Shaunda Devens

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One of Hyperliquid’s core innovations is builder codes. These codes function as a protocol-level parameter in transaction payloads, allowing interfaces to append a builder address for automated, onchain fee capture. Builders can attach a surcharge of up to 100 basis points (1%) on spot and 10 basis points (0.1%) on perps.



This decoupling of execution from settlement enables frontends to monetize proprietary flow without the technical complexities of maintaining an orderbook or the capital inefficiency of bootstrapping liquidity. As shown below, third-party frontends integrate Hyperliquid perps and add their own variable fee tiers on top, effectively creating a differentiated pricing landscape for the same underlying execution.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-38.png?w=1024&amp;h=1024" alt="" class="wp-image-110261" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-38.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-38.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-38.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-38.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-38.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-38.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-38.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-38.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-38.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



As such, builder codes have unlocked a powerful distribution flywheel. Nearly 40% of daily active users now trade through third-party frontends rather than the native UI, a share that briefly crossed 50% in late October. The top three builders alone, Based, Phantom, and pvp.trade, have collectively captured more than $31 million in fees.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-39.png?w=1024&amp;h=1024" alt="" class="wp-image-110262" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-39.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-39.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-39.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-39.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-39.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-39.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-39.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-39.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-39.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



From a market structure perspective, this pushes Hyperliquid away from the fully-integrated crypto exchange model and closer to the layered intermediation of traditional equities. In a centralized exchange like Binance, one entity controls the full stack across onboarding, routing, matching and custody.



Hyperliquid’s design mimics the US equity market, where retail brokers (Robinhood, Schwab) own the client relationship and monetize distribution, while routing orders to wholesalers (Citadel Securities, Virtu) that handle execution and settlement. In effect, the stack becomes two-tiered:



<ul class="wp-block-list">
<li>A broker-like distribution layer, where builders compete for order flow and differentiate on product and fee pass-through.</li>



<li>A central execution venue, where Hyperliquid concentrates liquidity and handles matching and margining.</li>
</ul>



While new to crypto perps, this decoupling mechanism has already played out on Solana. Trading terminals like Photon and Axiom controlled the user flow by focusing on the consumer layer. Photon grew first by being the fastest Solana memecoin sniper, while Axiom eventually challenged it with a broader product suite and more aggressive points and rebate designs. These terminals effectively functioned as builders: They sat on top of DEXs, bolted on their own fee markups, and maintained accounting manually. Hyperliquid’s builder codes essentially turn that pattern into a native protocol primitive.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-42.png?w=1024&amp;h=1024" alt="" class="wp-image-110265" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-42.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-42.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-42.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-42.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-42.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-42.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-42.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-42.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-42.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



However, the Solana example also highlights the risk. Trading terminals captured 77% of Solana&#8217;s DEX revenue over the past year, $633 million vs. $188 million for DEXs, a 3.4x multiple that highlights that owning the frontend is often more valuable than owning the backend. Specifically, is the frontend too valuable for Hyperliquid to give away?



The relationship between frontends and backends is rarely purely symbiotic. Frontends like Jupiter aggregate various backends (Meteora, Raydium, Orca) and return the best route given size, fees and slippage constraints. 



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1072" height="494" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-43.png?w=1024&amp;h=1024" alt="" class="wp-image-110266" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-43.png?w=1072 1072w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-43.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-43.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-43.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-43.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-43.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-43.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-43.png?w=80 80w" sizes="auto, (max-width: 1072px) 100vw, 1072px" /><figcaption class="wp-element-caption"><a href="https://jup.ag/">Source: Jupiter Frontend Aggregation Example</a></figcaption></figure>







This forces DEX backends into severe margin compression. With zero moat, they must be the cheapest route to win flow. Since they don&#8217;t own the user, backends are also at risk of replacement. We see this when pump.fun replaced Raydium as its liquidity backend with its own in-house AMM, significantly impacting Raydium&#8217;s volume share.&nbsp;



Right now, Hyperliquid does not face this problem. By pioneering builder codes on perps, it is effectively a singular-builder code environment. However, if builders evolve from a UI on top of HL into true routers that can send flow to competing backends, they start to resemble a smart-order router in traditional finance. In this scenario, builders can:



<ul class="wp-block-list">
<li>Optimize all-in cost: Calculate spread/slippage + taker/maker fees + builder surcharge − rebates + expected funding.</li>



<li>Bargain with venues: Demand higher builder shares or rebates with the threat of routing flow elsewhere.</li>



<li>Capture the user relationship: While venues are forced to compete purely to be the cheapest, best-execution wholesale liquidity provider.</li>
</ul>



Similarly, in traditional finance, wholesalers compete with broker-dealers for volume. Robinhood routes to Citadel Securities, Virtu, and Jane Street based on which provides the best execution and payment for order flow.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1318" height="748" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-40.png?w=1024&amp;h=1024" alt="" class="wp-image-110263" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-40.png?w=1318 1318w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-40.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-40.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-40.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-40.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-40.png?w=460 460w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-40.png?w=386 386w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-40.png?w=80 80w" sizes="auto, (max-width: 1318px) 100vw, 1318px" /><figcaption class="wp-element-caption"><a href="https://www.federalreserve.gov/econres/feds/files/2024080pap.pdf">Source</a></figcaption></figure>







While rival DEXs like Drift and Ostium have integrated builder codes, none have emerged as genuine competitors to date. However, a significant structural risk remains: If a venue like Lighter were to pair builder rebates with its zero-fee model, it could theoretically allow wallets like Phantom and Rabby to bypass Hyperliquid’s 4.5 bps fee. This would enable frontends to capture the entire fee stack, effectively doubling their revenue per trade compared to the current Hyperliquid model.&nbsp;



<a href="https://docs.tryliquid.xyz/trading/trading">LiquidTrading</a> serves as a leading indicator of this future. The Paradigm-backed terminal, which raised $7.6 million in its seed round, has facilitated $5.6 billion in volume on Hyperliquid. But crucially, it also allows users to trade on Ostium and Lighter via the same interface. If larger builders follow this path and begin actively routing flow based on venue rebates rather than loyalty, Hyperliquid builder frontends could evolve into a commoditized perp aggregator, directly threatening the protocol&#8217;s ability to capture value.



Still, there is a fundamental difference. Spot is easy to aggregate because each swap is atomic and the asset is fungible across venues. One transaction equals one fill, and a router can seamlessly split a trade across multiple pools. However, with perps, positions are persistent and venue-specific. A BTC-PERP position on Venue A is not fungible with a BTC-PERP position on Venue B due to differences in index composition, funding rates, liquidation engines and risk limits.



To route perps across venues meaningfully, the market needs one of two difficult solutions:



<ul class="wp-block-list">
<li>User fragmentation: Users must keep collateral on multiple venues, which is capital inefficient and results in poor UX.</li>



<li>Prime brokerage layers: The router must act like a clearing layer, solving the hard problems of credit extension, cross-margining and liquidation coordination.</li>
</ul>



While non-fungibility offers a short-term defense, the harsh reality is that frontends are rational economic actors; they will migrate if a competitor offers superior margins. Yet, the data suggests this threat is currently contained. Despite the high user counts on third-party interfaces, the vast majority of volume, over 90%, still originates from Hyperliquid’s native frontend.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-41.png?w=1024&amp;h=1024" alt="" class="wp-image-110264" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-41.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-41.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-41.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-41.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-41.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-41.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-41.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-41.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-41.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Furthermore, the HYPE token adds a retention layer. Builders can hold HYPE to access fee discounts, allowing them to stack revenue streams: referrals, builder fees, and volume-based discounts. With this, the cost of switching for incrementally better fees may not be worth it for existing frontends. Finally, the flow coming from builders appears to be additive rather than cannibalistic. These are new users entering the ecosystem via wallets and terminals, not users switching interfaces.&nbsp;



Therefore, while builder codes offer an effective expansion vector, expecting Hyperliquid to maintain total dominance over its distribution layer is unrealistic. As the sector matures, Hyperliquid will face a tougher grind to defend its lead against aggregators and low fee competitors. However, building a performant onchain orderbook remains an immense technical moat, and with frontend margins remaining healthy, the incentives for builders to switch are low. Still, in a rapidly expanding market, this is not a battle to retain volume, but rather a more competitive race for growth where Hyperliquid remains the heavyweight to beat.



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0xResearch Newsletter

Hyperliquid: The frontend wars

Kunal Doshi

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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Markets continued to claw back losses from Monday’s selloff, with BTC, the S&amp;P 500, and the Nasdaq up 2.52%, 0.22%, and 0.05%, respectively, yesterday. Even safe haven gold has given back some gains and is down -0.12% on the day as risk appetite improves.



The uptick came after a surprise <a href="https://tradingeconomics.com/united-states/adp-employment-change">decline</a> in private sector employment. Private employers shed 32,000 jobs in November, compared with expectations for job growth. This pushed the <a href="https://www.investing.com/central-banks/fed-rate-monitor">odds</a> of a rate cut next week to 85%, up from 80% a week ago. Microsoft dragged on the Nasdaq, falling more than -2% after reports that the company has <a href="https://www.tradingview.com/news/gurufocus:6c14c4ac7094b:0-microsoft-stock-falls-amid-slow-corporate-adoption-of-ai-solutions/">lowered</a> AI software sales quotas due to softer than expected demand.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1174" height="628" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=1024&amp;h=1024" alt="" class="wp-image-110254" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=1174 1174w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-34.png?w=80 80w" sizes="auto, (max-width: 1174px) 100vw, 1174px" /></figure>



Across crypto sectors, most indices finished in the green except Gaming, which fell -1.65%. Gaming has been one of the weakest performers this year and is down -77% year to date. Memes, typically the most reflexive sector during market rebounds, also lagged with a modest 1.24% gain. The index was weighed down by PUMP and PENGU, which fell -2.54% and -1.80%, respectively, on the day.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1169" height="625" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=1024&amp;h=1024" alt="" class="wp-image-110255" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=1169 1169w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-35.png?w=80 80w" sizes="auto, (max-width: 1169px) 100vw, 1169px" /></figure>



On the upside, the AI sector led the market with a 7.46% gain. TAO continues to drive the index higher and climbed 7.6% ahead of its halving next week. L1s followed with a 6.45% move, powered by ETH and BNB, which make up 63% of the index and were up 6.6% and 5.2%, respectively.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="950" height="365" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-31.png" alt="" class="wp-image-110251" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-31.png?w=950 950w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-31.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-31.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-31.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-31.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-31.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-31.png?w=80 80w" sizes="auto, (max-width: 950px) 100vw, 950px" /></figure>



Flows tell a more cautious story. After five days of inflows, BTC ETF flows turned negative again with a modest -$14.9 million in outflows. ETH ETFs, however, saw a strong rebound with $140.2 million of inflows after two days of declines earlier in the week. Even so, flows have yet to show real conviction when set against the -$4.4 billion in net outflows seen across November.



<h2 class="wp-block-heading">Market Update: Monad</h2>



Now that we are about one and a half weeks past the Monad TGE, it is a good moment to step back and assess how the chain is actually performing post launch. After a strong initial rally, MON has cooled off and is down -28% on the week, leaving it up a modest 16% from its ICO price. On the ecosystem side, DeFi TVL continues to climb and now sits at <a href="https://defillama.com/chain/monad">$277.5 million</a>.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=1024&amp;h=1024" alt="" class="wp-image-110257" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-37.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



A large portion of that TVL is concentrated in AUSD. Around <a href="https://defillama.com/stablecoin/agora-dollar">$144 million</a> of the $277.5 million sits inside Agora’s stablecoin, which is being farmed across various protocols to earn ecosystem incentives. Upshift holds $73 million and is deploying AUSD across DeFi protocols such as Morpho, Uniswap and Euler. Morpho currently offers 4.5% APY on AUSD and 5.98% on USDC, with most of the yield coming from <a href="https://app.morpho.org/monad/earn">MON incentives</a> rather than organic borrow demand. Incentives are an acceptable way to jump start early liquidity, but the real test will be whether Monad can attract DeFi applications that generate sustainable, organic yield once the incentive fire hose tapers off.



Looking at native apps, Nad.fun has been the breakout leader in both accounts and transactions since day one. It is Monad’s native memecoin launchpad, but its staying power is not guaranteed. Only <a href="https://nad.fun/">two tokens</a> launched there have crossed the $1 million market cap mark. Even Chog, the chain’s first community token, is <a href="https://nad.fun/tokens/0x350035555E10d9AfAF1566AaebfCeD5BA6C27777">down</a> more than 65% from its highs and sits at $4.5 million today. Not exactly the early momentum you would want for a vibrant meme ecosystem.



Other homegrown projects are <a href="https://monadvision.com/ecosystem?day=1D">gaining</a> traction. FastLane has become the primary LST on Monad. Pinot Finance is emerging as an alternative DEX to Uniswap. Lumiterra, an MMORPG, has quietly put up strong usage numbers and <a href="https://monadvision.com/ecosystem?day=1D">ranked</a> third by accounts and second by transactions yesterday.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1332" height="602" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=1024&amp;h=1024" alt="" class="wp-image-110253" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=1332 1332w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-33.png?w=80 80w" sizes="auto, (max-width: 1332px) 100vw, 1332px" /></figure>



On the chain level, activity looks promising for a network this early. Monad generated $100,000 in fees over the last seven days, placing it ahead of chains like Avalanche and Ton. <a href="https://monad.socialscan.io/charts/tx">Daily transactions</a> and <a href="https://monad.socialscan.io/charts/active-address">active addresses</a> have been hovering around 2.2 million and 117,000, respectively. These are respectable metrics for a chain that just came out of the gate.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1599" height="432" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=1024&amp;h=1024" alt="" class="wp-image-110252" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=1599 1599w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-32.png?w=80 80w" sizes="auto, (max-width: 1599px) 100vw, 1599px" /></figure>



But one data point stands out. WormholeScan shows that 75% of the assets bridged into Monad have already flowed back out to other chains. That is an early sign that users may be farming and rotating rather than sticking around.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="728" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=1024&amp;h=1024" alt="" class="wp-image-110256" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-36.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



For Monad, the next phase is all about conversion. Can the chain turn early speculative inflows into sticky liquidity and real economic activity? The charts above are the ones I’ll be watching closely to see whether this ecosystem can turn early hype into lasting traction.



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After Monad’s TGE, can the chain turn hype into long-term conversion?

Byron Gilliam

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Growth in revenues cannot exceed growth in people who can execute and sustain that growth.”



— Packard’s Law
</blockquote>



Arboreal ecosystems operate on a brutal but necessary paradox: For a forest to grow, it occasionally needs to burn.



Without these seemingly-apocalyptic conflagrations, the forest floor becomes choked with underbrush, preventing the new growth needed for regeneration and long-term viability.



Dion Lim <a href="https://ceodinner.substack.com/p/the-ai-wildfire-is-coming-its-going?utm_source=share&amp;utm_medium=android&amp;r=3qcul&amp;triedRedirect=true">says</a> this is how technology cycles work, too.



“The first web cycle,” he explains, “burned through dot-com exuberance and left behind Google, Amazon, eBay, and PayPal: the hardy survivors of Web 1.0. The next cycle, driven by social and mobile, burned again in 2008-2009, clearing the underbrush for Facebook, Airbnb, Uber, and the offspring of Y Combinator.”



The speculative frenzy of investment bubbles burns off non-productive capital much like a wildfire consumes dense fuel — and the inevitable crash clears the way for the market’s resources to be reallocated.



Without these seemingly apocalyptic market conflagrations, a permanent underbrush of failed startups would drain the technology sector of the resources it needs to grow.



This might be why crypto feels so left behind this year: A tangled undergrowth of big projects that never seem to die has been hoarding the resources the ecosystem needs to evolve.&nbsp;



In the real economy, labor is constantly being reallocated from failed companies to successful or promising ones: “Many of Google’s best early employees,” Lim notes, “were founders or early employees of failed Web 1.0 startups.”



This seems to happen less in crypto.



To cite just one example, the Polkadot blockchain — which collected <a href="https://tokenterminal.com/explorer/projects/polkadot/metrics/fees?granularity=day&amp;interval=7d">$72 of fees</a> yesterday — is <a href="https://www.developerreport.com/">supported</a> by 482 full-time developers and 1,404 contributors.



If a project like that — in its sixth year of operations — was funded by stock and not tokens, I’m guessing those resources would have been released back into the ecosystem by now.



This is a problem because <a href="https://www.jimcollins.com/article_topics/articles/the-timeless-physics.html">Packard’s Law</a> suggests that if the scarce resource of crypto developers is not being redistributed to successful projects, crypto will struggle to grow.



Unproductive crypto projects hoard investment resources, too.&nbsp;



Crypto founders are notorious for <a href="https://x.com/hasufl/status/1995417501321040346?s=20">over-raising from investors</a> and living off the proceeds, with no market-imposed urgency to find product market-fit.



For example: One of the original crypto projects, Golem, stockpiled 820,000 ETH in its 2016 ICO, and still held <a href="https://x.com/WuBlockchain/status/1810148153087173023?s=20">231,400</a> of it as recently as last year.



Traditional startup investors expect their capital to be deployed far more quickly than that.&nbsp;



In other cases, projects with inexplicably large market valuations fund themselves seemingly forever by selling their native token out of treasury. Cardano, for example, <a href="https://messari.io/report/state-of-cardano-q3-2025">holds</a> roughly $700 million of its ADA token in treasury, which should keep the project funded approximately forever.



Collectively, crypto protocols are sitting on billions in capital and have little or no incentive to deploy it efficiently — no activist shareholders to placate, corporate raiders to fear or quarterly earnings estimates to meet.



In short, crypto may be too funded to fail.



Ben Thompson has recently articulated a similar fear about traditional tech, worrying that giants like TSMC, Nvidia and Alphabet have become so dominant that the entire ecosystem risks stagnation.



He therefore welcomes the bubble: “What is invigorating or why we should embrace the mania, embrace the bubble, is [that] ‘too-big-to-fail’ was starting to afflict tech as well.”



Thompson notes that the benefit of private enterprise is that &#8220;stupid stuff&#8221; eventually goes out of business. But when companies become entrenched monopolies (or government-backed entities), the stupid stuff doesn’t die. It just becomes over-engineered and inefficient.



He argues we need investment bubbles precisely because they bring risk back into the equation: “You don’t get upside risk without downside risk.”



This might explain why crypto has felt so stagnant this cycle. We have the &#8220;stupid stuff&#8221; — protocols with few users and minimal revenue — but lack the mechanism to make them go out of business.



“Growth becomes difficult when everyone’s roots are tangled,” Lim warns.



Until a forest fire is allowed to burn through the tangled roots of over-funded zombie protocols, the nutrients — capital and developers — will remain trapped, and the next era of growth will remain out of reach.



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Too funded to fail: Crypto needs a forest fire

Marc Arjoon

Sam Schubert

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Today markets leaned decisively risk-on, with crypto leading the move while traditional assets stayed muted. Ethereum’s Fusaka upgrade arrived with PeerDAS, BPO hard forks, and the under-discussed EIP-7918, which together may finally restore deflationary pressure on ETH. On the thematic front, Sui is making an aggressive full-stack push into robotics, positioning onchain coordination, settlement and telemetry as critical primitives for a coming wave of real-world machines.



<h2 class="wp-block-heading">Indices</h2>



Markets leaned firmly risk-on, with crypto broadly outperforming traditional assets. BTC (+5.8%) sat mid-pack, while equities were muted. The S&amp;P 500 (+0.3%) and Nasdaq 100 (+0.9%) barely budged. Gold (-0.3%) slipped, and crypto miners were the clear outlier to the downside (-8.7%), suggesting profit-taking and sensitivity to BTC’s consolidation.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-29.png?w=1024&amp;h=1024" alt="" class="wp-image-110222" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-29.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-29.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-29.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-29.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-29.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-29.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-29.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-29.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-29.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The crypto sector breadth was exceptionally strong. Oracles, lending and the broader Ethereum ecosystem led the board, signaling a clear rotation back into core infrastructure and high-utilization protocols. DeFi, Modular, the Solana ecosystem, and perps followed close behind with similarly solid showings, pointing to broad appetite for beta across liquid alt sectors. Lower down the stack, L2s, AI plays, launchpads and gaming tokens all moved higher, while more speculative areas like memes lagged. The only clear pockets of weakness were crypto equities and miners especially, which saw meaningful pullbacks.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-27.png?w=1024&amp;h=1024" alt="" class="wp-image-110218" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-27.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-27.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-27.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-27.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-27.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-27.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-27.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-27.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-27.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The move fits with improving sentiment as macro headwinds ease. Yields stabilized, liquidity indicators firmed, and positioning metrics suggest investors are adding risk after a muted stretch. Strong rebounds in infra sectors imply expectations for higher onchain activity and potential catalysts from upcoming protocol upgrades. Looking ahead, attention turns to macro prints later this week, which could test the durability of this risk-on tone. Volatility remains compressed, but with crypto sector dispersion widening, traders should expect sharper rotations as narratives evolve.



<h2 class="wp-block-heading">Market update&nbsp;</h2>



Today is Fusaka day in Ethereum land, the second upgrade this year (the <a href="https://blockworks.co/news/ethereum-pectra-fork-live">Pectra hard fork</a> was in May). It’s not often that Ethereum has two upgrades in one year, and that’s because Fusaka is more of a half-upgrade. Over a dozen EIPs were removed after <a href="https://blockworks.co/news/ethereum-consensus-evm-upgrade-fusaka-devs">EOF was mothballed</a> in April.



Of the 12 EIPs remaining, PeerDAS, is the most significant, according to Gabriel Trintinalia, protocol engineer at Consensys.



&#8220;During the initial development of the Fusaka upgrade, any feature that carried a risk of delaying the fork, such as those requiring more research or having high complexity, was deprioritized and removed from the scope,&#8221; Trintinalia told Blockworks.



PeerDAS introduces <a href="https://ethereum.org/developers/docs/data-availability/">data availability sampling</a>, which allows validators to share the load of blobs, effectively allowing for an increase in blobs per block. There is one upgrade being overlooked, but first, some background:&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-28.png?w=1024&amp;h=1024" alt="" class="wp-image-110219" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-28.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-28.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-28.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-28.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-28.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-28.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-28.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-28.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-28.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Blobs have failed to hit their target of six per block, and just when it looked like they were about to, Ethereum is looking to raise the target again. Technically, Fusaka will not be raising the blob target, but is instead introducing <a href="https://blockworks.co/news/ethereum-fusaka-dec3-launch">Blob Parameter Only</a> (BPO) hard forks. This creates a separate and easier process to adjust blob storage parameters. So instead of waiting for a major upgrade, Ethereum can make smaller, more frequent adjustments to blob capacity.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1124" height="624" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-25.png?w=1024&amp;h=1024" alt="" class="wp-image-110216" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-25.png?w=1124 1124w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-25.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-25.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-25.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-25.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-25.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-25.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-25.png?w=80 80w" sizes="auto, (max-width: 1124px) 100vw, 1124px" /></figure>



The larger point still stands: With supply exceeding demand, the blob gas price has been largely immaterial (apart from a few blips here and there when the blob price reached a measly 1 gwei).&nbsp; 



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1124" height="624" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-30.png?w=1024&amp;h=1024" alt="" class="wp-image-110224" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-30.png?w=1124 1124w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-30.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-30.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-30.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-30.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-30.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-30.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-30.png?w=80 80w" sizes="auto, (max-width: 1124px) 100vw, 1124px" /></figure>



Post-Pectra, between June and October, Ethereum generated around $900 in blob fees. The brief spike in November brought this to ~$23,000. Still not material, but it highlighted the order-of-magnitude difference when blobs actually have a market.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1124" height="624" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-24.png?w=1024&amp;h=1024" alt="" class="wp-image-110215" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-24.png?w=1124 1124w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-24.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-24.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-24.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-24.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-24.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-24.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-24.png?w=80 80w" sizes="auto, (max-width: 1124px) 100vw, 1124px" /></figure>



This is why <a href="https://eips.ethereum.org/EIPS/eip-7918">EIP-7918</a> needs more attention. It addresses the blob fee market problem by introducing a reserve price tied to execution costs (a floor price of sorts). When L2 execution costs dominate blob costs, this prevents the blob fee market from becoming ineffective at 1 wei. For example, as shown below, if EIP-7918 was introduced on June 1, 2025, burnt blob fees would have been nearly 8x more. The upgrade isn’t only a reserve pricing model, it also presents more price stability and predictability, avoiding dramatic fee spikes when the blob market becomes inelastic.&nbsp;



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="917" height="445" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-26.png" alt="" class="wp-image-110217" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-26.png?w=917 917w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-26.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-26.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-26.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-26.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-26.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-26.png?w=80 80w" sizes="auto, (max-width: 917px) 100vw, 917px" /></figure>



Together with PeerDAS and BPO, this suggests that as Ethereum scales L2 capacity, blob fees should go up as well (historically, this relationship has been strictly inverse). For ETH holders, this, combined with L1 scaling, can hopefully return the ETH supply to a deflationary phase.



Updated Dec. 4, 2025 at 2:12 am ET: Clarified comment



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Ethereum’s Fusaka upgrade lands today

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could.”



― Rudiger Dornbusch
</blockquote>



The opening scene of Philip K. Dick’s 1969 sci-fi classic <a href="https://www.amazon.com/Ubik-Philip-K-Dick-ebook/dp/B005LVR6ZA/ref=tmm_kin_swatch_0?_encoding=UTF8&amp;dib_tag=se&amp;dib=eyJ2IjoiMSJ9.JF_a_3YBqUArh4K_Z-iE6I6X9p5rZmjuOVdoQJ2WB_pOXJYsddjBJD-C4GbxF5PWnydxdgUc4oqmKMArafhTlD7WDLvesTxtppG3tuVe4le3qpVkyrP5ILCHmxpK4PwQzG84S5zO1_X4hBi3WbFsSCuYetIwZlBHM-aeR3h0knDZvx-eCVN1xWYCwvl9yP_BRaaMJLQFiMfUchLg7OnMpClGXXjn1Q_bDHY_GK-k04o.yw3FYUPmpQ7IHVLHZEGZAiB6TQljO59oXPF-sq8ttjI&amp;qid=1764648536&amp;sr=8-1">Ubik</a> features an apartment door demanding payment from its owner.&nbsp;



When Joe Chip, behind on his rent, attempts to open the door for a guest, it replies, “Five cents, please.” Short of change, he offers to pay tomorrow, but his credit score is shot so the door ignores him.&nbsp;



He tries to reason with it:&nbsp; “What I pay you,” he informed it, “is in the nature of a gratuity; I don’t have to pay you.”&nbsp;



“I think otherwise,” the door responds, before instructing Chip to check his contract.



“You discover I’m right,” the door says. It sounds smug.



When Chip starts to unscrew the bolt mechanism with a knife, the door threatens legal action, but Chip is undeterred — “I’ve never been sued by a door. But I guess I can live through it.”



Before any damage is done, Chip’s guest pays from the other side and the door finally opens.&nbsp;



Later, the refrigerator, coffee maker and shower all demand payment before rendering their services — and the guest has to pay the door again to leave.



Such was Philip Dick’s dystopian vision of the future: Apartments turned into pay-as-you-go vending machines.



But this might also be the u-topian future of decentralized finance.&nbsp;



The dream of decentralized finance is to transform every asset into a programmable financial instrument that automatically enforces the terms of its own contract.



The problem with decentralized finance is that it’s limited to crypto assets, because a smart contract can’t reach into the physical world to repossess a car or evict a tenant.



But what if a smart contract could lock the door to your house, car or refrigerator? In that world, a lender could accept those kinds of real-world assets — anything that can be locked — as collateral against onchain loans.&nbsp;



It’s not a new idea.



Way back in 1997, Nick Szabo <a href="https://nakamotoinstitute.org/library/the-idea-of-smart-contracts/">described</a> the utility of turning smart contracts into smart locks: “Many kinds of contractual clauses (such as collateral, bonding, delineation of property rights, etc.) can be embedded in the hardware and software we deal with, in such a way as to make breach of contract expensive (if desired, sometimes prohibitively so) for the breacher.”



“These protocols would give control of the cryptographic keys for operating the property to the person who rightfully owns that property,” he added, “based on the terms of the contract.”&nbsp;



So far, that property has only been tokens, because that’s the only property whose ownership can be embedded in smart contracts.



But smart locks, controlled by smart contracts with verifiable, immutable rules, could turn the whole world into a vending machine.&nbsp;



Szabo called vending machines the &#8220;primitive ancestor of smart contracts”: a mechanical contract that holds an asset (a can of soda, say) and releases it to anyone who satisfies the conditions of that contract (inserting a coin). No human or corporate shopkeeper needed.



The rules-based machine becomes the shopkeeper — much like Joe Chip’s door becomes his landlord.



Szabo thought something like the latter was where we were headed: “Smart contracts go beyond the vending machine in proposing to embed contracts in all sorts of property that is valuable and controlled by digital means.”&nbsp;



Sixteen years before the advent of Ethereum, Szabo envisioned smart locks granting digital control of real-world property, citing cars as the “most straightforward” use of smart locks.&nbsp;



“We can create a smart lien protocol: If the owner fails to make payments, the smart contract invokes the lien protocol, which returns control of the car keys to the bank.”



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="839" height="314" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-23.png" alt="" class="wp-image-110212" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-23.png?w=839 839w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-23.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-23.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-23.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-23.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-23.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-23.png?w=80 80w" sizes="auto, (max-width: 839px) 100vw, 839px" /></figure>



Nothing exactly like that has happened as of yet, but Szabo was at least directionally correct — on two counts: Smart contracts exist, on Ethereum and elsewhere, and auto-loan lenders are securing their collateral with remote locks.



Starter interrupt devices (SIDs) that allow lenders to remotely disable a car when a borrower has fallen behind on their payments have become popular with sub-prime auto lenders in recent decades.



This raises some obvious questions: What if you need the car to get to work to make money to catch up on your loan? What if you’re doing 80 on the freeway when your lender decides to disable your auto? 



Unlike Joe Chip’s door, you can’t drop coins into the dashboard of a SID-disabled car to unlock it. And good luck getting someone on the phone at the lender to plead your case or even make a payment.



You could, however, quickly top up your payment via smart contract, on a smart phone with a digital wallet.



This is not a new idea, either.



In 2015, Slock.it promised exactly the kind of digital locks (Slocks) that Joe Chip negotiated with: “With Slock, the person who rents your house pays directly to the lock itself. The lock enters into a smart contract with the renter.”



For reasons that remain unclear, Slocks didn’t catch on — or get into production, even.



(The Slock.it team may have taken their eyes off the ball when their side project, The DAO, nearly sank Ethereum.)



But it might also be that they were just early.



If so, now may finally be the time for blockchain-based smart locks.



The infrastructure is built: Chains are fast, transactions are cheap, frontends are user-friendly.



TradFi wants to tokenize everything: Crypto assets have flopped this year, but the enthusiasm for bringing real-world assets onchain has only grown.&nbsp;



Investors want alternative assets: The demand for productive yield outside the shrinking universe of public equities is seemingly insatiable.



Smart contract smart locks might be the way to provide it.



Consider Turkey, for example, where borrowers pay 5% per month on their <a href="https://www.fibabanka.com.tr/en/product-and-service-fees/personal-interest-rates/auto-loans">auto loans</a>, which works out to over 100% per year — 70 percentage points above inflation.



If those loans were tokenized and governed by a smart contract that automatically disables a car when a borrower defaults, wouldn’t that attract investors from everywhere?



BlackRock’s Larry Fink <a href="https://www.economist.com/by-invitation/2025/12/01/larry-fink-and-rob-goldstein-on-how-tokenisation-could-transform-finance">said</a> this week that “tokenization can greatly expand the world of investable assets beyond the listed stocks and bonds that dominate markets today.”



Philip K. Dick predicted the technology. Nick Szabo wrote the manual.&nbsp;



Now, finance just needs to build the door to this investors’ utopia.



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smart contracts

The sci-fi future of onchain assets and smart locks

Carlos

Strategy stress, liquidity strain

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“It is essential for human flourishing that we conduct substantial parts of our lives unobserved.”



— Tiffany Jenkins
</blockquote>



Hallways were the first privacy tech.



In 1716, the Duchess of Marlborough questioned the architect designing Blenheim Palace because of all the long, narrow rooms he had planned. The architect had to explain that these were “no more than a passage” between rooms.



Another contemporary builder articulated the purpose of this revolutionary new design:&nbsp; “All the Rooms in this House are private; that is, there is a Way into each of them without passing through any other Room.”



In other words, hallways created privacy.&nbsp;



“It took a century for this architectural feature to become commonplace,” Tiffany Jenkins writes in <a href="https://www.amazon.com/Strangers-Intimates-Rise-Fall-Private/dp/1529034167">Strangers and Intimates; the Rise and Fall of Private Life</a>. “But once it did, the Victorians embraced it wholeheartedly.”



Before the time of hallways, “there was no strictly separate private sphere, no aspect of life where others could not legitimately intrude,” she explains. “The outside world could pry into anyone’s business and was expected to do so. Curiosity and nosiness were mandated.”



Counterintuitively, that began to change with the Puritans, whose insistence that matters of religion and conscience were private freedoms established the first barrier the state could not cross.



Once established, this zone of non-interference expanded into a Victorian definition of privacy that protected bedrooms, communications and commerce.&nbsp;



In 1844, the privacy zone was tested when the British government was caught opening the letters of the political exile Giuseppe Mazzini to snoop on his correspondence with Italian revolutionaries.&nbsp;



Mazzini proved the surveillance by having friends mail him grains of sand and poppy seeds. When the letters arrived otherwise empty — the grains having fallen out during the government’s clumsy inspection — the breach of privacy sparked national outrage.



Thomas Carlyle called opening a man’s letters a “scoundrelism” equivalent to picking his pocket.



Radical MP Thomas Duncombe said the practice was “subversive of the public confidence essential to a commercial country.”



Most tellingly, the plots of two Charles Dickens novels — Bleak House and Little Dorrit — revolved around stolen letters that threatened to expose family connections and economic dealings.



All of which confirmed, as Tiffany Jenkins says, that “a revolution in the value and esteem of privacy had taken place.”



But while Victorians were the first to embrace this cultural ideal, the United States was the first to write it into law — sort of.



In 1890, Samuel Warren and Louis Brandeis published <a href="https://www.brandeis.edu/library/archives/exhibits/ldb-100/career/privacy.shtml">The Right to Privacy</a> — a foundational article arguing for a fundamental &#8220;right to be let alone&#8221; that was written in response to the privacy intrusions of newspapers and early photography.



This was a &#8220;seminal moment&#8221; in the history of privacy, Jenkins writes. But, in researching their article, the two lawyers observed a surprising gap: There is no mention of privacy in the Constitution — not even in the Amendments.



Despite the influence of the article, the constitutional silence on privacy persisted for decades.



In 1928, the Supreme Court upheld the government’s use of warrantless wiretaps in Olmstead v the United States, which ruled that wiretapping did not violate the Fourth Amendment (because there was no physical trespass onto the defendant&#8217;s property).&nbsp;



Writing on behalf of the four dissenting justices, Justice Brandeis warned that “the progress of science in furnishing the Government with means of espionage is not likely to stop with wiretapping. Ways may someday be developed by which the Government, without removing papers from secret drawers, can reproduce them in court, and by which it will be enabled to expose to a jury the most intimate occurrences of the home.”



Exactly that has happened, of course.&nbsp;



(Less prophetically, Brandeis also warned that “advances in the psychic and related sciences may bring means of exploring unexpressed beliefs, thoughts and emotions.”)



It was not until Griswold v Connecticut in 1965 that the Supreme Court asserted a constitutional right to privacy. And even then it took some creative logic.&nbsp;



“To rule that privacy is a constitutional right,” Jenkins writes, “Justice Douglas argued that the Bill of Rights’ specific guarantees have ‘penumbras’ which, when drawn together, add up to a de facto right to privacy.” Penumbras — a concept that sounds more astronomical than legal — seems like a precarious legal foundation for privacy.



In 1967, the right to privacy got a little more concrete when the Supreme Court ruled in Katz v the United States that the Fourth Amendment protected not just places, but people, too.



This was celebrated by privacy advocates because it decoupled privacy rights from property rights, ensuring that the Fourth Amendment applied in places like the telephone booth where Charles Katz was illegally betting on college basketball.



In hindsight, though, the celebrations look misplaced because the court simply required that the government get a warrant for its eavesdropping.&nbsp;



“The ruling actually normalized wiretapping surveillance as a tool of law and order,” Jenkins writes.



For privacy advocates, things have only gone downhill from there.



“Through a series of rulings,” Jenkins writes, “the Supreme Court narrowed the definition of prohibited searches while broadening the scope of permissible searches and warrants. As a result, constitutional protections for privacy were progressively undermined.”



To illustrate just how undermined, Jenkins cites the case of Monica Lewinsky, who was forced to surrender her private correspondence, gifts, and clothing simply because her infamous correspondent was accused of a crime (and not even a big one).



With the government granting itself that kind of subpoena power, privacy is no longer a locked door at the end of a hallway — instead, it’s just a paperwork requirement.



Jenkins laments this.



“It’s essential to have a private space shielded from corporate, state and public scrutiny,” she concludes; “a place where we can be alone.”



But her history of privacy demonstrates that, contrary to popular belief, “it’s neither ‘natural’ nor universal to have a private life.”



So if we want one, we’ll have to build it.



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Cybersecurity

Privacy is not a ‘natural’ right — it’s an invention

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Today, we break down the BTC move during Asia hours and the renewed pressure from Japan’s carry unwind. We then look at China’s latest crypto FUD and track the continued USDe deleveraging cycle ahead of Pendle expiries, mapping what needs to shift for Ethena yields to recover.



<h2 class="wp-block-heading">Indices</h2>



BTC dropped about 5% in early Asia hours, trading near $86K. The move hit thin late-weekend liquidity and flushed several hundred million of long leverage.



On the rates side, Japan is again reactivating the yen-carry unwind. Two-year Japanese Government Bonds (JGBs) trade near 1%, 10-year yields are around 1.9%, both the highest since 2008. Overnight Interest Swaps now price about 80% odds of a December hike from the BOJ.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="920" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-1.png?w=1024&amp;h=1024" alt="" class="wp-image-110158" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-1.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-1.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-1.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-1.png?w=454 454w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-1.png?w=381 381w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-1.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The last surprise move in mid-2024, when the BOJ lifted rates to 0.25%, drove a sharp USD-JPY reversal and contributed to a near 30% BTC drawdown to roughly 49K as macro books de-grossed risk. A similar pattern appeared today, with BTC tracking the Nikkei lower during Asia hours.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="920" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-2.png?w=1024&amp;h=1024" alt="" class="wp-image-110159" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-2.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-2.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-2.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-2.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-2.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-2.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-2.png?w=454 454w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-2.png?w=381 381w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-2.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The underlying mechanism is unchanged. Global macro funds and institutions borrow yen or short JGBs to fund higher-yielding USD and EUR assets. As JGB yields rise, the yen funding leg becomes more volatile and more expensive. Investors reduce carry books and cut the highest beta exposures first, so BTC sits at the front of the liquidation stack.



The September 2024 BIS Quarterly Review quantified the size and opacity of this ecosystem:



<ul class="wp-block-list">
<li>Notional FX swaps and forwards with JPY on one side reached $14.2 trillion dollars (about 1,994 trillion yen). These positions sit off-balance-sheet and do not appear in conventional debt metrics.</li>



<li>Visible on-balance-sheet yen loans to foreign non-banks totaled only $271 billion dollars, confirming that most yen borrowing happens through derivatives rather than loans.</li>



<li>About $1.7 trillion dollars of yen liquidity is provided by non-bank financial institutions like trustee accounts. These allocators are volatility-sensitive and are prone to withdraw liquidity quickly under stress.</li>
</ul>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="965" height="703" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-4.png" alt="" class="wp-image-110161" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-4.png?w=965 965w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-4.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-4.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-4.png?w=353 353w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-4.png?w=358 358w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-4.png?w=301 301w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-4.png?w=80 80w" sizes="auto, (max-width: 965px) 100vw, 965px" /><figcaption class="wp-element-caption"><a href="https://www.bis.org/publ/qtrpdf/r_qt2409y.htm">Source: Sizing up carry trades in BIS statistics</a> </figcaption></figure>







As yen becomes more expensive, positions need to be unwound. This forces both de-risking in high beta assets and mechanical JPY buying, which can feed a reinforcing loop as yen strengthens.



Adding fuel to the fire, China contributed another catalyst. The PBoC reiterated that all virtual-currency trading remains illegal and explicitly categorized stablecoins under AML and capital flight restrictions. Hong Kong crypto-linked equities reacted immediately: Yunfeng Financial fell more than 10%, Bright Smart dropped about 7%, and OSL Group declined over 5%.



The substance of the policy is not new, and it seems this is the hundredth time China is banning crypto. However, the price reaction is significant, and shows we are still in a highly skittish regime.



<h2 class="wp-block-heading">Charts for The Week</h2>



This year’s Oct. 11 liquidation episode was the largest in crypto’s history. A Trump tariff tweet sent BTC from about $120K to roughly $102K and wiped out about $19 billion dollars of open positions in 24 hours. USDe traded as low as $0.65 on Binance and about $0.92 on Bybit. Despite this, Ethena processed $1.9 billion of redemptions, maintained full backing and contained systemic contagion. Combined with Bybit’s February $1.5 billion exploit, this was a second major stress event that USDe passed with flying colors. However, despite that resilience, USDe supply has fallen almost 50% from the $14 billion dollar peak to about $7 billion.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1350" height="712" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-6.png?w=1024&amp;h=1024" alt="" class="wp-image-110163" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-6.png?w=1350 1350w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-6.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-6.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-6.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-6.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-6.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-6.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-6.png?w=80 80w" sizes="auto, (max-width: 1350px) 100vw, 1350px" /><figcaption class="wp-element-caption"><a href="https://app.ethena.fi/dashboards/transparency">Source: Ethenas Dashboard</a></figcaption></figure>







The driver behind this is unattractive carry. Following October&#8217;s OI wipeout, funding rates for BTC and ETH are muted to negative, with Ethena’s dashboard showing negative funding across majors. Since November, the sUSDe spread has been below three-month Treasury yields.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1354" height="718" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-5.png?w=1024&amp;h=1024" alt="" class="wp-image-110162" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-5.png?w=1354 1354w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-5.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-5.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-5.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-5.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-5.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-5.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-5.png?w=80 80w" sizes="auto, (max-width: 1354px) 100vw, 1354px" /></figure>



With core delta-neutral strategy being unprofitable or returning low yields, 63.3% of the system is now held in liquid stables rather than deployed in delta neutral carry.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1342" height="672" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-3.png?w=1024&amp;h=1024" alt="" class="wp-image-110160" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-3.png?w=1342 1342w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-3.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-3.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-3.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-3.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-3.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-3.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-3.png?w=80 80w" sizes="auto, (max-width: 1342px) 100vw, 1342px" /></figure>



The unwind also shows up in Aave and Pendle TVL.



<ul class="wp-block-list">
<li>sUSDe looping became unattractive as sUSDe yields fell below USDC borrow rates (4.87% USDC borrow vs 4.77% sUSDe APY).</li>



<li>The November Pendle sUSDe PT expiry removed most of the size from Aave, and exposure fell from more than $5.4 billion to about $340 million.</li>
</ul>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1184" height="864" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image.png?w=1024&amp;h=1024" alt="" class="wp-image-110157" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image.png?w=1184 1184w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image.png?w=352 352w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image.png?w=358 358w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image.png?w=80 80w" sizes="auto, (max-width: 1184px) 100vw, 1184px" /><figcaption class="wp-element-caption"><a href="https://dune.com/sealaunch/ethena-on-aave">Source: SeaLaunch Dunes</a></figcaption></figure>







Going forward, the market needs to assess whether new expiries will attract significant utilization. The February 2026 PT implies a yield of only 5.8%, the lowest of any previous expiry, and at current levels, looping against Aave borrow rates is not profitable, so Aave PT utilization should remain low. Secondly, sUSDe rates must climb back above USDC borrow rates to continue to see demand on Aave.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1426" height="822" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-9.png?w=1024&amp;h=1024" alt="" class="wp-image-110166" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-9.png?w=1426 1426w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-9.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-9.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-9.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-9.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-9.png?w=453 453w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-9.png?w=380 380w, https://blockworks-co.imgix.net/wp-content/uploads/2025/12/image-9.png?w=80 80w" sizes="auto, (max-width: 1426px) 100vw, 1426px" /></figure>



Therefore, until funding turns frothy, Ethena’s core engine remains impaired. And as crypto becomes more institutionalized, with larger market makers and deeper derivatives liquidity, our base case is that funding rates trend structurally lower. For yields to recover, directional appetite must return so perp basis widens, and ETH vol needs to rise so positive funding can re-establish itself.



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Yen pressures meet soft crypto carry

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As the holiday week wraps up, the spotlight has shifted to fundamental valuation concerns. Monad’s mainnet launch, L1/L2 valuation debates, and new details around Berachain’s refund terms are driving most of the conversation. We also cover this week’s top reads and the key takeaways from Monday’s 0xResearch livestream to keep you plugged in.



<h2 class="wp-block-heading">Weekend Reading</h2>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1174" height="742" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-161.png?w=1024&amp;h=1024" alt="" class="wp-image-110148" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-161.png?w=1174 1174w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-161.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-161.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-161.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-161.png?w=407 407w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-161.png?w=413 413w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-161.png?w=347 347w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-161.png?w=80 80w" sizes="auto, (max-width: 1174px) 100vw, 1174px" /></figure>



<a href="https://x.com/santiagoroel/status/1992963918768054331">Crypto Is Priced for Network Effects It Does Not Have</a>



Santiago argues that crypto already trades as if it has Facebook-level network effects, with non-BTC crypto at a roughly $1 trillion market cap. This implies about $2,500 per broad user, $9,000 per active user and $23,000 per monthly onchain user, despite much weaker monetization and retention. He shows L1s are around 90% of market cap but their fee share has fallen from roughly 60% to 12% as DeFi and other apps capture most fees on a small share of value. That shift suggests real network effects sit in forkable aggregation layers rather than bases, and that while Ethereum and Solana are building stronger flywheels, the asset class is already priced for an internet scale settlement role it has not yet earned.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="640" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-163.png?w=1024&amp;h=1024" alt="" class="wp-image-110150" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-163.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-163.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-163.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-163.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-163.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-163.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-163.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-163.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-163.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



 <a href="https://4pillars.io/en/issues/to-see-tethers-future-look-at-its-investments">To See Tether’s Future, Look at Its Investments</a> 



Four Pillars reviewed several Tether investments to argue that USDT’s relentless growth and $135 billion Treasury portfolio shows Tether is building a digital financial empire. In capitalizing on MiCA friendly issuers in Europe, on- and off-ramps and wallets in several countries, and bets on BTC backed lending, bitcoin mining and gold royalties, Tether is stitching together global rails for USDT that serve both retail users and institutions. The piece concludes that instead of being weakened by regulation, Tether is becoming a too-big-to-fail onchain extension of the dollar system, with bitcoin and gold as strategic reserves. 



<img loading="lazy" decoding="async" src="blob:https://cms.blockworks.co/970f1aab-81ab-4918-b6e1-cd6912273413" width="372" height="209"> <a href="https://coinmetrics.substack.com/p/state-of-the-network-issue-338">Zcash’s breakout and the revival of onchain privacy</a>



Coin Metrics’ State of the Network argues that ZEC’s nearly 10x rally since October is a repricing of onchain privacy. Shielded supply has climbed to 4.9 million ZEC, or about 30% of circulating supply — up from 11% at the start of 2025. It highlights how the Orchard shielded pool, unified address wallets like Zashi and crosschain rails (such as NEAR Intents) have lowered friction for partially shielded flows, even as fully shielded transfers remain a small share of activity. The report also frames Zcash as a bitcoin-like, 21 million cap asset whose improving UX, faster proofs and growing anonymity set are finally being recognized by the market.



<img loading="lazy" decoding="async" src="blob:https://cms.blockworks.co/751adf3c-161b-4b9e-8763-41fed8bb09c9" width="544" height="217"> <a href="https://x.com/PineAnalytics/status/1992378885288194309">Understanding SIMD-0411</a>



Pine Analytics walks through Solana’s SIMD-0411 proposal, which doubles the disinflation rate from 15% to 30% so that inflation reaches the 1.5% terminal level in about three years instead of six. The proposal roughly cuts 22 million SOL of emissions, or about $3 billion at current prices. The piece contrasts this minimal parameter tweak with the more complex SIMD-0228 idea, arguing that a deterministic schedule is easier to model, govern and explain. It notes that slightly lower staking yields and pressure on weaker validators are worth the trade for less dilution, better capital efficiency and a stronger long-term monetary profile for SOL.



<h2 class="wp-block-heading">Monad Mainnet, L1 Valuations, and Berachain News</h2>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1280" height="720" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-162.png?w=1024&amp;h=1024" alt="" class="wp-image-110149" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-162.png?w=1280 1280w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-162.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-162.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-162.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-162.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-162.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-162.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-162.png?w=80 80w" sizes="auto, (max-width: 1280px) 100vw, 1280px" /></figure>



Takeaways from Monday’s 0xResearch livestream:&nbsp;



<ul class="wp-block-list">
<li>Monad mainnet launch: The hosts highlight a few early apps, but TVL is tiny, with day one typically representing a gap between huge expectations and limited initial utility until incentives and more products arrive. </li>



<li>ICO pricing and perps: The panelists discuss Monad’s Coinbase sale priced around a $2.5 billion FDV, while MegaETH still trades near $3.5 billion pre-TGE and is expected to reprice once spot liquidity appears. </li>



<li>Throughput vs. value: The discussion highlights new L1s like Monad and MegaETH promising higher TPS, yet the hosts argue raw speed alone no longer justifies multi-billion valuations without clear economic activity and value capture. </li>



<li>Who captures fees: The group notes Solana has seen more ZEC spot volumes than Hyperliquid, but Hyperliquid likely earns more per unit of trading activity because it owns the orderbook, which shows why chains need canonical revenue apps. </li>



<li>Neutral infra or app owner: The group prefers models where chains also ship their own DEX, lending and stablecoin rails, pointing to Berachain’s stack as directionally right and questioning why many L1s let external apps take most of the economics. </li>



<li>Berachain refund scoop: Reports that Brevan Howard’s Nova fund had a post-TGE refund on a $25 million allocation is being called highly unusual, raising MFN questions for other investors and highlighting how some funds face limited downside. </li>



<li>L1 tokens and launch design: James Christoph argues most new L1 tokens still trade on narratives and flows, that very few will reach Ethereum or Solana style valuations, and that future launches need lower FDV, broader public float and earlier onchain price discovery if they want anything other than down-only charts.</li>
</ul>



Look for the full podcast on <a href="https://www.youtube.com/watch?v=feFxJmFnpu0">YouTube</a>, <a href="https://spoti.fi/3NlP1hA">Spotify</a>, <a href="https://apple.co/3SNhUEt">Apple Podcasts</a> and <a href="https://x.com/0xResearch/status/1992987496230047899">X</a>.



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New chains, old problems

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Happy Thanksgiving, everyone! Prediction markets are exploding with record volumes, billion dollar raises and new players shaking up the landscape. At the same time, Neutrl is opening up one of the strongest and least talked about yield opportunities in crypto, and early numbers are already turning heads. Plenty to be thankful for in the middle of this market chop.



<h2 class="wp-block-heading">Market Update</h2>



Since my last update on prediction markets, the space has only gotten more competitive. New entrants want a slice of the rapidly growing pie, and the race for dominance now feels like a full-blown fundraising arms race. Kalshi’s valuation jumped to $11 billion after <a href="https://techcrunch.com/2025/11/20/source-kalshis-valuation-jumps-to-11b-after-raising-massive-1b-round/">announcing</a> a $1 billion round, following the NYSE’s $2 billion <a href="https://pitchbook.com/news/articles/polymarket-lands-2b-from-nyses-parent-company-as-prediction-markets-go-mainstream">investment</a> in Polymarket at a $9 billion valuation. Polymarket is already in <a href="https://www.coindesk.com/business/2025/10/23/polymarket-seeks-investment-at-valuation-of-usd12b-usd15b-bloomberg">early conversations</a> to raise at a $12 billion to $15 billion valuation, suggesting that the market is heating up faster than expected.



On the activity side, weekly volumes have broken past previous all-time highs, hitting $3.68 billion two weeks ago, which is 2.4x above last year’s election peak. A major reason for this surge is a new entrant called Opinion Labs. Backed by investors like YZi Labs, the platform is already doing close to one third of total volumes across prediction markets.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="803" height="470" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-156.png" alt="" class="wp-image-110138" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-156.png?w=803 803w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-156.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-156.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-156.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-156.png?w=446 446w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-156.png?w=374 374w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-156.png?w=80 80w" sizes="auto, (max-width: 803px) 100vw, 803px" /></figure>



However, most of this growth appears to be farming-driven. Opinion Labs is running a points program, and the data quickly shows it. One market alone, titled <a href="https://app.opinion.trade/detail?topicId=1274">Will Satoshi move any Bitcoin in 2025</a>, has done $1.28 billion in volume, which accounts for 32% of its <a href="https://dune.com/queries/6047958/9725367">total notional volume</a>. It is not the type of market one would expect to generate that level of activity organically. Despite the volume surge, Opinion Labs only represents 14% of total open interest, another sign of inorganic participation.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="803" height="471" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-159.png" alt="" class="wp-image-110141" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-159.png?w=803 803w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-159.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-159.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-159.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-159.png?w=445 445w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-159.png?w=373 373w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-159.png?w=80 80w" sizes="auto, (max-width: 803px) 100vw, 803px" /></figure>



Looking across categories, Polymarket has a more balanced distribution with Sports, Crypto, and Politics making up 38%, 28%, and 17%, respectively, of last week’s volumes.&nbsp;



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="802" height="468" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-157.png" alt="" class="wp-image-110139" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-157.png?w=802 802w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-157.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-157.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-157.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-157.png?w=447 447w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-157.png?w=375 375w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-157.png?w=80 80w" sizes="auto, (max-width: 802px) 100vw, 802px" /></figure>



On Kalshi, Sports is the clear story, with 85.5% of weekly volumes coming from that category. Regardless of platform, it is now undeniable that Sports is becoming the primary driver of prediction market growth.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="801" height="468" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-158.png" alt="" class="wp-image-110143" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-158.png?w=801 801w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-158.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-158.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-158.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-158.png?w=447 447w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-158.png?w=375 375w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-158.png?w=80 80w" sizes="auto, (max-width: 801px) 100vw, 801px" /></figure>



One protocol well positioned to benefit from this trend is Sire, which we covered in a <a href="https://app.blockworksresearch.com/research/sire-and-score-where-ai-meets-prediction-markets">research piece</a> recently. Sire functions as an onchain sports betting hedge fund that captures inefficiencies in sports odds. It does this by using Score Subnet’s AI models that extract alpha directly from gameplay footage. In the last 32 days, the agent has executed <a href="https://x.com/Kunallegendd/status/1992942075189588425?s=20">$267,700</a> in volume on an initial vault size of $500,000, with an average win rate of <a href="https://x.com/Kunallegendd/status/1992942075189588425?s=20">58%</a> and weekly returns on traded volume near <a href="https://x.com/Kunallegendd/status/1992942075189588425?s=20">10%</a>.



What is clear is that this market is just getting started. With FanDuel <a href="https://press.fanduel.com/press-releases/fanduel-and-cme-group-unveil-new-prediction-markets-platform-to-launch-in-december">preparing</a> to launch its own prediction product, the next phase will reveal whether this becomes a winner-take-all environment or whether different platforms carve out their own niches in Sports, Crypto and beyond.



<h2 class="wp-block-heading">How Neutrl is cracking open the OTC market</h2>



Amid the ups and downs of the market, innovative protocols continue to emerge, and one that has stood out to me recently is <a href="https://www.neutrl.fi/">Neutrl</a>. It introduced NUSD, a synthetic dollar built on top of OTC arbitrage, funding rate inefficiencies and market neutral strategies. These sources of yield usually sit behind OTC desks or require constant hands-on management, but Neutrl wraps them into a product that everyday users can access.



Around 20% of deposits are deployed into hedged OTC positions. Neutrl acquires discounted locked tokens from early investors, foundations or teams, then hedges them in perps markets to capture the spread. Discounts vary depending on the lockup period, and can reach well above 50%.



<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="1280" height="805" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=1024&amp;h=1024" alt="" class="wp-image-110140" style="width:728px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=1280 1280w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=409 409w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=415 415w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=348 348w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image.jpeg?w=80 80w" sizes="auto, (max-width: 1280px) 100vw, 1280px" /></figure>



This strategy benefits from the supply overhang in crypto markets and performs best in bearish periods when locked token holders under pressure are willing to accept deeper discounts just to access liquidity.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="1040" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=1024&amp;h=1024" alt="" class="wp-image-110144" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=395 395w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=402 402w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=337 337w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-1.jpeg?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /><figcaption class="wp-element-caption">Source: https://app.stix.co/listings</figcaption></figure>







60% of the portfolio runs delta neutral strategies similar to the ones popularized by Ethena. These strategies hold spot exposure while shorting perpetuals to collect funding payments and basis spreads. The remaining share of the portfolio is held in liquid reserves such as USDC, USDT and USDe, which supports redemptions and cushions volatility.



The strategy seems to be working. Based on Neutrl’s first epoch results, the effective APY sits at 16.58%, compared with <a href="https://app.ethena.fi/dashboards/market-data">5.12%</a> on sUSDe. The difference comes from the OTC component, where the unrealized APR on deployed capital currently sits at <a href="https://x.com/behrin/status/1991491863317213536?s=20">42%</a>. OTC yield is proving to be a powerful source of return, especially in an environment where buyers can negotiate steep discounts.



<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="1600" height="1398" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=1024&amp;h=1024" alt="" class="wp-image-110142" style="width:550px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=294 294w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=299 299w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=251 251w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-160.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The protocol launched on Plasma in October and the initial deposit cap of $50 million was filled in 20 minutes, which prompted the team to raise the cap by $25 million a few days after. Since removing the caps on Nov. 10, total <a href="https://app.neutrl.fi/metrics">deposits</a> now sit at $125 million. Beyond yield, depositors accumulate XPL incentives, Neutrl Points and UpShift points. With NUSD set to integrate with Pendle, speculation around point values could increase TVL further.



Neutrl benefits from a team with experience across both TradFi and DeFi, and it is backed by STIX, one of the largest OTC desks in the industry. That relationship likely gives Neutrl preferred access to locked token flow. Still, no strategy comes without risk. The main concern is the management of the short legs of these trades, especially in the event of auto deleveraging on perp platforms, which could leave the protocol with a naked long position. There is also the question of how scalable returns will remain as TVL grows.



Even with these uncertainties, Neutrl is one of the more compelling protocols I’ve come across in the last six months, and one worth keeping an eye on as it scales.



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Prediction markets surge to new highs as Neutrl unlocks hidden yield

Boccaccio

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Markets bounced as December rate cut odds swung back above 80%, lifting BTC, equities and gold. In crypto, MegaETH, one of the industry’s more beloved projects, had a slight problem with its predeposit program yesterday.



<h2 class="wp-block-heading">Indices</h2>



Markets tilted risk-on in the latest session, with most major crypto-adjacent sectors posting gains even as BTC (-1.1%) softened slightly. Traditional benchmarks were steady as the S&amp;P 500 eked out a small move higher (+0.9%), while Gold (+0.7%) and the Nasdaq 100 (+0.5%) saw modest strength. Overall tone skewed constructive, led by thematic crypto sectors rather than broad-based flows.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="837" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-153.png?w=1024&amp;h=1024" alt="" class="wp-image-110128" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-153.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-153.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-153.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-153.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-153.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-153.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-153.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-153.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-153.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Crypto sector indices showed a clear rotation into high-beta themes. AI was the standout performer, ripping +6.3% on the day, followed by strong moves across RWA (+4.9%) and Crypto Miners (+4.4%). On the downside, Modular networks lagged sharply (-1.7%), followed by Meme (-1.3%) and High-FDV Low-Rev tokens (-1.0%), signaling selective risk-taking rather than a wholesale chase across the curve.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="833" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-155.png?w=1024&amp;h=1024" alt="" class="wp-image-110130" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-155.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-155.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-155.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-155.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-155.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-155.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-155.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-155.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-155.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The moves fit a familiar narrative as investors gravitate toward sectors with strong storytelling momentum, such as AI, RWA, and miners (also AI), while trimming from overextended or lower-quality pockets of the market. With BTC drifting sideways and macro catalysts sparse, sector dispersion continues to dominate short-term performance.



<h2 class="wp-block-heading">Market Update: Klarna</h2>



Klarna announcing KlarnaUSD on <a href="https://blockworks.co/news/tempo-stripe-paradigm-planned-l1">Tempo</a> (the new Stripe/Paradigm payments chain) is a clean validation of the “stablecoin rail-replacement” trade that’s been building behind the scenes. With McKinsey pegging stablecoin settlement at <a href="https://www.mckinsey.com/industries/financial-services/our-insights/the-stable-door-opens-how-tokenized-cash-enables-next-gen-payments">$27 trillion</a> annually, the narrative is shifting from speculative infra to industrial-scale payments plumbing. Klarna’s 114 million users and $118 billion GMV aren’t crypto-native flow, but they’re exactly the kind of volume that can reshape onchain settlement curves once mainnet access opens. This initiative could help improve its weak stock performance by cutting payment costs and opening new revenue streams through faster, cheaper global transactions. It also signals innovation and business-model diversification, which may boost investor confidence after a period of poor market sentiment.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-154.png?w=1024&amp;h=1024" alt="" class="wp-image-110129" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-154.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-154.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-154.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-154.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-154.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-154.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-154.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-154.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-154.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Tempo’s positioning as a purpose-built payments L1 (low latency, predictable fees, Stripe-grade compliance rails) sets up a clear competitive lane vs. Solana/ETH L2s on consumer payments. A Stripe + Klarna distribution stack is a real threat — not only to crypto protocols, but to entities working on the $120 billion cross-border segment that Klarna is explicitly hunting. The interesting angle is that KlarnaUSD is built via Bridge’s Open Issuance, keeping issuance modular and likely multichain over time.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="900" height="506" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-150.png" alt="" class="wp-image-110125" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-150.png?w=900 900w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-150.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-150.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-150.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-150.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-150.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-150.png?w=80 80w" sizes="auto, (max-width: 900px) 100vw, 900px" /></figure>



For crypto markets, this reopens the “fintech-stablecoin adoption” trade that last peaked during PayPal’s PYUSD rollout. Watch for rotation into payment-aligned infra, high-throughput chains, issuer infra, compliance middleware and real-world settlement protocols. However, despite the institutional appetite, the regulatory overhang isn’t gone, as a bank-issued stablecoin hitting global distribution will likely trigger scrutiny in both the EU and the US. Either way, watch Tempo ecosystem assets and payment-rail narratives — Klarna just put real enterprise weight behind onchain settlement.



<h2 class="wp-block-heading">Oops</h2>



Yesterday, there was an unfortunate mistake with the MegaETH predeposit process. The predeposit launch failed at first due to an incorrect SaleUUID inside the predeposit contract, which blocked all transactions until a multisig update was executed. Once fixed, Sonar’s KYC service began rejecting traffic because of a misconfigured rate limit, leaving users unable to fund for about 23 minutes. When service resumed, the $250 million cap filled almost instantly from users who had been refreshing the site. The team planned to raise the cap to $1 billion in the next hour, but the transaction was executed about 30 minutes early by chud_eth.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="640" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-152.png?w=1024&amp;h=1024" alt="" class="wp-image-110127" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-152.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-152.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-152.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-152.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-152.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-152.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-152.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-152.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-152.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Once a Safe transaction has the required signatures, anyone can broadcast/execute it, including someone not on the multisig. Deposits surged again, and the team attempted to control inflows by lowering the cap to $400 million, then $500 million, with the latter taking effect and filling. Because KYC issues were still affecting users, the planned expansion to $1 billion was canceled. A withdrawal page is being prepared for those who want to remove funds.



Despite this unfortunate situation, MegaETH’s USDm experiment seems to have begun! For context, USDm is a partnership between MegaETH and Ethena, and represents Ethena’s first (popular) attempt at offering white-labelled stablecoins. USDm is MegaETH’s native/aligned stablecoin, where underlying Treasury bill yield generated by USDm is set to be used to subsidize gas costs and internalized as revenue.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1439" height="697" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-151.png?w=1024&amp;h=1024" alt="" class="wp-image-110126" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-151.png?w=1439 1439w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-151.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-151.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-151.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-151.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-151.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-151.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-151.png?w=80 80w" sizes="auto, (max-width: 1439px) 100vw, 1439px" /></figure>



Over the past day, MegaETH generated ~$55,000 in revenue off USDm, putting it in seventh place in terms of highest revenue-generating blockchains. Building out basic primitives on your own chain is a great way for chains to monetize more efficiently, as revenue through transaction fees has proven to be highly volatile and relatively low.



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Klarna steps into stablecoins

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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Markets bounced as December rate-cut odds swung back above 80%, lifting BTC, equities and gold.



Monad launched mainnet yesterday, but MON’s day-one listing on Solana and Hyperliquid was arguably the bigger story. Finally, we dive into Galaxy’s investment case, with GLXY allowing investors to express a bullish crypto view while also getting exposure to AI compute infrastructure demand.



<h2 class="wp-block-heading">Indices</h2>



Markets bounced on Monday as odds swung back toward a potential December rate cut. Bitcoin climbed as much as 2.73%, briefly pushing above $89,000 before closing the day at $88,200 (+1.72%). The standout performer, however, was the Nasdaq 100 (+2.22%), posting its strongest daily gain since mid-May. The S&amp;P 500 (+1.20%) also logged its best session in six weeks, while Gold (+1.75%) edged out BTC on the day, closing at its highest level since Nov. 14.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="894" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-144.png?w=1024&amp;h=1024" alt="" class="wp-image-110110" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-144.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-144.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-144.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-144.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-144.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-144.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-144.png?w=467 467w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-144.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-144.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



It seems markets have been hyperfocused on US rate developments over the past two weeks. Yesterday, Fed Governor Waller reiterated that the labor market’s weakness could justify a 25 bps cut in December. The latest dovish comments led to probabilities of a December rate cut rising above 80% on both Polymarket and the CME’s <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">FedWatch Tool</a>.



The chart below shows Polymarket’s odds for the Fed decision in December. Over the past two weeks, odds have swung sharply between a 25 bps cut and no change, underscoring the challenge the market faces in pricing near-term rates in the absence of economic data after the longest US government shutdown recorded.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-145.png?w=1024&amp;h=1024" alt="" class="wp-image-110111" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-145.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-145.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-145.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-145.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-145.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-145.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-145.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-145.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-145.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Back on the crypto side, most indices outperformed BTC, catching a bid after a tough month for risk assets. The best-performing index was Crypto Miners (+8.4%), with Cleanspark (CLSK) up more than 10% after JP Morgan raised its guidance for the company. Notably, the No Revenue index (+7.9%) was the second-best performer in the cohort, suggesting that investors’ risk appetite may be increasing as macro concerns ease.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="904" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-143.png?w=1024&amp;h=1024" alt="" class="wp-image-110109" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-143.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-143.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-143.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-143.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-143.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-143.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-143.png?w=462 462w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-143.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-143.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



<h2 class="wp-block-heading">Market Update</h2>



Monad went live on mainnet yesterday, almost three years after the team <a href="https://blockworks.co/news/paradigm-leads-monad-parallel-evm-fundraise">first raised</a> in January 2023. <a href="https://app.blockworksresearch.com/research/monad_a-supercharged-evm-layer-1">Monad</a> represents a bold attempt to supercharge the EVM experience from the ground up, introducing a new consensus algorithm, a parallel execution engine, and a custom data architecture. The chain targets 10K+ TPS, 400ms blocks, and 800ms deterministic finality, though it remains to be seen how this fares in production.&nbsp;



While Monad’s architecture may be novel, the fact that it took so long to come to market means it now faces an uphill battle catching up to more mature networks like Solana or even L2s like Base in terms of ecosystem activity, DEX volumes, TVL, stablecoins in circulation and so on. The chart below shows the top applications on Monad by TVL, as of today. The four largest apps are well established players in the EVM ecosystem, with Uniswap v4 topping the cohort with $25 million in TVL.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-146.png?w=1024&amp;h=1024" alt="" class="wp-image-110112" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-146.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-146.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-146.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-146.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-146.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-146.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-146.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-146.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-146.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The only “Monad-native” applications in the chart above are Kuru and Neverland.



<a href="https://kuru.io/">Kuru</a> is a DEX with a hybrid order book-AMM design. The platform also offers a DEX aggregator. Kuru hopes to take advantage of Monad’s speed and low fees to provide a venue for market makers to handle liquid assets, while also offering passive liquidity solutions to support long-tail assets. The team raised <a href="https://blog.kuru.io/p/kuru-labs-raises-2-million-seed-round">$2 million</a> in a seed round led by Electric Capital in July 2024.&nbsp;



Neverland is a lending protocol built on Aave v3’s architecture. Per DeFi Llama, the protocol has about $1 million in deposits and $420,000 in borrows. So far, Monad apps are not particularly exciting, but rather things we’ve already seen time and again in other ecosystems (DEXs, money markets, etc.). It will be interesting to monitor if truly innovative apps emerge on the chain over the coming months. Personally, I’m interested to see if<a href="https://x.com/ThogardPvP/status/1963379267871613138"> prop AMMs</a> will be able to thrive on Monad, or if they remain a Solana-only phenomenon.



Perhaps more exciting than Monad’s launch itself was the day-one listing of MON by Solana and Hyperliquid. While Hyperliquid has already supported other high profile launches on day one (e.g., PUMP, XPL, 2Z), it was the first time Solana users were able to trade a non-native asset at launch with relatively deep liquidity. The game changer that allows Solana to be competitive with CEXs and Hyperliquid on this front is prop AMMs combined with hardened bridge infrastructure (e.g. Wormhole).MON trading volumes on Solana have surpassed <a href="https://orb.helius.dev/address/CrAr4RRJMBVwRsZtT62pEhfA9H5utymC2mVx8e7FreP2/markets?cluster=mainnet-beta&amp;sort_by=volume24h&amp;sort_type=desc">$60 million</a> over the past 24 hours, roughly 60% more than Hyperliquid spot ($37 million). When stacked against CEXs, Solana would have been the fifth-largest venue by trading volume, only behind Upbit, Coinbase, Bybit and Bithumb. With xStocks, battle-tested bridge infrastructure and prop AMMs, there is no technical barrier preventing Solana from supporting every relevant asset. While it’s tempting to frame yesterday’s events as Hyperliquid vs. Solana (competition is good), the more important story is onchain, decentralized trading venues gradually outcompeting CEXs over the coming years.



<h2 class="wp-block-heading">Galaxy Digital ($GLXY) Investment Case&nbsp;</h2>



Galaxy Digital (“Galaxy”) is turning into one of the cleanest listed ways to own the institutional build out of crypto markets, while also getting exposure to AI compute infrastructure demand. Here we take a closer look at its business segments in light of the recent selloff. The market still mostly files it as a volatile trading shop, but the mix is shifting toward more durable revenue being at the center of institutional crypto flows and contracted infrastructure income, which should support a more stable earnings profile through the cycle.



Recent results show what the model can earn when conditions are favorable, with the latest quarter delivering about $505 million of net income against $3.2 billion of balance sheet equity. In Q3, earnings mix translated into about $250 million of EBITDA from Digital Assets and $376 million from Treasury and Corporate, with Data Centers still negligible. Investors are buying a scaling digital asset platform with significant crypto and equity holdings, and essentially a call option on AI infrastructure. Earnings will still swing with asset prices and volumes, but the fact that Q3 2025 nearly matches full year 2024’s net income underlines Galaxy’s earnings leverage to a growing digital asset market. <img loading="lazy" decoding="async" src="blob:https://cms.blockworks.co/ce4295fc-6c7b-4ce6-bb87-7b53f1822df0" width="720" height="340">



Galaxy has three key segments.&nbsp;



<ul class="wp-block-list">
<li>About 40% of equity capital sits in Digital Assets, which encompasses Global Markets and Asset Management &amp; Infrastructure Solutions. Global Markets drives most of the earnings here, with its sell-side trading desk (spot and derivative OTC, lending, structured products), coupled with the investment banking arm, adding M&amp;A advisory and equity and debt capital markets fees. Asset Management &amp; Infrastructure Solutions earns fee income from active and passive investment products, crypto services, and staking and custody solutions that offer clients customized exposure and stronger security. </li>



<li>35% of equity capital sits in Treasury and Corporate, which manages Galaxy’s own portfolio of digital assets and strategic equity stakes, so Q3’s profit reflects mark to market gains of those holdings. </li>



<li>The remaining 25% is tied to Data Centers, mainly the Helios build in Texas, which is effectively pre-revenue today but is expected to generate contracted rent from 2026 with CoreWeave its anchor tenant. Phase I targets delivery of 133 MW of contracted critical IT load by 1H26, with capacity rising to 526 MW when Phase III is completed in 2028.</li>
</ul>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1225" height="543" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-149.png?w=1024&amp;h=1024" alt="" class="wp-image-110117" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-149.png?w=1225 1225w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-149.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-149.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-149.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-149.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-149.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-149.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-149.png?w=80 80w" sizes="auto, (max-width: 1225px) 100vw, 1225px" /></figure>



GalaxyOne is Galaxy’s consumer platform for US individual investors, bundling high yield cash, premium yield notes, and simple-crypto and US-equity trading in one app. If it scales, it can grow fee and spread income on client balances, provide cheaper and stickier funding for the trading and lending book, and create a direct funnel into Galaxy asset management and staking products. In big picture terms, it is a way for Galaxy to capture more of the economics of retail flows instead of relying only on institutional clients.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1229" height="550" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-148.png?w=1024&amp;h=1024" alt="" class="wp-image-110116" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-148.png?w=1229 1229w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-148.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-148.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-148.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-148.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-148.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-148.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-148.png?w=80 80w" sizes="auto, (max-width: 1229px) 100vw, 1229px" /></figure>



Galaxy is also putting its Class A common shares onchain on Solana in partnership with Superstate, creating fully SEC registered tokenized stock that trades and settles on a blockchain. That is less about near-term earnings and more about proving out tokenized capital markets, giving them a live case study to sell to issuers, funds and banks who want to bring other securities onchain. Supply of onchain GLXY can be tracked with this <a href="https://dune.com/glxyresearch_team/glxy-class-a-common-stock-token">Dune dashboard</a>.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1100" height="599" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-147.png?w=1024&amp;h=1024" alt="" class="wp-image-110115" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-147.png?w=1100 1100w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-147.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-147.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-147.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-147.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-147.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-147.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-147.png?w=80 80w" sizes="auto, (max-width: 1100px) 100vw, 1100px" /></figure>



Galaxy is still a high beta way to express a bullish crypto view, with trading and principal investing a big swing factor, but it offers a cleaner way to play the broader adoption theme than a single coin. There is regulatory risk with the evolving political environment, meaningful execution risk around Helios delivering its planned AI leasing economics, and GalaxyOne gaining real traction in a competitive consumer market.



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Monad ships mainnet, while markets rebound

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Crypto opened the week with uneven signals. BTC gained +2.5%, but application and network revenues hit multi-month lows, and BTC ETFs saw their fourth-straight week of outflows. While AI and DePIN jumped +9%, broader activity remains soft, highlighting a market still searching for conviction.



<h2 class="wp-block-heading">Indices</h2>



Risk assets leaned modestly risk-on, with BTC (+2.5%) posting a steady gain while traditional equities lagged, as both the S&amp;P 500 (-0.1%) and Nasdaq 100 (-0.1%) slipped slightly. Gold (+0.1%) was essentially flat, reflecting a muted macro backdrop. Overall tone skewed constructive, driven largely by strength across crypto-native sectors.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="832" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=1024&amp;h=1024" alt="" class="wp-image-110101" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Over the last 36 hours, crypto sector breadth was notably strong. DePIN (+9.0%) and AI (+9.0%) led the board, continuing their multi-week momentum as investors rotate toward higher-beta thematic plays. DeFi (+4.2%) followed alongside solid showings from Ethereum-aligned assets (+3.5%). On the downside, Modular (-1.7%) was the only meaningful decliner, marking a sharp divergence from the otherwise broad green sweep.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="849" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-139.png?w=1024&amp;h=1024" alt="" class="wp-image-110099" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-139.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-139.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-139.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-139.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-139.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-139.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-139.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-139.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-139.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



The dispersion suggests a clear preference for high-growth, high-narrative segments rather than broad-based macro buying. AI and DePIN’s outsized moves (both +9%) signal renewed speculative appetite in infrastructure and computation themes as traders position ahead of upcoming macro releases. With equities pausing and volatility suppressed, crypto remains the higher-beta expression of incremental risk-taking. Looking ahead, attention turns to this week’s macro catalysts, which could dictate whether BTC’s grind follows through or stalls. Sector rotation remains active, suggesting volatility may pick back up as positioning normalizes.



<h2 class="wp-block-heading">Charts for The Week</h2>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1124" height="624" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-140.png?w=1024&amp;h=1024" alt="" class="wp-image-110100" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-140.png?w=1124 1124w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-140.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-140.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-140.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-140.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-140.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-140.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-140.png?w=80 80w" sizes="auto, (max-width: 1124px) 100vw, 1124px" /></figure>



Overall, application revenue was down 11% week over week from $49 million to $43.5 million — the lowest weekly revenue since March 2025. Hyperliquid continues to lead in terms of application revenue, making $18.5 million over the past week (up 8%), followed by pump.fun, which made $7.7 million (down 22%). Ore took third place for the first time, generating $2.3 million in the last week.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1124" height="624" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-137.png?w=1024&amp;h=1024" alt="" class="wp-image-110097" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-137.png?w=1124 1124w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-137.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-137.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-137.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-137.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-137.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-137.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-137.png?w=80 80w" sizes="auto, (max-width: 1124px) 100vw, 1124px" /></figure>



Weekly Network REV has been faring even worse, with the last two prints (both around $29.5 million) the lowest since 2022. Ethereum took top spot ($8.9 million), a position it’s been in and out of for the past few weeks. Solana remains in third with $5.1 million (down 15%) and Tron in second with $6.3 million (down 12.5%). Solana was the market leader in only one of the last seven weeks, after holding top spot for months in a row.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1124" height="624" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-138.png?w=1024&amp;h=1024" alt="" class="wp-image-110098" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-138.png?w=1124 1124w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-138.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-138.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-138.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-138.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-138.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-138.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-138.png?w=80 80w" sizes="auto, (max-width: 1124px) 100vw, 1124px" /></figure>



Over the four weeks, US spot bitcoin ETFs have seen consistent net outflows, with each of the last three weekly bars recording over $1 billion in withdrawn funds. IBIT has been responsible for the largest share of redemptions, while smaller but steady outflows also appear across funds like FBTC, BITB and ARKB. Overall, the trend reflects sustained investor derisking, with cumulative withdrawals building into late November.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="832" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=1024&amp;h=1024" alt="" class="wp-image-110103" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-142.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Nubank is one of the world’s largest digital financial services platforms, operating in Latin America with over 127 million customers as of Q3 2025. Nubank has an impressive activity ratio of 83%, and like many neobanks, has no physical branches. The company has become a major crypto gateway with 6.6 million crypto users (up 42% YoY) and transaction volumes jumping 250% after eliminating exchange fees. Future initiatives include a US bank charter application and a pilot for dollar-pegged stablecoin payments (<a href="https://app.blockworksresearch.com/research/the-nu-era-of-banking">Read more</a>).



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="900" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-141.png?w=1024&amp;h=1024" alt="" class="wp-image-110102" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-141.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-141.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-141.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-141.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-141.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-141.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-141.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-141.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-141.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Survey data confirms user awareness of these threats. Among respondents to our survey, 88% identify connecting to malicious sites as their primary concern, compared to 77% citing smart contract vulnerabilities. These results show that the market recognizes that frontend attacks are a significant threat vector (<a href="https://app.blockworksresearch.com/research/securing-de-fi-frontend-security-infrastructure-and-user-behavior-in-web3-applications">read more</a>).



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Revenue declines and ETF outflows keep pressure on the crypto market

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“There has been a lot of talk about an AI bubble. From our vantage point, we see something very different.”&nbsp;



— Jensen Huang
</blockquote>



Alphabet CEO Sundar Pichai said this week there are “elements of irrationality” in the current boom in AI infrastructure.



But his announcement of a new version of Google’s Gemini LLM gave us reason to think we may not be irrational enough.



Gemini 3 was received as a surprisingly massive improvement over Gemini 2.5, as measured by the arcane metrics that language models are judged on. (As a regular user, I can’t really tell the difference.)



Tomasz Tunguz <a href="https://x.com/ttunguz/status/1991601261662343332?s=20">says</a> this disproves the “scaling wall thesis” that LLMs had hit a plateau where simply adding more compute no longer resulted in better performance.



Google, however, added better compute — smarter algorithms, better training, newer chips — and Gemini 3 got a lot better.



This seems like a green light for everyone to keep investing like mad in everything.&nbsp;



Also this week, Jensen Huang said everyone is still investing like mad in GPUs: “Blackwell sales are off the charts, and cloud GPUs are sold out.”



Better yet, Nvidia CFO Colette Kress <a href="https://stocktwits.com/news-articles/markets/equity/nvidia-a100-gpu-shipped-6-years-ago-full-utilization-michael-burry-depreciation/cLPALD9RE9w">added</a> that “the A100 GPUs we shipped six years ago are still running at full utilization today.”



The comment from Kress appeared to be a direct response to Michael Burry’s <a href="https://x.com/michaeljburry/status/1987918650104283372?s=20">accusation</a> that Nvidia’s customers have been deceptively inflating their reported earnings with unrealistically long depreciation schedules.



But GPUs appear to be benefiting from a “<a href="https://interestingengineering.substack.com/p/why-michael-burry-is-wrong-about">cascading use model</a>”: The newest chips are used for training for a year or so and then run inference tasks for a while longer before eventually being put out to pasture to serve up YouTube videos and things.&nbsp;



That should be excellent news for investors: If the models are still getting better, demand for new chips is increasing and old chips are still useful…we should maybe be wondering whether AI companies are understating their earnings.



And yet, stocks were lower this week.



This might be a sign that the market has stopped worrying about the demand for chips and started worrying about the supply of energy.



Demand seems to be something close to insatiable: A Google Cloud executive recently <a href="https://www.cnbc.com/2025/11/21/google-must-double-ai-serving-capacity-every-6-months-to-meet-demand.html">estimated</a> it would have to double its compute capacity every six months for the next four or five years to meet it.&nbsp;



But where the power will come from to provide it is a mystery.&nbsp;



It takes five to seven years to build the gas turbines that power most data centers and the companies that make them are <a href="https://paulkedrosky.com/stranded-assets-and-the-ai-driven-gas-turbine-renaissance/">fully booked</a> until at least 2030.



If additional power isn’t available, there’s no point in buying a new-generation GPU that draws more of it — an older generation of chip, judiciously drawing less of it, would do just fine (or better).



Nor is there any point in building a new data center if there are no new turbines to pair them with.&nbsp;



All of which is to say, the AI bubble could pop even if the demand for AI is effectively unlimited.&nbsp;



Also this week, Pichai warned that if the AI bubble does pop, “no company is going to be immune, including us.”



He meant no AI company, but “no company” is not far from the truth, either.



Without the boom in data centers, the US economy <a href="https://x.com/jasonfurman/status/1971995367202775284?s=20">would likely</a> be in recession: Amazingly, data centers, which account for 4% of GDP, accounted for 93% of GDP growth in the first half of the year.



So, whatever part of the economy or financial markets you care about, you probably have to care about the scaling wall thesis, data center depreciation schedules and cascading use cases, too.



I’ll keep you posted.



“One chart to rule them all”:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1530" height="837" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-136.png?w=1024&amp;h=1024" alt="" class="wp-image-110092" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-136.png?w=1530 1530w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-136.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-136.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-136.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-136.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-136.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-136.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-136.png?w=80 80w" sizes="auto, (max-width: 1530px) 100vw, 1530px" /></figure>



Michael Burry <a href="https://x.com/michaeljburry/status/1990171815155752976?s=20">thinks</a> this is the only chart you need to see: As measured by capex as a percentage of GDP, the AI boom is already similar in scale to the investing booms that preceded the dotcom, housing and shale bubbles.



Depreciating, yes, but slowly:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1600" height="852" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-134.png?w=1024&amp;h=1024" alt="" class="wp-image-110090" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-134.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-134.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-134.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-134.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-134.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-134.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-134.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-134.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-134.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



Contra Burry from a16z <a href="https://www.a16z.news/p/charts-of-the-week-fully-scaled-agents">notes</a> that demand for older, less-powerful A100 GPUs has held up surprisingly well.



Going all in:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1247" height="593" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-128.png?w=1024&amp;h=1024" alt="" class="wp-image-110084" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-128.png?w=1247 1247w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-128.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-128.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-128.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-128.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-128.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-128.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-128.png?w=80 80w" sizes="auto, (max-width: 1247px) 100vw, 1247px" /></figure>



At Microsoft, capex has surged to nearly 50% of sales. Benedict Evans says this shows that Microsoft’s business model has changed “from competing on network effects to competing on access to capital.” The latter is much more bubble-prone.



Startups are all in, too:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1432" height="612" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-129.png?w=1024&amp;h=1024" alt="" class="wp-image-110085" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-129.png?w=1432 1432w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-129.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-129.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-129.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-129.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-129.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-129.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-129.png?w=80 80w" sizes="auto, (max-width: 1432px) 100vw, 1432px" /></figure>



Again from Benedict Evans, nearly all Y Combinator startups are now AI-related.



It could get bigger:



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="779" height="578" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-133.png" alt="" class="wp-image-110089" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-133.png?w=779 779w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-133.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-133.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-133.png?w=346 346w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-133.png?w=352 352w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-133.png?w=295 295w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-133.png?w=80 80w" sizes="auto, (max-width: 779px) 100vw, 779px" /></figure>



The starting dates for Emre Akcakmak’s overlaid <a href="https://x.com/akcakmak/status/1990303903775437163?s=20">charting</a> are probably a little arbitrary, but his graphic makes a good point: If AI is a bubble, history would suggest it could get a lot bigger.



The scariest chart in the world?



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="950" height="669" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-135.png" alt="" class="wp-image-110091" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-135.png?w=950 950w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-135.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-135.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-135.png?w=365 365w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-135.png?w=371 371w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-135.png?w=311 311w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-135.png?w=80 80w" sizes="auto, (max-width: 950px) 100vw, 950px" /></figure>



Derek Thompson <a href="https://open.substack.com/pub/derekthompson/p/is-this-the-new-scariest-chart-in?utm_source=share&amp;utm_medium=android&amp;r=3qcul">notes</a> that from the starting point of ChatGPT, the S&amp;P500 has shot higher and the number of job openings in the US has shot lower. I’m not sure how much causality there is here, but it does make for an excellent chart.



The bear case for human employment:



<img loading="lazy" decoding="async" src="blob:https://cms.blockworks.co/ff64d8a5-dbbf-460a-b285-bfb2fbbfa90e" width="624" height="304">Benedict Evans notes that Otis introduced the “Autotronic” elevator in 1950 — the exact peak of employment for elevator attendants. It’s possible that AI will turn out to be Autotronic everything, but we should remember that most elevator attendants found better jobs in the 1960s.



So far, so good:



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1005" height="618" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-130.png" alt="" class="wp-image-110086" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-130.png?w=1005 1005w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-130.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-130.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-130.png?w=418 418w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-130.png?w=424 424w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-130.png?w=356 356w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-130.png?w=80 80w" sizes="auto, (max-width: 1005px) 100vw, 1005px" /></figure>



The delayed jobs data showed the US with a surprise gain of 119,000 jobs in September.&nbsp;



We need some Autotronic housebuilders:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1496" height="797" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-132.png?w=1024&amp;h=1024" alt="" class="wp-image-110088" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-132.png?w=1496 1496w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-132.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-132.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-132.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-132.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-132.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-132.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-132.png?w=80 80w" sizes="auto, (max-width: 1496px) 100vw, 1496px" /></figure>



Torsten Slok notes that the median age of US house buyers is all the way up to 59 — excellent news because it makes me feel ahead of the curve for a change. On the other hand, as a younger-than-average home buyer, I can tell you that homeownership is overrated and renting is underrated.



At least houses aren’t imported:



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="914" height="506" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-131.png" alt="" class="wp-image-110087" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-131.png?w=914 914w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-131.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-131.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-131.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-131.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-131.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-131.png?w=80 80w" sizes="auto, (max-width: 914px) 100vw, 914px" /></figure>



A new <a href="https://www.pricinglab.org/files/TrackingTariffs_Cavallo_Llamas_Vazquez.pdf">study</a> of US prices finds that tariffs have made imported goods 5.44% more expensive than they otherwise would have been.&nbsp;



Other fun inflation facts: The average price of a car in the US is now above $50,000, and in some places, <a href="https://x.com/johnarnold/status/1990216601577103546?s=20">gasoline is cheaper than water</a>.



Have a great weekend, non-depreciating readers.



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Friday charts: Elements of a bubble

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It was a rough Thursday, with major indices sliding across the board. The tech-heavy S&amp;P 500 fell -2.4%, the Nasdaq dropped -3.8%, and even Gold edged lower by -0.60%. BTC took the biggest hit, falling -5.2% and briefly touching the $80,000 level earlier today.



The selloff came despite a strong earnings report from Nvidia, which makes the market reaction harder to pinpoint. The United States unemployment rate for September ticked up to 4.4% even as job growth <a href="https://www.straitstimes.com/business/economy/us-job-growth-beats-expectations-in-september-unemployment-rate-rises-to-4-4">beat</a> expectations. At the same time, the <a href="https://www.investing.com/central-banks/fed-rate-monitor">odds</a> of a December rate cut have fallen sharply from 45.4% last week to 28% now, and that shift in macro expectations is likely contributing to the recent weakness.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="957" height="368" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-127.png" alt="" class="wp-image-110076" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-127.png?w=957 957w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-127.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-127.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-127.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-127.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-127.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-127.png?w=80 80w" sizes="auto, (max-width: 957px) 100vw, 957px" /></figure>



Across crypto sectors, everything finished in the red. Two areas held up relatively well: Gaming at -2.8% and the Revenue sector at -3.2%.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1173" height="632" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-126.png?w=1024&amp;h=1024" alt="" class="wp-image-110074" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-126.png?w=1173 1173w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-126.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-126.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-126.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-126.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-126.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-126.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-126.png?w=80 80w" sizes="auto, (max-width: 1173px) 100vw, 1173px" /></figure>



On the other side, Crypto Equities and Miners were the hardest hit, falling -10.3% and -13.2%, respectively. The monthly picture is even more painful, with HOOD at -17.6%, COIN at -27%, and GLXY at -38%. Miners remain weighed down by skepticism around the AI trade and whether the pivot to AI data centers will deliver returns.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="957" height="368" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-127.png" alt="" class="wp-image-110075" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-127.png?w=957 957w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-127.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-127.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-127.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-127.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-127.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/11/image-127.png?w=80 80w" sizes="auto, (max-width: 957px) 100vw, 957px" /></figure>



One bright spot remains Solana ETF flows. While BTC and ETH ETFs have seen consistent outflows since Oct. 28, SOL ETFs just logged their 14th-straight day of inflows following the launch of BSOL. Roughly <a href="https://farside.co.uk/sol/#google_vignette">$500 million</a> worth of SOL is now held across these ETFs, with more issuers having entered the staked SOL ETF race.



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Crypto and tech indices close out a rough week

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“What had central bankers shaking in their boots, may end up being what steadies the ground beneath them.”



— David Beckworth on stablecoins
</blockquote>



Writing in The Atlantic, David Frum warns that stablecoins are “by far the most dangerous form of cryptocurrency” and that by legalizing them, the GENIUS Act has “lit a fuse to America’s next financial catastrophe.” Specifically, Frum expects stablecoin assets to surge to $4 trillion (citing an estimate from Citi), and that nearly all $4 trillion of it will go into three-month Treasurys (the riskiest asset issuers are allowed to buy under the GENIUS Act).



Then, he says, there will inevitably come a time when Treasurys crash — as they did in 2022-2023 — which will cause a bank run on stablecoins as holders withdraw their money before issuers are forced to realize their marked-to-market losses on the $4 trillion of Treasurys they hold.



Better yet, Frum thinks stablecoins “bristle with all the dangers of subprime-mortgage securities” and will end up forcing the government to socialize the losses it creates with a 2008-style bailout.&nbsp;



But the 2022-2023 crash in Treasurys played out over 18 months.



So it’s unclear to me why an 18-month decline in an asset that matures every three months would cause people to panic about stablecoin issuers that take no leverage.&nbsp;



But I present Frum’s take here because 1) it’s kind of amusing in its alarmism and 2) it probably represents what a lot of non-finance people are thinking: Stablecoins are dangerous because they will inevitably fail.



<a href="https://www.imf.org/en/publications/fandd/issues/2025/09/stablecoins-tokens-global-dominance-helene-rey">Stablecoins are dangerous because they will inevitably succeed</a>



Writing for the IMF, Hélène<a href="https://www.imf.org/en/settings/globals/publications/fandd/authors/helene-rey"> Rey</a> warns that stablecoins will be such a success that they’ll “threaten government revenues…and destabilize the international financial system.”



In short, she thinks so much of the world’s savings will be redirected to stablecoins that banks will no longer be able to lend, international governments will no longer be able to borrow, and central banks will no longer be able to set monetary policy.



The knock-on effects of such widespread stablecoin adoption will include “financial stability risks, potential hollowing out of the banking system, currency competition and instability, money laundering, fiscal base erosion, privatization of seigniorage and intense lobbying.”



Most alarmingly, Rey worries that this privatization of seigniorage will result in “significant wealth accumulation by…a few companies and individuals,” thereby undermining “the public good dimension of the international monetary system.”



Yikes.



“We must brace ourselves for substantial consequences,” she concludes.



<a href="https://www.federalreserve.gov/newsevents/speech/miran20251107a.htm">Stablecoins are not dangerous</a>



Like Rey, the Federal Reserve’s Steven Miran values our dollar-based international monetary system: “The reserve assets and currency provided by the US are global public goods.”&nbsp;



But that leads him to the opposite conclusion on stablecoins: “Stablecoins might establish an easier means for the financially repressed to enjoy these global public goods and evade draconian restrictions on their finances.”



Crypto people generally think of the Fed’s reserve assets (all the money it prints, basically) as a public bad.



But Miran is right on both substance and tactics: Framing US fiat as a public good is likely the best way to counter the anti-crypto arguments represented by The Atlantic and the IMF.



Unlike Frum and Rey, Miran sees “little prospect of funds broadly fleeing the domestic banking system” — mostly because the GENIUS Act mandates that they do not pay yield and are not FDIC-guaranteed (the flip side of Frum’s argument).



Instead, the “real opportunity in stablecoins is to satiate untapped foreign appetite for dollar assets from savers in jurisdictions where dollar access is limited.”



While Rey views this unsatiated appetite for dollars as a threat to all non-US governments, Miran says it&#8217;s a benefit to non-US people — because it “leapfrogs the challenges of high and unstable inflation or volatile exchange rates.”



It’s a convincing argument; certainly the most convincing of the three presented here.



But only if you can bring yourself to agree that fiat is a public good.



<a href="https://macroeconomicpolicynexus.substack.com/p/the-rise-and-redemption-of-stablecoins?utm_source=post-email-title&amp;publication_id=4309188&amp;post_id=166029841&amp;utm_campaign=email-post-title&amp;isFreemail=true&amp;r=3o9&amp;triedRedirect=true&amp;utm_medium=email">Stablecoins are stabilizing</a>&nbsp;



David Beckworth says that stablecoin alarmism “overlooks an important point: the widespread adoption of dollar-based stablecoins could actually help dampen the global financial cycle.”&nbsp;



Beckworth cites the aforementioned Hélène Rey, who has detailed the destabilizing effects of emerging market borrowers doing so much of their borrowing in US dollars.&nbsp;



Stablecoins, Beckworth says, could fix this by reducing the currency mismatch on private-sector balance sheets: When a strengthening dollar increases the value of dollar-denominated debts, the simultaneous increase in the value of their stablecoins will cushion the shock for emerging markets.



In other words, “stablecoins can act as a decentralized balance sheet stabilizer” for the global economy.



Combined with the likelihood that the Federal Reserve will “act as a backstop” to stablecoins in a future crisis — the very thing David Frum worries about! — the spread of stablecoins “may become one of the very tools that softens the peaks and troughs of the global financial cycle.”



“What had central bankers shaking in their boots,&#8221; Beckworth concludes, “may end up being what steadies the ground beneath them.”



<a href="https://www.justice.gov/usao-ndil/pr/founder-chicago-cryptocurrency-company-indicted-alleged-10-million-money-laundering">Stablecoins can be laundered, too</a>



Firas Isa, founder of an Illinois-based crypto ATM company, has been indicted on charges of money laundering — a reminder that despite the transparent nature of blockchains, many criminals believe the first step in laundering money is to put it onchain.



The (alleged) fact that Isa was able to collect $10 million of fees for converting stolen cash into cryptocurrency demonstrates that crypto crime isn’t just about stealing money that’s already onchain — it’s about laundering funds that were stolen off-chain, too.



Many worry this will get even easier as stablecoins get bigger and more integrated into the traditional banking system.



Hélène Rey, for example, says stablecoins could “help channel money linked to illicit or sanctioned activities and substantially erode the tax base of many countries.”



David Frum says “there is something perverse about a plan to boost demand for Treasury debt by making it easier for crooks to circumvent US laws against terrorist financing and money laundering.”



I don’t have a counterargument to cite against either of those takes, unfortunately.&nbsp;



<a href="https://x.com/KulveerRanger/status/1978912664379085126?s=20">Stablecoins can be boring, too</a>



Stablecoins recently made for perhaps the dullest exchange in UK parliamentary history when Lord Kulveen Ranger asked His Majesty’s government what it thought of them.&nbsp;



Responding on behalf of the King, Lord Livermore predicted that stablecoins will be useful in “reducing costs and enhancing efficiencies” in international payments.&nbsp;



As hot takes go, that is less newsletter-worthy than predictions that stablecoins will cause the next financial crisis, undermine the global financial system, save the global financial system or facilitate crime. But it’s much more likely, too.&nbsp;&nbsp;



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