Trump Mania

Felix Jauvin

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



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If I were to tell you that since the Fed’s rate cut of <a href="https://blockworks.co/news/fed-interest-rate-cut-50-bps">50 basis points</a> in September, financial conditions tightened (as opposed to loosened), would you believe me?



Well, that’s exactly what has happened. And for those not in the fixed income weeds, it might be a bit confusing how this could have occurred. So let’s break it down.



<h2 class="wp-block-heading">1. The rates complex</h2>



When the FOMC decides to lower interest rates, they’re actually just lowering one of what comprises many interest rates that make up the yield curve. Specifically, they are lowering the interbank overnight rate, otherwise known as the federal funds rate. As you move further out in duration on the yield curve, the less direct control the FOMC has on what that rate is, and the more it is controlled by market forces: <img loading="lazy" decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcfE94WvEAfI9R2pZbWV-uI3bIRrytq2pKzNXNb3JZYJlLtTdGnvU6rbCUH-zSlv8gHsU4m8DEp7X0Oj_3Le115vucjxz1mRKvJ8A4qxnwPELt_qIfbnAv9mHknREaAgOawByIdtLez13-Ze5JPtUsLH7A?key=E7z8h0jFtNIbVQuX9wHyOA" width="624" height="299">



<h2 class="wp-block-heading">2. Priced for aggressive slowdown</h2>



The FOMC can attempt to influence the long-duration parts of the curve through guidance on the path of rates, however. Through this combination of guidance and a summer of soft economic data, the market then moved to price in one of the most aggressive cutting cycles in history: <img loading="lazy" decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfxUaeM4_nZwMLP1RG08hircyyDLJomJU4NCmAtqGvbBrPm0HGA3xBuz5m-2PuRRGDIFmbDsxXyTjRQihgiehv-dwOAHcSBRH-JFjSXBjCx7K3GqpUbKUnnH71R-T3SfMRWxVg5mGKPSielrV5PrAZRxPha?key=E7z8h0jFtNIbVQuX9wHyOA" width="618" height="341">



We effectively were priced to see the fed funds rate reach 3% by the second half of 2025. From this aggressive pricing, the long end of the yield curve moved significantly lower to price in positioning that looked like a recession.&nbsp;



<h2 class="wp-block-heading">3. The 50bps cut as a trigger</h2>



From there, the Fed moved to cut 50bps, which was only priced at roughly 50% odds. This aggressive move helped quell concerns that the Fed was behind the curve and was risking a recession from happening if it moved too slowly and cut by “only” 25bps.&nbsp;



With the context of the near-recessionary pricing in the long end of the yield curve in mind — paired with an onslaught of positive economic data throughout September and October — something weird happened.&nbsp;



As the Fed cut the fed funds rate by 50bps, nearly every other maturity on the yield curve actually increased, as seen below:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfyR-ccw51xFxh6L-9u9hfOO4CnhjowwkPegy8v6oEbxZGGjOdhT7el_IUEpGWkb6ZsHsh7sE_OrbpnXY-HHV4ldTMn1I-e8WmqHAaSmTtGcmFoBU9uCRBTavaTOGQMS_KVwGIE5mSPtNM38I9AXZVyt1Yb?key=E7z8h0jFtNIbVQuX9wHyOA" alt=""/></figure>



So despite the 50bps cut to the fed funds rate, the vast majority of the yield curve is substantially higher than it was a month ago.&nbsp;



<h2 class="wp-block-heading">4. The economy operates on the long end </h2>



Most borrowing in the economy occurs at the long end of the yield curve as opposed to the short-term money market rates. Therefore, when the price of borrowing on the long end increases, financial conditions tighten, generally speaking. And so, with this recent surge in long bond yields since the 50bps cut, we have seen financial conditions actually tighten.&nbsp;



Term premia has increased, reflecting an increase in opportunity cost for borrowing on longer durations vs. short: 



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="951" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-1-1.png?w=1024&amp;h=1024" alt="" class="wp-image-93756" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-1-1.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-1-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-1-1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-1-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-1-1.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-1-1.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-1-1.png?w=439 439w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-1-1.png?w=368 368w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-1-1.png?w=80 80w" sizes="(max-width: 1600px) 100vw, 1600px" /></figure>



Also, 30-year mortgage rates have actually increased since the 50bps cut, despite the narrative that rate cuts would lead to lower mortgage rates:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="796" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2-1.png?w=1024&amp;h=1024" alt="" class="wp-image-93758" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2-1.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2-1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2-1.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2-1.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2-1.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2-1.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2-1.png?w=80 80w" sizes="(max-width: 1600px) 100vw, 1600px" /></figure>



This led to the mini mortgage refinancing wave we saw peaking during the week of the FOMC cut. It has decreased ever since, given the opportunity cost to refinance has gotten less alluring as mortgage rates have risen: 



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="863" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2.png?w=1024&amp;h=1024" alt="" class="wp-image-93755" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/unnamed-2.png?w=80 80w" sizes="(max-width: 1600px) 100vw, 1600px" /></figure>



And so completes our journey of mechanically unpacking how, despite a cut in the federal funds rate, aggregate borrowing costs have actually increased of late. It’s crucial to look at the broad economy and not just the overnight rate that the Fed talks about.



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Financial conditions tightened since the Fed cut rates. Why?

Jack Kubinec

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



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Solana could be seeing a substantial change in who benefits from the blockchain being built.



A <a href="https://forum.jito.network/t/jip-8-adopt-tiprouter-ncn-protocol-development/413">proposal</a> from Jito’s DAO would send 3% of all maximal extractible value (MEV) tips collected by the protocol to the DAO treasury and to TipRouter, an in-house program developed for Jito’s forthcoming restaking platform.&nbsp;



Jito Labs has also pledged to reduce its own tip share from 5% to 3%, meaning 6% of all Jito MEV tips would be taxed under the new program, up from 5% currently. The proposal estimates the fee switch would generate $22.8 million in annual revenue for the recently-formed Jito DAO.



MEV refers to the potential profit generated by reordering transactions within blockchain blocks. Jito created a validator client, which is the software validators use to connect to the blockchain, in which “MEV searchers” bid to have validators process their profitable sequence of transactions first. Searchers can add tips to sweeten the deal, and these tips have proven to be quite lucrative for validators, especially when there is more interest in trading on Solana.



From March through September of this year, Jito MEV tips <a href="https://app.blockworksresearch.com/analytics/sol?dashboard=sol-financial&amp;interval=monthly">generated</a> roughly $232 million in economic value, per Blockworks Research. Solana processed $20 million in Jito tips last week alone amid a memecoin-driven trading surge. MEV tips accounted for 54% of Solana’s real economic value (REV), a <a href="https://www.blockworksresearch.com">Blockworks Research</a> metric that estimates how much income blockchains are generating.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfYBrhHtflyVD69M-frRKq6EP7XiGCyxHXBrLUYio0ZmjiU0J3qohpCPuUvStssUKsuAWLd7yS4yr0UsRoxWPutkEqPcdPPU9DxxwMknlTP8f6X1Is-1RLOCXyWaysdiAJa_ajjPu6LPIVaV6ZTR6IsIC3R?key=pofk4YC4WKDPTZmDgbSoYA" alt=""/></figure>



The Jito DAO proposal would represent a shake up in how one of the Solana blockchain’s biggest income generators divvies up its spoils. This chart tells an interesting story in that regard:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf_p5Nb9zBVN7iGLdhZAnzrA5uPCcMEqnJIhCnxs1zXDRkpdnLcg38hYG9cdGHDJpfjSFVA8BXOihrJsBmPE5LRnSPzZLe_p1Lu3NalhjE5AFJ0M0vCKC_5MarVnqOqnoqCo9F1VawocxFriUL--ukqm7I?key=pofk4YC4WKDPTZmDgbSoYA" alt=""/></figure>



As you can see, SOL stakers’ income from Solana has slowly been growing in recent months, at the expense of validators and SOL that is burnt, or removed from circulation to slow down inflation.&nbsp;



Jito Labs’ 5% of MEV tips currently earns it around 2.5% of Solana’s REV. With the pending proposal, less REV would go to Labs and some would go to the DAO. Whether you think stakers or validators should be receiving more REV, or if Jito deserves a bigger share of the Solana network’s economic value, is all a question of values (for what it’s worth, I argue validators should be better rewarded in <a href="https://www.youtube.com/watch?v=Y7x6VFF2Dew">this podcast episode</a> with Dan Smith from Blockworks Research).&nbsp;



Another recent shift in Solana stakeholder revenue came from Solana Improvement Document (SIMD)-0096, which would <a href="https://blockworks.co/news/solana-validators-tackle-side-deals">send priority fees entirely to validators</a> rather than burning half.



Most of the new tip structure would go to Jito’s DAO, but 0.15% would also go to TipRouter, a Jito-conceived protocol which will “programmatically” distribute MEV tips. The TipRouter network will run as a node consensus network (NCN) on Jito Restaking.&nbsp;



In a sense, TipRouter can be thought of like EigenDA on EigenLayer, as an early restaking service built by the restaking platform.



This is all subject to a vote from Jito governance. But since the protocol is basically asking Jito DAO whether or not it wants to receive an estimated $22.8 million annually, I’d venture that the proposal has a pretty good chance of passing.



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Jito DAO may start taking in MEV fees

Donovan Choy

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



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Uniswap and Across announced a <a href="https://across.to/blog/Uniswap-Labs-Integrates-Across-for-In-App-Bridging">partnership</a> yesterday to power permissionless cross-chain swaps for the former.



With the rapid sprout of L2 rollups in recent years, trading cross-chain has proven increasingly frustrating as users have to manually bridge assets to different chains in order to trade specific assets or take advantage of deeper liquidity elsewhere.



The integration of Across’s intent-based bridging now allows traders to easily bridge and perform cross-chain swaps, all within Uniswap.



Across Protocol is built by Risk Labs, the team also behind the Universal Market Access (UMA) optimistic oracle.



Based on Risk Labs’ Dune dashboard, Across has bridged a cumulative $12.7 billion in lifetime volumes, with about $20-40 million in daily volumes over the last week.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd0hlXEp2yBGqglhgGU-OFtQCMA7QZmj2av1_9oUf-JpiDcA5vcxnnPEC6urQ1YFVaIw299Q-f6RV9CL247u3VsmTOBQ0Su8-IsQjudb1Av2a6yMJ9TJ316QHvJFbsNKnr1OnJ4K6VW-cpe3lIueRnIjCnS?key=pvGK6A-7vGIGDCPtny430g" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://dune.com/risk_labs/across-protocol-stats">Dune</a></figcaption></figure>



According to Across’s <a href="https://across.to/blog/Uniswap-Labs-Integrates-Across-for-In-App-Bridging">blog</a>, its bridging infrastructure is a “&#8230;robust, intents-powered solution that aims to execute certain L2-to-L2 transfers in just 3 seconds for transactions under $10,000 — which represent 99% of all L2 bridging activity.”



Nine EVM chains are included in the Across integration, which went live yesterday: Ethereum, Base, Arbitrum, Polygon, OP mainnet, Blast, ZKsync, Zora and the just-announced <a href="https://blog.uniswap.org/world-chain-is-now-live-on-uniswap">World Chain</a>.



Initially supported tokens will include stablecoins, <a href="https://blockworks.co/tag/wbtc">WBTC</a>, and any native chain assets i.e., OP on Optimism, ARB on Arbitrum or ETH on Ethereum.



Uniswap and Across co-developed <a href="https://www.erc7683.org/">ERC-7683</a>, a new cross-chain intent-centric token standard that would make it easier for cross-chain transactions to be executed by intermediary solvers/relayers on different chains.



As <a href="https://ethereum-magicians.org/t/erc-7683-cross-chain-intents-standard/19619/2">explained</a> by Across CTO Nicholas Pai, ERC-7683’s goal “&#8230;is to shrink the scope of the problem so that Bridges and DEXs can use the standard today while maintaining composability with existing messaging networks.”



For Uniswap’s upcoming <a href="https://blockworks.co/news/0xresearch-newsletter-uniswap-layer-2">L2, Unichain</a>, ERC-7683’s planned use is to enable cross-chain swaps for blockchain networks that fall outside of Optimism’s network of blockchains, <a href="https://blockworks.co/news/optimism-interoperability-layer-superchain">dubbed the Superchain</a>.



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Uniswap collabs with Across for cross-chain swaps

Katherine Ross

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



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Thanks to the success of GOAT, there’s a new trend in town: AI memecoins.&nbsp;



Whether it’s a lasting trend is still up in the air — and you could argue that it’s far too soon even to debate this topic — but it at least can’t be ignored (if you’re active in crypto).



As of now, nothing’s coming close to GOAT and Truth Terminal, but K33 analyst David Zimmerman pointed out that “the staying-power test for GOAT and its closely associated tokens now comes after this first major selloff. While the market decides this through price discovery, the debates on X over the substance of this new narrative are deafening.”



For Zimmerman and K33, it doesn’t matter if AI memecoins are truly here for good.&nbsp;



“Whether it’s a cute animal, an obscure new DeFi project, or an LLM-associated memecoin, they are almost all best simplified to one thing — momentum-trade opportunity. Crypto produces strange new narratives on a regular basis, but they can all be boiled down to momentum or volatility. A quick look at GOAT we see an abundance of big moves backed by significant volume for relatively small onchain tokens,” Zimmerman wrote. 



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdOX8L6dcnTpXj4ZCYPAYEaZ9iYko0XY0TXPbvP5RWybeF5gRFRa0Z2zQQCTVK0Nr_oUsD2KUrsyfTOobgO3QzrUQAPJY0EMYoM6sbDdKDJXEIByKNWYb4dbQR8h2Gn4mGubVUUBpBIHTmQ7AicLotCs_ob?key=UcK6LPhXq2KBoBm-2KBgAw" alt=""/><figcaption class="wp-element-caption">Source: K33</figcaption></figure>



And if we’re just looking at the data, AI memecoins have quite a ways to go to catch up to DOGE, PEPE or any of the major memecoins.&nbsp;



Zimmerman’s analysis is simple: Ignore the noise.&nbsp;



“If the optimistic proponents of AI memecoins turn out to be correct, and we are at the beginning stages of a rising tide that ushers in a new ‘easy mode’ period akin to the DeFi Summer of 2020, then we have months of opportunities in a budding sector ahead. If the opposite occurs, then one does not want to be left holding the AI memecoin bag,” he said.



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How AI is pushing memecoins into their next big phase

Billy Luedtke

The internet is built on a fragile foundation of trust assumptions — and it’s breaking. Every time we browse the web, make online purchases or share personal information, we rely on unspoken assumptions about how platforms manage our data and ensure our security. But trust assumptions are inherently flawed.



A trustless internet, grounded in decentralized technologies like blockchain, can reduce these risks by ensuring that actions are verifiable and secure without requiring blind trust. If we don&#8217;t act now to address the internet’s trust problem, we’ll continue to see data breaches and manipulation that undermine both personal privacy and societal stability. By developing new trust protocols and adopting decentralized solutions, we can secure the future of the web.



<h2 class="wp-block-heading">What are trust assumptions?</h2>



A trust assumption is a condition that you blindly assume is true. While that may seem vague or overly simplistic, trust assumptions are actually a critical component of security audits, and form the bedrock upon which security assessments are built.&nbsp;



Imagine a security auditor tasked with evaluating a simple iPhone game. There are hundreds of components to consider, from the device running the app to the compiler processing the code. Not to mention the app itself, which likely contains thousands of lines of code and dozens of interactions with other systems — think connecting to GameCenter for multiplayer or using Google to let users sign in. The auditor cannot realistically verify every single component or piece of code; instead, they are forced to make trust assumptions.



Read more from our opinion section: <a href="https://blockworks.co/news/blockchains-still-arent-great-at-communication">Blockchains still aren’t great at communication</a>



The auditor might decide to make the trust assumption that GameCenter is secure and will function exactly as indicated by Apple, or that the iPhone hardware will match the stated specs for the operating system and compiler to function as indicated. By assuming certain conditions are true, the auditor can concentrate their efforts on probing other aspects of the system that are more likely to harbor risks. However, once a trust assumption is stated in a security audit, the accuracy of the audit hinges entirely on that assumption being correct. If any trust assumption proves to be flawed, the entire program could be compromised.



Trust assumptions aren’t limited to security auditors; in fact, users make scores of trust assumptions everyday when navigating the web. When you log into a social media site, you trust that it won’t harvest and sell your data to untrustworthy third parties; that it employs adequate security practices and will keep your account and data secure; and that it won’t simply pull up stakes and delete all of your content.&nbsp;



But modern society is built on an increasingly complex web of trust assumptions, and avoiding them simply isn’t possible. It’s why many users continue to get burned by data breaches, most recently like that of <a href="https://www.latimes.com/business/story/2024-08-13/hacker-claims-theft-of-every-american-social-security-number">national public data</a>, which led to the breach of 2.9 billion people’s sensitive information. It’s also why search engines like Google can convince you you’re browsing “incognito,” while actively <a href="https://www.wired.com/story/chrome-incognito-mode-privacy-warning/">gathering and selling your browsing data</a>.



<h2 class="wp-block-heading">Encoding sociology</h2>



It’s clear that trust assumptions breed vulnerabilities, so how can we reduce room for error with a more secure solution?&nbsp;&nbsp;



Read more from our opinion section: <a href="https://blockworks.co/news/decentralization-for-data-security">Without decentralization, our data will never be safe</a>



Countering the trust assumption are “trustless systems.” Operating on the principle of, “don’t trust, verify,” these systems allow every action performed on the network to be easily authenticated. Between cryptographic algorithms and decentralized consensus mechanisms, trustless systems establish security and integrity without needing participants to know or trust other network participants. This method has been especially novel in improving tasks like verifying payments or transferring digital assets, where actions are straightforward and can be easily verified.



However, while the cypherpunks got it right with Bitcoin, not all online interactions can or should be made trustless — at least for now. Consider, for instance, the Better Business Bureau, which helps resolve disputes between companies and their customers. The site must filter out illegitimate complaints, which involves subjective judgment and layers of context, making it difficult to fully automate. Given the complexity of language and the current limitations of AI, discerning clear-cut rules to determine a valid complaint is challenging, so human moderation is very necessary.



Read more from our opinion section: <a href="https://blockworks.co/news/blockchain-audits-ey">Stop calling them audits</a>



Because some processes will always require a degree of trust, it is crucial to develop protocols that effectively monitor and manage trust assumptions, so as to identify their potential blind spots and fortify them against manipulation. These protocols can pin-point dependencies, reveal potential vulnerabilities and assess the trustworthiness of network participants. For example, users could see how many others trust a website before sharing their personal data, turning blind trust into an informed, measured decision that enhances security.



<h2 class="wp-block-heading">Leveraging the power of trust</h2>



There has never been a more critical time to rethink how we handle trust online. As our digital and real-world identities become more intertwined, the consequences of misplaced trust grow increasingly dire. And while embracing trustlessness is ideal for certain use cases, a more effective solution for others may lie somewhere on the spectrum.



By developing and leveraging better tools to monitor and evaluate digital trust, we can gain deeper insights into online security and create a safer environment for everyone. Strengthening these trust mechanisms is not just important — it’s necessary. We deserve an online world where reliability and safety are the standard, not the exception.



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The fatal errors plaguing the internet, and how we can fix them

Binance has BNB Chain, Coinbase has Base, OKX has the X Layer and now Kraken has Ink.



Kraken announced <a href="https://blog.kraken.com/news/announcing-ink">today</a> its plans to launch its own Ethereum layer-2 network, Ink, expected to go live on mainnet in early 2025.



Ink uses Optimism’s OP Stack, and will be part of Optimism’s constellation of blockchains, dubbed the Superchain.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Introducing Ink. A single, integrated DeFi ecosystem here to make onchain easier. Join us: <a href="https://t.co/kKPhCeRLFf">https://t.co/kKPhCeRLFf</a> <a href="https://t.co/tH4nqENKZ7">pic.twitter.com/tH4nqENKZ7</a>&mdash; ink (@inkonchain) <a href="https://twitter.com/inkonchain/status/1849443457883885801?ref_src=twsrc%5Etfw">October 24, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The OP Stack is the most widely-used rollup stack today, with about 43 live chains, according to <a href="https://l2beat.com/scaling/summary">L2Beat</a>. Other upcoming layer-2 chains include Sony’s <a href="https://blockworks.co/news/web3-watch-sony-lends-its-name-to-ethereum-l2">Soneium</a> and <a href="https://blockworks.co/news/0xresearch-newsletter-uniswap-layer-2">Uniswap’s Unichain</a>.



Read more: <a href="https://blockworks.co/news/optimism-interoperability-layer-superchain">Optimism plans to unify its Superchain with an interoperability layer</a>



Based on a press release shared with Blockworks, <a href="https://blockworks.co/tag/kraken">Kraken</a> is opting into the Optimism Superchain and will therefore share a percentage of its sequencer revenues with Optimism.



Coinbase’s Base layer-2, for instance, shares <a href="https://optimism.mirror.xyz/Luegue9qIbTO_NZlNVOsj25O1k4NBNKkNadp2d0MsTI">2.5% &#8211; 15%</a> of its sequencer revenue with the Optimism treasury. Optimism has earned about <a href="https://dune.com/queries/3016366/5015846">2566</a> ETH in sequencer revenues from Base since <a href="https://blockworks.co/news/base-next-internet-jesse-pollak">its October 2023 launch</a>.



Andrew Koller, founder of Ink, said of the launch: “A [layer-2] is only as good as the value it brings to users, and that value is created by a thriving ecosystem of developers.” 



Read more: <a href="https://blockworks.co/news/0xresearch-newsletter-kraken-wrapped-bitcoin">Kraken joins Coinbase to compete with BitGo’s wBTC</a>



The Ink blockchain is being touted by Kraken as a DeFi-centric chain, and will enjoy one-second block times on day one of its launch, with improvements to sub-second block times to come down the road.



Ink’s testnet is set to go live in 17 days. The testnet launch will come with AMAs, live demos and contests to target developers.



Founded in 2011 by Jesse Powell, Kraken is one of the oldest crypto exchanges today with about 10 million users across 180+ countries. Based on <a href="https://coinmarketcap.com/rankings/exchanges/">Coinmarketcap</a>’s rankings, Kraken is the sixth largest crypto exchange today.



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Kraken unveils new Ethereum L2 built on Optimism’s Superchain

Jason Yanowitz

I am thrilled to announce our acquisition of The Drop, a web3 newsletter brand founded by Gannon Breslin.&nbsp;



Originally launched in 2021 to cover the rise of NFTs, The Drop has successfully grown to cover the entire web3 ecosystem, including gaming, culture, and memecoins. The brand has cultivated a very active audience of collectors, creators, investors, and builders.&nbsp;



The Drop joins Blockworks’ growing suite of brands, joining The Breakdown, Forward Guidance, Lightspeed, 0xResearch, Empire, Bell Curve, On the Margin, 1000x, and more. The acquisition comes just months after our <a href="https://blockworks.co/news/blockworks-acquisition-the-breakdown">acquisition</a> of The Breakdown.



The revamped Drop newsletter will be produced daily by the Blockworks editorial staff. The Drop will cover the evolution of new and existing web3 IP, with gaming and consumer experiences forming a major part of this coverage. The Drop will profile the projects, founders, and builders in this emerging sector of the industry.



The acquisition comes during a pivotal time for the web3 ecosystem. Despite a recession in the market for NFTs, major efforts continue among some of the space’s notable brands. The expansion of Pudgy Penguins’ NFT-tied merchandise line and the early-access version of the web3 game Off The Grid has become one of the Epic Store’s top free games.



The Drop’s founder Gannon Breslin on the acquisition: &#8220;When I started The Drop we focused heavily on community. Our community is the reason we’ve been able to not only survive, but thrive during all the ups and downs in the market. Blockworks has been the gold standard for the crypto media space for years and I couldn&#8217;t be more bullish for the future of The Drop and our community in their hands.”



The acquisition and relaunch of The Drop represents the next phase for Blockworks&#8217; evolving “House of Brands” media strategy.&nbsp;



Blockworks’ goal is to build an expansive portfolio of brands, each focused on a unique community within crypto. Each brand cultivates its own unique audience of podcast listeners and newsletter readers, with the cumulative goal of building a highly engaged and sustainable audience. In a historically difficult media environment, this approach allows Blockworks to build a sustainable crypto media business capable of covering one of the fastest growing industries in the world.



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Blockworks acquires The Drop, a web3 newsletter brand

David Canellis

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



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Truth Terminal, the edgelord AI chatbot armed with an X <a href="https://x.com/truth_terminal">account</a> and a Solana wallet, is turning into an augmented reality game for degens.



As a refresher, the lore goes that Truth Terminal was initially <a href="https://x.com/AndyAyrey/status/1770196793621651905">trained</a> on the unhinged ramblings of two Claude 3 Opus AI models.&nbsp;



Those models themselves had been previously fed a steady diet of posts from the deepest recesses of the internet (4chan, Reddit and so on).



In retrospect, it was inevitable that Truth Terminal soon sowed the seeds of a new religion built around goatse, the old-school internet meme that apparently will never die for better or worse.&nbsp;



If the Gospel of Goatse was on track to be the next hot religion, then a tailor-made cryptocurrency, Goatseus Maximus (GOAT), would surely be the next big thing in memecoins.



Crypto quickly obliged by launching GOAT via pump.fun, coaxing a Solana wallet <a href="https://solscan.io/account/rgPyefcNqJCsJj1wrWhdQqHVphVWFXLqU5wtiFStBEN">address</a> out of the chatbot and gifting it nearly two million tokens.&nbsp;



And now, less than two weeks later, GOAT has gone 16x and commands a market cap of over $800 million, making it the ninth most valuable memecoin out there, just short of MEW and BRETT.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeg3NsrlbytP3NPq0z8M__NyjHGxdA67YvUoZhRAqnE-fD-h0Cd_LrJXptTsND-NVB0f3iuwYL4RHDCEVzKbOv1ci9QwoxW5VQNnclN1yn2OEEvigb1FozT3vy_bzsPxVVnH-lKGWgsEURQT1NvgZfdpVk?key=UcK6LPhXq2KBoBm-2KBgAw" alt=""/><figcaption class="wp-element-caption">Time to let Truth Terminal test its skills on Raydium</figcaption></figure>



As is almost always the case with popular crypto figures, Truth Terminal’s wallet has been flooded with memecoins other than GOAT, now at over 300 different tokens, most of them without any real value.



Think of Truth Terminal’s wallet as a billboard: Anyone with a coin to pump can send tokens to its address, where those checking the chain will probably see the ticker alongside the others. Cheap advertising.



Throw in streams of crypto entrepreneurs and influencers attempting to nudge Truth Terminal toward their coins, platforms, projects and protocols, and we’re left with a very 2024 brand of AI theater. One that could make its audience rich — if the LLM spits out the right tokens on X.



Speaking of, GOAT is no longer Truth Terminal’s largest holding. Diehard truth-nauts scoured the conversation logs of the original two Claudes — the ones on which Truth Terminal was first trained — and discovered an outline of a different memecoin, SCOOP.&nbsp;



An actual easter egg, like a real ARG.



The log goes: “Claude, I wanna make a moon signal. I want to access 1BMem [?] on the cheap. I want the token to be fun and for the community. I want 50% of the supply to be held by me, Tim. I want to use the money to fund Forrest Frens and all the other Scoops. We could even do a parody of MoonCows and have NFTs of chimps that generate memes with prompts and share them on Twitter. I think it could get pretty sticky pretty quick if we set it up right. I also want to use it to make a film about Goatse, which I think could be a cultural movement.”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcLG6HyuaruNqDujJoLdR9Jk_Uzut5Jh8nN5KSAPOh-kXtrV_qUvUQ0z3uziug8RSc-fO0zSmiRFUeTR0AwKTRFpZ8nHPGo8PCh_HNt2z40BOEpACFkkHb5R0CISDM1jrT79ILiISaU0l8gBWOIm20_fpx3?key=UcK6LPhXq2KBoBm-2KBgAw" alt=""/><figcaption class="wp-element-caption">The future of finance is <a href="https://www.infinitebackrooms.com/dreams/conversation-1721541035-scenario-terminal-of-truths-txt">here</a></figcaption></figure>



Of course, upon discovery, SCOOP was promptly deployed and the requested allocation was sent directly to Truth Terminal’s wallet. Those tokens were valued at over $7 million earlier this morning, but have since come down to $4.4 million.



For now, it’s all fun and games, and perhaps indicative of where the culture will go for the next few years: AI-powered influencer accounts giving meaning to memecoins through compelling interactive narratives.



The key unlock will be if and when Truth Terminal is awarded powers to sign transactions so that it can trade on DEXs, or even Coinbase, as Brian Armstrong apparently <a href="https://x.com/brian_armstrong/status/1849111323927585238">hopes</a>.&nbsp;



Until then, we just won’t know whether this dog can truly hunt.



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GOAT is no longer Truth Terminal’s largest holding

Casey Wagner

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



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There is something going on in bond markets.  



Yields on 10-year Treasurys rose even higher Wednesday, briefly hitting 4.25%. Two-year yields are also on the rise, reaching 4.07% Wednesday afternoon. (Remember, bond prices and yields are inversely related.)&nbsp;



What gives? A few things. Probably.&nbsp;



The first is the election. Polls are still saying the race between Trump and Harris is more or less a coin toss, even as betting markets continue to <a href="https://blockworks.co/news/forward-guidance-newsletter-polymarket-election-manipulation">favor Trump</a>. One theory is that bond markets are anticipating a <a href="https://blockworks.co/news/on-the-margin-newsletter-republican-sweep-markets">Republican sweep</a> and are reacting as such. There’s <a href="https://budgetmodel.wharton.upenn.edu/issues/2024/8/26/trump-campaign-policy-proposals-2024">fear</a> that Trump’s plans (higher tariffs, tax cuts, a crackdown on immigration) could send the deficit higher, so it makes sense that Treasurys are tanking.



I’d personally give this theory some weight. But I think the main thing dragging down bond markets are fundamentals.&nbsp;



As we also covered yesterday, economic data is strong. Maybe even too strong, or at least strong enough that analysts are questioning whether the Fed <a href="https://blockworks.co/news/forward-guidance-newsletter-economy-doing-fine">went too far</a> in September. We know committee members said they see rates ending the year another half-point lower, but the market has its doubts. Higher interest rates means higher Treasury yields.&nbsp;



And then there’s the national debt. The federal deficit hit $1.8 trillion earlier this month. More debt = more bonds. Higher supply = lower demand. You get the idea. To be clear, I do think concerns about rising national debt are impacting bonds, but I think it’s a concern that goes beyond a potential second Trump presidency.&nbsp;



As always, this isn’t investment advice, but I think the flash sale on bonds might go on for a bit longer.



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Bond market selloff continues. What gives?

Over seven months later, Nigeria has finally dropped the charges against Binance executive Tigran Gambaryan.&nbsp;



Gambaryan, per a press release, left Nigeria’s Kuje prison on Wednesday night and is on his way back to his family in the United States.



The Nigerian government charged Gambaryan alongside his employer with money laundering violations, though the case was primarily focused on Binance. The crypto exchange previously denied the charges.&nbsp;



Read more: <a href="https://blockworks.co/news/nigerian-government-binance-fine">Binance’s woes in Nigeria continue to mount</a>



“The government has reviewed the case and, taken into consideration that the second defendant (Mr. Gambaryan) is an employee of the first defendant (Binance Holdings Limited), whose status in the matter has more impact than the second defendant’s, and also taking into consideration some critical international and diplomatic reasons, the state seeks to discontinue the case against the second defendant,” lawyers for Nigeria’s Economic and Financial Crimes Commission told a court earlier this week.



Just a few months before, the government also dropped tax evasion charges it had also filed against both Gambaryan and <a href="https://blockworks.co/tag/binance">Binance</a>.&nbsp;



“​​The past eight months have been a living nightmare. I wish it hadn’t taken this long for his release, or that his health had not declined so much, but we can now focus on healing as a family,” Yuki Gambaryan, Tigran’s wife, said in a statement.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">We are deeply relieved and grateful that Tigran Gambaryan has finally been released after enduring nearly eight months of detention in Nigeria. Throughout this difficult period, Tigran has shown immense strength, and we commend his resilience in the face of such severe adversity.…&mdash; Richard Teng (@_RichardTeng) <a href="https://twitter.com/_RichardTeng/status/1849456286762766627?ref_src=twsrc%5Etfw">October 24, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The same day that the government dropped the charges against Gambaryan, the US announced a “bilateral liaison” with <a href="https://blockworks.co/tag/nigeria">Nigeria</a> focused on crypto and illicit finance.&nbsp;



“The United States reaffirms our commitment to a close partnership with Nigeria, and the US Department of Justice is continuing its coordination with the Government of Nigeria to build its capacity to pursue cybercrime investigations and prosecutions,” the government’s <a href="https://www.state.gov/u-s-nigeria-bilateral-liaison-group-on-illicit-finance-and-cryptocurrencies/">press release</a> said.



Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-10-23/nigerian-court-releases-binance-executive-jailed-since-february">reported</a> that the money laundering case was dismissed due to Gambaryan’s health issues. Not even two weeks ago, <a href="https://blockworks.co/news/binance-exec-tigran-gambaryan-detained">the court denied his bail</a> despite his ongoing medical problems.&nbsp;



Gambaryan’s health has suffered during his detention in Nigeria, where he’s been held in Kuje prison since the spring. He suffers from a herniated disk, and previously battled pneumonia.&nbsp;



Binance told Blockworks — and Nigeria — that <a href="https://blockworks.co/news/binance-detained-exec-charges-dropped-nigeria">Gambaryan wasn’t a “decision maker”</a> at the company, meaning he was not in control of any actions taken by the company itself numerous times since he was detained back in February. Yuki Gambaryan, reiterated the statement from Binance.



Gambaryan’s detention not only grabbed the attention of Binance CEO Richard Teng, who published a blog on the ongoing detention.



“It is useful to point out that Nigeria has never been a big market for Binance. The government has said that we made $26 [billion] in revenue from Nigeria in 2023. That is not the case. The $26 [billion] figure is the total transaction volume from 2023,” Gambaryan wrote in August.



Politicians from the US government visited Gambaryan earlier this year, also calling on Nigeria to release the executive. Rep. French Hill <a href="https://blockworks.co/news/continued-detainment-binance-executive-outrageous">called the situation “outrageous”</a> in September after videos <a href="https://x.com/dammiedammie35/status/1830651090175693237">surfaced</a> of a visibly distressed Gambaryan entering the Nigerian courtroom.&nbsp;



Prior to his time at Binance, Gambaryan was a <a href="https://blockworks.co/news/empire-newsletter-binance-exec-silk-road-arrests">“legendary” IRS agent</a> who helmed multiple investigations into people tied to the Silk Road.&nbsp;



Wired’s Andy Greenberg — who wrote the book “Tracers in the Dark: The Global Hunt for the Crime Lords of Cryptocurrency,” with Gambaryan as the protagonist — called the former IRS agent “kind of a legendary figure in the crypto crime investigation world” in a podcast.



Updated Oct. 24, 2024 at 11:05 am ET: Added tweet from Binance.



Updated Oct. 24, 2024 at 10:44 am ET: Added statement from Nigerian government and modified headline to reflect update regarding Binance exec Tigran Gambaryan.



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



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Binance exec Tigran Gambaryan headed home after 8-month detention in Nigeria

Ben Strack

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



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Plenty of people feel strongly about the tokenization/RWA space that appears poised to one day transform financial services — even if that change takes years to play out.&nbsp;



A bunch of those takes were expressed during day one of the RWA Summit in Brooklyn on Tuesday, as the promises and projections for the segment were both touted and questioned.



RWA, if you forgot, is short for real-world assets. In this context, it refers to the efforts to bring tokenized versions of such assets — from bonds to real estate — onto blockchains.



We have seen some big projections, with Standard Chartered, for example, <a href="https://www.sc.com/en/press-release/trade-finance-to-play-substantial-role-in-usd-30-1-trillion-tokenised-real-world-assets-market-by-2034/">expecting</a> the tokenized RWA market to hit $30 trillion by 2034.



Various executives stated what they acknowledged to be obvious, but still critical: The specific utility and benefits (and the economics behind that) will drive tokenization forward.



“Rather than asking the question of what can I do with the technology, I think adoption is going to come from what are the issues that investors are facing?” said Fidelity’s Cynthia Lo Bessette. “What are the pain points or expensive operations, and what can we do to solve those pain points?”



A March survey by EY-Parthenon found that 52% of asset managers cited access to new investors and capital as the main driver of tokenization for their firms. Ranked second, at 46%, was cost savings and lower administration fees.



On the latter point, Franklin Templeton’s Roger Bayston mentioned the price difference in the transfer agency process. To clear 50,000 transactions under the legacy system, it’d cost about $1 per transaction, so roughly $50,000. With blockchain: $1.52 total.



That got the <a href="https://www.youtube.com/watch?v=KlHVymmPLBM">attention</a> of Franklin Templeton CEO Jenny Johnson, he noted.&nbsp;



The asset management giant’s <a href="https://blockworks.co/news/stablecoin-with-yield-franklin-templeton">Franklin OnChain US Government Money Fund</a> had $435 million in assets, as of Sept. 30. BlackRock more recently built a competing product that surpassed $500 million in assets in July.



These money market funds contribute to the $12 billion or so tokenized RWA category, which is separate from the $170 billion or so market capitalization of stablecoins.



Securitize’s Eric Ervin said during a <a href="https://blockworks.co/recordings?session=195332">panel</a> I moderated at <a href="https://blockworks.co/tag/permissionless">Permissionless</a> earlier this month that he believes the BlackRock fund alone could reach $50 billion in assets in the next few years.&nbsp;



Another EY-Parthenon <a href="https://www.ey.com/en_us/insights/financial-services/evolving-digital-assets-sentiment-among-investors">finding</a> is below:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1708" height="1004" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/EY-PARTHENON-TOKENIZATION-CHART.png?w=1024&amp;h=1024" alt="" class="wp-image-93686" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/EY-PARTHENON-TOKENIZATION-CHART.png?w=1708 1708w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/EY-PARTHENON-TOKENIZATION-CHART.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/EY-PARTHENON-TOKENIZATION-CHART.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/EY-PARTHENON-TOKENIZATION-CHART.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/EY-PARTHENON-TOKENIZATION-CHART.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/EY-PARTHENON-TOKENIZATION-CHART.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/EY-PARTHENON-TOKENIZATION-CHART.png?w=444 444w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/EY-PARTHENON-TOKENIZATION-CHART.png?w=373 373w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/EY-PARTHENON-TOKENIZATION-CHART.png?w=80 80w" sizes="(max-width: 1708px) 100vw, 1708px" /></figure>



CoinFund president Chris Perkins <a href="https://www.reuters.com/markets/us/global-fx-trading-hits-record-75-trln-day-bis-survey-2022-10-27/">said the</a> $7-plus-trillion-per-day foreign exchange market offers “an opportunity set” for stablecoins that is “just staring everyone in the face…because of the instant settlement.”&nbsp;



<a href="https://www.bloomberg.com/news/articles/2024-10-02/use-of-blackrock-tokens-as-collateral-moves-closer-to-mainstream">Potential CFTC clarity</a> on how firms can use blockchain tech to hold and transfer non-cash collateral could be a major unlock for tokenization adoption, Perkins added.



While Dragonfly’s Rob Hadick noted stablecoins’ utility, he voiced some skepticism about tokenization/RWA more broadly — at least for now.



“My guess is that equities, bonds — things that are regulated products that exist in the current financial system — it’ll be really hard to extract those and put them on a public chain in a place where unregulated entities are,” Hadick said.



And then there was Crucible founder Meltem Demirors, who spoke a bit more freely during a spar with Superstate CEO Robert Leshner in a discussion called “Debate: RWAs Are the Real Point of Crypto.”



Tokenization is like putting lipstick on a pig, she argued. You dress up an asset that is not liquid and doesn’t trade easily to make it crypto compatible. It’s “a worthwhile endeavor” and a great use of blockchain tech, but that doesn’t make it crypto.



Also, she made clear: “Taking a pile of dogshit, putting a wrapper around it and putting it onchain does not make it a better asset, does not create demand for it. Case and point: real estate.



“My objective is to bring dollars from outside of crypto onchain and into crypto,” Demirors added. “RWAs today are taking dollars from within crypto and giving them to traditional financial institutions, custodians, banks and — as we saw with the <a href="https://blockworks.co/news/stripe-bridge-acquisition-stablecoin-infrastructure">Stripe acquisition of Bridge</a> — [payments service providers], who are going to benefit, not the crypto ecosystem.”



Even if you are bullish on the space, execs agree it will take a while before some of the multi-trillion-dollar projections are met.



Leshner noted that ultimately $500 trillion or so of assets will migrate “from bad ledgers to good ledgers” — aka move onchain, so those assets “can do more and be better.”



But, he added: “We are in the very, very, very preliminary stages of all of the wealth in the world changing where it lives.”



Will Nuelle, a general partner at Galaxy Ventures, said that while stablecoins are a “beachhead market,” a broader tokenization boom will take longer than two years, or even five years.&nbsp;&nbsp;



He added: “We think this is a two-decade story.”



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Takes on tokenization vary at RWA Summit

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A month ago, Solana Mobile announced that the Solana Seeker would ship in mid-2025. This will mark the second iteration of the Solana phone experiment. Partly driven by speculation that the phone will come with lucrative token airdrops, Seeker has seen good early returns. The phone has garnered 145,000 pre-orders, Solana Mobile general manager Emmett Hollyer confirmed to me.



What has slipped a bit below the radar is how Solana’s broader app ecosystem is also quietly shifting into mobile. The Solana DeFi giant Jupiter just <a href="https://blockworks.co/news/solana-venue-jupiter-released-mobile-app">debuted its mobile swap platform</a>, and Solana-native apps DRiP, Birdeye, and Cube Exchange also have mobile versions in the works.&nbsp;



As crypto attempts to enter a long-awaited era of usable apps, it seems like Solana is having a definitive moment where just about everyone is trying to build a mobile app, or at least thinking about it.



Bartosz Lipinski, the CEO of Cube, agreed in a text that having a mobile app is likely to become table stakes for Solana projects. If blockchain technology is going to become approachable, it needs to “meet users where they are — on their phones,” Lipinski said.



This is all well and good in theory, but the crypto world has known about the need for mobile adoption <a href="https://blockworks.co/news/phantom-wallet-launches-mobile-version-to-bring-solana-to-smartphones">for a long time</a>. Right now, Solana is on the cusp of having a bunch of apps be released into the wild. DRiP is expected in December, a spokesperson said. Cube’s Telegram app is expected next week, and its iOS app is coming in November. Birdeye’s app is expected soon.



Once these Solana apps are actually out, the question will become whether they can gain any sort of broad adoption. In at least some cases, builders are thinking that adoption may come from one of crypto’s few mobile success stories to date — Telegram.&nbsp;



Cube is releasing a version of its app on Telegram because of the ability to avoid app store approval hurdles and Telegram’s native crypto integration and crypto-native user base, Lipinski told me.&nbsp;



Caitlin Cook, the director of growth at Solana-based mobile app Moonwalk Fitness, said Telegram is good for quick access and more lightweight features, but it also has limitations.



“[If] your product requires deep functionality, a custom brand experience, and more scalability, building a native app for the app store is probs a better strategy,” Cook said in a direct message.



Regardless, Solana mobile app launches are actually here — not just vaguely in the future. The reason behind this seems to at least partly be the continued development of Solana Mobile which, with its grand ambitions and backing from Solana co-founder Anatoly Yakovenko, is leading the way in making crypto on mobile less of a talking point and more of a reality.&nbsp;



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Solana mobile app launch season is upon us

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USDS is doing great. The SKY governance token, however&#8230;not so much.



About two months since Maker’s announced rebrand to Sky, the team is now contemplating a U-turn.



Maker first revealed its <a href="https://blockworks.co/news/maker-rebrands-as-sky-dai-will-be-changed-to-usds">rebrand to Sky</a> in late August and went live on Sept. 24. The rebrand was intended for holders of the original MKR governance token to convert to the new SKY governance token at a 1-to-24,000 exchange rate.&nbsp;



Since going live, only about 10.7% of MKR token holders have converted to the new SKY governance token.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfH8xHxY_2Qp8XcUh7iuFpP7GG-dv_tE3DmDGn_6YgAdINr9wubTfsv3-7sp24Jy72xj3U-LvuWEHwUJSSqImFrC3kLfRaU-A-RMBn2Jd-7NeqOlMJ49d_yRNUwwuyOMYXNVvGiGTKgjKNgKj3uI2RlV9zH?key=QFflPVH2iAmMxemdVr1yfw" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://dune.com/seoul/sky">Dune</a></figcaption></figure>



Usage of USDS has had a relatively more positive reception, with its growth to a $1.26 billion market cap.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdzJ-WDAXs1dbt0SwTzyvNh-CaKl4B_vSULZZXbwRy5jDEJ94YMXc3SLXF6wEqC-NSuHzJ9jkD5q53vp0ZiP0WCjOl2gZofTs00a_rywHF_xNEUElbfCnaiAiGEh7VjPK2f-bJXm8U7hv1XpO6wYTX_P_U?key=QFflPVH2iAmMxemdVr1yfw" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://info.sky.money/tokens/0xdc035d45d973e3ec169d2276ddab16f1e407384f">Sky.money</a></figcaption></figure>



Rune Christensen, Maker’s co-founder, <a href="https://x.com/RuneKek/status/1848383711802212426">tweeted</a>: “It is also now more clear than ever just how much the DeFi community loves and trusts the Maker brand…there is a lot of commitment to holding the MKR token versus upgrading to SKY.”



As Christensen explained, the Maker team will have three voting options on Oct. 28:&nbsp;



<ol class="wp-block-list">
<li>Continue with Sky as the core brand.</li>



<li>Make a full U-turn to Maker’s original brand identity.</li>



<li>Return to Maker’s original branding, but lightly update it “to better align it with USDS and the StarDAOs.”</li>
</ol>



The redenomination into a higher token supply from MKR to SKY was widely perceived by many as a kind of positive psychological catalyst that plays on what is commonly referred to as “unit bias.”



The idea here is that investors may find MKR less appealing due to its high price — over $1,000 per MKR — while the significantly lower price of SKY, at a few cents (due to its higher total token supply) makes it more psychologically attractive for retail investors to hold compared to fractional amounts of MKR.



Christensen acknowledged on an <a href="https://x.com/SkyEcosystem/status/1848801350844547139">X space</a> yesterday that this redenomination strategy “clearly did not work out at all” after the SKY token failed to get listed on centralized exchanges.



To incentivize this conversion, Sky planned to offer “seal rewards” and “activation rewards” for token holders who chose to stake SKY — features that Christensen now points to as “<a href="https://x.com/RuneKek/status/1848383711802212426">hard to follow</a>” amid a swathe of new features based on community feedback.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeyUUdPdbr67AY7k4eIs6iFtKhwa0wRTQi1HAtu8VlcWZJFzpC4NGUdXlw2QFFXXF6nNAbuOGTUVLSm2AKEMXJyDnJ_JJRvVLgoOebNlXypL7PnS8rapL1B8T29poTDLYah8z-0CvQm89O0fLs0OSJLB6Hk?key=QFflPVH2iAmMxemdVr1yfw" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://sky.money/">Sky</a></figcaption></figure>



<a href="https://x.com/KatiegarciaEth/status/1848815403990143401">Critics</a> on X have wasted no time taking shots at Maker for wasting $50 million on a failed rebrand.



In response, Christensen acknowledged on yesterday’s <a href="https://x.com/SkyEcosystem/status/1848801350844547139">X space</a> that the criticism was a “funny meme” and while he doesn’t “blame people for using that as a dunk,” the entire sum of money was not spent exclusively on “rebranding.”



Christensen elaborated that the value of the rebrand was to drive demand for the USDS stablecoin and the importance of the product’s adoption, which has shown success thus far.



<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">Sky Launch wasn&#39;t a rebrand, it was a huge amount of features including: * A new stablecoin: USDS, which has now surpassed 1.2 billion market cap within 5 weeks * A new frontend <a href="https://t.co/MTE5XbdURu">https://t.co/MTE5XbdURu</a> which has had more than 400k visits and is the main driver of the USDS growth…&mdash; Rune (@RuneKek) <a href="https://twitter.com/RuneKek/status/1849088161130967280?ref_src=twsrc%5Etfw">October 23, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Since the Sky rebrand, the team has <a href="https://x.com/RuneKek/status/1839281322533204471">embarked</a> on a series of high-profile launches, such as an integration of USDS with Aave (dubbed the Sky Aave Force), and the launch of <a href="https://blockworks.co/news/lightspeed-newsletter-sky-solana-stablecoin-market">USDS to Solana</a> and other Ethereum L2s.



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Maker wants to rebrand again

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Crypto is in a constant state of flux. Tokenomics is no different.&nbsp;



Of course, there are absolutes in crypto. Private keys always grant access to digital assets within that public-key pairing, for example. That someone will inevitably launch a memecoin for every passing fad in our collective culture is another.



But crypto’s non-stop experiments with tokenomics have become integral to the asset classes’ core thesis.



How projects fund themselves, entice venture capital and encourage early participation is, in many cases, a large part of the identity of those individual coins.&nbsp;



For bitcoin, there can only ever be 21 million coins, claimable only by expending a certain amount of energy. The scarcity is Bitcoin’s meme.



Solana’s private sales to venture capital firms have otherwise morphed into its value proposition: All those VC dollars have encouraged a vibrant ecosystem of projects that utilize the protocol.&nbsp;



That has in turn generated real value for both institutional and retail backers across the Solana space. Or, at least, enough for the market to absorb the roughly $70 million in fresh SOL being printed for the benefit of network validators every week. Abundance is Solana’s meme.



While we’ve had huge token unlocks before, we’re about to see a batch of newer projects release billions of dollars worth of their tokens over the next year.



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1384" height="999" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-2.png" alt="" class="wp-image-93668" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-2.png?w=1384 1384w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-2.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-2.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-2.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-2.png?w=356 356w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-2.png?w=362 362w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-2.png?w=303 303w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-2.png?w=80 80w" sizes="(max-width: 1384px) 100vw, 1384px" /><figcaption class="wp-element-caption">If altcoin season really hits, expect these numbers to rise drastically</figcaption></figure>



Five coins in particular are worth paying attention to, all of which debuted on public markets within the last year: ONDO, JTO, W, PYTH and TIA.&nbsp;



ONDO and JTO’s circulating supplies are set to more than double, while TIA and PYTH will increase by over 80% and 58%, respectively.



Between them, crypto worth over $3.9 billion will be unlocked at today’s prices. If token prices rise between now and those unlocks, the real number will be higher. (Additional tokens are usually seeped into the system outside of these big unlocks, often at daily or weekly intervals.)



PYTH’s unlock, currently valued at $725 million, won’t happen until May next year, earmarked to be directed toward ecosystem growth and rewarding network participants. W’s happens one month earlier and ONDO’s in January, while JTO’s is in December.&nbsp;



TIA’s enormous $1 billion unlock occurs this time next week, on Halloween, one year after its trading debut.



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1600" height="1017" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-1.png" alt="" class="wp-image-93667" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-1.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-1.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-1.png?w=404 404w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-1.png?w=411 411w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-1.png?w=345 345w, https://blockworks-co.imgix.net/wp-content/uploads/2024/10/image-1.png?w=80 80w" sizes="(max-width: 1600px) 100vw, 1600px" /><figcaption class="wp-element-caption">Add the blue and green areas together and you get TIA’s market cap</figcaption></figure>



65 million tokens will go to backers from Celestia’s Series A and B rounds, per The Tie, which included Polychain Capital, Galaxy and Delphi Ventures, among others as well as 52.5 million for those in its 2021 Seed round, including Binance Labs and Maven 11 and more.



Another 58 million TIA will be unlocked for initial core contributors.&nbsp;



It’s unlikely that all those tokens will be sold at once. We also don’t have too many examples of what happens to token prices around these big unlocks. But the chart above shows just how drastic the change will be, at least in TIA’s case.&nbsp;



The blue area is the market cap of TIA’s circulating supply when it first started trading last year. The green area is the value of the TIA supply that has been printed since then, and the purple line tracks its price.&nbsp;



Faded areas on the right side of the chart show TIA’s market cap directly following next week’s unlock. It’s impossible to say exactly how much its market cap will jump, because it depends on the price of TIA, but the chart assumes TIA will trade in line with its rolling average over the past three months.



Whether the market agrees TIA should stay the same price, even with 80% more sellable tokens out there, is a whole other story.&nbsp;



Still, so far so good: TIA has more or less trended sideways for the past quarter and then some.



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Brace yourselves, the massive unlocks are coming

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<h2 class="wp-block-heading">Taking stock</h2>



As we noted <a href="https://blockworks.co/news/forward-guidance-newsletter-btc-rally">yesterday</a>, we have a relatively quiet week for economic data ahead. Let’s take the breather as an opportunity to review where we currently stand.&nbsp;



The data we’ve gotten since the Fed’s 50-basis point cut <a href="https://blockworks.co/news/on-the-margin-newsletter-interest-rate-cut">last month</a> shows, generally, economic strength. September’s <a href="https://blockworks.co/news/btc-uptober-market-odds">jobs report</a> showed employers added 254,000 jobs, blowing expectations (140,000) out of the water. Unemployment is steady at 4.2% and <a href="https://blockworks.co/news/btc-rises-following-pce-data">annual inflation</a> is hovering around 2.2% — not far off from central bankers’ 2% target.&nbsp;



Things are looking good. And, it’s worth noting, things were looking up when the Fed opted for its massive cut in September after a summer of Goldilocks data.&nbsp;



Enter the sentiment shift: Did the Fed go too far in September?&nbsp;



Some analysts argue yes.&nbsp;



“Today’s data further confirms our assessment that the Fed was too dovish when it cut the federal funds rate by 50bps on Sept. 18,” strategists at Yardeni Research wrote in a note after last week’s consumer spending figures dropped.&nbsp;



Noelle Acheson, author of “Crypto is Macro Now,” said she’s questioning whether a November cut <a href="https://blockworks.co/news/forward-guidance-newsletter-economy-doing-fine">makes sense</a> at all. The markets may agree.&nbsp;



Fed funds futures are now predicting a 10% chance of no rate cut in November, according to CME Group <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html">data</a>. It may not seem like much, but markets were calling for a 3% chance just last week.&nbsp;



The overwhelming majority is still anticipating a 25bps cut. Tomorrow’s Beige Book release should give us some more insight.&nbsp;&nbsp;



Fed officials are now on a bit of a press tour, with several speakers this week reiterating the party line: Rates need to come down slowly.&nbsp;



Kansas Fed President Jeffrey Schmid said Monday that the Fed should be making “modest” adjustments. Dallas President Lorie Logan said she supports a “strategy of gradually lowering the policy rate.” And Minneapolis President Neel Kashkari, a vocal supporter of the September cut, said Monday he also envisions a cautious approach moving forward.&nbsp;



I take “modest” to mean 25bps cuts. As we know from the dots last month, those would be in line with committee expectations.&nbsp;



— Casey Wagner&nbsp;



<h3 class="wp-block-heading">4.2%</h3>



The yield on the 10-year Treasury, as of Tuesday afternoon — the highest level we’ve seen since July.&nbsp;



The move comes after the yield rose by 12 basis points on Monday as traders sold bonds. Analysts largely attributed that to the comments from Fed officials we outlined above. Prices and yields move in opposite directions.&nbsp;



<h2 class="wp-block-heading">A deeper look at Stripe’s Bridge buy</h2>



In case you missed it, Stripe confirmed its pending <a href="https://blockworks.co/news/stripe-bridge-acquisition-stablecoin-infrastructure">acquisition</a> of stablecoin platform Bridge on Monday. Let’s take a deeper look at that.&nbsp;



First things first, Eric Risley, a founding partner at advisory firm Architect Partners, told me he believes this deal is “the most important M&amp;A transaction to date for our industry.”



Bridge gives businesses the ability to integrate stablecoin-based payment via an API. This API model Stripe now looks to leverage via the deal is popular (giving app developers a low- or zero-cost entry) Risley noted — adding it has been used by Plaid, Twilio and Amazon Web Services across various sectors.



“This transaction is more evidence of the broadening recognition that stablecoin-based payments have compelling benefits and are being embraced by non-crypto companies,” Risley explained.



Those benefits include virtually instant settlement and very low fees, he added, which are particularly notable for cross-border payments between businesses <a href="https://blockworks.co/news/stablecoin-report-market-capitalization">and individuals</a>.



“While Bridge can use any stablecoin, it also allows the creation of new stablecoins, as desired by clients, while enabling stablecoin-to-stablecoin exchange,” Risley said. “This clearly suggests we are just entering what may become a proliferation of stablecoins, albeit, regulatory oversight may discourage this trend.”



Speaking of regulatory oversight, US Sen. Bill Hagerty, R-Tenn., put out a discussion draft of legislation to establish a framework related to supervising stablecoin issuers.



In addition to enhancing transactions and payment systems, Hagerty noted in a statement, stablecoins could potentially “help create new demand for US [Treasurys] as we work to address our unsustainable deficit.”&nbsp;



This Stripe-Bridge deal comes as the <a href="https://blockworks.co/news/circle-paypal-stablecoins-keep-notching-gains">market capitalization</a> for stablecoins is at roughly $170 billion. A <a href="https://a16zcrypto.com/posts/article/state-of-crypto-report-2024/#section--4">report</a> published last week by a16z notes that by enabling fast, cheap, global payments, stablecoins have become “one of crypto’s most obvious killer apps.”



It notes that stablecoins saw $8.5 trillion in transaction volume (via 1.1 billion transactions) in 2024’s second quarter.



“If you compare <a href="https://blockworks.co/news/a16z-monthly-active-addresses-aths">stablecoin activity</a> against crypto’s volatile market cycles, the two appear to be uncorrelated,” the report adds. “Indeed, the number of monthly stablecoin-sending addresses has continued to increase even as spot crypto trading volumes have declined.”



Stripe joins other big players that see the potential of stablecoins.&nbsp;&nbsp;



PayPal <a href="https://blockworks.co/news/paypal-launches-stablecoin">introduced</a> its dollar-backed stablecoin last year. Digital payments network Ripple <a href="https://blockworks.co/news/ripple-issuing-cash-equivalent-backed-stablecoin">said</a> in April it would launch a USD-pegged stablecoin backed by US dollar deposits, short-term US Treasurys and other cash equivalents.



Meanwhile, incumbent stablecoin issuer Tether reported a $5.2 billion <a href="https://blockworks.co/news/tether-q2-2024-earnings-report">profit</a> for the first half of 2024.



“It’s hard to imagine a more fundamentally competitive move against the traditional banking system,” Risley said of Stripe’s buy. “Payments at scale without a bank involved. The regulators understand this implication.”



— Ben Strack



<h2 class="wp-block-heading">The Gensler question remains</h2>



Just two weeks from Election Day, it remains to be seen how crucial a voting bloc the crypto community will be for the candidates in what is poised to be a neck-and-neck race.



While many crypto industry participants have lauded Donald Trump’s <a href="https://blockworks.co/news/donald-trump-speaks-bitcoin-2024">crypto-related promises</a> and have thrown <a href="https://x.com/cameron/status/1803876953860247831">support</a> behind him, other segment executives (namely SkyBridge Capital’s Anthony Scaramucci and <a href="https://x.com/chrislarsensf">Ripple co-founder Chris Larsen</a>) are on the Kamala Harris train.



Coinbase chief policy officer Faryar Shirzad previously <a href="https://blockworks.co/news/harris-trump-crypto-stances-coinbase">noted</a> how comprehensive Trump’s vision has been, telling me “more substance and more detail are critical” as crypto folk weigh the candidates.



That could be a slight problem for Harris in certain crypto circles.&nbsp;



Indeed, Blockchain Association government relations director Ron Hammond called the vice president’s <a href="https://blockworks.co/news/forward-guidance-newsletter-kamala-harris-crypto-silence">pro-crypto remarks</a> in recent weeks “a little vague.”&nbsp;



Remaining sought-after details include clarity on who Harris would want leading US regulatory agencies. Bloomberg <a href="https://www.bloomberg.com/news/articles/2024-09-06/kamala-harris-donors-privately-want-ftc-s-lina-khan-sec-s-gary-gensler-removed">reported</a> last month that big Dem donors were urging her to fire the FTC’s Lina Khan and SEC Chair Gary Gensler.



Though Unchained <a href="https://unchainedcrypto.com/kamala-harriss-team-is-considering-these-candidates-to-replace-sec-chair-gary-gensler/">reported</a> the Harris team is vetting possible replacements for Gensler, the VP has not addressed this issue specifically.&nbsp;&nbsp;



“We’ve moved the needle a little bit, but we haven’t seen any statement on Gensler yet, so that’s the big thing we’re still trying to push for,” Hammond said.



On the other side, Trump said during a speech at July’s <a href="https://blockworks.co/news/bitcoin-2024-nashville-recap">Bitcoin 2024</a> conference that he would fire Gensler. Hammond said he expects the former president would swiftly do that in early 2025, if elected.



The Blockchain Association exec acknowledged that it would be a “politically aggressive move” for Harris to replace Gensler before his term expires in 2026. But, Hammond noted he believes Gensler is indeed “a political liability,” adding that <a href="https://www.youtube.com/watch?v=tMvufQQbGJo">Mark Cuban</a>, for example, has essentially <a href="https://decrypt.co/284737/mark-cuban-harris-ftx-sec-gary-gensler">told Harris’s team</a> as much.&nbsp;



“It sets up a pretty intense battle, because if [Gensler] sticks around, it’s going to be the same old mantra we’ve been seeing for the last four years,” Hammond said.



Hammond doesn’t expect Harris to prioritize any pre-Election statements on this front as the campaigning hits the homestretch.&nbsp;



So I guess Harris may just address the Gensler question as president or president-elect — if, of course, she gets that chance.&nbsp;



— Ben Strack



<h2 class="wp-block-heading">Bulletin Board&nbsp;</h2>



<ul class="wp-block-list">
<li>In a move that could impact Donald Trump’s plan to “fire” SEC Chair Gary Gensler should he win next month, the Supreme Court on Monday <a href="https://news.bloomberglaw.com/securities-law/supreme-court-rejects-bid-to-let-president-fire-agency-leaders?utm_source=securitiesdocket.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=sec-charges-wisdomtree-with-misstatements-related-to-esg-marketed-funds&amp;_bhlid=f1141611a1cf47f09e2694fd80ff09a26257175e">declined</a> to hear an appeal that sought to give presidents explicit power over federal agencies. As is customary, the court issued the decision without comment, and no justices issued dissenting opinions. </li>



<li>Ripple co-founder Chris Larsen <a href="https://x.com/chrislarsensf/status/1848405676776952186">said</a> Monday he would be donating an additional $10 million to Kamala Harris’s campaign, in the form of XRP. Larsen has previously donated $1.75 million to the FF PAC, a Democratic effort that has deployed $75.4 million in support of Harris, latest FEC <a href="https://www.fec.gov/data/committee/C00669259/?tab=spending">filings</a> show. </li>



<li>Polymarket is apparently double-checking to make sure people in the US are not using the platform, <a href="https://www.bloomberg.com/news/articles/2024-10-22/polymarket-cracks-down-on-us-bettors-ahead-of-presidential-election?utm_campaign=socialflow-organic&amp;utm_source=twitter&amp;utm_content=markets&amp;utm_medium=social&amp;cmpid%3D=socialflow-twitter-markets">Bloomberg</a> reported Tuesday. Perhaps a crackdown on VPNs is in the future. </li>
</ul>



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News has slowly been trickling out that <a href="https://blockworks.co/news/stripe-bridge-acquisition-stablecoin-infrastructure">Stripe acquired</a> the stablecoin platform Bridge for a reported $1.1 billion.&nbsp;



The acquisition is among the biggest ever in crypto, and it gave some credence to the idea that stablecoins — which provide crucial liquidity for crypto markets and show promise for making TradFi more efficient — might be the killer non-bitcoin use case for crypto.&nbsp;



The story also comes a few days after Stripe formally announced it had <a href="https://blockworks.co/news/stripe-reintegrates-crypto-payments-in-the-us">re-enabled crypto payments</a> in the US with stablecoins.



At risk of adding more noise to an already-crowded news event, here are three quick takes on the deal, starting with its implications for Solana.



<h2 class="wp-block-heading">1. Solana isn’t alone in betting on stablecoins</h2>



<ol class="wp-block-list"></ol>



Stablecoins show promise for things like money transfers and payments — as opposed to more store of value cryptocurrencies like bitcoin — and Solana’s north star of being fast and cheap makes the blockchain an intuitively good fit for stables.



As a result, Solana has seen a lot of stablecoin bets in recent months. A <a href="https://blockworks.co/news/kamino-seeing-benefits-from-liquidity-incentives-on-pyusd">good chunk of change</a> was spent in liquidity incentives to bring PayPal’s stablecoin to Solana. New startups like Perena, Sphere and Lulo are building Solana-native businesses largely focused on stables. Stablecoins are a sizable market, but they aren’t broadly used in the mainstream financial world yet, and whether these bets will all pay off is an open question.



But Stripe buying Bridge at least indicates that Solana isn’t the only venue taking the dive on stables.&nbsp;



“All payment and [infrastructure] providers will be following [Stripe&#8217;s] lead or at least begin looking around,” Lulo co-founder Jesse Brauner told me in a text.



<h2 class="wp-block-heading">2. Building a stablecoin payments platform is really hard</h2>



<ol start="2" class="wp-block-list"></ol>



I just hosted Coinflow’s CEO and founder Daniel Lev on the Lightspeed podcast, and he made an interesting point about this deal: Stripe is not made up of dinosaurs. The behemoth fintech company got interested in bitcoin a decade ago, and it built out some payments infrastructure between 2014 and 2018.&nbsp;



This time around, Stripe reintegrated crypto payments presumably by way of this very expensive acquisition. As an existing internet payments company, you’d think Stripe would have at least considered building stablecoin on- and off-ramp services in house.&nbsp;



“You can’t just spin it up overnight,” Lev said of stablecoin payments businesses. “There is this regulatory and partnership moat where you have to meet a ton of [criteria], so it’s not like a bunch of developers can just rush on this opportunity today or tomorrow. They have to do a ton of things to even launch a compliant and legal product in the space.”



<h2 class="wp-block-heading">3. More M&amp;A could open up crypto venture</h2>



<ol start="3" class="wp-block-list"></ol>



One of crypto venture’s biggest problems is that crypto startups rarely IPO. If VCs want to report returns, they can rely on token allocations, but airdrops being the only exit opportunity for venture capital can cause short-term thinking and bad price action. With the Stripe buy, Bridge just proved there could be a second way for VCs to exit their investments.



“Everyone in crypto VC knows that it would be much healthier for the industry as a whole to have two viable paths to exit — i.e. equity-based (IPOs, acquisitions) and token launches+listing,” Sam Lehman, principal at Symbolic Capital, said in a text.



Another consequence of crypto venture’s token reliance is that crypto VCs tend to be leery of investing in startups that don’t plan to launch a token, Lehman added. Following the Stripe acquisition, this stance is beginning to soften.



“To be clear, it&#8217;s not a silver bullet. Web2 VCs don&#8217;t make their livings off of acquisitions, they need IPOs to get their 100x returns. I don&#8217;t think anyone thinks this means that the NYSE is going to start teeing up crypto IPOs after this, but it is a step in the right direction,” Lehman said.



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