UXLINK

Donovan Choy

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



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How should blockchains be valued?



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



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



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



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



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



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



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



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



What is REV?



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



REV is not without its critics.&nbsp;



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



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



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">imo the issue with REV (chain fees + mev bribes) as a metric is when it&#39;s used to compare very diff chains: &#8211; FCFS rollups have no MEV bribes &#8211; Ethereum has widespread usage of MEV-protected RPCs and swaps (cowswap, 1inch fusion&#8230;) &#8211; Solana has bribes + low MEV protection So if…&mdash; 0xngmi (@0xngmi) <a href="https://twitter.com/0xngmi/status/1891211415769231784?ref_src=twsrc%5Etfw">February 16, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



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



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



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



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



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



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



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



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



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



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



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0xResearch Newsletter

Valuing blockchains: The great REV debate

Kate Irwin

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



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The foundation behind The Open Network (TON), which <a href="https://blockworks.co/news/ton-telegram-relationship">uses Telegram</a> but operates independently from it, has hired a new head of growth. Martin Masser is now trying to bring more awareness to the chain that saw a “tap-to-earn” run last year.



He told me in an interview that even in crypto circles, most know what Telegram is, but far fewer know about TON. Masser’s focused on expanding TON’s presence and awareness in the US and Europe. US residents can’t yet use TON Space (a self-custodial browser wallet inside Telegram), but Masser confirmed expanding TON Space to the US is part of the plan. That said, no live date for US access has yet been announced.



“I love the American market, especially. There’s so much that comes out of America, a lot of the narratives as well. We haven’t even had that to touch,” Masser said, adding: “I love going to America. There’s an energy. There’s a buzz, you know.”



Masser hopes that US builders will increasingly look to TON and Telegram as viable options for crypto projects like games, payments and remittance tools, DeFi miniapps, and other apps within the app that provide just about any service you could think of.&nbsp;



“My role as head of growth isn’t to give narratives. I don’t want to tell people you have to do stickers, you have to do gifts, you have to do DeFi, you have to do all of this stuff. I do see foundations try to do that, try and force this narrative,” Masser said.&nbsp;



“I love the fact, because people use Telegram, they have their ideas already, and then you’re giving them a lot more tools. I want to be there a) to support them, give them feedback, and also connect, because there’s lots of teams I’m already now connecting,” he added. “You can add so many more things.”



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crypto apps

TON Foundation’s new head of growth pushes for US expansion

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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Axie Infinity and Sky Mavis cofounder Alexander Larsen is calling out Sui-powered game <a href="https://playseedgo.com/">Seed</a>, also known as Seed Go, alleging copyright infringement.&nbsp;



“This infringes on our Axie Infinity IP, and it’s not okay,” Larsen said in response to a tweet about the project.



He also tagged two Mysten Labs cofounders, plus Sui and Mysten Labs, asking them to address the issue “so we can all save money and time.”



A spokesperson for Sky Mavis separately confirmed to me that the company has informed the Sui team of the alleged infringement and is looking to resolve the issue outside of court.



<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">Imitation is the sincerest form of flattery that mediocrity can pay to greatness. That said, this infringes on our <a href="https://twitter.com/AxieInfinity?ref_src=twsrc%5Etfw">@AxieInfinity</a> IP, and it&#39;s not okay. <a href="https://twitter.com/EvanWeb3?ref_src=twsrc%5Etfw">@EvanWeb3</a> <a href="https://twitter.com/EmanAbio?ref_src=twsrc%5Etfw">@EmanAbio</a> <a href="https://twitter.com/SuiNetwork?ref_src=twsrc%5Etfw">@SuiNetwork</a> <a href="https://twitter.com/Mysten_Labs?ref_src=twsrc%5Etfw">@Mysten_Labs</a>, can you deal with this so we can all save money and time. <a href="https://t.co/to6ZQVOUw0">https://t.co/to6ZQVOUw0</a>&mdash; Psycheout.ron (@Psycheout86) <a href="https://twitter.com/Psycheout86/status/1924353059976597570?ref_src=twsrc%5Etfw">May 19, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Seed Go is tied to the “Seed Combinator” gaming platform and uses pastel blob-like “Seedmon” NFT characters that players can “breed.” It also has a token, SLOVE, and the SEED token. Seed Go is a Telegram mini-app.



Axie Infinity, which was launched back in 2018, made a name for itself as one of the earliest players in crypto gaming with its blob-like pastel “Axies,” NFT creatures that players can “breed” and use to battle each other. It has had a token called Smooth Love Potion token (SLP) since 2019, as well as the Axie Infinity (AXS) token.



Larsen recently <a href="https://x.com/Psycheout86/status/1924404688255918220">shared</a> that Axie Infinity has made over $1.3 billion in total revenue since its launch.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="962" height="461" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedvaxie.png" alt="" class="wp-image-102703" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedvaxie.png?w=962 962w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedvaxie.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedvaxie.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedvaxie.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedvaxie.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedvaxie.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedvaxie.png?w=80 80w" sizes="auto, (max-width: 962px) 100vw, 962px" /><figcaption class="wp-element-caption">Seed versus Axie Infinity</figcaption></figure>



Jeffrey “Jiho” Zirlin, another Ronin and Sky Mavis cofounder, <a href="https://x.com/Jihoz_Axie/status/1924456523003994592">called</a> Seed Go “Axie at home,” referencing the “<a href="https://knowyourmeme.com/memes/we-have-food-at-home">food at home</a>” memes. Such memes refer to an experience where a child asks their parents for takeout or to go to a restaurant. But the parents say there’s food at home — and that food is bland, gross, or just not as good as the preferred option. (The “at home” memes have spawned loads of spinoff references for years now, sometimes about movies or other forms of entertainment).



Seed Combinator, which appears to be run by SeedDAO, has the support of Sui developer Mysten Labs, according to a <a href="https://chainwire.org/2025/04/01/seed-opens-a-new-chapter-for-gamefi-narrative-after-hitting-top-1-nft-collection-on-sui/">press release</a> from the game project. Another <a href="https://chainwire.org/2025/01/10/seed-secures-investment-from-sui-foundation-to-build-a-100m-user-web3-gaming-ecosystem-on-sui/">press release</a> states that Seed was “inspired” by Pokemon Go and Axie Infinity, and notes that the Sui Foundation invested in its project.



<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" width="672" height="660" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedgo.png" alt="" class="wp-image-102704" style="width:629px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedgo.png?w=672 672w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedgo.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedgo.png?w=262 262w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedgo.png?w=266 266w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedgo.png?w=223 223w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/seedgo.png?w=80 80w" sizes="auto, (max-width: 672px) 100vw, 672px" /><figcaption class="wp-element-caption">A quick look at Seed Go via Telegram</figcaption></figure>



Reached for comment, the Sui Foundation distanced itself and Mysten Labs from the Seed project. A Sui Foundation spokesperson confirmed to me that a small investment was made in Seed, but did not specify an amount.&nbsp;



They noted that Mysten Labs was not involved in Seed’s game development, but it did help the game set up Sui smart contracts to connect the Telegram game to Sui.&nbsp;



The spokesperson emphasized that the Sui Foundation has very high standards for the projects it endorses, and it does not currently support Seed.&nbsp;&nbsp;



SeedDAO did not respond to my request for comment.



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Gaming

Sky Mavis alleges Seed Go infringes on Axie Infinity IP

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 Pizza Day is meant to celebrate the first-ever bitcoin payment for a physical good: Papa John’s pizza in 2010.



But here’s a palate cleanser: Three days earlier, the founder of early MMORPG A Tale in the Desert adopted bitcoin for monthly subscriptions, apparently becoming the first commercial video game to do so.



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



We’re cheating a little bit: Bitcoin MMO Day was actually yesterday, on May 19.



At least, that was when Andrew “teppy” Tepper first announced he had opened his Ancient Egypt-themed online roleplaying game to bitcoin.



“I run the MMO <a href="https://www.desert-nomad.com/">A Tale in the Desert</a>. We charge $13.95/month for the game, and pay about $0.74 in merchant and gateway fees,” teppy <a href="https://bitcointalk.org/index.php?topic=30.msg1159#msg1159">wrote</a> on Bitcointalk.



“We’ll now accept Bitcoins as an alternate payment method. The price per month is 2,000 BTC, which according to the exchange is a discount right now.”&nbsp;



He was right: Bitcoins traded for less than half a cent at the time, pricing one month worth of game time at only $9.20 if paid in BTC — a 33% discount.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe90FVRbG8cVb2RnfyVOHnfIfP57q7ngzZ61VNyVO4M5ignuZ3IOiEBs38mrVG65W21gXVeXuj5JjRObNRqZNicX8hZndhXHQfA8fo8QpM7Ij64-gqd6LxGN_NnWnrTPegyYCIj5A?key=tyl1-0TKTUZTU4F69tqd8A" alt=""/><figcaption class="wp-element-caption">A screenshot from A Tale in the Desert circa 2010 shows a new frontier, just as Bitcoin was.</figcaption></figure>



Tepper had initially hoped to match in-game usernames with messages attached to each bitcoin transaction. Laszlo Hayncez, the Bitcoin Pizza Guy, quickly pointed out that messages could only be included when sending coins to IP addresses, a feature that was eventually removed in 2012 due to security concerns.



“Hmm &#8211; is there any text field associated with an address based transaction? It does make accepting Bitcoins a bit more cumbersome. Would including such a text field as part of the protocol compromise anonymity somehow?” Tepper replied.



Tepper’s quest spawned a discussion about encrypted messaging via transaction outputs that roped in Satoshi himself: “Bitcoin uses EC-DSA, which can only do digital signing, not encryption. RSA can do both, but I didn&#8217;t use it because it&#8217;s an order of magnitude bigger and would have been impractical.”



Laszlo continued to help Tepper in engineering a secure solution to accept bitcoins, one that would generate a new bitcoin address for receiving each separate payment.



It’s unclear whether such a system was ever implemented, but the address Tepper originally supplied for subscriptions <a href="https://mempool.space/address/17CJvRrNdqSPN3Zs2dWfNY6GoCiMRfNG2T">received</a> an eye-watering 42,100 BTC across 27 separate transactions in two months, worth around $3,600 back then but $4.4 billion today.



Tepper went on to <a href="https://www.theguardian.com/technology/gamesblog/2013/jul/08/dragons-tale-mmorpg-gambling-bitcoin">launch</a> another MMORPG, Dragon’s Tale, three years later, based entirely around online gambling.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd097dHtPG3kqTDJn0obQxhZD9MVFFf2Py0Ih8WsCdfTHaqR-T9dc1Fzog0TgJKuWPYBeWeceeOz-FUkqRNuVe64N9be_O202c1whQR_6eWicmEw3gZO-o2um-lOA5Lhabjg8G7Uw?key=tyl1-0TKTUZTU4F69tqd8A" alt=""/><figcaption class="wp-element-caption">Y&#8217;all got any more of those soldier statues?</figcaption></figure>



Of course, Dragon’s Tale accepted bitcoins (and credit cards), and even featured <a href="https://bitcointalk.org/index.php?topic=1591143.msg15978685#msg15978685">faucet-like mini-games</a> that gave out free BTC as late as 2016, when coins were trading at nearly $600 apiece.



We’ve got a line out to Tepper to see if he’s up for a chat, but in the meantime…



Happy Bitcoin MMO Day!



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Bitcoin

Happy Bitcoin MMO Day to those who celebrate

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"/>



As crypto continues to shift to a more fundamental focus, it makes sense that new metrics will be introduced — such as net new assets (NNAs).&nbsp;



Blockworks Research <a href="https://app.blockworksresearch.com/research/consumer-crypto-and-net-new-assets">defines them</a> as “assets that didn’t previously exist and/or couldn’t exist without crypto rails.” And, to be fair, it’s not a new metric to track, according to my colleague Ryan Connor.



Connor penned a report on NNAs and how they play into the rise of consumer crypto, something I’m keenly interested in.



Basically, Connor makes the case that crypto is becoming more mainstream and rolling out the red carpet for the consumer apps. These now have the opportunity to build up their user bases and, hopefully, become profitable. UXs have improved, the SEC’s no longer out to get US-based crypto projects, and <a href="https://blockworks.co/tag/meme-coins">memecoins</a> have found a niche.&nbsp;



There are three examples for Connor: <a href="https://blockworks.co/tag/pump-fun">Pump[dot]fun</a>, <a href="https://blockworks.co/news/permissionless-capital-markets">Time[dot]fun</a> and Believe. Pump[dot]fun is perhaps the most obvious, being the go-to memecoin hub for everyone. For reference, the chart below shows the tokens launched.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf9p9R5rI8YS_oWlOdTMx92JTac-aNwPis9V-4NtgqLPVeFLGtxMdM-eiHkFDLHj6agiKG8m8MeSaeJAY5jDzlC7VH1Cb4nFBdsV362SaMSQ8raZRbcV211AOyrB-mKDfCGEdNnpw?key=0o_wAyLiexIHyqxofZECZQ" alt=""/></figure>



“Importantly, Pump[dot]fun didn’t invent anything new. It simply addressed latent demand. For years, crypto natives have bent over backwards to issue arbitrary assets with funny names, trade them, and find the next 1000x,” Connor wrote. Pump[dot]fun just simply took advantage of the narrative.



I mean, just take a look at Pump[dot]fun’s total volume.&nbsp;



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="978" height="562" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/punpfun-volue.png" alt="" class="wp-image-102688" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/punpfun-volue.png?w=978 978w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/punpfun-volue.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/punpfun-volue.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/punpfun-volue.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/punpfun-volue.png?w=454 454w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/punpfun-volue.png?w=381 381w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/punpfun-volue.png?w=80 80w" sizes="auto, (max-width: 978px) 100vw, 978px" /><figcaption class="wp-element-caption">The dark purple is the volume of Pump[dot]fun’s AMM, Pumpswap, which <a href="https://blockworks.co/news/pumpswap-large-amm-solana">launched back in March</a>.</figcaption></figure>



But the effects go further than just the platform, Connor told me. It’s also sparked a rise in overall memecoins.



“A handful of crypto native funds are telling us they believe Pump[dot]fun style memecoin trading has staying power. We think the market is starting to wake up to this reality, as builders are leaning harder into the category,” he wrote.&nbsp;



Stemming from similar roots, Blockworks Research thinks that social tokens, too, have their own staying power…but they’ll need to somehow sustain value. Time[dot]fun’s sought to solve that issue by allowing creators to both earn trading fees when minutes are sold or bought, and allowing them to earn fees on volume and the redemption of minutes by fans.&nbsp;



For a non-crypto comparison, think <a href="https://www.cameo.com">Cameo’s</a> playbook.&nbsp;



But Time and Believe each have a ways to go to prove that they can maintain Pump[dot]fun level traction.



Candidly, I’ve had multiple discussions with Connor on Believe and, initially, I was lukewarm to it. But he has a compelling case. And the chart does speak for itself.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdzrbBFbFy2Y_y6HPeJkiuco7ErjP2l7FTdXjSM2NNyVfACYt7ZGC3ASqKkJzTDpKqQPYrJLT33NyyzIVtTk6NjaHYtPdJJuazJqJ-a1Ycb-vVPDvl-ON8XOK27JqxMAgKmMMkStA?key=0o_wAyLiexIHyqxofZECZQ" alt=""/><figcaption class="wp-element-caption">Look at that volume go. </figcaption></figure>



Believe is different from either Pump[dot]fun or Time[dot]fun in that it seeks to give traders and developers access to a market where the two can directly interact. The goal is to remove venture capital from the picture and let traders invest in smaller projects aiming to build apps.



“The potential equity valuation of a few million dollars of free cash flow would be low, but let’s say, best case, may be valued at 20M USD via its forward [free cash flow], plus some premium for growth via a large installed base of a few [hundred] thousand or million downloads,” Connor explained.&nbsp;



“While this is a fantastic outcome for the founder, this outcome is too small for a VC portfolio. By targeting this underserved cohort on the supply side, Believe brings venture-like upside to a growing cohort of retail crypto capital,” he said.



If successful, a market for crypto opens up, similar to one giving TradFi traders access to private companies like SpaceX. Undoubtedly, there’s demand, but for how long?&nbsp;



Even with Pump[dot]fun’s record, you can see in the charts that there have been times when activity has dipped due to decreased appetite.&nbsp;



It’s hard to deny the data, though, and for now it looks like these three act as a way to not only get retail investors in the door but keep them active in the space.



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Empire Newsletter

How 3 projects show the rise of consumer crypto

Casey Wagner

The Republican-sponsored GENIUS Act, which seeks to establish regulatory guidelines for stablecoins, has passed a key procedural vote in the US Senate.&nbsp;



The legislation is now clear to advance to a full floor vote. The cloture vote passed  66-32 on Monday evening.



The passage comes after a cloture vote on the GENIUS Act <a href="https://x.com/Blockworks_/status/1920552806135538057">failed</a> earlier this month in a 48-49 vote.&nbsp;



Senators have been negotiating elements of the bill over the past few weeks, people familiar with the matter told Blockworks.



The latest draft of the bill states that foreign stablecoin issuers not predominantly engaged in financial services activities must be unanimously approved by the Stablecoin Certification Review Committee, according to a copy of the draft obtained by Blockworks.&nbsp;



The new draft also updates some of the language around data sharing, stating that stablecoin issuers are permitted to share consumer information only when needed to comply with existing laws or legal requirements.&nbsp;



Some Democrats, however, are still unsatisfied with the new language, which has not been released publicly. Sen. Elizabeth Warren, a longtime critic of crypto-friendly legislation, told Senators ahead of the vote that the GENIUS Act, as it currently stands, is “worse than no bill at all.”&nbsp;



“It is fitting that we are voting on the GENIUS Act just a few days before President Trump hosts a ‘private, intimate dinner and a VIP White House tour’ for the top investors in his memecoin,” Warren added.&nbsp;



While a floor vote on the GENIUS Act has not yet been scheduled, it could be on the calendar as soon as this week.



This story has been updated with finalized vote tally figures. 



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congress

Senate advances stablecoin bill in cloture vote redo

Byron Gilliam

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



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



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Public service is my motto. Ninety-nine percent of the people in Chicago drink and gamble. I’ve tried to serve them decent liquor and square games. But I’m not appreciated.”&nbsp;



— Al Capone
</blockquote>



<h2 class="wp-block-heading">Breaking the law can be productive (for everyone)</h2>



Here are two things I believe: Tipping in cash so your server doesn’t owe taxes is good — but officially making income earned from tips tax-free is bad.



Let me explain.



Paying tips in cash is good because it helps low-margin businesses like restaurants hire staff they might not otherwise be able to afford.



More broadly, cash payments for off-the-books work enable quick hiring and firing, which benefits both high-risk businesses and workers in informal or gig-style jobs.



This makes the economy more efficient, to everyone’s benefit.



But officially making tips tax-free is bad because it would unfairly favor one industry over others and distort incentives by making income earned in tips more valuable than income earned in salary.



Also, it’s regressive.



Consider the case of the exotic dancer in Miami who made <a href="https://x.com/baldridgecpa/status/1922386539218194813?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1922386539218194813%7Ctwgr%5Ed50b8cf2378b2c2fd06884a66e56e9ea6b1ddcb2%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fwww.totalprosports.com%2Fgeneral%2Fsocial-media-is-freaking-out-over-mind-blowing-video-of-exotic-dancer-explaining-how-she-does-her-taxes%2F">$710,635 last year</a>, including $297,385 of “self-reported cash.”&nbsp;



(That’s 14,869 $20 bills, in case you’re wondering.)



As detailed in her very revealing TikTok video, she chose to report that cash to the IRS only because she wouldn’t otherwise be able to explain where her substantial investment income comes from.



But if that cash income was made tax free, high-income dancers in Miami would pay a lower marginal tax rate than, say, medium-income newsletter writers in Chapel Hill.



I know what you’re thinking, and, in this particular example, it’s hard to argue — some professions contribute more to society than others, so maybe her tips should be tax free.



But the tax code shouldn’t be making judgment calls like that.



Ideally, the IRS would treat all forms of earned income equally — if the goal is to help low-income workers, then just lower taxes for all low-income workers, not just for those who get tips.



But tax-free tips is good politics and politics is what has turned the tax code into an incomprehensible labyrinth of counterproductivity.&nbsp;&nbsp;&nbsp;



To escape that labyrinth, you sometimes have to do something “productively illegal” — like tipping your waiter in cash, paying someone to clean your house without reporting it on your taxes, or hiring an undocumented migrant to harvest crops that would otherwise wither in the fields.



This is one of the benefits of physical cash: “You want to have ways you can evade the law up to a point,” Ken Rogoff, an otherwise law-abiding economist, recently <a href="https://www.youtube.com/watch?v=u1bqpyqLn0A">told</a> Tyler Cowen.



Cowen agreed: &#8220;You’re lowering output by not enabling them to pay the nanny with cash.”&nbsp;



In other words, people probably wouldn’t bother hiring a nanny if it meant complying with the full suite of employment bureaucracy, so the economy would be less productive if physical cash didn’t enable them to break a few laws.



But what about breaking laws with crypto?



Stablecoins, for example, enable people to hold and send money without being KYC’d in the same way physical cash does.



But cash allows people to evade the law “up to a point.” With stablecoins, there is no stopping point — cash enables law evasion at a small scale and crypto enables it on a large scale.



That might still be a net positive, though, assuming there are some forms of socially desirable economic activity that are precluded by KYC — like using stablecoins to avoid banking rules in countries with hyperinflating currencies or autocratic governments, for example.



The places where stablecoins have most caught on are also the places most likely to benefit from the “productive illegality” of informal economies, as scholars like <a href="https://hir.harvard.edu/an-economists-view-of-the-informal-economy-interview-with-friedrich-schneider/">Friedrich Schneider</a> and <a href="https://www.elibrary.imf.org/view/journals/023/0029/021/article-A005-en.xml">Hernando de Soto</a> have documented.&nbsp;



In the relatively sensible US economy, by contrast, stablecoins have so far mostly been used to trade crypto tokens, many of which are functionally equivalent to equity, but with no investor protection, no rights, and no rules.&nbsp;



I’d argue that makes them illegal under current US law.



But that, too, may be productive.



If unregulated crypto equity is used to fund useful new services that would not have been funded otherwise, then it could well be a net positive that regulators are currently leaving crypto unregulated.



Not for much longer, of course — both stablecoins and equity-like crypto tokens are on the verge of being legally recognized in the US.&nbsp;



But if they go on to be truly productive, their few years of illegality will be equally to thank.



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regulation

Breaking the law can be productive (for everyone)

Jeff Albus

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



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



If you want to build in Web3, you&#8217;ve pretty much always needed to know how to code. Not necessarily at an elite level, but at least a baseline understanding. That plus lots of late nights, semicolon-heavy syntax, compiler errors, and a burly stack of ever-open documentation tabs.



The technical barrier was part of the “chewing glass” culture.



Gatekeeping, maybe, but also a necessary filter in an ecosystem where one misplaced line in a smart contract could drain a treasury.&nbsp;



That filter is eroding fast these days, however.



Brace yourselves, friends. We&#8217;ve now entered the era of vibe coding. The term, coined by computer scientist Andrej Karpathy, refers to a novel AI-native coding style where developers (and perhaps more importantly, non-developers) describe what they want and, at the click of a button, an LLM generates a working iteration of their request.



Tools like Cursor, Dev.fun and Poof.new are already lowering the floor, turning ideas into dApps with a few lines of stumbling prose. A Poof co-founder told Lightspeed that vibe coders have created over 2,000 apps on the platform since its open beta started on Thursday.



But, of course, there&#8217;s a dark side to every moon. Because if it&#8217;s easier than ever to build something legitimate, it&#8217;s also easier than ever to build something that only has the appearance of legitimacy.



The ICO boom of 2017 gave us a glimpse of this dynamic. Once the profit motive was clear, hundreds of anonymous teams emerged from the woodwork to spin up faux white papers and (usually crap) landing pages. They promised revolutionary tech, launched tokens, raised millions&#8230;and vanished into vapor.



Now imagine that, but times infinity. 



Imagine some clown throwing up an LLM-generated codebase, a slick AI-generated branding package, wholly-believable GitHub activity, a world-class website UI with Web3 login, and then getting his fake chatbot founders to do some live AMAs.



Honeypot contracts with backdoors phishing sites that buoy authentic functionality as an indicator of legitimacy…Mint buttons that seed approvals you don&#8217;t notice ‘til your wallet is drained…The potential for bad actors runs deep.



Once things really get going, reputation systems and persistent identities will likely be the only hope we have of ever trusting another product. Proof-of-humanity systems, social graphs and third-party attestations will form the backbone of trust in an AI-coded world in Web3 and beyond.



We&#8217;ll need open auditing tools built for non-coders, and sandbox environments that simulate contract behavior before anything hits mainnet. Smart contract registries could begin to mirror app store models, with verified publishers, community ratings, and AI-generated trust scores.



The responsibility won&#8217;t just fall on users — it&#8217;ll sit with platforms, protocols, and indeed, the vibe coders themselves.



But even with those risks, even with the inevitable rough edges, something big is happening here. We&#8217;ve spent years saying Web3 is about empowering creators. Now it actually can be. Not just for the technically-minded or the crypto-native.



The poet, the game designer, the high school kid with a better idea for an auction format or voting platform — they can actually build. And if we establish proper protection early enough, the best ideas may finally have a chance to win. Not because they raise the most capital but because they exist — functional, forkable, live.



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The rise of vibe coding on Solana

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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Assets whipsawed to start the week as investors weighed growing concerns over US debt, a new budget that looks poised to pass and, of course, ongoing trade war updates.



US equities were on the recovery path after a rocky start Monday morning. The S&amp;P 500 was trading virtually flat at 2 p.m. ET after opening almost 1% lower. The Nasdaq Composite similarly had rebounded to Friday’s closing level after starting off 1.3% in the red.&nbsp;



Bitcoin dipped this morning, but it had recovered some losses by the early afternoon. The largest cryptocurrency was trading just above $105,000 — around 1% lower than its Sunday high.



After the close on Friday, Moody’s downgraded the US government’s triple-A credit rating to Aa1. That’s one notch lower, representing a slightly higher risk; the change is likely what had indexes in the red and Treasury yields on the rise this morning.&nbsp;



Moody’s analysts attribute the downgrade to the growing fiscal deficit in the US. The move follows downgrades from others: S&amp;P Global Ratings in 2011 and Fitch Ratings in 2023.&nbsp;



All three groups have similarly cited a growing deficit and debt-interest costs.&nbsp;



While the updated Moody’s rating is likely driving the increase in Treasury yields we’re seeing today, DataTrek Research co-founder Nicholas Colas warns not to put too much weight on it.&nbsp;



“While the Moody’s downgrade may cause a bit of near-term equity market volatility, history shows it does not portend structurally higher interest rates, an imminent recession or declining stock prices,” Colas said.&nbsp;&nbsp;



“Rating agencies play a critical role in capital markets, but their decisions about US sovereign debt have never signaled anything useful about future asset prices,” he added.&nbsp;



The Trump administration was also unfazed, with Treasury Secretary Scott Bessent calling Moody’s a “lagging indicator” during an NBC <a href="https://www.nbcnews.com/politics/trump-administration/scott-bessent-calls-moodys-lagging-indicator-us-credit-downgrade-rcna207535">appearance</a> this morning.&nbsp;



Meanwhile, Trump’s “big, beautiful” tax bill — which experts on both sides of the aisle <a href="https://www.wsj.com/politics/policy/tax-plan-budget-national-debt-analysis-e9822072">agree</a> will increase the deficit over the next decade — advanced through a key House committee over the weekend in a rare Sunday night vote.&nbsp;



Speaker Mike Johnson said that “some minor modifications” have been made to appease the more budget-conscious members of the Republican Party. The bill is still under negotiation, House Budget Committee Chair Jodey Arrington told reporters last night.&nbsp;



We’ll be watching this play out, but Republican leadership has said the bill could pass as soon as Thursday.&nbsp;



Over in the Senate, the stablecoin-focused GENIUS Act is headed to a key procedural vote this afternoon. The bill narrowly missed passing cloture (which ends debate and allows legislation to advance) earlier this month, but Hill insiders tell us today is expected to have a different outcome.&nbsp;



And, of course we’d be remiss not to mention tariffs. We didn’t see any major updates on the trade war (or any negotiations that will end it) over the weekend, but Trump is still going after Walmart for their decision to pass on higher prices to consumers. Unfortunately, it’s a move we think other retailers will soon follow should rates not come down.&nbsp;



The European Commission today lowered its growth forecast for the year, citing lower exports due to US levies. Not surprising, but still disappointing for investors. 



That’s what’s going on around the market. Keep an eye on <a href="http://blockworks.co">Blockworks.co</a> tonight for an update on the GENIUS Act vote.



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US equities, bitcoin par losses while yields rise on deficit fears

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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Pengu Clash has kicked off its launch today by letting in a portion of its waitlist ahead of a full public release.



The new Telegram game featuring the Pudgy Penguins NFT collection’s cutesy seabirds is a 1v1 multiplayer battler. Players can dress up their penguins and fight each other at different types of minigames, whether it’s curling, darts, football or something else.&nbsp;



Pengu Clash isn’t a pay-to-win game but instead rewards skill, Michal Dabrowski, CEO and founder of crypto gaming protocol Elympics, told me in an interview.



Elympics built Pengu Clash for Pudgy Penguins with the goal of starting a trend around skill-first crypto social games.&nbsp;



“Pengu Clash is created with great care for actual gameplay,” Dabrowski said, emphasizing that it’s different from other Telegram-based crypto “clickers.” Such clicker games have short lifespans because they revolve around users farming for an airdrop, he added.



“I have mixed opinions about some games that have been out there on Telegram. But this…this connects to the trend and to the topic [of] why crypto gaming has not, you know, fulfilled its promise to bring a lot of users to crypto up until now. I think that a lot of the games created were very superficial, let’s say.”



Dabrowski continued: “So ‘crypto’ was just to have some kind of trading, or have some kind of crypto component, and not really focusing on the gameplay. And I deeply believe that it should be the other way around.”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdgC3QpUf5Dn1VlGVVYYkQ8U9i6GWmsBUi4Vh7E_zSsTTpHlXigF7taVf8S7OG_nj5pRIfTpBTt5EULXImiOAhn1mbg1LH05z-9fR6KFKve0inzkBk0ED3ahG22T7RaCiw7WhqatA?key=J0xDdw6PHTElYzdsP9UReA" alt=""/></figure>



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd4unvUnKkOTJfmpgjok1JDeKLr-_fokV35VYg5fHVJhMSjsJvvHMfkpj2rBqD8uWul8nWUon3rF24fSehnXNLnlUBmhGGdFCNujkzQdAa3B-oDxDGt5DlUtAuDS-zU4Ws-mTqWtQ?key=J0xDdw6PHTElYzdsP9UReA" alt=""/><figcaption class="wp-element-caption">A look at Pengu Clash’s shop and curling minigame.</figcaption></figure>



The game offers quickplay matches, a “PVP arena,” and a shop tab as of right now, with quests coming soon. The waitlist currently consists of more than 1.1 million Telegram accounts.&nbsp;



Like other crypto Telegram games, Pengu Clash is using TON for its in-game NFTs and optional wagering component (the original Pudgy NFTs are on Ethereum and the Pudgy memecoin is on Solana).&nbsp;



Players can enjoy Pengu Clash without logging in or creating a wallet, but those who want to buy cosmetic items can connect the Telegram built-in wallet (that’s <a href="https://wallet.helpscoutdocs.com/article/113-wallet-where-to-start#Wallet-doesnt-work-on-my-device-what-is-the-issue-y8T1u">not yet available</a> in the US, UK, and some other countries), or connect an external TON wallet to the game.



Pudgy Penguins has also recently made broader consumer plays toward younger audiences, like <a href="https://www.penguinrandomhouse.com/books/807250/pudgy-penguins-worst-birthday-gift-ever-by-michael-leviton-illustrated-by-kuma-labs-and-pudgy-penguins/">releasing</a> a children’s picture book and a kid-friendly animated series on YouTube.



When asked why Pudgy Penguins chose to build a Telegram-based game using TON — instead of its own Ethereum L2 <a href="https://blockworks.co/news/rekt-abstract-apple-seltzer-nfts">Abstract</a> — CEO Luca Netz told me in a message that their goal is “to become the face of crypto” and the world’s “most popular penguin.”



“That vision is chain-agnostic,” Netz said, adding that a desktop version of Pengu Clash using Abstract is also part of the plan.



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The Drop newsletter

Pudgy Penguins’ Telegram game Pengu Clash begins launch

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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Fluid’s flagship ETH-USDC pool has recorded more than $8.5 million in cumulative losses since launch, <a href="https://x.com/danrobinson/status/1923194745095905588">according to</a> a Dune dashboard by Paradigm researcher Dan Robinson. The issue: a rebalancing mechanism that not only underperformed during volatility, but appears to be systematically unprofitable, even outside of rebalance windows.



The pool, launched in December 2024, was designed to auto-rebalance liquidity once ETH’s price moved beyond ±10%. That design worked well during periods of modest volatility, but as ETH dropped from around $3,800 to $1,560 and then rebounded to $2,400, rebalancing dragged down liquidity provider (LP) capital. CEX-DEX arbitrage opportunities swamped any trading fee income LPs received.



The <a href="https://dune.com/queries/5142347/8473747?markout_minutes_t6c1ea=15">markout data</a> paints a grim picture. As the chart shows, LP PnL has been consistently negative, not just during rebalances. This contradicts the assumption that fee income from the concentrated liquidity <a href="https://blockworks.co/news/understanding-automatic-market-makers">AMM</a> model would offset rebalancing-related losses. Instead, it appears the entire design structure allowed MEV-extractive trades to bleed LP value, even under normal conditions.



Since the May 11 <a href="https://gov.fluid.io/t/current-issues-with-eth-usdc-pool/1606">governance post</a> detailing the problem, Fluid co-founder Samyak Jain has been playing defense.



As Sorella Labs CEO, who goes by @0xvanbeethoven, <a href="https://x.com/0xvanbeethoven/status/1923147878148735100">noted</a>, LPs lost millions in rebalancing-driven losses — effectively subsidizing arbitrage with no meaningful upside.



Critics argue the problem isn’t simply rebalance frequency, but the fact that arbitrageurs are able to consistently extract value, while LPs are structurally disadvantaged.&nbsp;



Fluid’s team has responded to the criticism, drawing parallels to the early days of Uniswap v3. Referencing a similar debate around using markouts as a proxy for LP returns, they point to <a href="https://x.com/xin__wan/status/1589321975767666688">prior commentary</a> from Uniswap researchers, such as Xin Wan, who argued that short-interval markouts can be misleading and don’t fully account for fee accrual or LP lifecycle behavior.



The planned Fluid v2 upgrade — targeted for June or July — will introduce dynamic fees, permissionless pools, and custom LP ranges. It may also work out the LP issues in other ways.



“There are multiple things that can be added including adding them via hooks on v2,” chief operating officer DMH told Blockworks. “I actually like [the] <a href="https://x.com/0xvanbeethoven/status/1923147944926249398">Angstrom solution</a> but have to study it more,” he added.



As proposed interim relief, the Fluid team suggests distributing 500,000 FLUID tokens (0.5% of supply) over a year to affected ETH-USDC LPs, plus $400,000/month in rewards until DEX v2 launches.



Rather than widening the rebalance band to reduce loss frequency, Fluid also proposes narrowing the range from ±10% to ±7.5%, increasing fee accrual per unit of liquidity, although that would also increase rebalancing events and potential losses.



This short-term fix has raised eyebrows. “If your pool is losing money on average, increasing concentration will increase both losses and variance,” wrote Dan Robinson. “So concentrating liquidity more would be a double whammy.”



Even if DEX v2 gives LPs more control, it assumes users will be able to model volatility risk and pick defensible ranges, a challenge even protocol governance struggled to get right in v1.



It’s to Fluid’s credit that the team has acknowledged the issue publicly, citing their own $1 million LP position as evidence of skin in the game. They also emphasize that correlated pairs (like cbBTC–WBTC) have performed well, and so the ETH-USDC pool’s struggles are not representative of the broader DEX performance.



Still, the damage to LP trust is real. Whether DEX v2 can reverse that dynamic will be the true test of Fluid’s unified architecture.



For now, the ETH-USDC pool stands as a cautionary tale: capital efficiency can cut both ways, especially when market volatility meets rigid strategy design.



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Swimming in red: Fluid’s ETH-USDC pool springs a leak

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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Stacking sats?



Chances are you’d be buying alongside any one of the dozen or so companies that are actively accumulating right now.



An estimate of the number of bitcoins held by corporate treasuries, both private and publicly-listed, has today reached a new all-time high: 1,082,164 BTC ($110.8 billion), according to <a href="https://bitcointreasuries.net/">BitcoinTreasuries</a>.



It’s equivalent to almost 5.5% of the current circulating supply. And if we don’t include Satoshi’s million or so coins, or the <a href="https://river.com/learn/what-happens-to-lost-bitcoin/">estimated</a> 1.57 million BTC believed to be lost forever, corporate treasuries are actually holding 6.25%.



That’s four times more bitcoins on corporate balance sheets than three years ago, as Terra/Luna was driving a wrecking ball through crypto markets.&nbsp;



Most of that growth is coming from public companies, led by Strategy of course, but Metaplanet, Semler Scientific and Tether are proving to be as ravenous as Saylor’s firm was in 2020.&nbsp;



The Jack Mallers-led XXI is on track to do the same, starting off with 31,500 BTC ($3.2 billion) disclosed late last month.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="862" height="648" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png" alt="" class="wp-image-102630" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=862 862w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=342 342w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=347 347w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=291 291w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart-strategy.png?w=80 80w" sizes="auto, (max-width: 862px) 100vw, 862px" /><figcaption class="wp-element-caption">This morning, Strategy disclosed buying another 7,390 coins, bringing its running total to 576,230 BTC ($59 billion). Purple bubbles point to Strategy’s bitcoin acquisition.</figcaption></figure>



Tether now holds over 25% more bitcoin than it did last October: 100,521 BTC ($10.3 billion) as of its latest disclosure.&nbsp;



Metaplanet holds 700% more coins across the same period, today reaching 7,800 BTC ($800 million). Semler has meanwhile tripled its stack to 3,808 BTC ($390.1 million).



Some of the data on BitcoinTreasuries may be a little screwy (does Block. one really still have 164,000 BTC, worth $16.8 billion?), but that’s besides the point.



The rate at which businesses are adopting bitcoin to reinforce treasuries (and copy the Strategy acquisition playbook) has, in turn, advanced Bitcoin to its intermediate phase.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="860" height="647" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png" alt="" class="wp-image-102628" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=860 860w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=342 342w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=347 347w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=291 291w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/bitcoin-treasuries-chart.png?w=80 80w" sizes="auto, (max-width: 860px) 100vw, 860px" /><figcaption class="wp-element-caption">Every bubble is more bitcoin added to corporate balance sheets. Not shown: Strategy’s buys.</figcaption></figure>



And just like the internet, mobile phones and social media, businesses were significantly slower to adopt Bitcoin than the public. It was now a decade ago, in 2015, that individuals in Venezuela and Argentina adopted bitcoin to protect their wealth from hyperinflation.



A handful of governments have clearly developed a keen understanding of the technology adoption curve and acted accordingly. We all know what comes next.



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Strategy, Metaplanet take bitcoin treasuries to new all-time high

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You know what’s better than big, splashy M&amp;A deals?&nbsp;



A bunch of smaller ones that show the appetite isn’t just isolated to the top.&nbsp;



Take, for example, three M&amp;A deals announced last week: Alchemy acquiring DexterLab, 0x buying up Flood, and Gnosis buying <a href="http://hq.xyz">HQ.xyz</a>.&nbsp;



That means that, so far in May, we’ve already seen a handful of acquisitions. Just last week, we had announcements from Robinhood, Alchemy, 0x, Anchorage and Gnosis.



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcRluzZtZHpGdx2zH-0vnQ8m17q9grdb3_hv0IvHsv6y274lWfeokhMZ6YJq1usf-dITEddRL2w-ZGx3t-IAUgKT8k_EuX1_BIpWMLo9k7hAt7EZ56akGwBPh6U7UFwETzUVp5R?key=tOhX2MjK5hSWxQJ7tAu5eA" alt="" style="width:1023px;height:auto"/><figcaption class="wp-element-caption">Source: <a href="https://blockworks.co/analytics/deal-flow/markets-fundraising-m-a">Blockworks Research</a></figcaption></figure>



We certainly fared better last year than we did the year prior, but we’re already on track to surpass 2021 levels, thanks to the mega-deals we’ve seen from the likes of Coinbase and Kraken.&nbsp;



The majority of deals tend to fall in the “Finance” category, per Blockworks Research, which isn’t necessarily a surprise given that companies are looking to add to their toolboxes as crypto sees wider adoption and activity picks up.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeKa5WKnFatpxByRBVsJC68O8H0BdZkBmqEUAL5IAw4Wf7NS5LPocNBx_-Mgd2pXlgkN94mGaG9t8MdFNpIm7P_akR-R6rgMhhb4Z3yNcWgmbiCGPzywHN8O3FhaepUsihjmDhM?key=tOhX2MjK5hSWxQJ7tAu5eA" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://blockworks.co/analytics/deal-flow/markets-fundraising-m-a">Blockworks Research</a></figcaption></figure>



Both Robinhood and Anchorage’s respective deals last week gave some insight into how the firms are looking to develop their offerings: Robinhood gained a Canadian foothold, while Anchorage widened its stablecoin exposure (although it won’t continue Mountain’s yield-bearing stablecoin <a href="https://blockworks.co/price/usdm">USDM</a>).&nbsp;



The <a href="https://blockworks.co/tag/gnosis">Gnosis</a> acquisition looks like a further foray into stablecoin payments, a la Anchorage. <a href="http://hq.xyz">HQ.xyz</a>, now Gnosis HQ, gives Gnosis the ability to offer stablecoin offramps, treasury oversight controls and accounting tool integrations.&nbsp;



“If <a href="https://blockworks.co/news/non-custodial-crypto-cards-ftx-industry-trend">Gnosis Pay</a> represents our commitment to empowering everyday consumers with self-custodial financial tools, Gnosis HQ completes that vision on the enterprise side: offering crypto-native teams and traditional businesses alike the tools they need to operate with autonomy, compliance, and clarity,” the team said.



Meanwhile, <a href="https://blockworks.co/tag/0x-labs">0x</a> is taking another step to stay competitive in the DEX aggregation space by acquiring Flood. This acquisition was of particular interest to me because it involves a firm buying up a competitor, and it speaks further to some activity I think we’ll see down the line as crypto really heats up.&nbsp;



The terms of the deal weren’t disclosed, but 0x <a href="https://0x.org/post/0x-acquires-flood-to-optimize-trade-execution?utm_source=social&amp;utm_medium=tw&amp;utm_campaign=flood">said</a> it’s “consolidating our leadership in aggregation infrastructure, bringing together elite technical talent and pioneering routing architecture to accelerate the evolution of decentralized trading.”



But Alchemy’s <a href="https://www.coindesk.com/business/2025/05/16/alchemy-acquires-solana-developer-dexterlab-for-undisclosed-sum">acquisition</a> of DexterLab is a bit of a different story. At first glance, my read is that Alchemy is acknowledging that firms want to build on <a href="https://blockworks.co/tag/solana">Solana</a>, and this acquisition gives them exposure to that play. 



Per CoinDesk’s report, the team said DexterLab will help the development of Web3 applications on Solana, which will help organizational demand. 



At this point, I might have to rethink calling it “M&amp;A season” and instead call it crypto’s M&amp;A year… But maybe I’m getting ahead of myself.&nbsp;



Either way, these deals show that firms have the appetite to grow or consolidate their offerings, which is a very healthy sign for crypto.&nbsp;



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Crypto M&A picks up in May

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Macroeconomics in this original sense has succeeded: Its central problem of depression prevention has been solved.”&nbsp;



— Robert Lucas, 2003
</blockquote>



I’m old enough to remember when people thought recessions might not be a thing anymore.&nbsp;



By the early 2000s, economists like Robert Lucas and Alan Greenspan argued that traditional recessions, in which a cyclical decline in demand led to a shrinking economy, were becoming an endangered species: less frequently seen and less dangerous when they were.



This was known as “The Great Moderation,” but just as the idea was catching on, it was seemingly discredited by the “Great Recession.”&nbsp;



There was nothing moderate about the 2008 recession: Peak to trough, US GDP fell 4.3%, the largest decline since World War II.



That should not have discredited the moderation thesis, however, because the Great Recession is more accurately known as the Great Financial Crisis — a financial own-goal that had little to do with macroeconomics.



Nearly two decades later, the US still hasn’t experienced a recession in “the original sense.”



The last traditional, business-cycle recession was way back in 1991, when Fed Chair Greenspan raised interest rates to 10.5% and unemployment rose to 7.8% — and even that was considered a mild downturn by the standards of the time.



In the 34 years since, we’ve only had three recessions and they were all triggered by non-cyclical shocks: the dotcom bust and 9/11 in 2001, the financial crisis in 2008, and the Covid pandemic in 2020.



As recently as last week it seemed like we were inevitably headed for a fourth.



But this week, markets rallied on a rising consensus that we’d avoid it yet again.



Which makes me wonder: If a sudden trade war can’t tip an aging expansion into recession, what can?



Is it only pandemics and banking accidents that cause recessions now?



Probably not.



But equally, Greenspan was probably right that the recessions we do have will be less frequent and less severe.&nbsp;



His <a href="https://www.federalreserve.gov/boarddocs/speeches/2004/20040220/default.htm">hypothesis</a> was based primarily on a belief in “better monetary policy,” and that seems to have been borne out: If Fed Chair Powell guides the US to a soft landing despite pandemic-induced inflation and tariff-induced uncertainty, I expect he’ll go down in history as the second greatest central banker of all time (behind only the patron saint of inflation fighting, Paul Volcker).



Another reason Greenspan cited for optimism was the ongoing “shift away from manufacturing toward services,” and that, too, might now be vindicated: This week’s market action seems to suggest that even a 10x increase in tariff rates won’t derail the US economy.&nbsp;



“The more flexible an economy,” Greenspan concluded, “the greater its ability to self-correct in response to inevitable, often unanticipated, disturbances and thus to contain the size and consequences of cyclical imbalances.”



The US economy, he explained, was getting more flexible thanks to automatic stabilizers, just-in-time logistics, deregulation and the “increased depth and sophistication of financial markets.”



More sophisticated markets give policymakers better information to work with — and the best information, of course, comes in the form of charts.



So let’s see what they’re saying.



It won’t be this quarter:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfMxzB_wOyEfVHWj9yzY3PvOix0pbZOgar9mrr-jTcBGEggUwM1W-sE2YI3gJwmhXBKY701c_vFv2aIakkE1sA92JiDhvx15zfKDBgGTharO6GMjb7uXUGygqbZlq5iOnSt2e_5?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



Suddenly, the next recession seems as far off as ever: The Atlanta Fed’s GDPNow model sees the US economy growing 2.4% in the current quarter.



It’s unlikely in Q3 or Q4, too:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcMseWSFUM-UGrtrOp-c1jmDZJ8gP5yzbG8pmIs1Aaj9w8OA2n8TnwyQuUWwsGIX4seTv1AVXlYbx4uAveBSdS1rtZ5EhLgtx2aFswxBRYKFvdW7MaWY-n0OcxZJBrvFHtsUwuD?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



Polymarket odds of a US recession in 2025 are down to 36%.



Are tariffs priced in now?



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcTuhGTM3ilSuipq0dFNbppJ-WyL18gjWZjtO02hFKuNbzR6xs8q_36bKIsUvbJt3mKKy4WxK7bBEv11JoPCtSIAwphJBhVeLlwoFtlCLYyRSz09gtEb1j9nnlErejCHfbeo9ppMg?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



Barclays Research (via the Odd Lots newsletter), estimates that the current trade-weighted US tariff rate is now around 14% and analysts at Goldman Sachs said it “would probably remain elevated for the foreseeable future.” That’s lower than expected just a couple of weeks ago, but we may not be out of the woods yet. President Trump <a href="https://www.politico.com/news/2025/05/16/trump-says-us-will-set-new-tariff-rates-for-countries-skirting-negotiations-00353370">said today</a> that, because there are too many countries to negotiate with, he will unilaterally decide tariff rates sometime in the next two or three weeks.



Wages &gt; inflation, still:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcTYNo9Y4O2BeZRJLF6BPsc4ZNoVORjl0FiYjzN-LSFh661RMJd1PAvoEQncmVRbOEpwiqt2NSe1-LtCJh5ZyICOJuoghk8LSBNKo5rk3Ht5W6vddUcBoJfymYjISB7AS0fHBFm?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



US wages are still growing at 4.3%, according to the Atlanta Fed — well in excess of CPI, which ticked down to just 2.3% in April. The top line above is wage growth for job switchers, which may have further to fall: The Wall Street Journal <a href="https://www.wsj.com/lifestyle/careers/job-market-overpaid-salary-9eeabbaa?mod=djem10point">noted</a> this week that two-thirds of US workers believe they are overpaid.



Apropos of nothing:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcVkmjeIzxnygDYiHL86eFZwzZCAuFYHb-6qbZ-4QEAME9obEu2I2Z1TO7rgC0VyIqUyTvEcRamR0wzifGqN8Z6IKLww-thCJ9TRjP1bklIlXub8lV5nEBI1dB9bITNzBRWeNjQFA?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



This is from 2024, but I only found it this week: An Ipsos survey found that Asian (and some Latin American) countries are “excited” about AI while Europe and the Anglosphere are “nervous.” Let’s check back in a decade or two and see if that’s correlated to growth rates. (I suspect it will be.)



Why Joe Rogan should be for free trade:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcOHB7aSF7zc2GJn30XrbhrDowS9gsAnY4RLdMAlAN64MuazH85MWU6_9k8K9sijjchB18EkPUuTQV1EPw34Pi3cTKw3z8PqOf7PsjWvlLGrcvZkpVbCgzgv6EcMzZlGyWVNCfIow?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



John Lettieri notes that the beginning of globalization (marked by NAFTA in 1994) was coincident with a trend change in male earnings: After two decades of decline, male wages began rising again.&nbsp;&nbsp;



Why everyone should be for free trade?



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcpAPh63mCcGhHx6tNMtq3R97tiwJIzm9d7I-_4LtSPEyTLRGxQ9VRMpQ2yIEZzRzQzixFMCsTJanu3x-ToKOoywzfm8fH1eayZAm5NS1Y8SFn2nOgWQpRwmpG_r5qajN4JvuA2PQ?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



Lettieri also finds that, starting with NAFTA, wages for the lowest quartile of earners rose faster than wages for the top quartile. If, like me, you enjoy these kinds of narrative violations, his <a href="https://x.com/LettieriDC/status/1922704137088577873">full thread</a> on trade is a must-read.



The other deficit problem:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcayiXEE18ElJk88KrsQYgL72jvMCn48ibhGrGwdWI0Sw0BQc7UoW8oYF_BnZam8_3LWkVEhJOpIoZALF_m1njFTyyd7BVTTGDjK79sWTFVUkdjstlLO0JNy25bK2b7mbDmcBWW3A?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



The current House budget proposal would add $3.3 trillion to federal debt through 2034. It probably wouldn’t pass the Senate, but it seems a safe bet that whatever eventually does will be only marginally more responsible.



In good times and bad: 



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1224" height="630" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=1024&amp;h=1024" alt="" class="wp-image-102609" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=1224 1224w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed.png?w=80 80w" sizes="auto, (max-width: 1224px) 100vw, 1224px" /></figure>



The really bad news about the US budget is not that it’s running a big deficit — it’s that it’s running a big deficit while the economy is booming. What’s this chart going to look like in the next recession? (If there ever is one.) Also, if your goal is to reduce the trade deficit, running a trillion dollar budget deficit year after year is, uh, not the way to do it.



Deficits are good for business, though:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcQlAPjbz4gJrhDoT8vI2zpiwuMC9cir_PqkzkfWrcUnNSoyGkOmw4zIPWzFB2R456zLE5jHQKjuD-LrJP1ikgDN7x-6K098zoVZpxkJZoEjGEeHWX-13G90-15m3weOBaoHLEwxw?key=zUftSAzS29kyOH4DvuNdQg" alt=""/></figure>



Global equities (orange) and a 60/40 portfolio of global stocks and bonds (purple) both made all-time highs today. Global equities ex-US (blue) made the highest highs.&nbsp;



Who said investing is hard?



If we don’t have to worry about traditional recessions anymore, it might not be.



Have a great weekend, moderate readers.



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The Breakdown Newsletter

Friday Charts: What if there are no more recessions?

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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Continuing a string of recent hires, Jito Foundation has appointed Nick Almond as its head of governance, Lightspeed has learned exclusively.



An academic by training, Almond comes to Jito following a stint as CEO of the DAO-focused R&amp;D shop Factory Labs. In comments shared with me, Almond said he hopes to steer Jito’s DAO clear of some common pitfalls that have befallen these organizations by “cautiously expanding” what the DAO tries to do.



Jito is Solana’s most important infrastructure project. Its Jito-Solana client, which adds <a href="https://blockworks.co/news/solana-top-protocols-by-fees">revenue-boosting</a> MEV modifications to the original Solana Labs client, is <a href="https://jito.retool.com/embedded/public/3557dd68-f772-4f4f-8a7b-f479941dba02">run</a> by 96% of Solana stake.



Jito has a labs entity, which develops software, and a foundation entity, which tries to grow Jito’s ecosystem of products and oversees the Jito DAO. Both sides have been staffing up recently: Jito Labs brought on veteran DeFi-focused lawyer Rebecca Rettig as its <a href="https://blockworks.co/podcast/lightspeed/3f681e50-efe0-11ef-9dea-1391c9fce092">chief legal officer</a> in January, and Jito Foundation made Jane Street veteran Thomas Uhm its chief commercial officer in April.&nbsp;



The headcount growth likely has something to do with Jito’s central positioning to benefit from Solana’s uptick in network usage. A majority of Solana’s <a href="https://blockworks.co/analytics/solana#:~:text=What%20is%20Network%20REV%20in%20Solana%20analytics%3F">REV</a>, a Blockworks Research metric for value accrual to blockchains, <a href="https://app.blockworksresearch.com/analytics/solana?dashboard=15">comes</a> from Jito tips that users pay to get transactions included in Solana blocks.&nbsp;



Jito also boasts perhaps Solana’s most advanced DAO, which has a lucrative revenue source vis-à-vis its 2.7% cut of those Jito tips. To put that in perspective, Jito tips were on pace to total roughly $1.5 billion this year at the end of April. 2.7% of that number would put Jito DAO at roughly $40 million in annual revenue.



Almond said Jito DAO’s “high potential” drew him to the role. I asked him about the favored governance mechanism among Solana governance nerds in <a href="https://blockworks.co/news/metadao-solana-governance-platform">futarchy</a>, which he said still needs to “prove itself as an effective decision-making mechanism.”



Probably the first question Almond will need to answer in his new role will deal with value accrual for the JTO token, which Jito launched in 2023 but which does not yet directly benefit from Jito revenue. Almond moderated multiple livestreams on JTO’s tokenomics before joining Jito Foundation.



“Fee switches, yield boosting mechanisms and buybacks have all been discussed heavily,” Almond said. “It’s going to be up to the DAO which direction we take very soon. I’d like to see one of and potentially more of the above, all implemented as quickly as possible.”



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Jito Foundation hires head of governance

Ben Strack

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



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After a process that took years (1,300 or so days, Galaxy CEO Mike Novogratz noted on a Tuesday earnings call), GLXY shares are trading on the Nasdaq.&nbsp;



The US listing boosts the stock’s visibility — i.e. via Robinhood and perhaps, one day, in indexes (S&amp;P, MSCI, Russell, etc.) More than that, though, we’re watching how it helps the firm scale as competition stiffens in the growing crypto space.&nbsp;



“Most of Galaxy&#8217;s growth over the last seven years was internally funded with investing profits or trading profits, and so there was a regulator on how fast we could grow,” Novogratz explained. “Depending on the opportunities we see, being able to tap the deepest capital market in the world is a huge advantage.”



In other words, the CEO added on the call: “Bigger is better in financial services, and we plan to get a lot bigger.&#8221;



We’ve seen some huge crypto M&amp;A so far this year. To name a few: <a href="https://blockworks.co/news/coinbase-deribit-deal-focus-derivatives">Coinbase-Deribit</a> (a $2.9 billion deal); <a href="https://blockworks.co/news/crypto-ma-mergers-feeding-frenzy-kraken">Kraken-NinjaTrader</a> ($1.5 billion); and <a href="https://blockworks.co/news/crypto-tradfi-intersections-ripple-blackrock">Ripple-Hidden Road</a> ($1.25 billion).



Novogratz noted that having a more fairly-valued stock — after historically trading below its book value — allows Galaxy to more seriously look at acquisitions.&nbsp;



“There are some businesses that make sense to grow organically, and some that make sense to add on,” Novogratz said. “And so, I think you&#8217;re going to see a little of both in the coming 36 months.”&nbsp;



DeFi Technologies also listed on the Nasdaq this week.&nbsp;



That company, like Galaxy, has been trading publicly in Canada (and continues to).&nbsp;



But as DeFi Technologies CEO Olivier Roussy Newton put frankly: “Canada is a small population base compared to the United States. The world trades on the US capital markets.”



He also alluded to M&amp;A, telling me: “You [present] your equity for investors, and if you can do that effectively you trade at a high multiple and you raise more money and you buy more companies.”



DeFi Technologies looks to have 100 crypto investment product listings by the end of the year. The company bought ETP issuer Valour in 2021 before acquiring Reflexivity Research and crypto liquidity provider Stillman Digital last year.



As for future acquisition targets, Newton said: “There’re a lot of private trading technology companies in the digital asset space that would want to…access capital market equity financings and other derivatives mechanisms to enhance those opportunities.”



Scale and product breadth will be especially important for firms like Galaxy and DeFi Technologies as more financial giants wade deeper into crypto.&nbsp;



One area that TradFi players entering the space are focused on (or will be) <a href="https://blockworks.co/news/yield-bearing-settlement-network-tokenization">is tokenization</a>, Novogratz said.



“We are trying to build our moat through domain expertise, through better customer relationships, and through kind of staying one step ahead of those guys,” he noted on the earnings call.



All’s to say, we’ll be watching more than just the GLXY and DEFT stock prices.



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