WaultSwap

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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Banks take in deposits to invest a portion in riskier, illiquid assets — that’s how they make money.



This “borrow short, lend long” business model is otherwise known as fractional reserve banking. As long as not every depositor wants their money at once, everyone’s happy!



When crisis mode hits and users rush for the exits, the risk models of banks are put to the test.



At the heart of the problem is non-transparency around a bank’s liabilities and available assets. You could theoretically avoid this problem if that information was visible, as you could curate your own risk models.



Enter infiniFi, a new DeFi protocol on Ethereum that aims to replicate the entire stack of fractional reserve banking onchain.



How it works:



<ol class="wp-block-list">
<li>Users deposit stablecoins for iUSD receipt stablecoin.</li>



<li>For lower risk yield, stake iUSD for siUSD. This is liquid.</li>



<li>For higher risk yield, lock up iUSD for liUSD. This is illiquid.</li>
</ol>



Now the “fractional reserve banking” component comes in.



InfiniFi deploys the liUSD liquid tranche capital into lower risk return money markets like Aave or Fluid, while optionally deploying the siUSD illiquid tranche into higher risk return strategies. (Governance will eventually <a href="https://docs.infinifi.xyz/Whitepaper-1f244c414f3680638480da26b5c47895">determine</a> these decisions.)



That exact ratio is informed by the demonstrated preferences of depositors and which yield options they select (siUSD vs liUSD).



The positive-sum outcome? InfiniFi gets to distribute amplified yields for both groups of depositors than if they had pursued their strategies individually.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf06-5f8LN88vv5r1slobEIeVD_Nd8UmLUOIFkJh-OZZSRnF9p9IQq0oLuD9vj8MMKJKqsHtzmhE69A0fjk7y_M-z7FS13NZBq_d0oCCdl40fbbfLfKpTQtrsuKSw4TRXN4BmSD_A?key=b6r_RZ3PubsUAQ7aaJEtyw" alt=""/></figure>



Source: <a href="https://docs.infinifi.xyz/Whitepaper-1f244c414f3680638480da26b5c47895#1f244c414f36817f9cb7d03bd9c8a9b0">infiniFi</a>



Based on infiniFi’s website, whether you’re opting for a liquid (siUSD) or locked (liUSD) yield, you get a comparatively superior yield than the underlying protocol.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfM6rroq45BXgu0XIt9HAiitvFDSxZqov7kTZp5ymWn3Y9pzpfCSwmtOFpRyzlhOz_v3X71YLVjkJkzjGjLG85_SSQIw33TrDcW_E7IuFW7uc2nU8H0LNIqTk7bHW-B5iuluGBVKA?key=b6r_RZ3PubsUAQ7aaJEtyw" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://infinifi.xyz/">infiniFi</a>.</figcaption></figure>



It’s a neat business model.



But what infiniFi is doing in itself — borrowing short and lending long — isn’t all that different from what banks usually do.



The innovation comes from the fact that the entire stack is on the blockchain.



That’s how you, as a user, can sleep easily at night — you know your bank isn’t pulling a Sam Bankman-Fried and pursuing unchecked leverage against the most illiquid assets.



InfiniFi’s reserve composition is completely transparent onchain, so you don’t have to rely on a quarterly call report.



You can easily look up USDC deposits and iUSD tokens minted against it to determine its exact asset-liability mismatch, if any.



You can also examine a breakdown of the protocol’s yield strategies, or whether the protocol is abiding by its liquidity buffers — down to the amount and type of assets they’re made up of.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfuIWvU5M1LgOmMQYlr7bteoKiI221JXIxJE75-XhXdzrCuyuaD4R0RHBaM4pIMLvR4RZnJ5P9lAMpj8et5jnCaHbhTY95FcE6pukSxwABiw-iql_j68Eyyw6opxe0F79N54NhwZA?key=b6r_RZ3PubsUAQ7aaJEtyw" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://dune.com/bob_dinkytown/infinifi">Dune</a>.</figcaption></figure>



In the event of a hack or “bank run,” an explicitly coded loss waterfall will determine who gets paid in order.&nbsp;



The highest-yield and locked liUSD token holders are first in the firing line, absorbing losses first.&nbsp;



SiUSD stakers (lower yield, no lock) are hit only after locked users are wiped. Plain iUSD holders come last.



No one wants to see this happen, but users can at least find some respite in the fact that they won’t have to wait two years like FTX depositors did.



InfiniFi has attracted $33 million <a href="https://defillama.com/protocol/infinifi">in TVL</a> and has an ongoing six-month <a href="https://x.com/infinifilabs/status/1932449266301075652">points</a> program launched at the start of June.



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<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>
</ul>

0xResearch Newsletter

Yield protocol infiniFi replicates fractional reserve banking onchain

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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Who’s selling bitcoin?



It’s a question that’s popping up routinely. The wonder is somewhat justified: Strategy alone is buying up billions in bitcoin every other week — so there must be an equivalent force dumping coins at the same time.



For more context, public stocks like Strategy, Metaplanet, Semler, Coinbase and two dozen others have scooped up about 251,700 BTC since the start of the year, a sum currently valued at $26.51 billion. 



That’s more than 3x the number of fresh coins that were mined in the same period. And that’s not counting the 20,800 BTC ($2.2 billion) collected by private companies like Tether and countries such as <a href="https://blockworks.co/news/bhutan-btc-mining-operations">Bhutan</a> and <a href="https://blockworks.co/news/president-nayib-bukele-bitcoin-maxi">El Salvador</a>.



ETFs from around the world have bought an additional 149,100 BTC ($15.7 billion) on behalf of shareholders — predominantly BlackRock’s IBIT, which is holding 130,850 ($13.8 billion) more coins than it was on Jan. 1.



All told, going by the latest available disclosures, more than 400,800 BTC has been stashed away by governments, private and public companies and ETFs this year — equal to 2% of the circulating supply.



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdSvl7nW-M8nOa1YV3DfaU0xAxY9CVeZjqEd9725lGkPL3iQiKCvxAQG70iSJ4zokUjaIJGRCYlOwxhbo2xjBAoCkBCS02Dqr_WwShJwxRJMSDPsP8YPpIU7SXzVQF3D9osYIWpjA?key=H_vVFm07tgzAgZ5vSoF73w" alt="" style="width:619px;height:auto"/></figure>



But that’s only counting companies that have increased their holdings.&nbsp;



As for who is actively selling, on the surface level, there doesn’t appear to be one major cohort that’s the culprit.



Still, miners have been slowly offloading their stock. CryptoQuant <a href="https://cryptoquant.com/asset/btc/chart/miner-flows/miner-reserve">data</a> shows miner balances overall are down about 2,000 BTC since the start of the year while retaining an eye-watering 1.8 million BTC ($191.4 billion, over 9% of the circulating supply). The US dollar value of collective miner holdings is, however, at an all-time high.



Otherwise, more than half of all ETFs have been selling the pico top. Fidelity’s FBTC has shed over 6,500 BTC this year while Grayscale’s Bitcoin Trust has sold more than 20,000 BTC, with its mini-trust making up only a fraction of the difference. Many other funds have released thousands of coins in the first six months of this year.



It may not be a perfect counterbalance to Strategy, the Saylor clones, and the ETFs that are buying, but it’s clearly adding up.



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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>



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</ul>

Bitcoin

If companies, countries and ETFs are buying bitcoin — who’s selling?

Ben Strack

The growing attention to stablecoins is set to help fuel a new wave of on-chain assets, Ondo Finance CEO Nathan Allman said.



<a href="https://blockworks.co/news/circle-shares-nyse-day-one">Circle’s successful IPO</a> has created “even more of a buzz” around the blockchain space and what’s next, he told me in an interview last week.&nbsp;



CRCL stock has surged (with help from <a href="https://blockworks.co/news/genius-stablecoin-act-passes-senate-vote">the Senate’s GENIUS Act passage</a> last week), opening at $250 on Tuesday — up roughly 70% from a week ago.



“I think it’s the tip of the iceberg,” Allman said of stablecoins. “We’re going to see, in a lot of ways, the exact same playbook being run for other large, liquid assets.”



Read more: <a href="https://blockworks.co/news/tokenized-rwa-segments-will-boom-next">Which tokenized RWA segments will boom next?</a>



Like BlackRock, Franklin Templeton and others, Ondo offers on-chain access to tokenized Treasurys. The company’s tokenization platform — set for launch next month — intends to let applications and wallets offer exposure to US publicly traded stocks, bonds and ETFs. 



There’ve been plenty of attempts to tokenize private markets. Allman told me that while he worked at Goldman Sachs from 2019 to 2021, his team explored tokenization for syndicated loans, which can take weeks to settle.



“But in reality, there’s a lot of general automation and digitization and standardization of documentation that has to be done before tokenization really is the limiting factor of accessibility,” the Ondo CEO said. “So I think that work is being done around a lot of these other asset classes in parallel.”



Tokenizing illiquid asset classes doesn’t make them liquid, Allman added.&nbsp;



He acknowledged that firms like BlackRock and Apollo Global Management are focused on creating more liquidity around private asset classes, and that will help allow for broader tokenization adoption there in the future. Apollo started offering tokenized access to its Diversified Credit Fund, for example, in January.&nbsp;



“The vast, vast majority of regulated financial assets will settle on blockchain rails in the future,” he noted. “That’s not a crazy prediction.”



Keep reading for more excerpts from Blockworks’ interview with Allman.



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



Blockworks: What did you think of the investor demand around Circle’s IPO?



Allman: Stablecoins are obviously by far the largest [real-world asset] — really the only one — that we’ve seen yet get substantial product-market fit. Stablecoins are a great model for us…to think about the benefits of tokenization that most resonate with the marketplace.&nbsp;



There are a lot of theoretical benefits for tokenization, from driving efficiency gains through reduction in settlement times and enabling onchain programmability. But I think what stablecoins have most tapped into is just expanding accessibility globally, especially in the case of Tether really getting into LatAm and Turkey and certain parts of APAC.



Read more: <a href="https://blockworks.co/news/stablecon-execs-bullish-stablecoins-financial-revolution">Digesting Stablecon: Execs bullish on imminent financial infrastructure revolution </a>Circle, with USDC, has obviously seen more traction in the US [and] in DeFi. But we have been very focused at Ondo on tokenizing other assets…on taking that value prop that stablecoins have demonstrated and reapplying it to other assets.&nbsp;



Blockworks: As Ondo gets set to launch a tokenization platform, what do you make of some of the high projections for this segment?



Allman: I think the fact that assets settle on blockchain rails will be abstracted away over time, so the statement there’s $1 trillion, $5 trillion or $10 trillion of assets “tokenized” won’t hold the same significance at some point in the future.&nbsp;&nbsp;&nbsp;&nbsp;



Securities settlement is very regional and fragmented today. Every country seems to have its own securities settlement depository, and I think there will be a big push to have settlement happen on distributed databases. Not necessarily public Ethereum; I think there are certain compliance and other features that may necessitate permissioning in certain parts of the stack.



Blockworks: What was your takeaway from meeting with the SEC earlier this year?&nbsp;



Allman: They’re extremely open-minded and thoughtful and willing to engage with us, which is really exciting to see and encourages us to want to be more transparent and want to put more effort into figuring out how we can bring our products into the US.&nbsp;&nbsp;



There’s a variety of potential paths to how we could bring something like Global Markets — tokenized US public securities — specifically to the US. We haven’t settled on which path makes the most sense to put all our eggs into, so we’re having ongoing conversations related to that.



But the meeting definitely left me much more optimistic that there will be a path, and we and others … won’t have to put so much effort into staying outside the US indefinitely.



Blockworks: How does Ondo seek to differentiate from bigger traditional players that might be wading deeper into the tokenization space?



Allman: Primarily through ecosystem and distribution. We’re a vertically-integrated platform building not just the tokenized assets but also the infrastructure and protocols to create utility and distribution around those tokenized assets. [Ondo Chain is] meant to be this hub for securities issuance onchain, where issuers can bring assets onchain initially and then have them distributed to the broader public blockchain ecosystem.



We’re going to be working on other similar protocols for creating utility for tokenized securities — both those that we issue and those that others issue on Ondo Chain. So we sit in sort of an interesting part of the ecosystem, in that we very much want to encourage these other issuers.&nbsp;



This interview was edited for clarity and brevity.



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</ul>

Banking

Stablecoins ‘tip of the iceberg’ as RWA space matures: Ondo CEO

Westie

Even the best data loses its edge when scattered.



Dashboard Builder, the latest addition to <a href="https://www.blockworksresearch.com">Blockworks Research</a>, allows full control over how you view and use Blockworks data.



Earlier this year, we <a href="https://blockworks.co/news/blockworks-evolution-into-a-data-powerhouse">laid out an ambitious plan</a>: double‑down on data, put better tools in the hands of crypto professionals, and increase transparency.



With Dashboard Builder, investors can surface critical signals in moments and protocol teams can track growth and retention without dashboard gymnastics.



We continue to stand by our vision: improve the data, improve the industry.&nbsp;



Now, let’s improve how you see that data.



<h2 class="wp-block-heading">Why Dashboard Builder?</h2>



<figure class="wp-block-embed is-type-video is-provider-vimeo wp-block-embed-vimeo wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="Custom Dashboards" src="https://player.vimeo.com/video/1095973023?h=a8be1a2978&amp;dnt=1&amp;app_id=122963" width="1024" height="576" frameborder="0" allow="autoplay; fullscreen; picture-in-picture; clipboard-write; encrypted-media; web-share"></iframe>
</div></figure>



Dashboard Builder is our first step toward in-platform customization. Now, you can shape and arrange data right inside Blockworks Research, bringing the visuals you need into one place.



The Builder allows you to:



<ul class="wp-block-list">
<li>Tell your own story. Combine metrics that matter to your thesis rather than relying on our default layouts.</li>



<li>Work faster. Eliminate the tab‑hopping routine and surface insights in seconds.</li>



<li>Share with context. Present a clean narrative to teammates or clients. No extra screenshots required.</li>



<li>Curate an investment thesis. Pin the KPIs that prove or disprove a trade idea and watch them update every single day.</li>
</ul>



We rebuilt the front‑end around a true drag‑and‑drop canvas. Drop in any Blockworks chart, table, or text box and it snaps into place instantly.&nbsp;



Under the hood, every tile pulls from the same validated data warehouse, so the quality data you trust stays intact no matter how you slice it.



<h2 class="wp-block-heading">Coming soon: The complete toolkit</h2>



<figure class="wp-block-embed is-type-video is-provider-vimeo wp-block-embed-vimeo wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="Coming Soon" src="https://player.vimeo.com/video/1095972653?h=94a37482d8&amp;dnt=1&amp;app_id=122963" width="1024" height="576" frameborder="0" allow="autoplay; fullscreen; picture-in-picture; clipboard-write; encrypted-media; web-share"></iframe>
</div></figure>



Dashboard Builder is the first of several releases aimed at giving you full control over Blockworks data.&nbsp;



This summer you can expect:



<ul class="wp-block-list">
<li>Data API: Programmatic access to raw and normalized data for Python notebooks, Excel models, or any in‑house system.</li>



<li>Chart Builder: A no‑code environment to design custom visuals directly in the platform.</li>
</ul>



Together, these tools combine both flavors of access — customize inside, retrieve outside — and transform Blockworks Research into a true end‑to‑end analytics workspace from ingestion to visualization to distribution.



<h2 class="wp-block-heading">The bigger picture</h2>



Blockchain transparency should make rigorous analysis easier. But today, data collection and cleanup are still harder than they should be.&nbsp;



Our mission is to remove that friction so investors and operators can make decisions on solid ground.



Data wrangling should not be a full time job. That is where the hours disappear.



Less time downloading CSVs. More time finding alpha.



Dashboard Builder shrinks the gap between &#8220;I saw it&#8221; and &#8220;I acted on it,&#8221; pushing you closer to effortless crypto insights.



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



Dashboard Builder is <a href="https://www.blockworksresearch.com">live inside the platform</a>. Spin up a custom view, kick the tires, and let us know where we can improve. Plus, keep an eye out for our Data API and Chart Builder launching later this year.



Questions or ideas? Reach us anytime at <a href="mailto:research@blockworks.co">research@blockworks.co</a>.

Blockworks

Dashboard Builder: Our Data, Your Way

<a href="https://aptoslabs.com/?utm_source=blockworks">Aptos Labs</a> and <a href="https://jumpcrypto.com/?utm_source=blockworks">Jump Crypto</a> today unveiled Shelby, a standalone hot-storage network and protocol designed for continuous, high-frequency Web3 workloads. By combining a global mesh of high-performance nodes with a dedicated fiber backbone and onchain programmability, Shelby lets developers build streaming video, AI pipelines, social timelines, and DePIN applications that operate at cloud-like speed while retaining full decentralization.



With <a href="https://www.demandsage.com/video-marketing-statistics/?utm_source=blockworks">82.5 percent of global internet traffic dominated by video and live feeds</a>, traditional clouds struggle to keep up without locking developers into closed systems. Shelby offers a new onchain path: a decentralized hot-storage protocol that matches cloud-level performance while keeping all data flows verifiable, so builders can create next-generation apps without compromise.



Shelby is the product of deep collaboration between two of the leading names in Web3 today in Aptos Labs and Jump Crypto. Drawing experience from their time at Meta on projects like helping to scale Instagram, many Aptos Labs engineers are building consumer-grade blockchain infrastructure for Shelby to offer fast coordination, flexible logic, and immediate production out of the box. Meanwhile, the team at Jump Crypto – as one of the most prolific infrastructure builders in the digital asset industry – is applying their experience with real-time systems and instant trading to ensure Shelby features low-latency reads and parallel data flows. Envisioned to serve data at scale with Web3 economics and Web2 speed, Shelby is positioned to introduce a new vertical of data storage to the market that unites the best of cutting-edge Web3 and Web2 technologies.&nbsp;



Serving data at scale with the flexibility and economics of Web3, and the performance of Web2, has been a shared challenge for leading projects. Decentralized storage has often meant cold, slow, and static systems that are great for archiving but not for action. Shelby meets diverse needs, where it is fast NFT media serving, onchain monetization for video, or real-time, rights-gated content delivery. Shelby introduces a new data primitive: hot, programmable storage that streams, earns, and evolves with how it is consumed. This delivers sub-second reads, enforces access rules, and supports dynamic pricing.



<h2 class="wp-block-heading">How Shelby Works</h2>



Shelby runs on a globally distributed network of high-performance servers connected by a dedicated fiber-optic backbone, with edge caching that delivers sub-second content access at scale. Its architecture supports usage-based pricing, token-gated reads, tipping, DRM enforcement, and smart-contract–defined access control, all without compromising performance. Shelby leverages Aptos’ 600 ms finality, 30,000 TPS capacity, and $0.000005 gas fees for coordination. While Aptos will be the native coordination layer for the protocol, Shelby is designed to be chain-agnostic with support for Ethereum, Solana and more.



“Shelby represents the next chapter for decentralized infrastructure,” said Avery Ching, CEO of Aptos Labs. “It’s not just faster or more flexible. It unlocks entirely new categories of applications that can operate in real time, scale across chains, and give creators and developers full control over their data and economics.”



“We built Shelby to end the false choice between speed and sovereignty,” said Saurabh Sharma, Partner, Head of Investments at Jump Crypto. “The ability to move data at scale, program access logic, and monetize content natively is a leap forward not just for Web3, but for the internet as a whole.”



Shelby supports a range of data-hungry applications:



<ul class="wp-block-list">
<li>Streaming Media: Creators can deploy live pay-per-view streams or premium video tiers without cold-storage latency.</li>



<li>On chain data: Serving as a decentralized source of truth for indexers and chain snapshots.</li>



<li>AI Data Marketplaces: Training datasets stay immediately accessible, removing upload/download delays and simplifying version control.</li>



<li>DePIN &amp; Social: Sensor feeds and user-generated content can update in real time, empowering decentralized social feeds and onchain metering.</li>
</ul>



With in-depth explorations that include web2 and web3 brands like Metaplex, Story Protocol, and Pipe, Shelby signals strong cross-chain demand for real-time Web3 infrastructure and growing trust in Aptos beyond its native ecosystem.&nbsp;



A developer-focused devnet will go live in Q4 2025, followed by a public testnet. Cross-chain support will include Aptos, Ethereum, Solana, and expansion to other modular environments.



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.

Aptos Labs, Jump Crypto unveil Shelby, a high-performance, hot storage network

Katherine Ross

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



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



We all know that there’s some serious institutional demand out there for crypto. Two announcements made this week just prove that TradFi institutions are putting their money where their mouth is. 



In the case of Digital Asset, I mean that literally. The firm behind the Canton Network announced that it raised $135 million in a funding round led by DRW and Tradeweb, but it was some of the participating names that really caught my eye.&nbsp;



Goldman Sachs, Citadel and BNP Paribas were also investors. Notably, both Goldman and BNP have been <a href="https://www.canton.network/news/goldman-deutsche-b%C3%B6rse-30-firms-join-canton-network-for-institutional-blockchain-interoperability">partnered with Canton</a> since 2023, well before the tide turned for crypto.



According to a press release, the funding will be used to expand the integration of real-world assets on the network, including “bonds, money market funds, alternative funds, commodities, repurchase agreements (repos), mortgages, life insurance, and annuities.”



&#8220;This funding milestone validates the inevitability of what we envisioned years ago: a privacy-enabled public blockchain designed specifically for institutional adoption,” Digital Asset CEO Yuval Rooz said.



“Canton is already actively supporting numerous asset classes — from bonds to alternative funds — and this raise will accelerate onboarding even more real-world assets, finally making blockchain&#8217;s transformative promise an institutional-scale reality.”



Then there’s <a href="https://www.businesswire.com/news/home/20250623052523/en/Fiserv-Launches-New-FIUSD-Stablecoin-for-Financial-Institutions">Fiserv’s announcement yesterday</a>, which notably comes on the heels of JPMorgan’s deposit token.&nbsp;



ICYMI: The payments provider is debuting a bank-friendly stablecoin, FIUSD, that’ll be incorporated into its infrastructure by the end of this year.&nbsp;



It’ll utilize infra from both Paxos and Circle, and is — interestingly enough — making FIUSD available to clients via Solana.&nbsp;



“In addition, the company is exploring the use of deposit tokens to maintain the benefits of stablecoins in a more capital-friendly structure for banks. Fiserv is active in discussions with other potential partners to further expand use cases for stablecoins and tokenized deposits, both in the United States and internationally,” the firm added.&nbsp;



What makes FIUSD bank-friendly, according to the release, is that it can be integrated with a Software Development Kit that is suitable for the customer-facing platforms already offered by Fiserv. It’ll also offer fraud monitoring, risk management and settlement controls for banks so that they can manage compliance.&nbsp;



Are either of these announcements surprising? I think everyone can see the writing on the wall. However, both of them show that the building blocks are being put in place for a more crypto-focused future for institutions, which is why it continues to be important to watch.



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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>



<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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Canton Network parent Digital Asset receives financial backing from Goldman Sachs, Citadel

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">
&#8220;The global economy is going to work 100 times better because it&#8217;s using this new technology that lets us move money in a permissionless, programmable way.&#8221;



— Jesse Pollak
</blockquote>



Imagine if Twitter, instead of publishing the world’s stream of consciousness in real time, embargoed our posts during the day and released them all at once at 2 am every day.&nbsp;



Or if the New York Times stockpiled its journalists&#8217; daily output and published it in a single daily batch.



Such is the pre-internet dystopia in which our banking system still lives.



Credit cards, Venmo and Apple Pay make it feel like we’re sending money in real time, but this is smoke and mirrors.&nbsp;



For the most part, banks still collect our payment instructions during the day and process them in one giant batch in the middle of the night.



That’s because, behind the scenes, banks still keep their internal ledgers on creaky mainframes powered by COBOL — a programming language old enough to collect Social Security.



A <a href="https://www.reuters.com/graphics/USA-BANKS-COBOL/010040KH18J/">Reuters study</a> from 2017 estimated that 43% of the world’s banking systems run on COBOL, including those accounting for 80% of in-person transactions and 95% of ATM transactions.



At the time, the industry was estimated to be running on 220 billion lines of COBOL — and banks continued to <a href="https://techchannel.com/cobol/special-report-cobol-survey-results-prove-pervasiveness-value-and-a-bright-future/">pile it on</a> in the years since, digging themselves ever deeper into a hole of legacy code.



Many fear there is no way out.



One top banking regulator <a href="https://www.americanbanker.com/news/small-banks-feel-like-hostages-to-their-core-systems-occs-hsu">said</a> banks “feel like hostages” to their core COBOL-based systems, which are too mission-critical to risk replacing — or pausing, even.



“Some of these systems have been running for decades without being turned off,” <a href="https://www.thebanker.com/content/e22f03a8-305b-5a6d-bb07-a192a2e27bb6">according</a> to a software executive who refers to banks&#8217; COBOL systems as “zombie code.”



“If there is a power shortage,” he adds, “many banks will have no idea how to turn the core systems back on.”



This risk is not just theoretical.&nbsp; When the British bank TSB turned its COBOL systems off in 2017 to migrate to a modern Java-based platform, for example, it failed to get the new system turned on correctly.



This left as many as 1.9 million customers without access to their accounts, including tens of thousands of business customers who were unable to pay their employees.&nbsp;



The disruption lasted for the best part of a year and cost the bank more than £400 million in customer compensation, consulting fees, operational losses, fraud and regulator fines.



TSB’s chief investment officer was personally fined £81,000.



Not many banks have risked replacing COBOL since.



Recognizing that these legacy systems are effectively impossible to replace, banks have instead been looking for ways to simply avoid them, with only modest success — the real-time payments we make with Venmo and PayPal continue to be batched overnight by COBOL.



But JPMorgan’s deposit coin, <a href="https://www.jpmorgan.com/kinexys/content-hub/deposit-tokens">JPMD</a>, hopes to do better.



Announced last week, JPMD will allow whitelisted customers to move deposits held with JPMorgan on Coinbase’s BASE blockchain.



A fully KYC’d digital dollar on a corporate blockchain is not exactly cypherpunks’ dreams come true, of course.&nbsp;



But it’s undeniably useful.



In effect, it would allow banks to move money with hundreds of lines of smart contract code instead of 100,000s of lines of COBOL code.



Similarly, Jesse Pollak told the <a href="https://youtu.be/4zSMFup894w?si=f5dFUcwZ_wHe6Xx4">Unchained podcast</a> that Coinbase has helped Shopify build an onchain payments protocol that will use smart contracts to do the same job that previously required “millions of lines of code of offchain systems.”



This, he says, will allow Shopify to move money “way more efficiently, way more cheaply and fully, fully global.”



In Pollak’s telling, that is how crypto and blockchains will make the global economy “work 100 times better.”



I don’t blame you for being skeptical.



Most of the blockchain-based reimaginings of finance that I write about here are crypto-native fever dreams that end up leaving little impression on reality.&nbsp;



But TradFi appears to be paying attention this time: Shares of Visa and Mastercard slumped last week on fears that stablecoins really will disrupt payments, while newly issued Circle shares were skyrocketing.



The even better evidence that something is different this time may be today’s <a href="https://www.wsj.com/finance/currencies/stablecoin-crypto-fiserv-smaller-banks-aa9049ea?gaa_at=eafs&amp;gaa_n=ASWzDAiuAOuttUqOTsDK7Rw3bPhbyXWO5DB7RRm4R5nnzbZTnWYscLPRv7w-V5NaNAA%3D&amp;gaa_ts=68599256&amp;gaa_sig=xfuRwlSpsPotDMadI8fhOGGFW5wkTZl0qCfPx5bgXHQ24XoqIJnAtwoUZvutqdPi1iZEesSpbdWf6ZRBsQwX-w%3D%3D">news</a> that the fintech giant Fiserv plans to issue its own stablecoin and launch a <a href="https://blockworks.co/news/fiserv-solana-based-stablecoin-bank-transfers">Solana-based payments platform</a> for smaller banks to use it on.



I find this instructive because Fiserv is one of the three major fintech companies that provide “middleware” connecting banks’ batch-processing COBOL systems to real-time payment systems like FedNow.



If Fiserv’s stablecoin catches on, it might render its middleware offering redundant — and help banks out of the mainframe-sized hole they’ve dug themselves into.



It won’t happen overnight, of course.&nbsp;



But stablecoins and deposit tokens might eventually do to COBOL what the internet did to newspapers and email did to the post office: Make it obsolete by making it irrelevant.



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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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<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>
</ul>

The Breakdown Newsletter

Blockchains may finally free banks from COBOL

Jeff Albus

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



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



One of the biggest payment processors on earth is dropping its own stablecoin. This morning, the $90-billion payments giant Fiserv <a href="https://investors.fiserv.com/newsroom/detail/2848/fiserv-launches-new-fiusd-stablecoin-for-financial-institutions">announced</a> it will launch a bank-friendly stablecoin called FIUSD.



According to the company, this will be a dollar-backed stablecoin built on Solana, catering specifically to banks, merchants and financial institutions. The company indicated that the launch will happen later this year, though it has not yet given an exact date.



FIUSD will run natively through the same infrastructure that already powers 90 billion transactions annually, including Clover POS systems and banking tools used by 10,000 financial institutions.



Most global commerce still runs on systems designed for a slower age. Funds take days to clear, cross-border transfers are expensive and error-prone, and small businesses often wait until Monday for weekend payments to settle.



The rise of crypto has been <a href="https://blockworks.co/news/stablecoins-accelerating-payments-commerce">promising</a> to change that for over a decade, but banks and enterprises are slow to evolve. Until <a href="https://blockworks.co/news/fidelity-stablecoin-launch-market-yiel">recently</a>, most have lacked a compliant, scalable way to interact with decentralized assets.



Fiserv&#8217;s solution is a regulated, programmable digital dollar built using infrastructure from Circle (USDC) and Paxos (PYUSD).



Fiserv also <a href="https://investors.fiserv.com/newsroom/detail/2849/fiserv-and-paypal-expand-partnership-to-advance-stablecoin-payments">announced</a> an expansion of its partnership with PayPal. The two firms will build interoperability between FIUSD and PYUSD to smooth cross-border payments, merchant settlements and real-time payouts.



Banks and merchants would tap into FIUSD via SDKs baked into Fiserv tools like Experience Digital and Commercial Center. Then, they can track transactions on the Finxact core ledger, with compliance, fraud monitoring and risk controls handled on the backend.



It sounds like end-users will mostly be unaware they&#8217;re even interacting with crypto. They&#8217;ll gain all of the speed, transparency and efficiency benefits of Web3 with none of the persisting friction.



It doesn&#8217;t take a genius to figure out why Fiserv has chosen to do this now.



Just six days ago, the US Senate <a href="https://blockworks.co/news/genius-stablecoin-act-passes-senate-vote">passed</a> the GENIUS Act — short for Guiding and Establishing National Innovation for US Stablecoins — by a wide 68-30 margin.



The bill creates a comprehensive federal framework for payment stablecoins, defining them as a new legal category of regulated payment systems, not as securities or commodities.



Large issuers will fall under federal oversight, while smaller ones may opt-in via aligned state-level rules.



The Act mandates 100% backing with high-quality liquid assets, strict transparency, monthly reserve disclosures and AML compliance under the Bank Secrecy Act.



This is <a href="https://blockworks.co/news/crypto-aws-moment-stablecoins">a major turning point</a> in US digital asset policy and clears the way for enterprise-scale stablecoin adoption. That clarity likely removed one of the biggest remaining hurdles for Fiserv, which operates deep in regulated financial infrastructure.



For normal people, these changes could mean that your paycheck starts arriving on Sunday. Your international orders could settle in seconds. A business in Brazil could get paid instantly by a partner in Boise.



Look out, world. <a href="https://x.com/blockworksres/status/1935690126405095600">Stablecoins</a> aren&#8217;t just for crypto traders anymore.



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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>



<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>
</ul>

Lightspeed Newsletter

Solana-based stablecoin to settle merchant and bank transfers instantly

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



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With easier access to crypto companies proliferating, we now have another bitcoin-focused firm looking to go public…



And with a treasury strategy that’s becoming less fringe.



That would be Anthony Pompliano-led ProCap Financial, via a merger with a SPAC called Columbus Circle Capital Corp. Oh, and the company said Monday it intends to buy up to $1 billion of bitcoin for its balance sheet.



The story is becoming more common. Pompliano was the latest to voice what more are believing: Bitcoin is disrupting the legacy financial system.&nbsp;



ProCap Financial plans to not only acquire BTC, but generate revenue from those holdings.&nbsp;



So deploying “cash flow–oriented structures that balance upside potential with downside protection,” said Constantine Karides, the chair of Reed Smith&#8217;s crypto and digital assets group and lead lawyer on this deal. He didn’t get more specific.&nbsp;



“It reflects a broader shift in the marketplace — away from speculative token models and toward capital-markets-tested frameworks that can support long-term sustainability,” Karides told me.



Karides was also the lead lawyer on Trump Media’s $2.5 billion bitcoin treasury deal.



And you might recall, Strive Asset Management moved last month to combine with Asset Entities and form a Nasdaq-listed bitcoin treasury company. The firm then signed a $750 million private investment in public equity with Asset Entities for its “first wave” of BTC buys.



Twenty One Capital — a new entity that was set to combine with Cantor Equity Partners in April — holds 31,500 BTC, according to its website.



Strive board member Ben Werkman <a href="https://blockworks.co/news/companies-building-btc-treasuries-corporate-reserves#">had told me</a> he wouldn’t be surprised to see 25-35% of all bitcoin one day held by corporations. Strategy, by itself, owns roughly 3% of the bitcoin in supply.



<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">Strategy has acquired 245 BTC for ~$26.0 million at ~$105,856 per bitcoin and has achieved BTC Yield of 19.2% YTD 2025. As of 6/22/2025, we hodl 592,345 <a href="https://twitter.com/search?q=%24BTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$BTC</a> acquired for ~$41.87 billion at ~$70,681 per bitcoin. <a href="https://twitter.com/search?q=%24MSTR&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$MSTR</a> <a href="https://twitter.com/search?q=%24STRK&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$STRK</a> <a href="https://twitter.com/search?q=%24STRF&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$STRF</a> <a href="https://twitter.com/search?q=%24STRD&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$STRD</a> <a href="https://t.co/bnE0OC9kEv">https://t.co/bnE0OC9kEv</a>&mdash; Michael Saylor (@saylor) <a href="https://twitter.com/saylor/status/1937118945057915061?ref_src=twsrc%5Etfw">June 23, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Werkman, also Swan Bitcoin’s CIO, noted today: “As confidence in the dollar and US Treasurys to preserve balance sheet strength erodes, bitcoin is emerging as the new standard for long-term corporate resilience.”



That is, despite its volatility. BTC, up 58% from a year ago, recently dipped below $100,000 and was down nearly 4% over the past week, as of 1:30 p.m. ET. 



Kraken CFO Stephanie Lemmerman said at an April event that she expects about 20% of the roughly 55,000 public companies <a href="https://blockworks.co/news/corporate-bitcoin-adoption-boom-inevitable-kraken">to hold BTC</a> a couple years from now.



ProCap raised $516.5 million in equity and $235 million in convertible notes. Alongside various institutions, Eric Semler is listed as an investor.



Semler is the chair of Semler Scientific, a medical tech provider that held ~3,800 BTC at the end of Q1. It seeks to hold 10,000 bitcoin by the end of 2025 and looks to 10x that (to 105,000 BTC) by 2027’s end.



ProCap Financial intends to ultimately list on Nasdaq, Karides said. A next step is filing a registration statement with the SEC, and the transaction could close within roughly 100 days from there.&nbsp;



“This deal…won’t be the last of its kind,” the lawyer added.



The point is that getting regulated exposure to bitcoin through a listed vehicle is “a model that is becoming increasingly attractive in today’s evolving capital markets landscape,” Karides said.



It’s been roughly five years since Strategy started accumulating BTC. MSTR’s stock price is up more than 3000% over that span.



And beyond bitcoin treasuries, just look at what happened when investors had the chance for public equity exposure to stablecoins <a href="https://blockworks.co/news/circle-shares-nyse-day-one#">via Circle’s IPO</a>.&nbsp;



CRCL was trading around $264 at 1:30 pm ET — up 10% on the day. 



<a href="https://blockworks.co/news/crypto-ipo-boom-etoro-kraken">As Dan Tapiero said</a> at Blockworks’ DAS in March, investors like owning companies.



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



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

Fringe to frequent: Inside ProCap’s bitcoin strategy, listing hopes

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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A security flaw on CoinMarketCap’s website let an attacker briefly add a malicious pop-up onto the homepage that resulted in victims losing thousands of dollars.



The MetaMask team <a href="https://x.com/MetaMask/status/1936185313640300659">warned</a> users on Friday evening against connecting their wallets to CoinMarketCap’s website because the coin tracker’s frontend had been compromised to push a wallet drainer scam.



About an hour later, CoinMarketCap <a href="https://x.com/CoinMarketCap/status/1936197663931933117">confirmed</a> that visitors to its site should not connect their wallets when prompted.



Later that evening, CMC <a href="https://x.com/CoinMarketCap/status/1936273633611334081">explained</a> that a vulnerability in a “doodle image” on its homepage “contained a link that triggered malicious code through an API call, resulting in an unexpected pop-up for some users.”



Crypto cybersecurity firm Coinspect Security <a href="https://x.com/coinspect/status/1936231159320453579">said</a> it was able to recreate the JavaScript injection vulnerability that facilitated the CMC wallet drainer attack via an exploit in Lottie animation JSON files.



Three cybersecurity experts from other firms separately confirmed to me over the weekend that Coinspect’s assessment of the incident is accurate.



Trey Blalock, founder of cybersecurity firm Verification Labs, told me he was able to retrieve copies of CoinMarketCap’s source code using the Internet Archive’s Wayback Machine to examine the incident.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdAgKFlMDIIQuCDXQw3YHtrLC8YNNFMz2gT3K9_EJZ_DSl9pLsvGPN0dQWQ2UjLFwqyymd4Qk-tG985FUw9voxCkypCSqgl2d_PUyx3bDmsTcahzcvr0D5zzFIZl4VRYgw-uUajHw?key=qdzbrQ-ATNfVznfGkYRHWA" alt=""/><figcaption class="wp-element-caption">Image of the malicious pop-up on CoinMarketCap’s site.</figcaption></figure>



“What is immediately noticeable is the heavy use of Scalable Vector Graphic (.SVG) images,” Blalock said of CMC’s site. “SVG is an excellent format for creating performant websites that look great across various display sizes, but recent security vulnerabilities have allowed attackers to embed HTML script tags inside SVG images that contain URLs to an attacker-controlled website, enabling them to execute a form of cross-site scripting.”



What can CMC and other sites do to avoid attacks like this in the future?



Blalock said companies should use security tools that test site elements and look for scripts within SVG files.&nbsp;



“This is relatively easy to do, but it is rarely done,” he said.



C/Side Security Analyst Himanshu Anand also noted that sites need to vet all third-party integrations more carefully.



“They should monitor client-side activity continuously to detect and alert on unusual behaviors like DOM (JavaScript) injections,” Anand said, adding: “Platforms should treat every external asset as a potential entry point for malicious code. Real protection means watching what actually runs in the browser, not just what’s served from your own systems.”



Nic Adams, CEO and cofounder at cybersecurity firm 0rcus, said eliminating all third-party JSON dependencies is another security strategy.



“Browser-in-the-browser style phishing has changed: Bad actors can embed interactive brand-perfect overlays that trick users into approving malicious transactions,” Adams said in a message.



CMC said late Friday night that it had fixed the issue, and vowed to keep its support team available to anyone with concerns.



On Monday, CMC <a href="https://x.com/CoinMarketCap/status/1937094379304374302">said</a> it will reimburse all 76 accounts that lost funds as a result of the attack, and said that $21,624.47 was lost in total.



But that’s not all — Cointelegraph also experienced a similar incident over the weekend on Saturday. Attackers <a href="https://x.com/blockaid_/status/1936976381490995403">used</a> the crypto news site’s frontend to inject a malicious phishing pop-up for a fake airdrop.



Cointelegraph <a href="https://x.com/Cointelegraph/status/1937077253373866301">said</a> early Monday morning its banner publishing system had been compromised, but it has since removed the unauthorized code. We don’t yet know how many might have been impacted by this incident.&nbsp;



Binance CEO CZ <a href="https://x.com/cz_binance/status/1936991040420110834">warned</a>: “Hackers are targeting information web sites now. Be careful when authorizing wallet connect.”



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CoinMarketCap

76 wallets drained in CoinMarketCap frontend exploit

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’re kicking off this week with a collection of charts around political markets on Polymarket, Maple’s unstoppable SyrupUSDC growth, and an ambitious Celestia proposal to leave proof-of-stake behind.



<h2 class="wp-block-heading">Polymarket political markets</h2>



Polymarket is back in the limelight amid recent geopolitical conflicts.



In the last week, markets in the “Politics” category saw a jump from $3.9 million to $19.5 million in volumes, as denoted by the light blue bars in the chart below.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc7hUObP8pVy4XKuQ58DPZVGrHGak8rhCt8v4aJbESeWy1ZQbuUOs4sbrb2FYKWggkDpthx_SlAP5mWnRfzly6ZwKn_SuQT_Cy7_J43tKo6nP2JCAWMz03oVChiBY4ORL56tYOy?key=cRSo9z7KKeL8tZciBY-DLw" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://app.blockworksresearch.com/analytics/polymarket?dashboard=53">Polymarket</a>.</figcaption></figure>



All eyes were focused on the “US military action against Iran before July?” market, which <a href="https://polymarket.com/event/us-military-action-against-iran-before-july?tid=1750273470067&amp;utm_source=hs_email&amp;utm_medium=email&amp;utm_content=367725286&amp;_hsenc=p2ANqtz-8TeV1lleAcBdX0r-vOK9uiPIEv5Nbrs65tK4kFmpL4j8SICyG1mHZ5ThEudBWgPAtIcq25zZeOdR1gHD7q0PLJeWtOTg">contract</a> resolved yesterday following reports of US strikes on alleged Iran nuclear facilities. The market saw a total $29.9 million in trading volumes.



Just before the market surged to 99%+ near certainty, “Yes” shares on the market had been trading at $0.59, meaning markets were pricing in about a 59% probability of the US taking military action against Iran.



<h2 class="wp-block-heading">Celestia’s governance</h2>



Celestia should abandon proof-of-stake consensus for “proof-of-governance” (PoG), argues Celestia co-founder John Adler in an ambitious new governance <a href="https://x.com/jadler0/status/1936813032140636643">proposal</a>.



If passed, the following material changes will be enacted:



<ol class="wp-block-list">
<li>TIA issuance will be cut by about 20x, or 95%.</li>



<li>Delegated staking and liquid staking contracts will be phased out. No more onchain governance.</li>



<li>All TIA issuance will be routed solely to validators as payment for running nodes.</li>



<li>Validators would be picked by off-chain governance, because Celestia lacks general execution and is not suited to support onchain token voting. </li>



<li>Network fees would be burned as a form of value accrual to TIA token holders. Celestia’s protocol fees amount to <a href="https://app.blockworksresearch.com/analytics/celestia?dashboard=138">$100–$300</a> daily.</li>
</ol>



TL;DR: Reduce Celestia’s constant emissions in a bid to stave off its declining price action (see chart).



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfSvCeKCWgEbxevKpPXgnWus4Riw0ipBzOlV5NxZJXyWREgS2YblbE3G60fXhrjPF6SRSni1lOALN0SjbEic-fYrINK9x6YkolncwKAfXNjP-w1UUfNYyNFV0ePpOReClVD0MoV?key=cRSo9z7KKeL8tZciBY-DLw" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://app.blockworksresearch.com/analytics/celestia?dashboard=134">Blockworks Research</a>.</figcaption></figure>



The proposal challenges many common sense “wisdoms” of Ethereum thought, namely where a chain’s “economic security” is derived from (not slashing), the framing of PoS as really permissioned “proof-of-authority,” and how to think about “blockchain profitability.” Expect Ethereum maxis to be triggered.



<h2 class="wp-block-heading">SyrupUSDC growth</h2>



Maple’s yield-bearing stablecoin SyrupUSDC is now at a market cap of $780 million, making it the fastest-growing stablecoin this year.



Users deposit USDC onto the platform, which is then used to issue overcollateralized loans to institutional borrowers. The interest charged on those loans is resulting in above average APYs of about 10% today (6.4% base yield +3.5% Drip points), driving SyrupUSDC’s rapid growth.



You can also forgo points to snag a <a href="https://app.pendle.finance/trade/markets/0x9a63fa80b5ddfd3cab23803fdb93ad2c18f3d5aa/swap?view=pt&amp;chain=ethereum">9.2%</a> PT fixed yield on Pendle instead.



About $587 million is used across DeFi, mainly 55% in Spark and 19% in Pendle.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcjOKU0Y9_fXBG5bWNQwjMk2DQKWWs9NpxTbl0ymw9c9uktQr7seFQ99V8g68hy9po0-e3bF8G6ydZ4EeDvKgf4x1O8GqkxftYu3-ITL9x3u5dxyRYFLqrQV8ax3CWGXtL7mFsDcw?key=cRSo9z7KKeL8tZciBY-DLw" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://dune.com/jonaso/syrup-usdc-usage-in-defi">Dune</a>.</figcaption></figure>







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Polymarket ‘politics’ markets surge, Celestia rethinks consensus

<a href="https://nexus.xyz/?utm_source=blockworks">Nexus</a>, the company building a Layer 1 blockchain for the AI era, today launched the final testnet, marking the last major milestone before mainnet later this year. More than 2.1 million users and 3.6 million nodes contributed over a 5-day period in the previous testnet.&nbsp;



Nexus makes it easy for anyone to contribute compute power from any device, even a laptop or phone. With just one click, users can connect at <a href="https://app.nexus.xyz/rewards?utm_source=blockworks&amp;utm_medium=pressrelease&amp;utm_campaign=TN3?utm_source=blockworks">app.nexus.xyz</a> to start earning rewards and help scale a verifiable network built for the AI economy.



By offering compute power, users strengthen the Nexus blockchain by equipping it with the speed and scalability required to support AI systems at global scale. In doing so, they help build a world where every action can be proven, every model audited, and every interaction verified.



Users can also run more powerful nodes using a streamlined, copy-and-paste command line interface (CLI). An interactive global map shows active contributions, and a public leaderboard tracks top participants.



“We need to fundamentally rethink blockchain infrastructure in the age of AI,” said Daniel Marin, CEO and Founder of Nexus. “As AI models become more intelligent, they’re consuming compute and issuing transactions at exponential rates. How do we generate enough compute power to enable billions of transactions per second, and do it in a way that people can trust? The Nexus Layer 1 blockchain is our solution. It’s a world supercomputer that gets more powerful with each connected device.”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfoZfZ-HjwpnsD-4jHimqcc4zl6Mx0qe6X9BlRp6DZ61XFbVnqXBrHIuCNWV3Izkhd7iys02oW8oTPJLd2w8obBvnYy_bBcBtHD9SGbLU80QsufOMgI3QXCR4fAFC6ohMaenCeY8A?key=Fcc3NILIb4QgbsyI-z8PgQ" alt=""/></figure>



Under the hood, the Nexus supercomputer is designed to scale verifiable computation through a unique Layer 1 architecture, where each node runs secure workloads using zero-knowledge virtual machines (zkVMs).



This approach prioritizes proof over promises and unlocks exponential scalability, massive performance improvements, and auditability essential to power the next generation of AI agents, applications, and systems.



Nexus recently launched two new initiatives to make Verifiable AI a reality and the Nexus ecosystem now includes more than 50 partners.&nbsp;



The <a href="https://blog.nexus.xyz/nexus-verifiable-ai-lab/?utm_source=blockworks">Nexus Verifiable AI Lab</a> is a dedicated R&amp;D division focused on the intersection of verifiability, economics, and artificial intelligence. The <a href="https://blog.nexus.xyz/introducing-via-the-verifiable-intelligence-alliance/?utm_source=blockworks">Verifiable Intelligence Alliance</a> brings together leading institutions to promote responsible, verifiable AI infrastructure.



This is the final testnet before the Nexus mainnet release later this year.&nbsp;



Join the testnet at <a href="https://app.nexus.xyz/rewards?utm_source=pr&amp;utm_medium=pressrelease&amp;utm_campaign=TN3&amp;utm_content=prannouncement?utm_source=blockworks">app.nexus.xyz</a> today to contribute compute power and help build a verifiable world.&nbsp;



Nexus is building a Layer 1 blockchain for the AI era. Nexus has a team of experts in cryptography, research, and engineering developing the Nexus Layer 1 blockchain and Nexus zkVM (zero-knowledge virtual machine) to create a verifiable world. Nexus is backed by premier investors including Blockchain Builders Fund, Dragonfly Capital Partners, Lightspeed Venture Partners and Pantera Capital.



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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Nexus activates testnet for 2.1M users ahead of mainnet launch

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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Just one coin has ever come close to flipping bitcoin, around this time, eight years ago.



In June 2017, bitcoin was in the final stages of warming up for a historic push to nearly $20,000 by Christmas.



Altcoin prices were <a href="https://coinmarketcap.com/historical/20170612/">wacky</a>. Bitcoin would be flat one week, while coins like BitShares would jump massively, by 250%. Others, like Stratis and DigiByte, were down up to 50% in the same period.



Ethereum, meanwhile, was poised for an explosion in token projects. One <a href="https://cointelegraph.com/news/ethereum-ico-boom-history-crypto">study</a> calculated that $7 billion flowed into ICOs throughout 2017, practically all of it going to Ethereum-based projects. That was supposedly 4x more than the equity investments into crypto companies across the same period.



The price of ETH rose as investors piled into coin offerings through Ethereum’s native token. And on June 12, the market cap of ETH came within 17% of surpassing bitcoin’s: $36.8 billion to $44.3 billion.



Had bitcoin stayed flat, ETH would’ve only needed to jump from $400 to $470 to slide into the No. 1 spot. 



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcFOWSH_PJ_7fr_LdiZAkcB84ThHr2Oh5U-3OOjH_fxa5BDF9rgkV7eOaH87xa0tubyKuWNvQtyNM3O8MNEOk6mgex8qlZE4ao09nu_jFmjQMon9Osudrk2bLaYtjg3bb1xvDdvIw?key=jS_4PelAAmFF3xIXRPdgkw" alt=""/><figcaption class="wp-element-caption">This banger from the New York Time was published days earlier.</figcaption></figure>



But it would never be: BTC and ETH both fell by 60% over the next month, preceding a 10x pump through the end of the bull market for BTC — but only a 9x for ETH. Ether never made the ground back.



Still, ether came much closer than the other two primary hopefuls ever did. Litecoin made it to 10% of bitcoin’s market cap in late November 2013, $11.8 million to $1.18 billion, while XRP reached more than half in May 2017, about a month before ether’s attempt.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdvu6L6WDTkbxkMimY7B74ybyCvYx8P6XSv0DBETjUOVpaZNl0a-e7ESmLoQ18cV7oZMXkM3FKX7MKFLwGS9T657fR0Gq19Zz8uuCYz6hGV6Dqkfs4kXqL7rsG_41k9LlIpUOVa?key=jS_4PelAAmFF3xIXRPdgkw" alt=""/><figcaption class="wp-element-caption">By late June 2017, it was becoming clear the Flippening was no longer realistic.</figcaption></figure>



These days, ETH sits at around 13% of bitcoin’s market value, with bitcoin <a href="https://www.tradingview.com/symbols/BTC.D/?timeframe=60M">dominance</a> currently at almost two-thirds — its highest point since January 2021.&nbsp;



If there’s a status quo in crypto, it’s bitcoin.



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Ethereum was close to flipping Bitcoin in 2017 — then never again

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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Ex-Chorus One CIO Xavier Meegan is launching a $20 million crypto native pre-seed fund, we’ve exclusively learned.&nbsp;



At Frachtis, Meegan holds the role of General Partner with four others on an investment and advisory committee, including Chorus One’s Brian Crain and Felix Lutsch. The fund is based in Lisbon, Portugal. 



“There are five of us around the fund right now, and all of us have experience operating crypto-native businesses, which I think is kind of rare. There are only a few funds in the space that do that. Mix that with the fact that we also have experience operating blockchain infrastructure,” Meegan told me.



He said that they’d raised over the past 12 months, and noted that crypto’s currently in the “consumer apps era. The next big winners in crypto will be applications that leverage the infrastructure we already have.”



The infrastructure days, he told me, “are over.” It’s time to focus on building for the future of crypto, instead of launching more L1s and L2s, he added. Instead, he sees the demand focusing on consumer and mobile apps.



Though he’s also interested in the crossover between AI and crypto, adding that he’s closely watching AI agents.



“One big thing there, which we have another thesis around, is that these agents need way faster and more contextualized data, for example. And so, we need to build this infrastructure. Maybe the agents need certain permissions to access certain things; otherwise, there&#8217;s going to be a lot of security risk there,” he said.



“AI personalization, retention, and also loyalty of certain kinds of apps is going to get more and more important as there&#8217;s more and more stuff going live in crypto. I think that&#8217;s going to be a way that some of these teams can win: by using AI to enhance your applications, enhance the usability, enhance the engagement for the users.”



Right now is a “great time” to invest, Meegan told me. It’s been difficult for founders to raise, which has had the unforeseen benefit of forcing founders to strengthen their ideas.&nbsp;



He expects, over the next 12-18 months, to see LPs come back and get a bit more active.&nbsp;



“Everything we&#8217;ve invested in…had a long-term thesis around, and I&#8217;ve spoken with many teams&#8230;I believe [are] going to win long-term. And we have a framework for how we do this, actually, and how we analyze these founders and teams that we&#8217;ve developed over several years,” Meegan added.



Frachtis has invested in eight projects so far, over pre-seed and seed stages — including Turtle Club and Hyve. And they’re just getting started.



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Empire Newsletter

Exclusive: Ex-Chorus One CIO launches $20M crypto fund

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
&#8220;Just because I don&#8217;t care doesn&#8217;t mean I don&#8217;t understand.&#8221;



— Marge Simpson
</blockquote>



Financial markets are forward-looking, even though humans usually are not.



It’s fundamentally what makes investing difficult: &#8220;100% of the information you have about any business reflects the past,” the legendary Bill Miller notes. “And 100% of the value of that business depends on the future.&#8221;



That’s logical enough — but also kind of confusing: How can stock prices remain so unconcerned about the future when, like this week, war breaks out in the Middle East?



In times like this, our natural instinct is to assume “the market” doesn’t understand the news we’re watching.



When stock prices appear to be under-reacting, we think everyone else must be wrong, or asleep at the wheel, or not paying attention.



This, combined with our evolutionary bias toward action, is what makes so many investors act like traders. The fight-or-flight instinct we learned in the ancient Rift Valley has evolved into a trade-or-sell instinct in the modern stock market.



But we should resist that impulse because Marge Simpson is right: The market understands what’s going on. It just doesn&#8217;t care.



“Geopolitics doesn’t normally matter much for long-run market performance,” Deutsche Bank strategist Henry Allen wrote in a note to clients this week.



Data from <a href="https://marginalrevolution.com/marginalrevolution/2025/06/markets-are-forward-looking.html">LPL Financial</a> appears to back that up, demonstrating that geopolitical shocks impact markets far less than most anyone would predict in the moment.



Even the worst events are typically followed by full market recoveries within “only a few weeks to a couple of months.”



Yet, we insist on confidently predicting the dire investing consequences of every unfortunate event that comes along.



How often do you hear an investor say, “I don’t know”?



Not very. But we did hear it from the world’s best informed market watcher this week.



On Wednesday, Fed Chair Jerome Powell <a href="https://x.com/TheTranscript_/status/1935436244890087503">explained</a> the FOMC’s decision to leave interest rates unchanged by cautioning that, &#8220;we haven’t been through a situation like this and think we have to be humble about our ability to forecast it.”



He was talking about the economic situation, but that’s probably good advice for life ones too: <a href="https://www.psychologytoday.com/us/blog/think-act-be/201907/how-often-do-your-worries-actually-come-true">Studies suggest</a> that most of the things we worry about don’t really matter.



As for markets, global prosperity has trended relentlessly upwards for decades despite our best efforts to disrupt it with wars, short-term thinking and economically illiterate policymaking.



So I find uneventful market weeks like this one reassuring.



When markets seem surprisingly calm, it’s probably not indifference or ignorance, but perspective.



Let’s check the charts.



Nothing ever happens: <img loading="lazy" decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcjocTjhL0Ms05A12TGJXSzquqaa-A1YQyj0evZPTC6th1HtyYZAH3WQOxEG4aoYb2unh9mDUJoOp5ayk-1YMruyt3h_VVREc79d6QYGrrxCAmP7TuQxEUmZNBOb8wq2Y7yz_Ohig?key=MdB9863qS6m-tBRLwI6GGg" width="624" height="435">



It feels like the world has had a tumultuous month, but you’d never know from financial markets: BTC, gold, stocks and bonds have all been sideways.



Expectations re-coupling with reality?



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfypM0QW599motUHNXWaNMzGM-iTAF5IaYbGM5t7Dh3Eadc9cB-yFOLd9q5Cwfvt9Cgj9BihP8HCFdOqb8AVVEY3JWuZby4y8WMa9BAnXCRCwejHcjKZx8fkrRdjYuRA44oZD5eXg?key=MdB9863qS6m-tBRLwI6GGg" alt=""/></figure>



The “soft” economic data (i.e., sentiment-based surveys) has rebounded back to where the “hard” data (i.e., actual economic activity) is. The hard data is trending down, but in the short-term at least, the economic impact of tariffs and policy uncertainty has not been nearly as bad as expected.



Long-term, the news is usually good:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeLOzMdghOauEVdqkPtrFMQ0M7QDC63oUZalbEvmm0SEXBETRWkPsHL2aebi-OvDaHOjMOU5HgXGMGY0k-UGzaNuhlrHc66fNyehyUN8Xk_CosYWs_F2FG6AqxWcxzbJb2RU1ip?key=MdB9863qS6m-tBRLwI6GGg" alt=""/></figure>



Scott Grannis <a href="http://scottgrannis.blogspot.com">notes</a> that the real (inflation-adjusted) net worth of US households has increased by 3.6% per year for decades. “The US economy is an astounding engine of growth and prosperity,” he concludes.



The news aside, things are unusually good right now:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcP7OPDHTI0GdYhbkI_RDHm3O08p4dYDd1d_69PvNHIm7DRymzJoNm90Wmrd_6Nv6k2HBP-r0Q-j8fvEUCvWMA5cj4fW4peWYPDF-fhJXkgs_ekqBLwr_39t1ZBdUAkx5kyL_pulw?key=MdB9863qS6m-tBRLwI6GGg" alt=""/></figure>



Ed Yardeni characterizes the current mix of inflation and employment as a rare instance of economic “nirvana”: “The history of economic nirvanas with both inflation subdued at around 2.0% year over year and the economy at full employment (i.e., with the jobless rate at 4.0%) shows eight such transcendental experiences since the 1950s, including the current one.”



The class of 2025 is not feeling it, however:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdRGg3Q0XoZiE6VzMkxuW4ZXrCM8ZAObAPBpvc-x-lrHqlSE1oSTLVosiC9fGv1MZeW2iV3SPxBRbeDTbpQ2sx9kYop_k-mc0Vgs2FlAIV27HbaqtmhKrzWFUaWfB4YgeazONS57g?key=MdB9863qS6m-tBRLwI6GGg" alt=""/></figure>



2025 might not be the worst year ever to graduate college — but it is probably the worst relative to how good the economy otherwise is. That might be because AI is doing the entry-level jobs now. Or, as Paul Krugman <a href="https://paulkrugman.substack.com/p/bad-times-for-college-graduates">believes</a>, because political uncertainty has caused employers to stop hiring. Or something else, it’s too early to say for sure. But if you’re in school, consider staying there.



Off to a slow start:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfivkwW9FT6kY5F_Pt_GgM4wqtqKSicCCE0gqgNRuqMlnnp1Q_m5B4cR3iZnMUmRNYYHoWsMn-WBYkfrwvs4JEoWyzNveoWMMfRu9weE41QpvXqgkVt_WYs5rQtUT52Cr7lRJ2hNA?key=MdB9863qS6m-tBRLwI6GGg" alt=""/></figure>



Recent graduates are 3x more likely to be unemployed than the cohort aged between 35-44, which is probably even worse news than it sounds. Krugman notes that the consequences of early unemployment last “basically forever,” citing an NBER study that found that “those who join the workforce in a downturn have lower long-term earnings, higher rates of disability, fewer marriages, less successful spouses and fewer children.” Ugh.



You can’t see it in the data, though:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfmfuBG9PhMWyMjMXhTgG9VMg7XNOfBmV8wkg7Fx4yfuDzLK-WStxdy5oPDm7SrAxZKvM2K0wKMstECiKdWY_I9xhKliXoC9c3xgnT9rL79UDDDYFFzSA0p9yWmTlnRJpP_p4R8-Q?key=MdB9863qS6m-tBRLwI6GGg" alt=""/></figure>



The Atlanta Fed’s GDPNow model sees Q2 growth coming in at a robust 3.4%. This makes the consensus FOMC projection of 1.4% growth for the full year seem unnecessarily gloomy. Worse yet, the FOMC’s elevated inflation forecasts make it look like they’re <a href="https://www.nytimes.com/2025/06/18/business/fed-stagflation-trump-tariffs.html">expecting stagflation</a>.



Inflation “forecasting” is getting even closer to guessing:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeDP_96Oaqlu60-Opa4JQ2b0HtUJSLUg8zeH2H91mHr2kbz4X7CIUDjD4Vai2waTfakXd8pLXqq2LSbIxlEZrwUdoyONOZj8UgnFWYz-3L9w-LW1PXWroBvfJLus51zsZEFTwLrMw?key=MdB9863qS6m-tBRLwI6GGg" alt=""/></figure>



Torsten Slok <a href="https://www.apolloacademy.com/the-daily-spark/?utm_medium=email&amp;utm_source=pardot&amp;utm_id=701Dp00000017sOIAQ&amp;utm_campaign=EXT_Daily+Spark">notes</a> that almost a third of the prices going into the CPI at the moment are guesses. This seems likely to get worse, because as Jerome Powell <a href="https://x.com/YahooFinance/status/1935416500136862202">noted</a> this week, layoffs are making it harder for the government to collect economic data — data that’s &#8220;a real benefit to the general public&#8221; because it ensures people &#8220;have the best possible understanding of what&#8217;s happening in the economy, and hence, what&#8217;s likely to happen.&#8221; As if that wasn’t hard enough already.



There are ever more investors chasing pretty much the same number of stocks:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfyXuiP4B4j3zjm6nUfFB4Cz8QmXcj58Wty4T2kMLc1tbBtR2-FHXqjTKqeNzAc5b7YuslmhdDCh_dz8td4yZ9Le89mLsptPGaiZK99QCUDcczcptQzKJzYkbb3cLoc5JvPRnIJhg?key=MdB9863qS6m-tBRLwI6GGg" alt=""/></figure>



The US ranks second to Switzerland in average per capita wealth. It fares less well if using the median, but the number of new millionaires is impressive: Bloomberg <a href="https://www.bloomberg.com/news/articles/2025-06-18/surging-stocks-helped-us-add-more-than-379-000-millionaires-last-year?cmpid=061925_morningamer&amp;utm_medium=email&amp;utm_source=newsletter&amp;utm_term=250619&amp;utm_campaign=morningamer&amp;embedded-checkout=true">notes</a> that over 379,000 US residents became millionaires last year — more than 1,000 per day!



And we wonder why the market never goes down.



Have a great weekend, understanding readers.



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Friday Charts: The market understands

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 a card-carrying member of the “nothing ever happens” club, many of my thoughts on whether or not news has been priced-in can be summarized by <a href="https://www.reddit.com/r/wallstreetbets/comments/eberem/everything_is_priced_in/">this</a> classic Reddit post.&nbsp;



Nevertheless, one of my guests on the Lightpeed podcast this week explained why ETH has been slowly gaining ground on solana — and why he believes that trend may continue.



<a href="https://youtu.be/TUY-_P-9A9s?si=rjFfNy1XZh4dqFEt">I hosted Geoff Kendrick</a>, the head of digital assets research at Standard Chartered, to explain his Solana thesis. Standard Chartered is a relatively large global bank based out of the UK. This Solana report was the bank’s first, in what may be a show of Solana’s growing relevance to institutional investors.&nbsp;



The report is bullish on SOL, offering a price target of $275 by year’s end and a target of $500 by the end 2029, but it predicts that ETH will outperform SOL in the short to medium term. I found this surprising given how bad the vibes surrounding ETH have been in recent months — and how mostly positive things have been in Solana land.&nbsp;



SOL consistently <a href="https://app.blockworksresearch.com/analytics/l1">leads</a> ETH in real economic value (a Blockworks Research metric for the tips and fees that measure demand to land transactions on a blockchain) despite Solana having a quarter of Ethereum’s market cap. ETH’s big headwind <a href="https://blockworks.co/news/non-crypto-native-companies-ethereum">is its L2s</a>, which have helped the blockchain scale but may be damaging to ETH’s ability to accrue value since they take on a lot of trading volume, but pay relatively little in fees to Ethereum. Geoff believes the bad vibes surrounding ETH are already “priced in.”



“There was a lot of debate in 2024 about, ‘Do [L2s] add or subtract value?’” Kendrick said. “So, let’s say that a lot of that story has already played out in a relative sense.” He later added: “For Solana, you came off massive multi-year lows post-FTX, had a comeback in 2023 thanks to <a href="https://blockworks.co/news/crypto-market-impact-solana-memecoins">memecoin activity</a>, but now that memecoin trading is post-peak, Solana may underperform Ethereum in the near term.”



Kendrick argued that the market trades Solana at a discount relative to its economic activity from memecoins because it views memecoin trading as unsustainable. I would note that memecoin activity has proven more sticky than many might have predicted — pump.fun generated $50 million in revenue last month, despite a dip in usage — but we’ll have to see how all of this plays out over time. 



Kendrick’s thesis has been correct over the past month, at least. The ratio of SOL’s price to ETH’s price is <a href="https://www.tradingview.com/symbols/SOLETH/">down</a> nearly 15%.



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

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