UXD Protocol is an algorithmic stablecoin protocol backed by delta-neutral perpetual swap positions. The stablecoin lives natively on Solana and leverages perpetual swap protocols to create a backing mechanism not affected by volatility.

UXD Protocol

Byron Gilliam

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Missionaries build better products.”



— Jeff Bezos
</blockquote>



Q: Do we need a new internet?



The business model that populated the world wide web with information was straightforward: create content, attract traffic, sell ads.



Now, however, you can often get better, aggregated information from a large language model, which sends a bot to visit those same websites on your behalf.&nbsp;



Soon, most traffic on the web will be bots and therefore impervious to ads (and tragically uninterested in subscribing to newsletters).



This might break the web’s business model: The best search results now come from AI language models, but those AIs get their information from human-written content that may soon cease to exist if its creators can’t get paid.



(Side note: Please click the ads on this webpage.)



As more web traffic becomes &#8220;agentic&#8221; — i.e., automated, machine-based and impervious to monetization — the entire incentive structure for populating the web with information begins to unravel.



Ben Thompson, however, <a href="https://stratechery.com/2025/the-agentic-web-and-original-sin/">proposes</a> an ambitious solution: Create an all-new web economy in which AI agents pay for the information they retrieve — with crypto!



Thompson believes it’s possible to “build an entirely new marketplace for content” but that this would require a new protocol layer that includes “a mechanism for payments via digital currency, i.e., stablecoins.”&nbsp;



Unlike existing web protocols, this new protocol would allow language model providers like OpenAI to “build an auction mechanism that pays out content sources based on the frequency with which they are cited in AI answers.”



This, Thompson says, is the “best possible way to not only keep the web alive, but also in the process create better and more useful AI.”



Creating such an “agentic” version of the world wide web — with internet-native payments — is no small task, however.



Thompson is enthusiastic about “MCP as a protocol layer” (a kind of machine-to-machine version of HTTP) and “NLWeb as a markup layer” (a kind of HTML for language models).&nbsp;



It took years for HTTP and HTML to become the global standard for web traffic, so I’m not sure we’ll be seeing MCP and NLWeb anytime soon.



But if we do, crypto will have a new mission: saving the internet.



Q: Is crypto straying too far from things of value?&nbsp;



In a recent <a href="https://youtu.be/477qF6QNSvc?si=JC2qJNDr65oWrO2v&amp;t=9823">discussion</a> with Epic Games founder Tim Sweeney, Lex Fridman notes that crypto is a “really powerful technology,” but also “frustrating” because “so many people use it to try to make money — to create these bubbles, and the hype and the memecoins — [that it] drifts far away…from things that are of value.”&nbsp;



A lot of people, even within crypto, share his frustration — mostly because memecoins still account for such a high percentage of crypto activity and mindshare.&nbsp;



(Real Bitcoiners don’t even approve of Ethereum, let alone Fartcoin.)



But Fridman has a rather memecoin-y definition of value himself: “How your outfit looks in Fortnite provably holds value.”&nbsp;



Exactly! Part of crypto’s promise is that it allows you to own that outfit instead of just borrowing it from Epic Games.



But to own something digitally, it has to be tradeable and that invites speculation.&nbsp;



Fridman seems unhappy with this — he wants crypto to create “a standard definition of money” but not “let it become this hype thing.”



It’s a fine line to walk (and if you want the “thing” to be permissionless, an impossible one).



“People try to buy and sell to make money instead of staying close to the thing that actually has value,” Fridman, whose five-hour podcasts must make him quite a lot of money, complains.&nbsp;



“Forget the money,” he advises. “It’s more about exchanging valuable experiences.”&nbsp;&nbsp;



Buying and selling things is a time-honored way to earn money, of course.



But, that aside, how do you make “valuable experiences” exchangeable without allowing people to buy and sell them?



You probably can’t: Making everything tradeable makes everything speculative.



I think that’s a feature of crypto, but a lot of people understandably think it&#8217;s a flaw.



Q: Is Trump bad for crypto?



There have been pluses and minuses.



On the plus side, bitcoin made another all-time high today, the SEC has flipped from enemy to advocate, crypto industry legal fees must be down about 99%, stablecoins may soon be legally recognized and we might even get a market structure bill at some point.



But that doesn&#8217;t really capture the sea change of perception we’ve lived through: The Economist noted <a href="https://www.economist.com/briefing/2025/05/15/the-crypto-industry-is-suddenly-at-the-heart-of-american-politics">last week</a> that the crypto industry “suddenly finds itself at the heart of American public life” — kind of an astonishing thing to read.



Unfortunately, they didn’t mean that as a plus.



Instead, The Economist warns that “the Trump family’s crypto frenzy is making it harder for the industry to win sufficient support in Congress” and that “Mr. Trump’s enthusiasm for crypto may end up doing the industry more harm than good.”



I’m not sure how it’d quantify “more harm than good” because its argument is mostly about politics and there would be far less political support for crypto had Trump lost the election.



But I do wonder whether crypto might ultimately have been better off if it had been forced to develop in a hostile environment — we might have ended up with more censorship-resistance and fewer memecoins.



Counterfactuals are impossible to prove, of course, but it’s not inconceivable that The Economist is right — and that single-issue crypto voters may have voted the wrong way.



Q: Do ideals matter in crypto anymore?



It feels less mission-driven these days: Centralized exchanges, centralized stablecoins, bitcoin “treasury companies,” BlackRock ETFs — the biggest drivers of crypto have strayed a long way from Bitcoin’s cypherpunk roots.&nbsp;



“Bitcoin was supposed to be the rebellion,” one <a href="https://open.substack.com/pub/mensmercatus/p/the-great-bitcoin-copy-machine?utm_source=share&amp;utm_medium=android&amp;r=3qcul">blogger</a> sums up. “Instead, it&#8217;s being re-engineered by ‘The Empire.’”



But maybe the rebellion’s mission is just changing?



Crypto used to be more about building permissionless software and disintermediating dark-side middlemen like central banks and social media companies.&nbsp;



Now it&#8217;s more about permissionlessly building startups that make money.



Instead of the old emphasis on DeFi legos, where cooperative composability was the goal, we now have fierce competition — like pump.fun building an exchange to capture Raydium’s profits and Raydium building a launchpad to capture pump.fun’s profits.



This isn’t necessarily bad, it&#8217;s just different.



Or better, if you like startups. “Crypto is very different today,” <a href="https://youtu.be/61O5345QUgU?si=9iJ1za6ctCMYOU9_">Ryan Connor approvingly says</a>. “Crypto has legitimate builders who are commercially oriented, who are non-ideological.”



Non-ideological is good in his book: “In the past, you had people who had to maximally decentralize everything and didn’t have a history of building successful startups or did not have that Web2 orientation that really matters for winning markets.”



Web2 is supposed to be the bad guy, I know.



But this is the normal evolution of a nascent industry — like when Red Hat jumpstarted an industry of for-profit businesses built on top of open-source Linux.



In crypto, old school ideologues can continue building open-source, decentralized and censorship-resistant apps and blockchains — and newer startup types can build businesses on top of them.



(See yesterday’s <a href="https://blockworks-research.beehiiv.com/p/money-without-gatekeepers?_bhlid=6eefe643d0e92030153b124eb21795b271a45bc8&amp;utm_campaign=money-without-gatekeepers&amp;utm_medium=newsletter&amp;utm_source=blockworks-research.beehiiv.com">0xResearch newsletter</a> for an example of people still doing ideological things, like attempting to reinvent money.)



There might also be a happy medium to be found here because, as Jeff Bezos says, “missionaries build the best products.”&nbsp;



I’d argue that you don&#8217;t have to be a cypherpunk to build in crypto but that you do have to believe in something — even if that something is just a marketable product.



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



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



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



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



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The Breakdown Newsletter

Thursday Mailbag: Micropayments, digital value and mission-driven crypto

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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As the Solana community descended on Pier 36 in New York for the Accelerate conference, the feeling in the air was one of reset expectations.



Propositions about Solana’s tech and investment prospects that seemed like consensus just six months ago have now gone out of style.&nbsp;



For one, there’s the muted impact of Firedancer. The Jump-developed client was once spoken of in quasi-religious terms by Solana fans. The software’s launch was going to let Solana <a href="https://blockworks.co/news/lightspeed-newsletter-blockchain-tps-testing">hit one million</a> transactions per second — a nice and round, if meaningless, figure.&nbsp;



A partial Firedancer implementation called Frankendancer is live but so far has struggled to gain adoption. Just 5% of Solana stake currently <a href="https://reports.firedancer.io/?tab=versions">runs</a> on the client. Firedancer is launching a stake <a href="https://delegation.firedancer.io/delegation-program">delegation program</a> similar to what the Solana Foundation offers for Agave, perhaps in hopes of growing its slice of the pie.



Jump’s head of R&amp;D, Kevin Bowers, gave a talk to kick off Accelerate, but it was overshadowed by a talk from a different client developer: On Monday, Anza’s head of research Roger Wattenhofer gave a talk announcing Alpenglow, a major overhaul of Solana’s consensus protocol that could greatly <a href="https://www.anza.xyz/blog/alpenglow-a-new-consensus-for-solana">reduce</a> Solana’s latency.&nbsp;



In short, some in Solana’s validator community are finding, to paraphrase Taylor Swift, that the client they’ve been dreaming of has been here the whole time — in Agave.&nbsp;



I ran into Anza’s lead economist, Max Resnick, at Accelerate. He said the developer shop had to spend time pruning and ironing out bugs in the original Solana client’s code — longtime readers will remember last April, when it became <a href="https://blockworks.co/news/solana-bug-patch-zero-knowledge-proofs">difficult to land</a> transactions on the network at all — before it could test out more frontier ideas like Alpenglow.



It also used to seem obvious to many in Solana-land that ETF approval was going to prove a <a href="https://blockworks.co/news/bitwise-ceo-solana-ncredible-emerging-asset">major tailwind</a> for the asset. That no longer seems to necessarily be the case, as MicroStrategy-like companies make major SOL <a href="https://blockworks.co/news/smallcap-stocks-solana-treasury-buys">treasury purchases</a>.&nbsp;



Some investors made a lot of money by taking a non-consensus bet on SOL following the FTX collapse. Now, as the Solana network looks more consensus than before, conventional wisdom within the ecosystem is starting to be turned on its head.



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conference

Solana Accelerate Day 1: Time to challenge assumptions

Felix Jauvin

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



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



I’m old enough to remember when, just a few months ago, the Trump administration talked about cutting deficits to 3% of GDP.



Ever since the Liberation Day pivot, however, the Trump administration has 180’d on its goals and is now pushing a new way to manage the US debt situation: Run it hot.&nbsp;



Oftentimes, the zeitgeist of a moment can easily be encapsulated by a meme: 



<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" width="676" height="652" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/RunItHot.png" alt="" class="wp-image-102875" style="width:441px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/RunItHot.png?w=676 676w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/RunItHot.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/RunItHot.png?w=266 266w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/RunItHot.png?w=271 271w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/RunItHot.png?w=227 227w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/RunItHot.png?w=80 80w" sizes="auto, (max-width: 676px) 100vw, 676px" /></figure>



Last week, Treasury Secretary Scott Bessent hinted at this pivot in a CNN interview:



“There is the potential growth of the debt, but what’s more important is we grow the economy faster. I inherited a 6.7% deficit as a percentage of GDP, and we’re trying to bring that down by decreasing spending, increasing revenue and [growing] the GDP faster than the debt.”&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">We&#39;ve inherited a 6.7% deficit-to-GDP, the highest outside war or recession. Our focus is to grow the economy faster than the debt, that’s how we will stabilize debt-to-GDP. <a href="https://t.co/yblwrunO9t">pic.twitter.com/yblwrunO9t</a>&mdash; Treasury Secretary Scott Bessent (@SecScottBessent) <a href="https://twitter.com/SecScottBessent/status/1924110227168690298?ref_src=twsrc%5Etfw">May 18, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Read between the lines of Bessent’s quote and you realize the implications for owners of US Treasurys.&nbsp;



Luke Gromen said it best:



<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">When the US Treasury Secretary tells you holders of LT USTs are going to lose money on a real basis, you should believe him 👇 <a href="https://t.co/WTpwJzKqvd">https://t.co/WTpwJzKqvd</a>&mdash; Luke Gromen (@LukeGromen) <a href="https://twitter.com/LukeGromen/status/1924132829656478112?ref_src=twsrc%5Etfw">May 18, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



This is financial repression in action: Grow the way out of an elevated debt/GDP ratio by making bonds yield less than the growth rate of the economy.



For example, if bond yields remain fixed at 4% but the economy grows at 6% nominally, you can outgrow the debt since the yield is fixed and will become less of a burden over time as higher revenues make it less burdensome.&nbsp;



I&#8217;m sympathetic to the idea Bessent articulated during the interview: The White House wants to cut spending and increase revenues. However, squaring that idea with the House tax and spending bill, just passed overnight —&nbsp;it doesn’t quite pass the sniff test.&nbsp;



The new bill would increase deficits by nearly $3 trillion over the next 10 years:



<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" width="646" height="702" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Budget-Bill.png" alt="" class="wp-image-102876" style="width:472px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Budget-Bill.png?w=646 646w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Budget-Bill.png?w=276 276w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Budget-Bill.png?w=236 236w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Budget-Bill.png?w=240 240w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Budget-Bill.png?w=202 202w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Budget-Bill.png?w=74 74w" sizes="auto, (max-width: 646px) 100vw, 646px" /></figure>



Breaking down the calculus, a significant amount of the bill’s spending will need to be funded by higher debt issuance: 



<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" width="835" height="700" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Deficit-changes-WSJ.png" alt="" class="wp-image-102877" style="width:666px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Deficit-changes-WSJ.png?w=835 835w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Deficit-changes-WSJ.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Deficit-changes-WSJ.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Deficit-changes-WSJ.png?w=307 307w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Deficit-changes-WSJ.png?w=311 311w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Deficit-changes-WSJ.png?w=261 261w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/Deficit-changes-WSJ.png?w=80 80w" sizes="auto, (max-width: 835px) 100vw, 835px" /><figcaption class="wp-element-caption">Source: Wall Street Journal </figcaption></figure>



To play devil’s advocate, the scoring and measurement of this bill is fraught with inconsistencies that should be acknowledged:&nbsp;



<ol class="wp-block-list">
<li>It doesn’t account for increasing tariff revenues to partially offset this bill. An effective tariff rate of 15%, which is roughly where things stand today, would bring in $300-$400 billion a year. This would help partially offset the widening deficit, but not entirely, and this revenue certainly wouldn’t be the golden goose that the Trump administration hoped it would be so as to narrow the deficit to pre-Biden levels. </li>



<li>The scoring in the bill assumes a quick expiration of Trump’s first-term tax cuts that then get reinstated afterward, leading to a superficial surge in tax cuts despite them being net-neutral. </li>
</ol>



<figure class="wp-block-image is-resized"><a href="https://x.com/wabuffo/status/1925559627204153737"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfarIbthsNp-zIhVeJtja-m6omwUZ7IhSV9orEsVMAgFfXnxRwr7tyInqWPzpfknFKGb21h8gcFSQc0QzqJA3t-Uj_834LTcfzyv29eI2297rW4mgTXETwwN8ndbYU1KTYuQzomVg?key=luZ3IeQth6XoFpp55SR3Xw" alt="" style="width:687px;height:auto"/></a><figcaption class="wp-element-caption">Source: @wabuffo on X</figcaption></figure>



Semantics aside, it&#8217;s clear that the policy goal has shifted from one of austerity (remember DOGE?) to one that involves running the economy hot to outpace debt growth. 



This strategy is nothing new. In fact, it&#8217;s more in line with the US government’s approach from 2021 onwards.



In the great words of Lyn Alden: Nothing stops this train.



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congress

The strategic pivot from ‘austerity’ to ‘running it hot’

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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Ember Sword, a crypto MMORPG in development, has been cancelled. They say it’s because the team couldn’t get more funding for the game.



Ember Sword once used Polygon, then the Immutable X chain, then Mantle, <a href="https://medium.com/embersword/ember-sword-immutable-x-migration-b9db9db243cc">asking</a> early NFT buyers to migrate their assets from chain to chain over the years.



“In today’s market,” the team wrote in a message, all that’s left of its now-wiped <a href="https://embersword.com/">website</a>, “we couldn’t find a path to keep building. Our journey, and the servers, will go offline.”



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfdrH8of1ZKv4pEzQvNZ5ugh-pDOCmLBc_8vnvgd3Eh1MLA-Oh8ANsWjxOy6B1xwjLuZofe_R7zKKr4S9ZK3kPOYMFBMsDRs-dSuy-cyJTON_24qkvlbAZVFUjM10o0-BNsjqYj?key=Sf26KBWnHx6TgQMpCq11sg" alt="" style="width:795px;height:auto"/></figure>



So how much funding did Ember Sword have? It’s unclear. Bright Star Studios, the team behind the game, raised <a href="https://www.blockchaingamer.biz/news/14032/ember-sword-bright-star-studios-700000-seed-play-ventures-galaxy-eos-fund/">$700,000</a> in 2020 and another <a href="https://www.prnewswire.com/news-releases/bright-star-studios-secures-2m-investment-ahead-of-ember-swords-first-land-sale-on-may-27th-301299164.html">$2 million</a> in 2021 in publicly disclosed rounds, according to data from BlockchainGamer.biz and a press release. Before 2020, Bright Star was called So Couch Studios.



In 2021 — a peak time for NFTs more broadly — prospective Ember Sword players collectively pledged a total of <a href="https://www.coindesk.com/business/2021/08/04/gamers-pledge-203m-in-ember-swords-virtual-land-sale">$203 million</a> in NFT land sales for the unreleased game.&nbsp;



VentureBeat <a href="https://venturebeat.com/games/bright-star-studios-launches-land-sale-for-web3-mmo-ember-sword/">reported</a> in 2023 that the game had over $18 million in funding from investors ($7.1 million) and land sales, not including the game’s 2023 “<a href="https://www.immutable.com/blog/immutable-games-spotlight-ember-sword-announces-alpha-land-sale">Alpha land sale</a>.”&nbsp;



As we’ve <a href="https://blockworks.co/news/crypto-games-shouldnt-monetize-early-nfts">heard from some VCs</a> recently, it’s not always a good idea to monetize your crypto game too early.&nbsp;



It’s also difficult to know for certain how much money a studio has raised in total, as some blockchain partnerships and grant deals are not publicly disclosed.



Ember Sword had apparently been in development for over <a href="https://massivelyop.com/2018/10/18/new-mobile-mmo-ember-sword-is-another-cryptocurrency-game/">seven years</a>, since <a href="https://web.archive.org/web/20230921143607/https://embersword.com/blog/bright-star-studios-forging-better-experiences-in-gaming-and-technology-in-2023-beyond">2018</a>. The game only <a href="https://x.com/PlayEmberSword/status/1863564192814350541">offered</a> full early access in December 2024, though there have been some community opportunities to playtest earlier versions of the game since at least 2023.&nbsp;



The game’s token, EMBER, deployed in mid-2024 and is now down <a href="https://www.coingecko.com/en/coins/ember-sword">over 99%</a> from its all-time high that it saw at its launch.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfIiVAp9PHRH3z8ibJjoGp2uu-ZIwN5Qupd_SY-eDPvHdqi3BQQdrV5y7JJEyxUYDNpW3-KEdYpfStdKe3BpN3hU2SOqsLdXus3lzQPtMiRo0ITaSC3cnAz1iivHQI3LD_x7XIUKQ?key=Sf26KBWnHx6TgQMpCq11sg" alt=""/></figure>



Image: EMBER price over time.



The studio previously <a href="https://nordic.ign.com/ember-sword/74597/preview/ember-sword-hands-on-preview-potentially-great-mmo-but-worries-about-blockchain">ditched Unity</a> in favor of developing its own game engine, and then cycled through five different proprietary engines before making a final decision (Bright Star’s website, now purged, has deleted its past webpages with these details).



“As a team we have developed and worked on 5 engines in total,” an <a href="https://web.archive.org/web/20230921143607/https://embersword.com/blog/bright-star-studios-forging-better-experiences-in-gaming-and-technology-in-2023-beyond">archived copy</a> of a webpage published in January 2023 from the studio’s site reads.



“Make no mistake — this is not just another browser game. This is a fully functioning highly competitive MMORPG,” the team claimed on that now-deleted page, further adding: “Having a game accessible via the browser is made possible by our own proprietary engine, Project SERIUS which allows for much higher accessibility, allowing hundreds of millions of users to enjoy it as opposed to a few million.”



Now, it looks like not even a single user will get to play it.



Ember Sword did not respond to my requests for comment.



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Gaming

Crypto game Ember Sword shuts down after 7 years of development

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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One of the longstanding complaints against Big Tech is that they “exploit” user data for their own profit.



In some sense, I guess that’s true. I’ve used Twitter for years, and was never paid a cent for giving up any information about my demographics and interests.&nbsp;



But is that “exploitation?”



Sure, my data is valuable in hindsight. But billions of dollars in cloud infrastructure and data analytics had to be invested to turn it into something economically valuable that marketers want to buy.



InfoFi, short for “Information Finance,” is a niche sector in crypto looking to do something similar.



Is InfoFi an investable category? Consider Kaito, the leader in this space.



Kaito has two main products. Both of these products generate a substantial $33 million in annualized revenue, based on <a href="https://dune.com/kaitoai/kaito">Dune</a>.



The first is its data analytics platform, offering structured, sentiment analysis of public information. This is packaged as a monthly $833 subscription service that is sold to traders, AI agent companies and funds whose businesses depend on accurate sentiment tracking.



The second is a B2B service for crypto companies doing marketing. Dozens of <a href="https://yaps.kaito.ai/yapper-leaderboards">prominent projects</a> use Kaito for this purpose today.



The rough idea is this: Companies want to do marketing. Rather than the traditional top-down way of sponsoring events, media or paid influencers, Kaito offers an alternative way to incentivize bottom-up and organic content marketing.



Anyone can register on Kaito, start tweeting about a listed project on Twitter, and earn a share of these rewards. dYdX, for instance, is <a href="https://www.dydx.xyz/blog/dydx-yapper-leaderboard?utm_source=dYdXTwitter&amp;utm_medium=GlobalSocial&amp;utm_campaign=GlobalSocial">committing</a> $50k a month in tokens for such a campaign with Kaito.&nbsp;



The problem, of course, is that this opens the door to all manner of trolls and low-quality content.



That’s where Kaito’s proprietary AI tech comes in. It’s supposedly filtering out slop from genuinely thoughtful content. So if you’re just posting “gmdYdX” or “bullish dYdX,” you’ll likely qualify for almost no rewards.



In sum, what Kaito’s really doing is using the blockchain to place a market value on attention, clout, social capital, or whatever you want to call it. Hence, “InfoFi.”



Based on partnerships with companies like Story, EigenLayer, Berachain and more, Kaito has helped distribute <a href="https://dune.com/kaitoai/kaito">$72.3 million</a> to <a href="https://blockworks.co/news/kaito-yap-to-earn-takeover">yappers</a> (this excludes KAITO’s own airdrop).



The KAITO token isn’t simply a governance token, either. The token can be <a href="https://yaps.kaito.ai/stake">staked</a> for an 11% APY, and the team has committed to buybacks — about $3.9 million cumulatively so far.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcPaXtlPzsvj00qTP-PQLu4zUzhfIkhsUAHmNBZL_YOuJFJgHX69u-HULZpQifw9AL_KkqeyL-5rDpA50zFVVJXaVzx0YJ373QdsXXA7Z2dtmHQEkRGzH5pW6bAVqFr-aKSt8VzAg?key=heH_Hib5eGQdBysOkiQnOg" alt=""/></figure>



At a circulating market cap of $502 million today, KAITO is trading at a ~15.8 P/S ratio. If you’re willing to comps KAITO to traditional SaaS companies (~20x), then it suggests KAITO is undervalued.



The tricky thing, of course, is that no one really knows what the “right” multiples are for a crypto company, let alone one in a niche subsector.&nbsp;



I think Kaito is leveraging token incentives to do something genuinely innovative. It’s struck up partnerships with major crypto teams like <a href="https://blockworks.co/tag/eigenlayer">EigenLayer</a>, Berachain and more.



Its success has attracted a few emerging competitors. One of them is Cookie DAO, a data analytics platform that rose to prominence during the <a href="https://blockworks.co/news/crypto-welcomes-ai-overlords">AI token craze</a> earlier this year. As far as I can tell, Cookies DAO is doing something almost identical. Instead of yaps, you have <a href="https://x.com/cookiedotfun/status/1924939636004237549">snaps</a>. Instead of yappers, they’re called snappers. You get the idea.



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe63byUPx84imoj3sODspXIesul01KxypbmthYLyMGTWX1mTQ7Xsp7_TcqAurKG4rbTWO1aQOaxWfQGiDdb8gVwRN1h4XvZP8gfp0hmSwvVbGVMM4mjY3fC4qbrVPo14eJuZofBOA?key=heH_Hib5eGQdBysOkiQnOg" alt="" style="width:684px;height:auto"/><figcaption class="wp-element-caption">Source: @ahboyash on <a href="https://x.com/ahboyash/status/1925540901772026191">X</a></figcaption></figure>



This brings into question how strong Kaito’s moat is.&nbsp;



Anyone can scrape public social media data. Switching costs are also fairly low. In theory, it’d be easy for Kaito’s clients to switch to another sentiment analysis platform.



Where its edge lies, I think, are in its AI tools, and how well it scores user-generated content and filters for high-quality content. That’s crucial because it determines what kind of marketing is rewarded, which in turn determines continued usage.&nbsp;



The devil’s in the details.



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0xResearch Newsletter

Is InfoFi an investable sector? Crypto’s attempt to tokenize attention

Pete Rizzo

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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Today’s Bitcoin Pizza Day is shaping up to be a special one. Yes, it’s the first Pizza Day where the two pies in question are worth <a href="https://x.com/pete_rizzo_/status/1925488081437688273">over $1 billion</a>, but that’s not what I’m talking about here.&nbsp;



No, sometime today, in the heart of New York City, in <a href="https://www.meetup.com/pubkey-meetups/events/307585025/?recId=74ebef07-8cb7-4a9b-9026-9b4dcdd495b2&amp;recSource=ml-popular-events-nearby-offline&amp;searchId=d2673ef2-15f0-4f28-a943-76bfc72e47d4&amp;eventOrigin=find_page%24all">the back of a humble bar room</a>, Laszlo Hanycez’s heroic contribution is going to be honored with something else — a simple metal plaque that represents his induction into the Bitcoin Hall of Fame. Officially launching at <a href="https://pubkey.bar/">Pubkey Bar and Restaurant</a>, it’s a small addition to the 500 or so Hall of Fames estimated to have been established globally. It may even seem an odd choice. I can’t imagine, for instance, that many early Bitcoiners were enamored with sports accolades. 



Yet, it’s a small reminder of something that gets lost in all the conversation around bitcoin’s march above $100,000 —&nbsp;that while bitcoin may be, objectively, the best store of value, value is itself subjective. As the Austrian economists learned (and fiat economists too often forget), it’s something we create and exchange through our actions.



 So, I, for one, will be there to lend my support, because I value Laszlo’s sacrifice. Sure, he may have lost $1 billion, but he’s earned something far more: our respect and admiration for his intentions and his foresight.&nbsp;



And for that, I can’t think of anyone better to be inducted into the Bitcoin Hall of Fame.



— Rizzo



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



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



Bitcoin Pizza Day is really more of a Bitcoin Pizza Week.



It took four whole days for someone to take Laszlo Hanycez up on his offer of 10,000 BTC for two large pizzas.



“I like things like onions, peppers, sausage, mushrooms, tomatoes, pepperoni, etc.. just standard stuff no weird fish topping or anything like that. I also like regular cheese pizzas which may be cheaper to prepare or otherwise acquire,” he <a href="https://bitcointalk.org/index.php?topic=137.0">wrote</a> on Bitcointalk.



Without willing counterparties, Laszlo even suggested that he raise his bid: “So nobody wants to buy me pizza? Is the bitcoin amount I&#8217;m offering too low?”



User BitcoinFX replied: “laszlo I would offer to buy you a pizza, but I&#8217;m not based in the USA, so they might think I&#8217;m a prank caller. If you don&#8217;t get any other offers I might look into how to go about buying you one online. Are you getting hungry or do you just like pizza?”



The next day, Laszlo would show <a href="https://x.com/pete_rizzo_/status/1925488081437688273">picture</a> proof that someone had finally done the deed. The deal was <a href="https://blockworks.co/news/3-piping-hot-pizza-day-facts-for-bitcoin-connoisseurs">organized on IRC</a> with early adopter Jeremy “Jercos” Studivant, who’d also been mining bitcoin around the same time via the cloud.



No question that Laszlo did a lot for Bitcoin with his passion for pizza. He also did a lot for Satoshi, even when he didn’t really feel like it.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXffVHnqN2ehImH6STHTb5DoKfzDI5Bx9MeuXXQ8-W-7WVAGuliwCTyD1F-auxksE9ubEQYqdKzW7eUztUcZpbXCA0hvES3Y9ktwxBW16X4v_0Vc4Hdftm7rd3L7VEULYMq4OhI5YA?key=_2iCpYHNxRNpulU1KTJ8aw" alt=""/><figcaption class="wp-element-caption">Laszlo’s first pizza purchase would now be valued at $1.1 billion. An equivalent amount invested into Papa John’s stock would otherwise be worth $164.</figcaption></figure>



In a 2018 <a href="https://www.businessinsider.nl/satoshi-nakamoto-was-weird-and-bossy-says-bitcoin-developer-2018-5?international=true&amp;r=US">interview</a>, Laszlo gave perhaps the most candid insight into what it was like to develop Bitcoin alongside Satoshi in the very early days.&nbsp;



In total, Laszlo exchanged hundreds of emails with Satoshi across 2010, leading Bitcoin’s creator to frequently send tasks to complete.



“I thought bitcoin was awesome, and I wanted to be involved, but I had a regular developing job,” Hanyecz told Business Insider. &#8220;Nakamoto would send me emails like &#8216;Hey, can you fix this bug?&#8217; &#8216;Hey, can you do this?’”



&#8220;He&#8217;d say, &#8216;Hey, the west side&#8217;s down,&#8217; or &#8216;We have these bugs — we need to fix this.&#8217; I&#8217;d be like, we? We&#8217;re not a team. I thought that it was approval from him, that maybe he accepted me as a member. But I didn&#8217;t want the responsibility. I didn&#8217;t really understand all of the forces that were going on at the time.&#8221;



Laszlo was clear that he deeply respected Satoshi, but there were still a few requests that didn’t sit quite right. &#8220;I brushed them off because I was like, who cares if this guy tells me to go pound sand and go away? This wasn&#8217;t my job or anything — it was a hobby.”



“I was trying to be friends with him. He seemed very paranoid about people breaking the software. He kept calling it &#8216;pre-release,&#8217; and I was helping him get it to release.&#8221;



Bitcoin Core developers would only drop the “0.x” naming convention, which implied the software is still in beta, in 2021 — over a decade later. It was a symbolic move, representing Bitcoin’s maturation since Satoshi’s heyday. And so is Bitcoin Pizza Day.



— David



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Bitcoin

Bitcoin celebrates Pizza Day with price record, Hall of Fame induction

Ben Strack

As the world’s largest asset manager expands its crypto reach, its chief rival has thus far resisted entering the market.



BlackRock has added a layer of credibility to crypto for a segment of investors, given its management of $11.5 trillion in assets. The iShares Bitcoin Trust (IBIT), the fastest-growing ETF of all time, managed nearly $69 billion as of Wednesday.&nbsp;



Yet Vanguard, with its roughly $10 trillion in assets under management, isn’t biting — even as major competitors continue to seek more entry points.&nbsp;&nbsp;&nbsp;



Vanguard was not among the firms lining up to launch the first US spot bitcoin ETFs in January 2024. When those ETFs started trading, the company told Blockworks the funds <a href="https://blockworks.co/news/vanguard-disallows-bitcoin-etf-trading">would not be available</a> for purchase on Vanguard’s brokerage platform.&nbsp;



Roughly six months later, Vanguard similarly <a href="https://blockworks.co/news/vanguard-opposes-platforming-eth-etfs">blocked the trading</a> of ETFs holding ether.



Read more: <a href="https://blockworks.co/news/wealth-managers-feel-pressure-bitcoin-etfs">Restricting access to growing bitcoin ETFs becoming ‘hard to justify’</a>



Both times, a representative told Blockworks that crypto ETFs “do not align with our [offerings] focused on asset classes such as equities, bonds and cash, which Vanguard views as the building blocks of a well-balanced, long-term investment portfolio.”



They added: “We continuously evaluate our brokerage [offering] and evaluate new product entries to the market.”



A Vanguard spokesperson told Blockworks at the <a href="https://blockworks.co/news/crypto-exchange-etf-event-vegas">Exchange ETF conference</a> in March that the firm’s view on crypto has not changed. Representatives at the company did not return Blockworks’ newest requests for further comment.&nbsp;



<h2 class="wp-block-heading">Vanguard rivals flock to crypto</h2>



Executives at a number of traditional finance giants have historically been wary of bitcoin and the crypto space more broadly.



Vanguard founder John Bogle told people in 2017 to “avoid bitcoin like the plague.” BlackRock CEO Larry Fink once <a href="https://www.cnbc.com/2017/10/13/blackrock-ceo-larry-fink-calls-bitcoin-an-index-of-money-laundering.html">called</a> bitcoin “an index of money laundering.”&nbsp;



<a href="https://blockworks.co/news/bitcoin-salesmen-michael-saylor-larry-fink">Fink’s view evolved</a> as demand grew, with the BlackRock leader labeling bitcoin (after launching IBIT) as “an asset class that protects you” from economic uncertainty and geopolitical risk. Bogle had no such stance change — at least publicly — before his death in 2019.&nbsp;



Fink has also been adamant about the benefits of blockchain technology, noting in a March letter to shareholders that <a href="https://blockworks.co/news/stablecoins-tokenization-blackrock-galaxy-das">tokenizing</a> every stock, bond and fund would “revolutionize” investing.



Samara Cohen, BlackRock’s CIO of ETF and Index Investments, <a href="https://www.youtube.com/watch?v=61XGfxAgKUc">told Blockworks co-founder Jason Yanowitz</a> last month that company executives have been “students of crypto for years.”&nbsp;



She added: “What we heard from clients in 2020 and 2021 was really changing from what it had been a few years before in thinking that this actually has a potential role in a diversified portfolio, and why.”



BlackRock launched a private bitcoin trust in 2022 before debuting its spot bitcoin ETF less than two years later. Earlier this year, the firm’s alternatives-focused model portfolios began allocating between 1% and 2% of its assets to IBIT.



Ric Edelman, founder of Edelman Financial Engines and the Digital Assets Council of Financial Professionals, said Vanguard is clearly unmoved by data showing <a href="https://blockworks.co/news/bitcoin-boosts-60-40-portfolios">the historical benefit</a> (on risk-adjusted returns) of adding a small single-digit percentage allocation to bitcoin.



“If you fundamentally believe in modern portfolio theory, if you believe in diversification and portfolio rebalancing, then you want assets included that are both volatile and non-correlated,” he said. “Bitcoin is the perfect example of a volatile, non-correlated asset.”



BlackRock is not the only financial titan seeking to capitalize on investor demand for crypto.



State Street Global Advisors — the third-largest fund manager and issuer of the first US ETF in 1993 — is bullish on diversified, actively managed crypto portfolios. The company <a href="https://blockworks.co/news/state-street-galaxy-crypto-etfs">launched several such funds</a> last year via a partnership with Galaxy Digital.



Fidelity formed a digital assets unit in 2018 and has a bitcoin ETF with roughly $20 billion assets under management. <a href="https://blockworks.co/news/franklin-templeton-etfs-tokenization-2025">Franklin Templeton</a> has a BTC ETF as well — and, like BlackRock, is in the tokenized money market fund game.



Charles Schwab <a href="https://blockworks.co/news/charles-schwab-spot-crypto-etfs-plan">has not ruled out offering a bitcoin fund</a>. In the meantime, the brokerage titan allows investors to buy and sell crypto ETFs on its platform and has signaled its interest in offering spot crypto trading when more regulatory clarity comes.



Morgan Stanley, too, is <a href="https://www.bloomberg.com/news/articles/2025-05-01/morgan-stanley-plans-to-offer-crypto-trading-to-e-trade-clients">reportedly</a> looking into adding crypto trading to its E*Trade platform, though a spokesperson declined to comment.



Read more: <a href="https://blockworks.co/news/spot-crypto-trading-wall-street-interestschwab">Spot crypto trading to become ‘commoditized’ as Wall St. interest persists</a>



Wells Fargo — a firm with no concrete, public crypto plans — still recognizes crypto as a viable asset class. The bank <a href="https://blockworks.co/news/merrill-wells-fargo-offer-bitcoin-etfs">made available</a> unsolicited spot bitcoin ETF purchases to certain clients last year and called digital assets “investable as they continue to evolve” in a March report.



Even JPMorgan Chase CEO Jamie Dimon, who has criticized bitcoin for years, <a href="https://www.cnbc.com/2025/05/19/jpmorgan-ceo-jamie-dimon-says-the-bank-will-let-clients-buy-bitcoin.html">said</a> Monday that clients of the bank will be able to buy bitcoin. He likened buying bitcoin to smoking — saying he doesn’t think you should, but: “I defend your right to buy bitcoin.”



Those comments came a couple days before BTC hit a new all-time high above $111,000.&nbsp;



Outside of bitcoin, Bank of America CEO Brian Moynihan said at the Economic Club of Washington, D.C. in February that the company would enter the stablecoin business if US lawmakers give regulatory approval. Citi analysts’ base-case estimate for the stablecoin market’s size in 2030 is $1.6 trillion — roughly seven times its current size of $230 million.&nbsp;&nbsp;&nbsp;



<h2 class="wp-block-heading">Vanguard’s choice ‘befuddling’ to some&nbsp;&nbsp;</h2>



Edelman argued that Vanguard’s decision to “draw a line in the sand” on crypto products is “bufuddling” and makes no business sense.&nbsp;



“It puts Vanguard in the awkward position of acting as a stepmother dictating behavior of its children, as opposed to a business partner facilitating the ability of their customers to invest as they choose,” he told Blockworks.



Bloomberg Intelligence analyst Eric Balchunas — author of “The Bogle Effect” — said Vanguard has avoided Wall Street scandals over the years and built up perhaps more trust than any other financial services company.&nbsp;



But its decision to block crypto ETFs from trading on its platform seems “nannyish and targeted,” he argued.



“It feels like maybe they’re trying too hard to be the responsible Boy Scout trustworthy person in this case,” Balchunas told me. “I don’t think they need to do that. I think what might even be more trustworthy is to trust their own investors to make the decision.”



Bitwise CIO Matt Hougan said the irony with Vanguard is they’ve been on both sides of the financial innovation curve.&nbsp;



The mainstream asset management industry scoffed when Vanguard introduced index funds in the 1970s, calling such passive vehicles &#8220;unAmerican&#8221; and &#8220;Bogle&#8217;s folly.” Balchunas’ book on Bogle chronicles how Vanguard transformed the financial industry in part by lowering fund costs.&nbsp;&nbsp;



On the other hand, Bogle was skeptical of ETFs as iShares and State Street Global Advisors built dominant franchises. The firm has since established itself as a low-cost leader in the category; the Vanguard S&amp;P 500 ETF (VOO) is the world’s largest ETF, with about $660 billion in AUM.&nbsp;&nbsp;



“So they know what it&#8217;s like to dismiss an innovation and then realize their mistake,” Hougan said. “And yet, here they are again with crypto.”



Beyond Vanguard’s statements to Blockworks over the last 16 or so months, a January 2024 <a href="https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/no-bitcoin-etfs-at-vanguard-heres-why.html">Q&amp;A</a> with executives Janel Jackson and Andrew Kadjeski provides a bit more color on their thinking.



In the post — titled “No bitcoin ETFs at Vanguard? Here’s why” — Kadjeski notes Vanguard removed access to leveraged and inverse funds on its brokerage platform in 2019.&nbsp;



He says: “These products are often misunderstood and misused by investors and can magnify losses.”



Hougan noted that many platforms indeed initially created gates or educational requirements that made it hard to buy leveraged funds. But it’s not the best analogy, he told Blockworks, given that the compounding effect (and its impact on returns, particularly over the long term) can make such products difficult to understand.&nbsp;



“But a bitcoin ETF is one of the simplest ETFs in the world,” the Bitwise CIO said. “It holds bitcoin, and that&#8217;s it. No confusion.”



Hougan added: “There&#8217;s a good case to be made for ensuring investors understand the ETFs they buy. But I think platforms make a huge mistake when they start telling investors which ETFs they should or should not own.”



<h2 class="wp-block-heading">Will they budge?&nbsp;</h2>



Vanguard’s leadership is one reason some believe it’ll ultimately choose to jump into the crypto game. CEO Salim Ramji led BlackRock’s ETF business as it prepared to launch IBIT.



Read more: <a href="https://blockworks.co/news/vanguard-ceo-blackrock-bitcoin-etf">Yes, Vanguard’s new CEO supported BlackRock’s bitcoin ETF launch</a>



Ramji told ETF.com in August that the company would not be launching crypto ETFs. “I’m not going to copy competitors,” he added. “It’s important that a company stay consistent with who they are.” 



But positions can change, industry watchers maintain.



“I don’t think, when he joined, he wanted to rock the boat so quickly,” Balchunas said of Ramji.



Edelman said he’s “highly confident” Vanguard will “reverse its policy position” by the end of the decade — ultimately listing these on its platform and offering its own crypto ETFs. “They will obviously be recognized as a me-too player,” he said. “Nobody who already owns a crypto ETF is going to shift over to theirs unless they offer a compelling reason to do so.”



Offering lower-cost funds could be the way they gain market share, Edelman acknowledged.



The advice and wealth management business Vanguard teased in December could also spur movement on the crypto front, Balchunas argued.



“I would think over time they’re going to get more requests from people who want crypto as part of their portfolio, even if it’s not in a Vanguard ETF,” he said. “Are they going to keep denying them that? I think the desire to grow the advisory business could ultimately make them cave on the brokerage platform thing.”



While Edelman believes consumer demand will push Vanguard to offer their own crypto funds, Balchunas is less sure about that.&nbsp;&nbsp;



The company has avoided launching its own gold ETF, citing its view of focusing on equities, bonds and cash. Still, it allows gold ETFs from BlackRock, SSGA and others to trade on its platform.&nbsp;



Either way, various segment observers agree Vanguard will at least lift the bitcoin ETF ban from its brokerage platform.



Time and competition will be what pushes Vanguard to update its “antiquated, 2013-era view of bitcoin,” Hougan argued.&nbsp;



“They say everyone gets the bitcoin price they deserve,” he noted. “I&#8217;d say every brokerage gets the bitcoin entry point it deserves too. But make no mistake, the day is coming.”



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<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



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



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



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



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



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



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

As more TradFi giants flock to crypto, Vanguard stands apart

Katherine Ross

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



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Yesterday I had the opportunity to moderate a panel for American Banker’s <a href="https://conference.americanbanker.com/event/AB-Crypto-Virtual-Summit/summary">virtual stablecoin summit</a>.



Obviously, the audience that the panel catered to was more TradFi than crypto, but my panelists included <a href="https://blockworks.co/tag/a16z">a16z Crypto’s</a> Sam Broner, EY’s <a href="https://blockworks.co/speaker/paul-brody">Paul Brody</a>, Halliday’s Griffin Dunaif and Superstate’s <a href="https://blockworks.co/tag/robert-leshner">Robert Leshner</a>, which meant we could cover a wide variety of topics.&nbsp;



Anecdotally, one of my takeaways was that there’s a lot of interest and appetite for stablecoins. And the base level of knowledge is pretty high for folks who are presumably not crypto-native. One of the highlights for me was the infra talk, even if it’s not necessarily the most attractive topic.



But back to the panel itself: Brody, who’s EY’s global blockchain leader, told me that they’ve estimated that if they moved all of EY’s payments from the traditional systems to crypto rails, it would save them a $100 million a year. (He added that they can’t do that, because of regulations.)&nbsp;



Even for EY, $100 million isn’t a small amount.&nbsp;



Dunaif, at one point, also brought up that “the stablecoin moment” opens the door for “the Amazon Web Services moment” in finance.&nbsp;



“I think one of the most exciting properties of a blockchain is that we’re making our commercial systems, our finance systems, look a lot more like data systems and traditional [software as a service] systems. So what that means is that value suddenly becomes a programming primitive, right? It’s in the runtime itself,” he explained.



So there’s the potential for a bank or a FinTech to offer a service akin to what AWS does for the cloud.&nbsp;



“There’s probably not a whole lot of margins in just the stablecoin itself, but in the services you could add on top,” he added.



While I think the overall thought has been that stablecoin rails could clean up and simplify the preexisting system, Brody noted that the infrastructure may look “just as complicated” as what was there previously, but “it might be much more contestable, much more open, much more competitive.”



Don’t get too excited, though. Broner still thinks we’re a few years out, even with the uptick in demand and regulatory potential. He believes the adoption will be slow, but it’s coming. It’s not just the EYs of the world that are looking to be more efficient and save money; there are plenty of smaller firms that would love to save money on things like international money transfers.&nbsp;



And that’s your vibe check this wonderful Thursday.



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



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Are stablecoins crypto’s AWS moment?

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



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



— Warren Buffett
</blockquote>



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



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



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



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



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



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



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



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



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



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



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



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



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



We can pseudo-prove this with a thought experiment.



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



Which would you offer money for?



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



Lots of people think it should be.



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



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



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



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



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



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



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



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

Should crypto cash flows be discounted?

Jeff Albus

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



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



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



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



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



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



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



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



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



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



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



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



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Bitcoin hits all-time high while Solana holds steady

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



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



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



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



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



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



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



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



As for changes to existing ETFs (i.e. permitting staking), SEC Commissioner Hester Peirce <a href="https://www.sec.gov/newsroom/speeches-statements/peirce-journey-begins-020425">said</a> in February “the commission may have to make progress on custody and other issues” first.&nbsp;&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Lotta questions. Replying here: The SEC *typically* takes the full time to respond to a 19b-4 filing. Almost all of these filings have final due dates in October. Early decisions would the action that&#39;s out of the norm. No matter how &quot;Crypto-friendly&quot; this SEC is There&#39;s no…&mdash; James Seyffart (@JSeyff) <a href="https://twitter.com/JSeyff/status/1924909692318580894?ref_src=twsrc%5Etfw">May 20, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



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



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



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



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ETFs

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

Casey Wagner

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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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US stocks slipped while bitcoin rallied on higher Treasury yields

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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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Capital Raise

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

Macauley Peterson

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



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



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



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



Circles is governed by four simple rules:



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



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



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



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



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



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



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



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



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



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



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



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



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Circles V2 reimagines fair money for all

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



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



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



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



Marc Andreessen wasn’t worried.



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



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



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



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



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



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



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



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



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



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



The answer was Bitcoin.&nbsp;



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



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



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



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



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







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



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



“Yeah,” Andreessen replied.



“Trillions…?”



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



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



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Andreessen Horowitz

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

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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



Everything Intelligence. AIOZ AI.



Be the future redefining how AI is built and delivered.



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



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



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







This content is sponsored and does not serve as an endorsement by Blockworks. The veracity of this content has not been verified and should not serve as financial advice. We encourage readers to conduct their own research before making financial decisions.



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