortal, lasting much longer than bull and bear markets.&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">Ubisoft CEO responds to the Stop Killing Games petition, stating the publisher is &#39;working on&#39; improving its approach to end-of-life support, but that &#39;nothing is eternal&#39; <a href="https://t.co/jJUzFQOnZB">https://t.co/jJUzFQOnZB</a>&mdash; PC Gamer (@pcgamer) <a href="https://twitter.com/pcgamer/status/1946946266484941205?ref_src=twsrc%5Etfw">July 20, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Nothing is eternal, maybe, but it can still be a goal.



Blockchains will be online for as long as there are people interested in running the machines that serve as validating nodes on the network, and the modern-day blockchain space is built on incentivizing those people to continue doing so with valuable tokens.



It could be that the current narrative bent towards consumer apps over infrastructure is missing the forest for the trees, particularly when it comes to gaming.&nbsp;



<h2 class="wp-block-heading">Potential gaming applications</h2>



<a href="https://www.stopkillinggames.com/">Stop Killing Games</a> is a consumer movement that hopes to sway studios and publishers from snuffing out games from their back catalogue, most of which tend to be online-only these days. Games are routinely made unavailable for good when the company responsible decides the overhead costs of the relevant server is, economically, not worth the squeeze.



Blockchain fixes this. While blockchains themselves are not exactly suitable to host online games in their entirety, there could be a future where gaming communities band together to operate servers on their own, paying for the upkeep through token rewards in the same way that Ethereum or Bitcoin validators are sustained by token emissions.



Of course, it’s debatable whether it’s possible in practice, especially when dealing with modest userbases. But in a world where crypto is still a universe of niche apps mostly populated with relatively small active communities, there are few other use-cases that make sense with longevity in mind.&nbsp;



Perhaps killer consumer crypto apps are already here — they just don’t know it yet.



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blockchain

The case for how crypto can Stop Killing Games

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



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A few years back at Bitcoin Amsterdam, I <a href="https://www.youtube.com/live/SSVajSFE14Q?feature=shared&amp;t=14160">watched</a> Core contributor Sjors Provoost make a point about the right to financial privacy in today’s digital world.



“I go to the bathroom at the train station right now. If I pay with my debit card, these records are kept for at least a decade. So the bank can actually look up, 10 years from now, exactly at what time I went to the bathroom. I think that is ridiculous, and I think everybody would agree that&#8217;s ridiculous.



“I think we should change the financial system to [stop doing] that.”



The panel featuring Provoost was about how the Financial Action Task Force (FATF) threatens Bitcoin privacy.



Which, to be fair, is something the intergovernmental agency has absolutely done over the past decade or so. FATF’s anti-money-laundering policies directly influence how worldwide regulators treat Bitcoin mixers and other privacy protocols built around more trustless implementations like CoinJoin.&nbsp;



Surprise, they really don’t like them.



It was on this day in 2017 that BitMixer, then considered the largest Bitcoin mixer by volume, bowed out altogether amid rolling raids on darknet marketplaces across the world.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcmYMqecVq-gcQkiSW0YZahYx_Gt2YobG_RNx1M8va3ZzvqYnsdzXMR0ETxK9DYvZef7Tab2myFecHTrkx3me3Dv236R8mFAUZDh8-YQIMOWuAc0SjKkXgBMCnU44hZYBUtiRUP?key=5Mb2084A0KY4WJoOqHZcdQ" alt=""/><figcaption class="wp-element-caption">In the comments, the OP was adamant that they were not shutting down due to any interaction with authorities.</figcaption></figure>







BitMixer was the quintessential centralized mixing service. Users would enter some parameters onto a website and send bitcoin to an address, after which they would receive the same amount of coins back, minus a fee. The bitcoin received was made of entirely different UXTOs, which helped to break any blockchain analysis that might link them to the original sender.



All standard for most Bitcoin mixers, including its predecessor <a href="https://blockworks.co/news/bitcoin-fog-founder-convicted-by-jury">Bitcoin Fog</a>. Where BitMixer stood out was its reliability and speed, particularly for large orders, having accepted up to 2,000 BTC at a time ($5.4 million when it shut down and almost $236 million today), with operations backed by a larger liquidity pool than its competitors.&nbsp;



In November 2015, BitMixer had <a href="https://themerkle.com/interview-with-the-owner-of-bitmixer-io-a-high-volume-bitcoin-mixer/">reported</a> processing around 65,000 BTC in one month (around $44 million back then).



BitMixer’s owner also promised that the servers were out of reach of regulators. (“Our servers are located in a country where US authorities can’t get access to the server without a local court order. Bitcoin is not considered as money here, so we can’t be a money-laundering service.”)



They added that they use encrypted disks and delete all order data after 24 hours, including erasing used bitcoin addresses from the official wallet after mixed coins were distributed. “Even if the server is seized, they will find nothing,” the owner was <a href="https://themerkle.com/interview-with-the-owner-of-bitmixer-io-a-high-volume-bitcoin-mixer/">quoted</a> as saying.&nbsp;



Users could additionally generate a letter of guarantee signed by BitMixer’s PGP key that would represent an obligation to send the mixed coins, so that any shortchanging could be cryptographically verified.



It was no <a href="https://static.googleusercontent.com/media/research.google.com/en//pubs/archive/46785.pdf#:~:text=five%20ransomware%20families%2C%20the%20top,given%20family%20Cerber%20CryptXXX%20CryptoDefense">secret</a> that BitMixer was relied upon by users of darknet marketplaces and ransomware hackers. And the service’s retirement post came only days after a multi-national sting on AlphaBay, which ran outgoing user transactions through unnamed tumbling and mixing services to provide users with privacy.



Over the following years and until today, a number of high-profile mixing services would either shut down voluntarily or be forced to close by authorities, including Helix (with the owner later indicted and sentenced), BitBlender, Bestmixer, Blender.io, ChipMixer, Sinbad.io and Bitcoin Fog. Darknet markets followed a similar trend.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdFRRPWqN6DfQvbvDE_IJZ3oErO-tgZLelSHnwTd88ZlRACW9Fu4HZKiwIB2PqKMAHoH2VW81EQ1c7wPkTcH1-vIodpW-GC4pZi8xPItocfq2EQYOOSBWn8uO-7QeElJIDeE2BpOw?key=5Mb2084A0KY4WJoOqHZcdQ" alt=""/><figcaption class="wp-element-caption">A helpful explainer on the philosophy behind BitMixer was <a href="https://web.archive.org/web/20150314222329/https://bitmixer.io/why.html">posted</a> to its website. (NB: Take caution in interacting with any service using the same domain or name today.)</figcaption></figure>







Of course, regulators eventually came for decentralized alternatives through the <a href="https://blockworks.co/news/samourai-wallet-matters-memecoins-privacy">case against Samourai Wallet</a>, which is still pending pre-trial motions set for later this year.&nbsp;



Meanwhile on Ethereum, smart contracts and their developers have been under fire via the <a href="https://blockworks.co/news/roman-storm-trial-opening-statements">Tornado Cash case</a>, which has seen one co-founder given a 64-month prison sentence, now under appeal, while the other continues to face up to 45 years in prison.&nbsp;



So, where does that leave Sjors’ quest to keep our bathroom trips at European train stations private?&nbsp;



Frustrating as it may be, while these cases shake out, it might be safer to simply hold it until you get home.



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Why Bitcoin’s biggest mixer walked away from ‘huge profits’

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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84% of general partners and limited partners are feeling pretty good about crypto, a <a href="https://btlaw.com/en/investment-funds-outlook-report?utm_source=vuture&amp;utm_medium=email&amp;utm_campaign=pfam%20report%202025">survey</a> from Barnes &amp; Thornburg found.&nbsp;



It’s also one of three areas highlighted by general and limited partners as being a part of the market that thrives in volatility.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfA_r_S1MUpklYhD5yWFkDDBTJc8842B2CNqW00Xsy80ON_GqGpp3UPSePGzJP5bzBX7QLmoByXLDCEW3gnazMzWpsrCpTzXs9OySYisJvZYm8W8rvykmP-d8-5WDCkKtx_ArbifA?key=TJg8wOJzl-lanIp5Wmso_Q" alt=""/><figcaption class="wp-element-caption">Source: Barnes &amp; Thornburg</figcaption></figure>



In a similar vein, a whopping 85% of respondents said that they’re looking to invest in crypto this year, many of whom — 61% — noted that it’s thanks to the regulatory clarity. Woo-hoo!



But both the market growth and the innovative investment products offered are big draws for them as well.&nbsp;



Compared to this time last year, are you more or less likely to invest in cryptocurrency funds?



<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="1224" height="820" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=1024&amp;h=1024" alt="" class="wp-image-105458" style="width:648px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=1224 1224w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=384 384w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=390 390w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=327 327w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-3.png?w=80 80w" sizes="auto, (max-width: 1224px) 100vw, 1224px" /></figure>



Here’s a chart comparing 2024&#8217;s responses to 2025&#8217;s, just in case you need to see the year-over-year change for yourself. I know we’ve become slightly desensitized to the growth that this industry’s experienced in the last year, but these numbers are pretty wild. 



[Asked to those who are more likely to invest in crypto funds] What level of importance do you place on the following when deciding whether to invest in a cryptocurrency fund?&nbsp;



<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="1368" height="1058" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=1024&amp;h=1024" alt="" class="wp-image-105459" style="width:704px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=1368 1368w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=332 332w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=337 337w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=283 283w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-4.png?w=80 80w" sizes="auto, (max-width: 1368px) 100vw, 1368px" /></figure>



This gives you a better idea of what’s driving investments. Outside the top three motivators, institutional adoption is relatively high, which is understandable, given that general economic conditions are not as significant a driver.&nbsp;



Unfortunately, there’s not a clear reason given as to why investment professionals don’t see economic conditions as a big factor driving interest here. However, across the larger landscape, “nearly 75% of respondents say that the current economic outlook presents an investment opportunity.”



I’m going to put on my guessing hat here and say that I think this is probably tied to the fact that crypto has not proven that it’s a safe haven play in times of market uncertainty. If you need a solid example, take a look at the leg down bitcoin took in February after we started receiving the tariff headlines.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdzMvxyFs_urG2JvlSHRwiWojqiFg_mJwyJLg4KGgpSsy9EGhaDnAGQLkceAfrlh1zUMIAxWedl2H3iMiZqk8cowBUu-b_C-IXxKMGq4UI6Zofzvn-ooa2p1_2PJVpk8b-Hr18m?key=TJg8wOJzl-lanIp5Wmso_Q" alt=""/><figcaption class="wp-element-caption">A look at the last six months, courtesy of Blockworks Research</figcaption></figure>



Mind you, that’s not to say that bitcoin hasn’t shown its resilience, especially since, according to Coinbase, it’s up 81% at the time I’m writing this newsletter.&nbsp;



If we zoom out, Barnes &amp; Thornburg noted that the survey finds “ample room for optimism” across a number of sectors — from crypto to hedge funds. All of this is based on survey data collected in April and March from investment professionals, including GPs and LPs.&nbsp;



All in all, I think the data shows a pretty decent appetite for crypto, especially since a lot of the momentum for the industry is tied to regulatory clarity and the overall crypto market growth. Those are both big positives for the space.



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BittensorTAO

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