VOLT.WIN

Kate Irwin

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



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Arbitrum’s gaming investment group is offering Ronin up to 750,000 ARB spread across three consecutive years to join them as an “Orbit” chain.



Currently, that’s worth about $367,500, which doesn’t seem like a whole lot.



But in this down-and-out gaming market, maybe that’s enough.&nbsp;



Ronin’s cofounders shared screenshots on social media of the offer from Arbitrum Gaming Ventures (AGV), noting that it would also include Gaming Content Creator Program access (social content support funded by Arbitrum DAO).&nbsp;



They’d also get financial assistance with audit costs via an existing $10 million Arbitrum ecosystem audit program.



“Cool to see Arbitrum throwing their hat into the ring,” Jeff “Jihoz” Zirlin, one of the founders, <a href="https://x.com/Jihoz_Axie/status/1957845308681195992">wrote</a> in a pretty neutral-seeming response to the offer, which came from AGV councilmember and Offchain Labs Head of Gaming and Consumer Partnerships David Bolger.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">The proposals are starting to roll in. Many of the questions we&#39;ve gotten around Ronin 2 revolve around: • How will Builder score be calculated? • Which L2 provider will be chosen? These are not fully up to Sky Mavis. They will be worked on and decided in conjunction with… <a href="https://t.co/zkq0jmh51G">pic.twitter.com/zkq0jmh51G</a>&mdash; Jihoz.ron (@Jihoz_Axie) <a href="https://twitter.com/Jihoz_Axie/status/1957845308681195992?ref_src=twsrc%5Etfw">August 19, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The proposal emphasizes Arbitrum’s continued interest in gaming.



Despite some <a href="https://blockworks.co/news/arbitrum-gaming-catalyst-dao-relations-rep">controversy</a> earlier this year around how much money AGV more broadly was committing to gaming, they’re still pushing forward in the sector.&nbsp;



AGV was previously known as the Arbitrum Gaming Catalyst. Its founding partner, Daniel Peng, <a href="https://blockworks.co/news/blockchain-gaming-reckoning-gdc">told me</a> back in March that they were talking to over 100 game teams (some of those talks seemed to have resulted in investments since).



Arbitrum Gaming Ventures is now helping fund <a href="https://x.com/ArbitrumPlay/status/1920545754432877026">titles like</a> Wildcard (a fun MOBA-style creature battler), plus gaming startups like Xai Games and Proof of Play (the latter of which recently killed its onchain game Pirate Nation).



“Studio Chain” is also <a href="https://blockworks.co/news/studio-chain-gaming-blockchain-launch">building</a> with Arbitrum, which is a gaming- and entertainment-focused Orbit chain from the My Pet Hooligan-affiliated Karrat Foundation.



Ronin’s founders don’t seem totally sold on the idea of jumping on the ARB train just yet. They’re still open to offers from other sequencers.&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;re starting to see different L2 providers submit their proposals to Ronin. This means that they&#39;re looking to provide access to their sequencer technology which would facilitate Ronin becoming an Ethereum layer 2. What does a sequencer do? • Collects user transactions from…&mdash; Jihoz.ron (@Jihoz_Axie) <a href="https://twitter.com/Jihoz_Axie/status/1957942407028437202?ref_src=twsrc%5Etfw">August 19, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Ronin and Sky Mavis cofounder Aleksander Larsen specifically <a href="https://x.com/Psycheout86/status/1958051860780032326">mentioned</a> Optimism and zkSync as other possible vectors for Ronin to become an L2 besides going the Arbitrum route.



Zirlin also emphasized that these decisions are “not fully up to Sky Mavis.”



“They will be worked on and decided in conjunction with the governing validators,” he explained.



Last week, Ronin’s leaders <a href="https://blockworks.co/news/ronin-becoming-ethereum-l2">announced</a> they were planning to rejoin Ethereum, moving away from being a sidechain to turn into a true Ethereum L2.&nbsp;



The change could help speed up transactions and make Ronin more than just a gaming chain.&nbsp;



Where will they land? Guess we’ll have to wait and see.



But it’s probably a sign that sidechains are over. At least, for now.



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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/forward-guidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</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/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/supply-shock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
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Arbitrum

Arbitrum Gaming Ventures offers Ronin 750K ARB to become Orbit chain

Donovan Choy

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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When one thinks of DeFi’s greatest innovations, automated market makers (AMMs) come to mind.



Popularized by early OG teams like Bancor and Uniswap in 2018, AMMs enabled permissionless liquidity provision without the need for professional market makers to manage an order book.



This permissionless structure has immense benefits for bootstrapping markets around illiquid tokens, but it comes with many well-known tradeoffs.&nbsp;



Since liquidity positions and execution is public, LPs are vulnerable to MEV attacks, manifesting in price impact and slippage problems for the end-user.



Protocol designers have tried to tackle these problems in a variety of ways over the years (e.g. Uniswap v3’s concentrated liquidity or dark pools). Others such as Hyperliquid have simply opted for the reliability of the central limit order book (CLOB) design.



In recent months, a wave of new AMM DEXs on Solana has been charting its own path to address these issues.



These DEXs are popularly referred to as prop (short for proprietary) AMMs, or dark AMMs; they include players like HumidFi, SolFi, Tessera, ZeroFi, GoonFi and Obric.



You’ve probably never heard these names, and that’s by design.



Prop AMMs do not use a frontend. They quote prices privately and rely on vault-based liquidity supplied by one proprietary market maker as opposed to external liquidity pools.&nbsp;



By centralizing liquidity provision in the hands of a few, this design choice enables prop AMMs to protect order flow execution from MEV attacks by high-frequency traders that public AMMs are susceptible to.



How then do prop AMMs find users? They simply plug into a DEX aggregator — such as Jupiter or Titan — on the backend, which allows the aggregator to query across DEXs for the best price quotes.



Almost all of prop AMMs’ volumes are routed from DEX aggregators, as per the below chart.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdfh9PlPhK62j0oabljX3Y9b9CMZJbsgM4elHIz1devfa5yzuDFNshf6XM_Vb-BaDPB-xYWkymlWFIT8Gi5n_FT5FUBhsvKeGq44T_jdKMVJmRKTHBERFQfbbqSCEwyzgEe8ohpIA?key=Htjrz4d2NG5fLa1a3iXfvg" alt=""/></figure>



Chris Chung, CEO and co-founder of Titan told me: “Initially, when prop AMMs first launched, you had to be integrated with all of them to even stand a chance of finding the best route due to their dominance. The first three (SolFi, ZeroFi and Obric) had a stranglehold over the market, but standard onchain AMMs could still compete.



“With the influx of many new prop AMMs, the market share of prop AMMs has continued to keep going up, but each successive one has seen less of an impact on a router&#8217;s success vs. its peers.”



<h2 class="wp-block-heading">Prop AMM dominance</h2>



Since January 2025, prop AMM volumes have consistently made up about 13% to 24% of monthly DEX volumes.



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe_FKTLqlXCzEKHrpkK5JJXl6iQj-2mYHUOSVrfhoIr3sjNLA5HRq5waxjI8pXkAAkRz9zGFZTpxEHtaWNUOS-NjtrFGPaXSl1hT7RVY1PVifCVA_TcddlOCYI-G30gbVH-FoMYzg?key=Htjrz4d2NG5fLa1a3iXfvg" alt="" style="width:653px;height:auto"/></figure>



Isolating volumes data down to highly liquid trading pairs, like SOL-stablecoin, brings the growing usage of prop AMMs into clearer view.



For SOL-stablecoin volumes in the last week, prop AMMs are collectively processing ~53% ($7.42 billion) of all DEX volumes, per Blockworks Research data.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc51fptUJGHA9AFk4HqgRhBYrQx6RxDIBcYdBhAMnDxUy531pvhQDQXJc_H7pfMezTL8VZzfDdsVmv6z7Qt7NJ0-JL8RCbKRhODRUx6uIj7Sko6hLPJxu9bgkDNg2kCRMkuuNTb?key=Htjrz4d2NG5fLa1a3iXfvg" alt=""/></figure>



Blockworks Research data shows a similar story emerges on stablecoin pairs — SolFi and Obric together captured ~50% of the $1.1 billion in trading volumes over the last week.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdfrZbR8oFbo0Mu18Bc1mTFK7PIN_jp6z_MPnsq8PWbBzS0Bb6mYdO32qxSdZTigK_kC80wLXvhUg7wbRWYsKYJiG9wmbglmBFcTfqpaPSXmQctk8y-Ok2RV6FeN8MWdK3IGWSb0Q?key=Htjrz4d2NG5fLa1a3iXfvg" alt=""/></figure>



And as expected, illiquid assets like memecoins are still traded on traditional AMMs (there’s a caveat, though: larger memecoins like <a href="https://solscan.io/tx/ai6HWvsU43upmtQ4DUGMmRK83g4P5RX6xz8VkRecZfJPEtiKeSiFLg9FTxdc8XS6PCbWHEwv9Vrs49BrcZ8pUKU?ref=solanatracker.io">POPCAT</a> and <a href="https://solscan.io/tx/5kYPVw38ac5xbiy7sqTZwWD2pn2ESa4RzEfXgW1FeunAX9frxkBF2nhtkhqaZonm7qnkLc9uzjdJHphC8M4jcWeQ?cluster=mainnet">FARTCOIN</a> are showing up on prop AMM routes).



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe043dnm19xm83_03syacFOe769iEubskgCLRUFskPlQn--i84gZoh-9RHHSY4O1sFGDOYuGGCHRfsz6ziNd0jFIlcZUWouUwasIB7JW5ZscQsf2mGo5n6ENKmoA8ovLJvsYr_R?key=Htjrz4d2NG5fLa1a3iXfvg" alt=""/></figure>



Blockworks’ Carlos Gonzalez Campo <a href="https://app.blockworksresearch.com/flashnotes/prop-am-ms-changing-solana-s-market-structure">predicts</a> that tokens will increasingly bifurcate into traditional AMMs vs. prop AMMs based on asset maturity:



“On the one hand, long-tail assets (e.g. new memecoins) will be dominated by traditional AMMs like Raydium and Pump. On the other hand, it appears that prop AMMs like HumidiFi and SolFi will gradually dominate liquid markets (e.g. SOL-USD, stable-to-stable pairs).”



It looks like traditional AMMs will continue to power long-tail speculation and early price discovery as long as there’s demand to gamble on illiquid memecoins.



But for mature assets, liquidity is consolidating around AMMs that deliver tighter spreads and more predictable execution. The dominance of aggregators on Solana is steering its market structure toward a more efficient equilibrium where ideology matters less than fill quality.



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



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



<li><a href="https://blockworks.co/newsletter/supply-shock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
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AMMs

Solana’s proprietary AMMs are reshaping liquid asset markets for users

Marc Arjoon

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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Tether was the seventh-largest net buyer of US Treasurys in Q2 2025. With ~$8 billion in incremental purchases, Tether is positioning its reserves as a quasi-sovereign allocator. This aligns with its business model: backing USDT with highly liquid, low-risk assets while capturing yield from elevated short-term rates. The move underscores two dynamics:



<ul class="wp-block-list">
<li>Institutionalization of stablecoins: Tether is now functionally a material participant in global USD funding markets, alongside central banks and sovereign wealth funds.</li>



<li>Liquidity concentration risk: Treasury bills are becoming the backbone of USDT collateral. Any regulatory, liquidity or market shock to this exposure could reverberate across crypto markets and short-term dollar funding channels.</li>
</ul>



Tether’s ascent as a top-10 foreign buyer signals a structural shift: Stablecoin issuers are no longer just liquidity users within crypto, but systemically relevant investors in global sovereign debt markets. For Treasurys, this is supportive in the near term, but the reliance on a private, opaque entity adds a new risk layer to the market’s stability profile.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcEgLQZXraQbDhjDN6TxCu-ElgXpdIWQYR8_Kblu4Rw3JpOoPyUnGZNKmlYC7TbJgyEsZ2MH6_y5xm97jsPB3sJdafOQ8yDoX-GULOujStorO3eGr_tSm2qzFBfNHULGHknO1IbxQ?key=y1XQPN8YOtqWP06vY2OM3g" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://x.com/PlasmaFDN/status/1957845665494483451">Plasma</a></figcaption></figure>



Continuing on the tokenized asset front, Figure Technology Solutions (hereafter “Figure”) formally <a href="https://www.reuters.com/business/blockchain-lender-figure-technology-reveals-revenue-surge-us-ipo-filing-2025-08-18/">filed</a> for an IPO. It’s aiming for a Nasdaq listing under the ticker FIGR, with Goldman Sachs, Jefferies and BofA Securities serving as lead underwriters.&nbsp;



The company reported a 22% YoY increase in revenue to approximately $190.6 million for the first half of 2025. Even more compelling is Figure’s return to profitability: $29.1 million in net income, reversing a $15.6 million loss in the same period last year. Figure also disclosed that, since inception, it has originated over $16 billion in home equity loans, and counts more than 160 partners — including mortgage originators, banks, servicers and credit unions — utilizing its Provenance blockchain-powered lending platform.&nbsp;



In 2025, public markets have seen a vibrant “crypto IPO summer.” It was marked by standout debuts and filings from major players like Circle, Bullish, Gemini and others, driven by renewed regulatory clarity, investor enthusiasm and institutional backing. Figure Technology distinguishes itself within this wave by anchoring its strategy not around an exchange or stablecoin, but rather around tokenization of real-world, traditionally illiquid assets using public infrastructure (Provenance). With its profitability and healthy growth, Figure showcases a highly touted use case for blockchains in capital markets.



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc_HMETD3zYYbeEnLgjiZ2jpq1KggVZE1w04DqfZpQIn6NdyTk7oaXS3IyWxJ6fqruBW_oNDz_r5oEoj_zzO0Z6TRDc3H1gHi-3zxsKEANdSdQKCylTOPuRa-mJ9s1xBLAy7mPunQ?key=y1XQPN8YOtqWP06vY2OM3g" alt="" style="width:668px;height:auto"/></figure>



<a href="https://www.sec.gov/Archives/edgar/data/2064124/000162828025040673/ftintermediateinc-sx1.htm"></a>



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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/forward-guidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</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/lightspeed">Lightspeed</a>: All things Solana.</li>



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

0xResearch Newsletter

Tether: Quasi-sovereign allocator

David Canellis

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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Everyone is searching for top signals.



It could be that crypto is destined to forever follow the global money supply. Any sign of the bull market’s end would then be buried in macroeconomic data. Boring!



Empire is all about giving a look behind the curtain of the crypto industry.&nbsp;



So let’s instead draw a more interesting correlation: how many shares crypto’s richest executives are cashing in on the way up.



First, it’s worth making one thing clear: People are allowed to make money. If any of us were in the same position, there’s no doubt that we’d be offloading our equity as markets heat up. That’s what it’s there for. 



And boy, have insiders been putting up numbers.&nbsp;



Since January 1, insiders at just four publicly-traded companies in and around crypto have altogether net-sold almost $1.7 billion in company shares.



More than three-quarters of that sum was sold in the past three months alone — during bitcoin’s push from around $103,000 to over $124,000.



The chart below plots those insider stock sales (the colorful columns) against the price of bitcoin (the purple line).&nbsp;



As you can see, insider sales remained relatively quiet for the first half of the year but ramped up once Circle went public in June.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcb-qLWXKS6SWLprYnRZP-dUnNiGZx48n4zzo2VwgeFqnQUjhIuiR9n1NEW99eBjNN_Q-hzw1PxgdzgomU9AGwERa2WbLJwJM-gZq62AutochOYt5Y2rCRkMCDYL0uejg-JfFDdtg?key=r_WgUn7XBsOqyXnRPtHFIA" alt=""/><figcaption class="wp-element-caption">Source: Openinsider, CoinGecko</figcaption></figure>



Circle CEO Jeremy Allaire alone made $46.4 million by selling nearly 1.6 million shares on Circle’s second day of trade, some flowing through a trust. The stock was sold for $29.30 on average, while CRCL’s share price has since climbed past $135 — a 360% increase.



Still, that technically places Allaire in fifth position by value generated by stock sales for 2025 to date, excluding VC firms General Catalyst Group VI and Chuang Xi Capital, which cashed in $104 million and $68.2 million in shares, respectively, directly following Circle’s IPO.



As for who’s been selling the most stock in crypto, at least out of company executives, it’s Coinbase CEO Brian Armstrong, hands down.



Armstrong has sold $485.8 million in COIN shares so far this year through a trust, per OpenInsider data, which collates SEC filings.&nbsp;



That’s nearly $85 million more than former Robinhood CEO Bhatt Baiju’s $399.7 million worth of shares, and almost $300 million more than current CEO Vlad Tenev’s $207.1 million.



Not all insiders have been strictly dumping, however. Nine execs from Strategy have actually been buying shares over the past five months or so, led by Peter L. Briger, a recently-appointed company director and former co-CEO at Fortress Investment Group.&nbsp;



Briger <a href="https://www.sec.gov/Archives/edgar/data/1050446/000095017025099806/xslF345X03/ownership.xml">participated</a> in the STRC preferred stock offering in July to the tune of $19.8 million through an LLC.&nbsp;



What does any of this tell us about where we’re at in the cycle? It’s obviously been hot enough for insiders to start itching for a big payday, it seems.&nbsp;



Are they savvy enough to have sold the top?&nbsp;



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<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </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/forward-guidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</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/lightspeed">Lightspeed</a>: All things Solana.</li>



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

Economy

Crypto insiders ramp up stock sales, nearing $1.7B in 2025

Byron Gilliam

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“We are what we repeatedly do.”



— Aristotle
</blockquote>



Central banks are buying gold in the 21st century for the same reason Romans bought it in the first: It has value because people perceive it to have value.&nbsp;



That circular logic has proved so durable that the purchasing power of gold is <a href="https://www.nber.org/system/files/working_papers/w18706/w18706.pdf">virtually unchanged</a> since antiquity.



In that sense, central banks are buying gold now because Romans were buying it then.



Perception has become reality through repetition.



The bet with crypto is that it can pull off the same trick, but faster — compressing millennia of belief into a few short decades.&nbsp;



Lately, it’s started to look like it might.



Recent <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5029660">research</a> offers empirical evidence that people are using crypto to protect against the risk of government default: “A 10% increase in sovereign CDS spreads is associated with a 2.9-4% increase in crypto app downloads.”



10%!!! 



It doesn’t take much to move a credit default swap 10%, so that correlation suggests people are quick to turn to crypto at any sign of a debt crisis.



Importantly, the correlation tests positive for causality: “Crypto adoption jumps in the months following news related to sovereign risk.”



The researchers established cause and effect by studying credit-risk events like inflation shocks in Argentina, Turkey and Venezuela and sovereign debt crises in Sri Lanka, Greece and Ecuador.



Advocates have been telling these stories for years as proof of crypto’s utility, but with limited effect likely because the evidence was only anecdotal.



But the data now supports the narrative.



In short, the study confirms that when bank depositors are reduced to <a href="https://www.aljazeera.com/news/2022/9/15/what-is-behind-lebanons-bank-robberies-explainer?utm_source=chatgpt.com">stealing their own money</a>, people really do turn to crypto.



Other studies also suggest that crypto’s narratives often line up with reality.



Bitcoin, for example, has long been framed as an escape hatch from irresponsible economic policymaking by corrupt governments — and that is, in fact, how people use it.



“We document a flight-to-bitcoin (FTB) phenomenon,” one <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3278469">study</a> concludes, “whereby local demand for bitcoin increases with local economic policy uncertainties.”&nbsp;



“FTB is driven by investors’ lack of confidence in government as FTB is stronger in countries where the confidence in government is low and corruption incidents surge,” the authors explain.&nbsp;



It gets even better for the broader crypto narrative: “Bitcoin ownership shifts from centralized exchanges to decentralized wallets amid such turbulence.”



What could be more crypto-narrative-confirming than that?&nbsp;



Another <a href="https://www.sciencedirect.com/science/article/pii/S1544612325013984">study</a> even cites crypto as a reason for corrupt governments to change their ways, concluding that “the control of corruption appears to discourage cryptocurrency adoption.”



Crypto advocates sometimes celebrate government dysfunction as another confirmation of their narrative (and who doesn’t love having their narrative confirmed?). But if crypto could frighten governments into good-governance reforms, that would be an even better story, I think.



The same study finds that “higher emigrant ratios in…lower-income countries are associated with increased cryptocurrency usage” — with the implication that people find crypto useful for remittances.&nbsp;



Remittances is one of crypto&#8217;s original use cases, but it’s always been surprisingly hard to quantify.&nbsp;



Western Union still hasn’t been fully undermined by crypto, but seeing the empirical evidence makes the remittances narrative more substantial.



Finally, another <a href="https://www.emerald.com/jfrc/article-abstract/33/3/406/1274488/Sanctions-and-cryptocurrency-a-catalyst-for?redirectedFrom=PDF">study</a> backs one of crypto’s grandest storylines — that it puts money and finance beyond the reach of government control. 



Studying the relationship between international sanctions and crypto usage, the authors conclude that “sanctions can act as a significant motivator for countries to adopt cryptocurrencies.”



Satoshi set out to create non-sovereign money, and sanctions evasion is proof that it works as such.



If these academic studies feel, well, academic to you, you’re probably reading from a developed economy: All of the studies found their results primarily in emerging markets.



In the US, by contrast, bitcoin’s “digital gold” narrative took a hit in 2023 when it failed to hedge against 9% inflation.



But the study on sovereign default risk showed that people mostly use bitcoin to hedge inflation risks resulting from a sovereign debt crisis, and not, say, supply shocks.



Even with CPI at 9%, no one doubted the US’s ability to service its debts, so people didn’t feel compelled to swap their dollars for bitcoin.



But there are signs that crypto’s value proposition is starting to be recognized in developed countries, too.



“In just the last year,” the lead author of the paper on sovereign debt <a href="https://youtu.be/YEXsFk4XKX0?si=kXyB3ybbVzjp-MGA&amp;t=2827">observed</a>, “we’ve seen [the crypto] narrative migrate from being just an emerging markets’ story to one that folks in advanced economies are contemplating, too.”



The signs are mostly anecdotal so far, but also impossible to miss: Larry Fink referring to bitcoin as a “flight to safety” asset class; Jim Cramer recommending both bitcoin and ethereum as a hedge against deficit spending; even the US government itself starting a strategic bitcoin reserve to hedge against its own irresponsibility.



The risk of US default remains small — but not so small that Wall Street, CNBC and the US Treasury can resist hedging it with bitcoin.



The more that behavior is repeated, the more the perception of crypto will become its reality.



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The Breakdown Newsletter

Are crypto narratives becoming reality?

Macauley Peterson

Skeptics of Ethereum’s rollup-centric roadmap have speculated that layer-2 networks might eventually peel away from the ecosystem. The concern was that rollup teams would grow tired of paying Ethereum’s data availability fees and break off into sovereign layer-1 chains with their own validators.



But so far, that hasn’t happened. Instead, the gravitational pull has flowed the other way: independent layer-1s are re-architecting themselves as <a href="https://blockworks.co/tag/ethereum">Ethereum</a> L2s.



Celo and Lisk are two prominent examples. Celo launched in 2020 aiming to build a mobile-first, payments-centric L1 with its own stablecoins and identity layer. Lisk’s origins go back even further to 2016, when it launched with a focus on onboarding JavaScript developers through a custom SDK and sidechains.



But by the 2022–2023 bear market, both faced a common challenge seen across many mid-tier L1s: limited liquidity, fragmented developer ecosystems, and difficulty attracting and retaining users beyond niche use cases.



Rather than double down on independence, both chains opted to <a href="https://blockworks.co/news/celo-migration-to-ethereum">plug into Ethereum</a>. Celo completed its migration in March 2025, relaunching as an <a href="https://blockworks.co/tag/optimism">OP Stack</a> rollup using <a href="https://blockworks.co/news/eigencloud-launch-a16z-eigenlayer">EigenDA</a> for <a href="https://blockworks.co/news/ethereum-roadmap-data-availability-da">data availability</a>.



“It was the right time to return home to Ethereum,” Rene Reinsberg, Celo co-founder, told Blockworks, citing new infrastructure like rollup-in-a-box stacks. “This allowed Celo to maintain its unique technical advantages like 1-block finality, sub-cent gas fees, and ERC-20 tokens as gas currencies… while gaining Ethereum’s security, community, and network effects.”



Celo says its community overwhelmingly supported the shift, with unanimous votes through onchain governance and proposals reviewed in public calls and open forums.&nbsp;



“Building in the open was, and remains, a core priority,” Reinsberg said.



The results are <a href="https://blockworks.co/analytics/celo">showing in the metrics</a>. According to Celo, daily active users now top 600,000, and stablecoin transfers have reached over 123 million across more than 1.1 million wallets. The chain also reports over $1 billion in monthly stablecoin volume and a 365% increase in protocol revenue since the migration. Celo’s onchain FX platform, Mento, recently processed over $200 million in a single day.



Much of the usage has been driven by real-world applications like MiniPay, a mobile wallet integrated with Opera’s browser.&nbsp;



“MiniPay’s built for everyday users,” the team said, noting that it recently surpassed 8 million activated wallets. Meanwhile, DeFi integrations have accelerated, with <a href="https://blockworks.co/tag/aave">Aave</a> V3 hitting its initial supply caps, prompting governance to raise limits for USDT, ETH, and CELO.



Lisk’s path followed a similar arc. In May 2024, it migrated its <a href="https://blockworks.co/price/lsk">LSK</a> token to Ethereum and relaunched as an OP Stack rollup using Ethereum’s blobspace for DA. Its “DAO Season 1” campaign reportedly attracted over 277,000 new accounts and 48 million transactions. Lisk is now betting on distribution and Ethereum-native interoperability to power its next growth phase.



“The so‑called ‘crisis’ in Ethereum was never truly real, because Ethereum has never been just another ecosystem,” Dominic Schwenter, COO of Lisk, told Blockworks.



“Projects are joining the Ethereum ecosystem to interoperate, not compete…It has set the highest standard for what it means to scale technology at the most decentralized level possible,” he said.



The contrast with the feared L2-to-L1 narrative is stark, with virtually no examples of successful pivots. DYdX <a href="https://blockworks.co/news/ethereum-solana-cosmos-convergence-blockchain-founders">left StarkEx</a> for a Cosmos appchain in 2023. Starknet continues to post data to Ethereum, and every major rollup launched since 2021 — <a href="https://blockworks.co/tag/arbitrum">Arbitrum</a>, <a href="https://blockworks.co/tag/base">Base</a>, OP Mainnet, <a href="https://blockworks.co/tag/zksync">zkSync</a>, <a href="https://blockworks.co/news/unichain-mainnet-is-live">Unichain</a>, Linea — remains anchored to Ethereum.



“The Ethereum community has the strongest network effects,” Reinsberg said. “This fact has helped guide the migration.” And rather than see it as a step down in sovereignty, Celo sees its L2 status as a way to scale Ethereum into emerging markets where mobile-first financial access is critical.



The upshot is, Ethereum’s center of gravity is growing stronger. Despite the persistent “L1 premium” reflected in certain token prices, no L2 has broken away to become a sovereign L1 in the <a href="https://blockworks.co/tag/rollups">rollup</a> era, while several L1s have chosen to become L2s.&nbsp;



For users, that means cheaper fees, more stablecoin liquidity, and a better onchain UX. For Ethereum, it signals a future where more of the network forms around a shared security and settlement core.



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Rollup reality check: It’s the L1s that are defecting

Ben Strack

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



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More crypto IPO filings from Gemini and Figure affirm investors will soon have a more complex investment universe to navigate.&nbsp;



<a href="https://blockworks.co/news/circle-shares-nyse-day-one">Circle’s IPO turned heads</a> in June. Bullish followed suit with its own <a href="https://blockworks.co/news/bullish-stock-surges-ipo-110">NYSE listing</a> two months later. It’s safe to say we’re just getting started.&nbsp;



I’m a journalist, so I won’t tell you which stocks to pick. I also don’t know; that would depend on the specific exposure you’re looking for. You must know by now that crypto companies are not a monolith. You have your miners, your exchanges, your stablecoin issuers, etc. Coinbase was one of the only renowned crypto stocks in town for a while after its 2021 direct listing.&nbsp;



More recent <a href="https://blockworks.co/news/genius-act-passes-house">regulatory</a> <a href="https://blockworks.co/news/us-house-passes-clarity-act">tailwinds</a>, crypto price surges and TradFi’s embrace of the space spurred demand for more pure-play exposure to crypto sectors with big growth potential (i.e. stablecoins and tokenization), Bitwise research head Ryan Rasmussen noted.&nbsp;



You therefore saw what he called the “massively oversubscribed” IPOs for Circle and Bullish. And he argued that investors haven’t fully gotten their fill.



“We expect investors to remain excited about crypto IPOs through the year end and beyond,” he told me. “Despite a handful of recent and successful crypto IPOs, there remains a massive shortage of publicly traded crypto companies.”



Gemini submitted an <a href="https://www.sec.gov/Archives/edgar/data/2055592/000110465925079323/tm255912-12_drsa.htm">S-1</a> with the SEC on Friday, marking its latest step toward an IPO. Blockchain-based lender Figure followed <a href="https://www.sec.gov/Archives/edgar/data/2064124/000162828025040673/ftintermediateinc-sx1.htm">suit</a> Monday, applying to list its Class A common stock on the Nasdaq Global Market.



Asset manager <a href="https://blockworks.co/news/grayscale-exposure-signals-etfs">Grayscale</a> and crypto custodian BitGo are among those also waiting their turn.



I asked Dan Weiskopf, co-PM of the Amplify Transformational Data Sharing ETF (BLOK), about how to evaluate this growing set of public companies. His fund was essentially the first to focus on blockchain/crypto equities when it launched in 2018.&nbsp;



The space, of course, was a lot smaller seven years ago. The category’s universe has expanded by 25-35% over the past six months alone, Weiskopf told me.&nbsp;



BLOK’s process begins by evaluating the management’s experience in and commitment to the space. It tries to omit positions in firms “just trying to chase the fast buck,” Weiskopf noted.&nbsp;



“We are focused on operators who are trying to solve the necessary infrastructure problem beyond just facilitating transactions,” the BLOK PM added.&nbsp;&nbsp;



Also, valuations matter. Overpaying will obviously hurt returns.&nbsp;



“We have learned from past cycles that patience can be rewarded,” Weiskopf said. “We nibbled on CRCL when it first came out, but the run-up was too fast. We will be watching for the moat to be built on partnerships and distribution.”



A reminder: <a href="https://blockworks.co/news/circle-shares-nyse-day-one">CRCL shares opened</a> at $69 (up from the IPO price of $31). Circle stock peaked near $300 later that month but was trading around $134 as of this afternoon.



When the bench of public crypto firms is deep enough, retail and institutional investors will want exposure via index funds, Rasmussen explained — like they do across other markets, from energy to biotech.&nbsp;



“Most investors don’t want to spend time attempting to pick winners and losers,” Rasmussen said. “They just want to own the market.” (I’ve heard that sentiment on <a href="https://blockworks.co/news/hashdex-crypto-etfs-index-sec-interview">the tokens front</a>, too).&nbsp;



And there will, indeed, be winners and losers.



Gemini, in its S-1, noted the “highly competitive industry” in which it operates — adding that DEXs and DAOs “may be able to innovate faster and offer products and services that we do not offer.”&nbsp;



The crypto platform, which lost $282 million in the first half of 2025, looks to diversify its revenue streams beyond mainly transactions.



Figure summarizes its mission as “building the future of capital markets using blockchain-based technology.” Its success will depend in part on the continued demand for home equity lines of credit, which Figure notes comprised over 99% of its total loan originations in 2025’s first half.



So as the crypto stock universe expands, take note of the nuances. Or, I guess, just buy the index.



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Forward Guidance newsletter

Evaluating crypto stocks with more IPOs on deck

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



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Wyoming’s Stable Token Commission is launching its state stablecoin, FRNT, across seven blockchains using LayerZero’s tech. There are plans for it to be yield-bearing.



LayerZero CEO Bryan Pellegrino emphasized in an interview that would be a key differentiator between what could set FRNT apart from other stablecoins.



The “Frontier” stablecoin, which is backed by US dollars and short-term US Treasurys and won’t have a fixed supply, is being deployed on Ethereum, Solana, Base, Arbitrum, Optimism, Polygon and Avalanche.&nbsp;



It’s a first for any US state — and a sign that you can just do things.&nbsp;



It has taken a few years, though: The Wyoming Stable Token Act passed in March 2023, which established the Commission and set all this in motion.



“When I heard that a state was doing this, I was like, okay, like, that’s kind of crazy. Clearly very forward-thinking and innovative,” Pellegrino said.



“Wyoming has done this with their banking regulation around crypto, with all of the DAO structure. They&#8217;ve been really, really progressive on that side,” he added. “They had the vision of like, hey, we have a competitive advantage here that no central issuer has, right?”&nbsp;



Some of the profits from FRNT interest will be paid to the Wyoming School Foundation to fund state-level education (the <a href="https://www.wyoleg.gov/Legislation/2023/SF0127">Stable Token Act</a> states that after operational costs are deducted, some profits will be kept as savings for future expenses).&nbsp;



The Commission says the stablecoin facilitates “secure, transparent, and efficient digital transactions” and is intended for people and businesses around the world. Like all crypto transactions, FRNT transactions in theory let users avoid middlemen payment providers, but users will still have to pay a nominal fee every time.



Besides funding education, the move puts Wyoming on the global stage yet again as a key crypto player — and destination.



<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">Today, Commission Chairman &amp; <a href="https://twitter.com/GovernorGordon?ref_src=twsrc%5Etfw">@GovernorGordon</a> announced the mainnet launch of the Frontier Stable Token (FRNT). This historic move marks Wyoming as the first public entity in the United States to issue a blockchain-based stable token. FRNT is designed to provide secure&#8230;&mdash; Wyoming Stable Token Commission (@wyostable) <a href="https://twitter.com/wyostable/status/1957767185415245891?ref_src=twsrc%5Etfw">August 19, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Pellegrino predicts FRNT will see adoption from emerging markets looking to gain access to the US Dollar and economy.



“Getting exposure to it will become easier and easier as it’s adopted in more places,” he said.



Wyoming Stable Token Commission Executive Director Anthony Apollo explained in a statement that using LayerZero’s tech allows them to adhere to state guidance to take a “multi-chain, technology-neutral” approach.&nbsp;



The stablecoin on Solana will be available on Kraken “in the coming days,” according to a <a href="https://content.govdelivery.com/accounts/WYGOV/bulletins/3ee734a">release</a> from Wyoming Governor Mark Gordon.



FRNT will also be available to spend via a Visa <a href="https://www.rain.xyz/resources/frontier-stable-token-frnt-debuts-rain-issued-card-on-avalanche-for-everyday-stablecoin-spending">card</a> from payments firm Rain.



The governor’s office and the Stable Token Commission are expected to make another announcement when FRNT becomes more publicly available.



Based on a <a href="https://stabletoken.wyo.gov/pages/about-us">timeline</a> from the Stable Token Commission, that may be as soon as next month.



“Everything’s just like a really great bellwether for the industry as a whole,” Pellegrino said. “Just shows the US leaning in in a way that they were not a couple of years ago.”



Updated 8/19/2025 at 3:05 p.m. to reflect future plans about FRNT as a yield-bearing token.



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kraken

Wyoming FRNT stablecoin on Solana to go live on Kraken

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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The decentralized wireless company Helium is planning to funnel 100% of Helium mobile subscriber revenues to HNT token burns, co-founder and CEO Amir Haleem <a href="https://x.com/amirhaleem/status/1957200674539581521">tweeted</a> yesterday.



It’s not clear if Helium plans to buy HNT on the open market or simply burn tokens from its treasury, but the initiative is going into effect “this week, barring any weird logistics,” he <a href="https://x.com/amirhaleem/status/1957214730344624605">said</a>.



In any case, that’s an <a href="https://app.blockworksresearch.com/flashnotes/helium-halving-tailwinds">estimated</a> $2.3 million in monthly gross revenues offchain that otherwise would have gone to Helium’s parent company, Nova Labs, now being redirected to HNT token holders.



HNT is Helium’s native SPL token, which migrated to Solana from its own L1 appchain in April 2023.



When users pay USD to use Helium’s network, it’s swapped under the hood to HNT, which is then burned for a consumable fixed-price token of $0.00001 known as “Data Credits.”



Today, Helium has about <a href="https://world.helium.com/en/network/mobile">1.1 million</a> daily users across 108,850 hotspots.



The majority of Helium’s revenues is driven primarily by WiFi carrier offload, rather than its own mobile virtual network operator (MVNO).&nbsp;



When users of big telcos like AT&amp;T or T-Mobile are near a Helium WiFi spot, they can shift that data onto Helium’s network automatically and pay Helium on a per-demand basis.



This way, major carriers avoid additional CapEx while still managing to improve coverage for customers in hard-to-serve or obscure locations.



Earlier this month, Helium also went through its biennial emission halving, halving annual HNT emissions from 15 million to 7.5 million.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXehCb3TC7b1tPlN4mCnp1nz9rbFuYoKbLj1q3V5pwGT4ge0_YBpqmyaz-fgctD4RW-OLhjO82YBENqd6vYl35HA3eFcxmpqaJElcqmngTOvZwF7OyJy_VaMZI09Ivun7fs-QgR9?key=F1UcsFQTLvYx0-0eewtjyQ" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://app.blockworksresearch.com/flashnotes/helium-halving-tailwinds#top-idea">Blockworks Research</a></figcaption></figure>



Both mechanics in tandem — an emission halving and circulating supply burn — could create a net deflationary effect for the HNT token.



Blockworks’ Nick Carpinito told me: &#8220;Amir&#8217;s announcement creates immediate deflationary pressure on HNT by burning tokens equivalent to Helium Mobile&#8217;s subscriber revenue, which could accelerate the timeline for HNT to become net-deflationary sooner than expected.”&nbsp;



“While we don&#8217;t yet know the specific mechanics (whether Nova Labs will burn from its treasury or make open market purchases, or whether this applies to gross vs. net revenue), this represents a significant step toward integrating Nova Labs&#8217; offchain revenue streams directly into HNT&#8217;s tokenomics as we anticipated in our July analysis.&#8221;



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DePIN

Helium eyes a potential path to deflationary tokenomics

Ether treasury company BTCS is leaning into its “Ethereum-first” identity with a one-time blockchain dividend: a $0.05 per-share payout in ETH, plus an optional cash alternative for investors who don’t opt in.&nbsp;



The company also unveiled a $0.35 per-share loyalty payment — payable only in ETH — for holders who move shares to book entry with its transfer agent and keep them there through Jan. 26, 2026. Instead of your shares being held at your broker, they’re recorded in your name on the company’s official shareholder register.&nbsp;



Framed as both a reward and a balance-sheet signal, the move arrives while BTCS trades below its asset base. Management points to a $4.41 share price on August 15 against roughly $6.65 per share in cash and digital assets. That valuation gap also shows up in Blockworks Research’s mNAV (enterprise value / net asset value) tracker of Ethereum-treasury peers.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdnPSIUZtIaAVGfpYrsrezJFjbsSOFHZ-f3gYwwp9-v7PJGXa9JjCqaUPw87n2LmDR5bN1dLnhPk1Y0rfFQEblKUJjoQC9VCSJbAU_uLYefbAPXQ3gt0PIG4iNcsfJvISKoVaOlrw?key=LR3gLDoIhpkH5qeVLviMHA" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://app.blockworksresearch.com/analytics/treasury-companies?dashboard=366">Blockworks Research</a></figcaption></figure>



As of Aug. 18, BTCS sat near the low end at ~0.75×, compared with SBET ~1.08×, GAME ~1.20×, and BMNR/BTBT ~1.40–1.45×; only DYNX was lower. In other words, the market is still assigning BTCS a below-peer multiple on its balance sheet.



CEO Charles Allen cast the program as both shareholder alignment and a shot across the bow against short sellers.



“As the largest shareholder of BTCS, let me be perfectly clear: my goal is to grow our market cap primarily through share price appreciation, not toxic dilution,” he <a href="https://x.com/Charles_BTCS/status/1957397105661657378">wrote</a> on X, adding that concentrating shares at the transfer agent is intended to make them harder to borrow for shorting.



Operationally, investors who want ETH must complete an opt-in at bividend.com and transfer shares to Equity Stock Transfer before the record date; otherwise, they’ll receive $0.05 in cash. The loyalty payment is paid after 120 days to those who keep shares in book entry for the full window.



Whether this closes BTCS’s valuation gap is the open question. The persistent mNAV discount suggests investors are still pricing execution risk around the company’s DeFi/TradFi “accretion flywheel,” ETH-denominated revenue exposure, and liquidity dynamics.



Still, paying out effectively a share dividend in ether is novel. If the program meaningfully shrinks lendable float and builds a stickier base, the multiple could drift toward peers. If not, BTCS will still have delivered a crypto-native distribution that puts real ETH in loyal holders’ wallets but, considering its shares have fallen about –40% over the past month, while ETH is up 20%, that may be a small consolation.



The record date for the “bividend” is Sept. 26, 2025. To qualify, you’d need to own shares by the close on Wed, Sept. 24 (or earlier).



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<li><a href="https://blockworks.co/newsletter/forward-guidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</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/lightspeed">Lightspeed</a>: All things Solana.</li>



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

Ethereum

BTCS rolls out Ethereum ‘bividend’ as NAV discount lingers

Luke Leasure

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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We’ve all seen the USDe chart as of late. It’s up and to the right, now crossing $11.4 billion in circulating supply. There are a few key reasons behind this, which aren’t fully reconciled with sUSDe’s 6-9% APY.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeY-F7ogqwEGtQU_TCQW0XaDsvtDq5jlHg47d0WJaylU5iddj3KbSoh_0DgCVuraxzVkoZJinC8PrQjJ-NXS_kbSpbqJWOZNfBWzKGyq5TEY38qD_W5MwPg_Y1UafC_aqxXS0NCTQ?key=pcjPED5ZQ4NjfOmnFZGasA" alt=""/></figure>



Looking under the hood, the USDe market on Pendle for the September maturity now accounts for over $3.4 billion in USDe, 30% of USDe’s circulating supply.&nbsp;



Unlike sUSDe, USDe itself is not natively yield-bearing, and is intended to represent the value of $1. On this Pendle market, however, USDe liquidity receives a 70x sats boost from Ethena’s points campaign, and the YT buyers on this market are pricing the value of these sats at an implied APY of ~14%, a steep premium to the underlying APY of 0% and the benchmark yields provided by sUSDe or USDC supplied on Aave. As the price of ENA has risen from $0.25 at the start of July to $0.67 today, the expected value of ENA distributions from sats has risen along with this.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdPEkkLqyLut9wfwiuaT1SbOKCD1-3snltVJGSudZMb7CVgo1HYolaaF6yhV3zBYUF963iR5uSznhPE0JE7TcfAxaxGQLp8F2nGQ_wT3kPP6XUMCyRIQjjSvCS-VdLE0Z0RSDcX?key=pcjPED5ZQ4NjfOmnFZGasA" alt=""/></figure>



Herein lies the flywheel-points farming. Spend on growth with “points”, making USDe more attractive on Pendle. The USDe supply grows, accelerating top line metrics for Ethena. The growth in the top line leads the liquid markets to price ENA higher, raising the expected value of ENA distributions through points. As the market raises the implied valuation on points, the USDe supply continues to grow to crowd out this now 14%-16% implied yield, continuing the flywheel. Over $1 billion of USDe has been added to this market since last week.



Going one level further — as the market raises the implied valuation of the points, the fixed yield on the USDe-type PTs is lifted as well, making them more attractive for looping. As discussed last week, these instruments have shown profound utilization rates on Aave, which now holds over $4 billion in PTs, with borrow capacity and LTVs completely maxed out. As leverage across these instruments is continually dialed up, risks of an unwind continue to amplify.&nbsp;



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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/forward-guidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</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/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/supply-shock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
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Peeling back the onion on USDe’s growth

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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Crypto is tribal. That’s one of its best qualities. Think about it: What would this space even be without purity tests?&nbsp;



Notice that I used the word “space” and not “industry,” “asset class” or “sector.”&nbsp;



Crypto has always had intense rivalries, but the nuances are mostly lost on those on the outside. It’s not their fault — the regulatory war that raged in the US over the past few years united otherwise squabbling camps against a common enemy (Gary Gensler). An “<a href="https://blockworks.co/news/sec-ripple-gary-gensler">enemy of my enemy is our enemy</a>” situation.



The thermal effect of that chumminess has largely worn off, however, and things are only destined to get uglier from here, especially if/when the market rolls over.



<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">can CT even survive another bear market lmao&mdash; VanEck (@vaneck_us) <a href="https://twitter.com/vaneck_us/status/1957568763236073831?ref_src=twsrc%5Etfw">August 18, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



For sure, there is a crypto industry. And there is a crypto asset class. And a crypto sector. But they’re not filled with the same stuff.



With Gensler gone and the SEC headed by someone more agreeable, it’s easy to forget that a lot was hinging on the Ripple verdict, for reasons that don’t feel as pertinent now.&nbsp;



The question of what exactly a so-called “crypto security” is ultimately mattered to every single person working in and around crypto, in a very different way than the <a href="https://blockworks.co/news/roman-storm-guilty-one-count">Roman Storm verdict</a> and the Samourai Wallet guilty pleas were important.&nbsp;



Let’s run through a hypothetical: Pretend we believe that — even if XRP was not a security when sold to institutional backers — there exist many tokens that are clearly as centralized as XRP, or even more so. Some are more centralized in very different ways. In that case, the long-term viability of any coins we hold directly depends on whether the underlying tech (and the broader ecosystem) is truly decentralized. And for that, we need purity tests.



<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">Ethereum vs. Solana is not the vibe Ethereum/Solana vs. Ripple, Stellar, Hedera, and all of this other centralized drek that are looking for institutional and regulatory capture, is the vibe Faster both communities realize this the better imo&mdash; _gabrielShapir0 (@lex_node) <a href="https://twitter.com/lex_node/status/1868677562681217471?ref_src=twsrc%5Etfw">December 16, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Perhaps we will get regulatory clarity (read: a state-sanctioned purity test) from the SEC about what makes a token a “security,” in such a way that plainly dictates what is and what isn’t a sufficiently decentralized asset on blockchain rails.&nbsp;



It might even come out in the wash of the XRP and Solana ETF applications — but if regulation by enforcement was bad, then don’t be surprised if regulation by ETF application is worse.



If I had to pinpoint the vibe right now, I’d say it’s that there is an unconscious understanding that this is destined to come to a head.&nbsp;



After all, why is it that institutions are gravitating towards Ethereum as they migrate onchain, rather than Solana? Could it have something to do with a perceived degree of centralization in and around Solana, one which just isn’t there with Ethereum?&nbsp;



Hammer out the differences between the two networks and you’ll have devised your own purity test. Although, perhaps it has nothing to do with home validators at all.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">the level of social coordination amongst Solana stakeholders is second to none. whatever they are “waging war” against is what people need to double down on. centralized block production decentralized block validation always has been <a href="https://t.co/Et95qEno3G">https://t.co/Et95qEno3G</a>&mdash; namik // mega-chef Σ: (@NamikMuduroglu) <a href="https://twitter.com/NamikMuduroglu/status/1950119561258230247?ref_src=twsrc%5Etfw">July 29, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Alongside this tension, stress has bubbled through the proof-of-work side of the crypto space. But decentralization is much easier to prove in that world. All that really matters, at a bedrock level, is whether the hash rate is distributed enough so that the blockchain can withstand a 51% attack. Anything less is centralization.



Monero has just passed such a test — but only barely. You probably saw that AI project Qubic attempted to 51% attack Monero by incentivizing its users to mine XMR. Qubic only got as far as about 28%, according to one <a href="https://shai-deshe.gitbook.io/parallel-thoughts/proof-of-work/the-qubic-minority-report">analysis</a> (up to 35% if considering selfish mining).



“The elephant in the room is not what this means for Qubic, but what this means for Monero,”



Independent researcher Shai Wyborski wrote. “Monero brands itself as a provider of military grade security, suited for sensitive, high-profile applications. They aspire to become part of the global economic infrastructure designed to provide reliability and robustness. Having been disrupted to such a thorough extent by an overall niche movement should considerably undermine their ability to do so.”



Monero is largely an old head Tornado Cash or Samourai Wallet: a network you jump in and out of to muddy the provenance for your coins, hypothetically speaking. But would the disappearance of any of those three really impact the crypto “industry,” “asset class,” or “sector”? I’d argue not; in fact, it might even be really good for business.



That said, losing those platforms and protocols and others like them would be absolutely detrimental to the “crypto space.”&nbsp;



There we go again, another purity test.



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Empire Newsletter

Why crypto is headed for straight PvP

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“The effect of liberty to individuals is that they may do what they please; we ought to see what it will please them to do before we risk congratulations.”



— Edmund Burke
</blockquote>



When Queen Victoria sent President Buchanan a 98-word message over the first transatlantic telegraph cable, it crossed the ocean in just 16 hours.



This technological feat inspired The New York Times to describe the invention of telegraphic communication “full of hopeful prognostics for the future of mankind.&#8221;



Some even foresaw the end of disinformation.



“The infallible Telegraph will contradict their falsehoods as fast as they can publish them,” a contemporary journalist <a href="https://www.amazon.com/Information-History-Theory-Flood/dp/1400096235">predicted</a>.



Telegraph signals were spoken of as an invisible current carrying the truth itself — a technical channel free of human bias that would broadcast news from a single, trusted source (the Associated Press).



It didn’t work out that way.



Another journalist soon noticed that “intelligence thus hastily gathered and transmitted has also its drawbacks, and is not so trustworthy as the news which starts later and travels slower.&#8221;



Instead of re-broadcasting a canonical version of the truth, local newspapers put their biased spin on news arriving via telegraph — and the speed of transmission amplified mistakes and misinformation.&nbsp;



100 odd years later, however, people had similarly high hopes for the internet.



In 1996, cyberlibertarian John Perry Barlow confidently <a href="https://www.eff.org/cyberspace-independence">predicted</a> that cyberspace would be shaped and defined by “ethics, enlightened self-interest and the commonweal.”



By freeing information from government control, many believed the internet would topple dictators and return power to the people.



In 2007, Al Gore assured us this hope was being realized: “Broadband interconnection is supporting decentralized processes that reinvigorate democracy,” he <a href="https://cyberlaw.stanford.edu/blog/2007/05/assault-reason/">wrote</a> in The Assault on Reason. “Networked democracy is taking hold. You can feel it.”



If you’ve been on social media recently, you’re probably not feeling it.



But that was only the first iteration of the internet.&nbsp;



The internet’s second act — Web3, aka crypto — comes with similarly high hopes: What the telegraph promised to do for information, blockchains really will do for money.



“Bitcoin is a tool for freeing humanity from oligarchs and tyrants,” Naval Ravikant promised.



“Follow the protocol,” The Declaration of Bitcoin’s Independence <a href="https://bitcoinmagazine.com/culture/declaration-bitcoins-independence">urged</a>. “It has anarchistic implications&#8230;Bitcoin undermines governments and disrupts institutions because bitcoin is fundamentally humanitarian.”



But anarchy is not generally conducive to humanitarianism.&nbsp;



The French Revolution, for example, promised liberté, égalité and fraternité, but delivered famine, terror and dictatorship.



There are risks to crypto’s idealist visions, too, like North Korea exploiting mixers, pig-butchering scams enabled by stablecoins and corporations re-centralizing everything.



I don’t expect any of those external villains to precipitate a crypto reign of terror.



But the biggest risk may come from within: insiders extracting value from the very retail investors crypto was intended to empower — because the decentralization of finance increasingly seems to be centralizing wealth in the hands of a few.



Low-float, high-FDV token launches make the system feel rigged. Memecoin launches really are rigged. Giant insider unlocks flood the market with supply. Holders of public tokens often find themselves subservient to holders of private equity. Sniper bots and sandwich attacks are an invisible tax on retail.



The latest example is digital asset treasury companies, where insiders invest at or below NAV in private raises while everyone else invests at a fat premium on public exchanges.&nbsp;



In many cases, retail investors are getting stuck with the bill for paying bankers, asset managers and stock — the very things that crypto was meant to disintermediate.&nbsp;



In other cases, they’re providing exit liquidity for executives of failed shell companies.



In a few cases, as Andrew Keys explains <a href="https://youtu.be/KHGEZf0TnzY?si=eyQitqf1cAG8_MyA&amp;t=828">here</a>, they&#8217;re creating a “honeypot for class action lawsuits.”



This all seems dangerously contrary to the spirit of an industry that started with the fair launch of Bitcoin and the Ethereum ICO, open to all for 42 days.



The original high-minded ideals of that era still stand as a counterweight to the scams, grifts and insider games we’re currently suffering.&nbsp;



These ideals can still prove transformational — just as the telegraph did, in its own way, even while falling short of its promise to end misinformation.



&#8220;Professor Morse&#8217;s telegraph is not only an era in the transmission of intelligence,” The New York Herald opined in 1842, “but it has originated in the mind an entirely new class of ideas, a new species of consciousness.&#8221;



Crypto is similarly meant to be an entirely new class of money and new species of investment — one that can not only democratize investing, but change the world.



These are high-minded ideas, worthy of pursuit.&nbsp;



But, to paraphrase Edmund Burke, we might want to see what people do with their new financial freedom before we risk congratulations.



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Decentralization in progress: High ideals and hard realities

Casey Wagner

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



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Investors seemed to be looking for direction during Monday’s session. Major indexes traded sideways all morning and into the early afternoon, flipping between the mildest of gains and losses ahead of what may turn into a volatile week.&nbsp;



First, geopolitical tensions will take center stage as the world waits for updates from Ukrainian President Zelensky’s White House visit Monday. The meeting comes after Trump’s Friday trip to Alaska, where he met with Russian President Putin.&nbsp;



Trump and Zelensky started speaking with reporters in the Oval Office right as we were finalizing today’s newsletter. Trump said he thinks he can arrange a Putin-Zelensky meeting. Zelensky said he was open to this possibility and wanted to find a diplomatic way to end the war.&nbsp;



Later this week we’ll see the minutes from the FOMC’s July meeting (out Thursday). It’s the first look we’ll get into what went down last month when two Fed governors <a href="https://blockworks.co/news/powell-resolute-amid-rate-dissents">dissented the decision</a> to hold rates.&nbsp;



The Jackson Hole Economic Symposium (the Kansas City Fed’s annual conference) kicks off Thursday. Fed Chair Jerome Powell will speak on Friday morning. As of Monday, markets were pricing in an 83% chance of a 25 basis points interest rate cut in September — up from a month ago (56%), but down slightly from a week ago (86%), per CME Group <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html">data</a>.&nbsp;



Powell’s speech is the main event of the week. Historically, his Jackson Hole remarks tend to be followed by a mild boost. The S&amp;P 500 has had a median increase of 0.4% on the day of Powell’s Wyoming address between 2018 and 2024, according to data from MarketWatch.&nbsp;



2022 was an exception, when the S&amp;P 500 slid 3% the day after Powell took a more hawkish stance in his comments.&nbsp;



Powell effectively claimed victory over price stability last year, noting in his <a href="https://www.federalreserve.gov/newsevents/speech/powell20240823a.htm">speech</a> that his “confidence has grown that inflation is on a sustainable path back to 2%.” Weeks later, the Fed made its first cut in more than four years and slashed interest rates by 50 bps.&nbsp;



This time around, the data isn’t looking as promising. Plus, there’s significant pressure from the White House (although, as we’ve written before, given that Powell knows he’s on <a href="https://blockworks.co/news/fomc-june-powell-term-end">the way out</a>, we doubt he’s taking the president’s thoughts into consideration).&nbsp;



The Fed has held off on cutting so far this year because officials wanted to wait and see how tariffs impact inflation. July’s US wholesale price data, as measured by the producer price index, came in much hotter than expected at 0.9%. That was the largest jump in more than three years. The concern now is if (or when) producers pass on higher prices to consumers.&nbsp;



The labor market is also looking weaker. Unemployment for July was unchanged at 4.2%, but payroll growth over the last three months averaged 35,000 — levels not seen since the pandemic.&nbsp;



Finally, earnings season comes to a close with big box retailers including Target, Walmart and Lowe’s set to report this week. We’ll be listening for any comments about tariffs and consumer prices.



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

Stocks trade sideways ahead of political updates, Jackson Hole

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



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Yuga Labs wants its “Otherside” game to be like the Roblox or Fortnite of crypto — and isn’t giving up, despite the ongoing blockchain gaming lull.&nbsp;



Part digital social space, part video game with the goal of making user-generated content a massive part of the experience, Otherside is arguably the most ambitious crypto metaverse project still in development.&nbsp;



“This cycle is very different. I feel like every crypto cycle is a little bit like a revenge on the excesses of the last one,” Yuga Labs CEO and cofounder <a href="https://blockworks.co/news/yuga-labs-ceo-bayc">Greg “Garga” Solano</a> said in a recent <a href="https://x.com/RealJonahBlake/status/1955700364071858277">interview</a>.&nbsp;



“It’s a weird cycle in that, like, the quote-unquote ‘consumer-crypto’ part of things is actually insanely quiet. Whereas North America is coming onchain via treasury companies, ETFs. And then it’s like just the Zoomers that are coming onchain via like memecoins and pump.fun,” Solano said.



Things certainly are much quieter on the gaming front. DappRadar <a href="https://dappradar.com/blog/state-of-blockchain-gaming-in-q2-2025">reported</a> last month that crypto gaming funding is down 93% year-over-year, and user activity is on the decline as well.



Yuga saw over <a href="https://decrypt.co/99156/yuga-labs-sees-561-million-in-otherside-ethereum-nft-sales-within-24-hours">half a billion</a> dollars in “Otherdeed” virtual land NFT sales in less than a single day during the 2022 NFT boom — after raising <a href="https://blockworks.co/news/bored-ape-yacht-club-creator-secures-whopping-450m-seed">$450 million</a> in funding.&nbsp;



If you ask me, if anyone has the dough to actually ship an expansive crypto game, it’s Yuga. But that also comes with a lot of pressure.



“The core Otherside holders don’t actually overlap a ton with Web3 gaming. It is a very collector-minded audience. And I think that’s also being taken into account,” Solano said of the decision to give Otherside a large social component.



On the development side, Solano said the Otherside team is “shipping at a faster cadence than we ever have.”



When asked whether Otherside has enough funding for another two to three years of development, Solano told crypto investor Jonah Blake:&nbsp;



“Yes. Hands down. We can do that just with cash without ever even touching any crypto assets that we own.”



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The Drop newsletter

Yuga Labs CEO on crypto market: ‘This cycle is different’

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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When do buybacks make sense?



According to the wisdom of TradFi, buybacks have typically been motivated by three reasons: when growth opportunities are scarce and revenues cannot be increased further, when a stock trades below its intrinsic value, or as a tax-efficient way to return dividends to investors.



From this viewpoint, the dozens of crypto companies spending multimillion-dollar budgets on token buybacks seem to be doing something grossly wrong.



The growth opportunities to launch an adjacent product in crypto are vast (forking open-source code is free), plus most tokens have not been around long enough to establish any kind of fair market value.



But buybacks in crypto serve a uniquely different purpose of marketing. Specifically, buybacks signal legitimacy in a token market plagued by what has been called crypto’s <a href="https://youtu.be/99XsVSN_doQ">lemon market problem</a>.



So if you’re doing buybacks, you may want to put the pedal to the metal and go all in.



That’s the plan of “Heaven,” the latest memecoin launchpad to open its pearly gates on Solana.



Backed by the Solana Foundation’s Colosseum accelerator/hackathon, Heaven is purportedly committing 100% of its protocol revenues to buybacks of its native token, LIGHT. And the buybacks aren’t for a period; but<a href="https://x.com/heavendex/status/1956106489732420069"> forever</a>.&nbsp;



That’s nuts! This is a team that only raised $27 million in an ICO two weeks ago.



About<a href="https://dune.com/adam_tehc/heaven-dex"> $1.4 million</a> in lifetime revenues (by “lifetime,” I mean one week) has been spent on buyback-and-burns for 2% of its total token supply — what the team terms its “God Flywheel.” The result is a six-day-old token that has traded up 225% to a $64 million market cap as of today.



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcrk-EY_jaavwfh4DQma9TGjCftVKOSSvvZcke7fnSVYMDtOdM2YNsTTZkKYmqhuMJWkmDq4MrNxF0v8Jg4d1F3Mi8aoSdlXwT8NbM5wJYZv0F90h9Xh_osDcD1utSc7yPQYLe76Q?key=0y5Dimtew96e8fjdrGIxrg" alt="" style="width:784px;height:auto"/><figcaption class="wp-element-caption">Source: Trading View</figcaption></figure>



You can see Heaven’s traction based on the corner blot of black on the chart below. Yesterday saw Heaven deploy 3,865 tokens, or about 15% of launchpad market share.



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeMlbPE52opD-EFjWuFF8ufBWxrC2u-XjGF3QvMGyYGEYtKfJmWpYEGGCzo2HQFMC-N86Vmtcy4jkdDMhqclO9ACSUdMdnPnIL-EZoqAYleP-te5O39a4pgU6pTF1wb_dFeyTSuEA?key=0y5Dimtew96e8fjdrGIxrg" alt="" style="width:686px;height:auto"/><figcaption class="wp-element-caption">Source: Dune</figcaption></figure>



Pump still has the lead, but Heaven’s revenue buyback gimmick has garnered it enough attention to put it ahead of launchpads like LetsBonk, Moonshot and Jup Studio, all of which have been around for a while.



Heaven’s memecoin launchpad is tightly integrated with its own AMM DEX, which launches tokens exclusively from its own launchpad from the second one.



This vertically integrated design eschews the standard bonding curve design of memecoin launchpads in pursuit of two key objectives.&nbsp;



One, it lets Heaven customize stricter parameters around fee collection.



Heaven-launched tokens are manually gated by the team and categorized under one of three categories. Tokens<a href="https://docs.heaven.xyz/permissioned"> flagged</a> under the &#8220;Creator&#8221; (i.e., serious) label can claim 1% of fees for themselves, those under the “Community” (i.e., non-serious) label are entitled to only 0.1%, while “Blocked” tokens are entitled to none.



In the founder’s<a href="https://x.com/peacefuldecay/status/1945573113196155338"> words</a>: “&#8230;When you trade a token and see Heaven as the DEX, you know that it&#8217;s gone through the heaven gauntlet.”



All<a href="https://docs.heaven.xyz/fees"> protocol fees</a> from token trading on the DEX go directly to buying back and burning LIGHT.



Second, the design lets the team protect token launches with anti-MEV mechanisms. Heaven implements a linearly-decaying six-second “sniper tax” for new tokens.&nbsp;



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeZ3F68NRy-Tdmd_jfINuYyrPVpav0_YxBgp-9N_7dOdWr3EJrmp93OQMexYevc7jPGXrR_eaDQCF6zmfVqzY4z410UoLRla3rLoqRZrP3J3Pr6TV1hg8b7Q2X2-LuWn071eaFZCg?key=0y5Dimtew96e8fjdrGIxrg" alt="" style="width:519px;height:auto"/></figure>



These features seem to create something of a theoretical moat around the Heaven product, one that the average launchpad lacks.



Yet Heaven’s closed surface design may create liquidity silos from DEX aggregators if Heaven’s pools aren’t well integrated or economically competitive in routers. How much routing it wins remains to be seen.



Updated August 18, 2025 at 4:21 pm ET: Modified headline for clarity. 



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