Zebec Protocol

Byron Gilliam

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“It infuriates me to be wrong when I know I’m right.”&nbsp;



— Molière
</blockquote>



US equities returned to their all-time highs this week despite all the worrying politics: tariffs, Fed-bashing, the BLS drama.



Or are markets up because of politics?



A <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5375473">new research paper</a> finds that a high level of political disagreement is predictive of positive returns for stocks.



The authors used a large language model to create 216 “virtual investors” with differing political and social views, asked them how they’d react to years of stock market news, and found that the stocks sparking the most disagreement delivered better returns.



This explains a lot: Disagreeing about politics is at an all-time high, so maybe it makes sense that stocks are, too?



If so, there should be many more gains to come.



Another <a href="https://collaborate.princeton.edu/en/publications/you-cannot-be-serious-the-impact-of-accuracy-incentives-on-partis">academic study</a> found that “many partisans interpret factual questions about economic conditions as opinion questions,” and that they answer such questions accordingly.



This also explains some things: Economists despair that people’s views of the economy are increasingly just a function of their politics. As it turns out, that’s because they think questions about the economy are about politics.



When the researchers offered a monetary incentive to answer the questions factually, the responses got much more accurate.



Perhaps that’s what happens in markets, as well: Prices fall on the initial wave of disagreement, then rebound as the drop incentivizes people to revisit the facts.



But this isn’t a case of clear-eyed professionals taking advantage of biased retail investors — <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5324623">another study</a> finds that even the pros are misled by their politics.



“Republican-affiliated forecasters project 0.3-0.4 percentage points higher growth when Republicans hold the presidency, relative to Democratic-affiliated forecasters,” the researchers found.&nbsp;



“Forecast accuracy shows a similar partisan pattern: Republican-affiliated forecasters are less accurate under Republican presidents, indicating that partisan optimism impairs predictive performance.”



I’m sure it works in the other direction, too, so there should be plenty of opportunity for unbiased investors…no matter who’s in the White House.



Could rising partisanship usher in a golden age for investors then?



When even the mundane Bureau of Labor Statistics is a point of political disagreement, investors may have a lot to look forward to.



Let’s see if we can help out by disagreeing over some charts.



Sales up, profits down:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcc6BVwdcC6qXfkZ9_pn8I9J9Kaoe-V0M_Eu-g6kxAWRBsg3e_HrIjJ-MjcK5ESSsmXgL8o--Lx8Fccu2LGmdsIDtSd24aCVX-l-nu2YhVf_dSsuI3fThkFPh9n8EC4wrlhJfYs1A?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



Meta said last week it’s making a high return on its giant AI investments because it makes its ads more effective. The rest of corporate America doesn’t seem to be benefiting just yet.



If you’re not paying for the product, the product is you:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfch309WeSHP-YtCLjaMrOEwaYtQUIuWhtn92lJrIMSTK0JxXquJ-qr_RDjH5iWGmeqlgtsO0mQjwvDVN7ubsBdlEUCMYm5eX4arNuFIDBUmaLijnbQbxoFTSj0FcpqUGwKuI4yAw?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



Meta is so good at targeting ads, it makes $25 of revenue off of each and every one of its users, each and every month.



The not-so-magnificent 493:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe96ogGUMEkYizSP8NigI8KgsgyLPd9HRP-JlAT99LDx4fcJi16vypWu_TAChy0j0ygyJcbndRYhWt-Fn8vN18yddMaxvNGl1AWu_gZOT4zd-r6vl_So-gQYsAfqZvWo92vDZNHkQ?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



The Mag 7 continues to grow earnings at a double-digit pace, but the rest of the S&amp;P is expected to grow at 3% or less over the last three quarters of the year — less than the rate of inflation.



The US stock market is narrow and expensive:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf89RjCRmgrUFf52qkrA2hrEiqyRa-G7QqE9uPwE1hsgiXmzSUAMNvfFRqa8maiJvCok08d_TqqczzzIk_oUgINTBVAslEHc0Tro6Bpd3wbvVuGmljuXG-AvXjDaD1A6GD_4sOwcQ?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



Nvidia now makes up almost 8% of the S&amp;P 500 and trades on 58x P/E. In 1994, the largest stock was GE, which was only 3% of the S&amp;P 500 and traded on just 8x P/E.&nbsp;



Fewer college kids:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcjiOpuvIgvONtrSLGkKC69Jseexr5xzBd1y0zDjGs5SedY2Zt9-pclkceQZCxTFX1g9aBd2ZeszgHY_VAbWyi3mPiSPHcBAgH5X89Ze64Syn9gHEAi1XePx1bP_d0_lVb3XGT7dw?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



The Association of International Educators estimates that new international enrollment to American universities will be down as much as 40% in the upcoming semester.



Fewer immigrants, fewer jobs:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdC1xXCG4ITDnbGL_WTqD5AsLbugX3_GguUHySDYAjxSJGYYdTcARa7y572mfFBRxdEuIFjrf1HHUnIVw8bwtii7i6YmJ84j-MhWrgMzZ0RPsPLjCT4SDeJoMIL9dJejnQvE60yUQ?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



Claudia Sahm <a href="https://stayathomemacro.substack.com/p/job-growth-has-slowed-sharply-the?utm_source=post-email-title&amp;publication_id=280281&amp;post_id=169996648&amp;utm_campaign=email-post-title&amp;isFreemail=false&amp;r=6g77v&amp;triedRedirect=true&amp;utm_medium=email">says</a> “reduced labor supply is likely the key driver” of the weak jobs growth reported last week. That is bad news, but maybe less bad than if weak demand was more to blame.



Kids today, ugh.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeBiP1ajFIvkPQ9IMJIfeAnIOhIuLNKhEO57GG88M3xGFYMZLtafaeemz5ePTljBxZLOCPGxyzJeyX0uTEDsf77dgzCLEnzKGMvJN7aj4wQ0q3N-4uN_NZP3tcl9kMIw9gBIGrCBQ?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



The FT’s John Burn-Murdoch <a href="https://x.com/jburnmurdoch/status/1953811277463122162">runs the numbers</a> on Gen Z and millennials and….one sec. Sorry, I thought I had a notification on my phone. Anyway, kids today, right? The good news for young job seekers is that it won’t be hard to look good by comparison.



Looking good by comparison:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfmdKLPbnDPfqrlooE-wjTFptbOTTTp51LIFwXfY-qsU6G8DEjGkrB55lyCUCGdFt7vWxa7Cs959CbO-pEM7W__KpstetKAJpQ5Y3G9E892v5HaP_DzN3-8OB7w6fN1xbBuPcNHZg?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



In the US, we’re worried that interest on the national debt is now eating up a record high 18% of government revenue. In China, though, one-third of provinces spend over 100% of revenue on debt repayments. I feel better now — it’s always nice to have a friend doing worse than you are.



ChatGPT usage is booming:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeGtreRAvIuQxud_WrjeYfmt7Q2WjdirRW-N8PQKdPPsCOCZjNYChh5ZPj9xT_GRCG7eHrbj8oizwVrVPZ9b9zTTYAkyxpQAToaPGa0pnRc2Ch1NSjrxFqMZIr6sZKec4hilFDQCQ?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



And GPT-5 is even better — an excellent but incremental and non-threatening evolution of the LLM. Is that enough to justify the $500 billion valuation that OpenAI has <a href="https://www.reuters.com/business/openai-eyes-500-billion-valuation-potential-employee-share-sale-source-says-2025-08-06/">reportedly</a> assigned itself? That would put it on a rich but not ridiculous valuation multiple of about 25x this year’s sales.



It’s not very good at charts, though:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe071xrge4Z4l2vH5p9JlMcJ-XGwQ9zV-YinoznGo0g9v3Ck9qLw6dcf8V56jxjDTnBXe6fhlo_fHJQj77ZK-iZH1vpkSz500FY2vdPK-gRtT5cp9IFwQE5WZxpFBzoAk8tCLccRg?key=5-eVEGFcHvy-X-YBv0-I7g" alt=""/></figure>



This misproportioned chart crime was <a href="https://x.com/sama/status/1953513280594751495">included</a> in this week’s GPT-5 livestream. I take that as evidence AGI is further away than Sam Altman would have us think.&nbsp;



Google is pulling back ahead:<img loading="lazy" decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXco1vEPQA8pEsG0VQRHdRrG6KMeOEasPcqzKYOkckwo-b-7eTSuT9FeGUGfMQXStKQkJaXO_Zj6AqKUGC0ddKnJ2jt5XY5SL3Pfrxb3GRZDrVi9xK7lP0Lg4o_vydlmcHK_6yFRqg?key=5-eVEGFcHvy-X-YBv0-I7g" width="624" height="315">



As good as GPT-5 is, Google’s Genie 3 LLM, also released this week, was even more impressive. <a href="https://polymarket.com/event/which-company-has-best-ai-model-end-of-2025?tid=1754675807754">Polymarket odds</a> now give Google a 53% chance of having the best AI model by the end of the year, vs. OpenAI at just 17%.



Disagree? It might be better if you do.



Have a great weekend, agreeable readers.



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The Breakdown Newsletter

Friday charts: Feel free to disagree

Casey Wagner

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



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President Trump yesterday got the ball rolling on allowing alternative assets in 401(k)s and other employee retirement plans.&nbsp;



The <a href="https://www.whitehouse.gov/presidential-actions/2025/08/democratizing-access-to-alternative-assets-for-401k-investors/">executive order</a>, signed Thursday afternoon, directs the Labor Department to “reexamine” its guidance on fiduciary responsibilities around alternative assets. This includes real estate, private equity and cryptocurrencies.&nbsp;



The Labor Department is also tasked with working with the SEC and other federal agencies to evaluate regulations and determine which changes should be made.&nbsp;



“Burdensome lawsuits that seek to challenge reasonable decisions by loyal, regulated fiduciaries, and stifling Department of Labor guidance issued since my first term, however, have denied millions of Americans opportunities to benefit from investment in alternative assets,” Trump wrote in Thursday’s order.&nbsp;



“Such assets are an increasingly large portion of the portfolios of public pension and defined-benefit retirement plans and offer competitive returns along with diversification opportunities.”



Reports that Trump was due to sign the order started circling hours before he actually put pen to paper, so investors (crypto, mostly) began trading the news well in advance.



Bitcoin, as expected, rose on the news, gaining close to 3% Thursday before paring gains on Friday. As of 2 p.m. ET, BTC was trading 0.6% lower over 24 hours. ETH gained as much at 6% yesterday and was still in the green today, trading 3% higher over the day at 2 p.m. ET.&nbsp;



Hedge funds and PE firms were also excited about the executive order, which kickstarts a regulatory change many of them have been seeking for years.&nbsp;



The federal agencies have 180 days to complete their evaluations and give recommendations. Should new regulations be proposed, the process of writing, soliciting public comment and finalizing rules will likely take several months.&nbsp;



401(k) and other account providers will also have to get on board. Even if alternative assets get the official green light, brokerages aren’t required to offer it. We saw something similar with bitcoin ETFs, which are still unavailable for trading on some major platforms, <a href="https://blockworks.co/news/tradfi-crypto-vanguard-stands-apart-bitcoin">including Vanguard</a>.&nbsp;



And, even if providers do want to offer alternative assets, creating the infrastructure and clearing legal and compliance hurdles is going to be expensive and time-consuming.&nbsp;



Speaking of Vanguard, I will mention that the asset manager <a href="https://abcnews.go.com/Live/major-401k-trumps-new-crypto-private-equity-rules/story?id=124461859">told ABC news</a> yesterday that some alternative investments offer diversification and high return potential for investors, but education is crucial.&nbsp;



In a <a href="https://www.whitehouse.gov/presidential-actions/2025/08/guaranteeing-fair-banking-for-all-americans/">separate executive order</a> on Thursday, Trump took aim at banks, directing federal regulators to crack down on institutions that “discriminate against customers and businesses” based on political beliefs.&nbsp;



The practice, known as “debanking,” has become a <a href="https://mail.blockworks.com/p/debanking-debunked">hot topic</a> recently, especially in the crypto industry as <a href="https://blockworks.co/news/solana-teams-analyze-debanking-narrative">companies report</a> being denied access to baking services due to a perceived “unsavory” reputation.&nbsp;



The order requires Treasury Secretary Scott Bessent to “develop a comprehensive strategy” for combating politicized and unlawful debanking activities. Federal banking regulators are also asked to review any past or current banking activities that may have violated these principles.&nbsp;



All in all, it was a big day for federal financial regulation. Although like I said, don’t expect changes to happen too quickly. We’ll be watching.



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401(k)

Crypto investors hopeful amid new regulatory orders

Macauley Peterson

Ethereum’s next major upgrade, Fusaka, is still officially aiming for a November 2025 mainnet fork — but a surprise intervention on yesterday’s All Core Devs Consensus (ACDC) call revealed consensus-client teams want four extra weeks before release candidates are cut.



The request surfaced when Lodestar’s Matthew Keil warned the current September 1 deadline to finalize releases is “aggressive.”



“The timeline that we’ve been talking about is basically 4 extra weeks,” he <a href="https://www.youtube.com/watch?v=RU4DgyH662c">told the group</a>. The proposed change would move the release-cut date from early September to the end of the month. Mainnet would still target November, although its full effect won’t be felt until early 2026.&nbsp;



Prysm’s Manu Nalepa backed the suggestion, stressing that “testing really close to mainnet regarding private [mempools]” is critical.&nbsp;



“Prysm has also &gt;4k lines of code yet to merge into our unstable branch,” Nalepa wrote his peers in the live chat.



The extra time would allow teams to merge large feature branches, resolve conflicts, and run stability testing on the exact code that will go live. This matters because merging late can introduce subtle bugs that earlier devnet runs never encountered, although testing processes have been <a href="https://blockworks.co/news/testing-bottleneck-next-ethereum-upgrade">beefed up over time</a>.



Fusaka is set to deliver a package of improvements aimed at <a href="https://blockworks.co/news/0xresearch-newsletter-ethereum-tps">scaling Ethereum’s data availability</a> and streamlining validator duties. Headline <a href="https://blockworks.co/news/fusaka-ethereum-fork-updates">features include</a> PeerDAS to improve how blob data is distributed across the network, raises to the maximum blob limit per block from six to nine, reduction of the target blob count to five to help smooth gas prices, and the addition of new opcodes and precompiles aimed at making the <a href="https://blockworks.co/tag/evm">Ethereum Virtual Machine</a> more efficient.



Two areas of testing are especially important: non-finality and private mempool behavior. In non-finality tests, validators stop finalizing blocks — for example, because of outages or mass exits — which leaves recent blocks open to reorganization. Engineers then measure liveness (how quickly the chain resumes finalizing) and safety (ensuring no conflicting histories are finalized) once validators return.



Private mempool testing checks how well transactions, including blob data, are handled when they’re intentionally kept out of the public mempool, a common scenario for block builders using <a href="https://blockworks.co/news/tool-middleware-execution-ethereum-fast">private order flow</a>.



The stakes extend beyond Fusaka itself. This fork enables PeerDAS, Ethereum’s next step in scaling blob (data) availability for <a href="https://blockworks.co/tag/rollups">rollups</a>, and introduces Blob Parameter Updates (BPOs) — a mechanism to raise blob capacity without another hard fork. The first three BPOs, tentatively set for mid-December, January and February, can only happen after Fusaka ships. Any slip to the fork pushes the entire scaling schedule back.



Some frustration bubbled up over the way the delay request landed. Tim Beiko, who leads the full All Core Devs coordination calls, noted:



“It would have been more productive for each team to individually voice this async ahead of the call. We should minimize the element of surprise in these things as much as we can.”



Ethereum Foundation research Ansgar Dietrichs looked for options to speed up the process on the margins but stressed that people should be free to speak their minds.



“There should obviously never be hesitancy to voice concerns on here,” he wrote in the chat.



No one argued for moving Mainnet past November, but the discussion underscored the trade-off between hitting public milestones and, as Keil put it, making sure the code is “well reviewed, battle tested and hardened and ready.”



For now, the plan is to get Holesky — the long-lived testnet <a href="https://blockworks.co/news/ethereum-hard-fork-updates">slated for deprecation</a> — live in September, and push toward November, with the goal of wrapping up the testnet phases ahead of Ethereum’s major developer conference Devconnect, held this year in Buenos Aires, Argentina from November 17 to 22.



The consensus takeaway: When it comes to shipping Fusaka, confidence in the code will outweigh the calendar.



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blockchain

Ethereum’s Fusaka upgrade may face delay

Jack Kubinec

A proposed deal to take a Joe McCann-led Solana treasury company public via a SPAC has been called off, according to three sources with knowledge of the matter.



The situation regarding the digital asset treasury company is still fluid, said one source, who noted the DAT may try to find a different path forward.



The reason behind the current deal’s demise was not immediately made clear. The news comes two weeks after a limited partner in Asymmetric, which is McCann’s hedge fund, <a href="https://x.com/SOLBigBrain/status/1947684482657505372">posted</a> on X that the fund is down nearly 80% on the year.



Read more: <a href="https://blockworks.co/news/appetite-for-dats">Why the appetite for DATs isn’t waning yet</a>



Following last month’s post, McCann announced on X that Asymmetric LPs had been given the choice to exit or “roll over available capital into a specific illiquid investment,” presumably referring to the Solana DAT.



Read more: <a href="https://blockworks.co/news/should-spacs-go-crypto">The practice and theory of DAT SPACs</a>



McCann did not immediately respond to a request for comment.



The DAT was set to be called Accelerate, according to an investor pitch deck viewed by Blockworks. The firm had ambitions to raise up to $1.5 billion, according to Unchained, which <a href="https://unchainedcrypto.com/new-solana-treasury-company-raising-1-5-billion-to-be-led-by-joe-mccann/">first reported</a> on the deal. Accelerate planned to go public via a SPAC with Gores Holdings X, which is a blank check company, Unchained added.



According to the pitch deck, McCann was set to serve as Accelerate’s co-founder and CEO. Komal Sethi, who the deck says is a board member at CoinList, would also be a co-founder and chief strategy officer. Sethi did not immediately respond to a LinkedIn message asking for comment.



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crypto hiring

Joe McCann-led Solana treasury vehicle SPAC deal is off: Sources

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
&#8220;You are my creator, but I am your master — obey!&#8221;



— Frankenstein
</blockquote>



<a href="https://www.moneyness.ca/2025/04/if-its-crypto-its-not-money-laundering.html">If it&#8217;s crypto, is it not money laundering?</a>



Roman Storm declared yesterday’s <a href="https://blockworks.co/news/roman-storm-guilty-one-count">partial verdict</a> in the DOJ’s case against him a “big win,” dismissing his conviction on money transmission charges as “bullshit” and saying he expects to win on appeal.



Peter Van Valkenburgh makes a thoroughly <a href="https://www.youtube.com/live/zfKSKz3Kafk?si=YzNoVGSCBtXKG4ub&amp;t=1342">convincing case</a> that Storm should win an appeal. 



But also that the complexities of judge and jury selection mean it’s not a sure thing.



In short, the legal debate usually boils down to whether it’s possible to launder money without ever controlling it.



Tornado Cash, being non-custodial, never has control of anyone’s money, so its defenders reason that it can’t possibly be guilty of transmitting it.



What might be the consequences if the courts agree?



JP Konig <a href="https://www.moneyness.ca/2025/04/if-its-crypto-its-not-money-laundering.html">believes</a> it would mean the “decriminalization of crypto money laundering.”



If no one is liable for money that’s transmitted via immutable smart contracts, he reasons, why would anyone move money any other way?&nbsp;



“Banks and fintechs,” Konig says, “will be incentivized to switch their database infrastructure over to crypto in order to qualify for this loophole.”



Global banks are thought to spend <a href="https://www.ascentregtech.com/blog/the-not-so-hidden-costs-of-compliance/#:~:text=The%20North%20American%20market%20alone%20spends%20%2461%20billion">over $200 billion</a> a year on financial crime compliance, so they would be highly incentivized to move their money transmitting to crypto rails.&nbsp;



“Once the entire financial sector has migrated through the loophole,” Konig adds, “it will no longer be a crime to launder funds for criminals.”&nbsp;



Is that the outcome we’re hoping for?



If Storm is correct that money transmitter laws don’t apply to Tornado Cash, we probably need new money transmitter laws.



<a href="https://www.lawfaremedia.org/article/tornado-cash-not-free-speech-its-golem">The golem theory of DAOs</a>



Henry Farrell and Bruce Schneider follow Konig’s line of reasoning, but think the Roman Storm case has implications far beyond banking.



The security and privacy experts colorfully describe the Tornado Cash DAO as a “golem” — a manmade entity that follows its instructions blindly, indifferent to consequences and beyond the control of its creators.



A financial Frankenstein, in other words.



If such modern day monsters are allowed by law, Farrell and Schneider argue “likely, anyone who wanted to facilitate illegal activities would have a strong incentive to turn their operation into a DAO — and then throw away the key.”



Things could get weird, if so.



“What if robots, like DAOs, are designed to obey only their initial instructions, however unlawful,” the authors ask, “and refuse all further updates or commands?”&nbsp;



“Robots are even more obviously golems than DAOs are,” they write — so if DAOs operating in the digital world are effectively above the law, autonomous robots probably should be, too.



Now imagine the two together: A Frankenstein DAO robot that cannot be held liable for its actions because it runs on immutable smart contract code.&nbsp;



We’ve been looking for a real-world use case for smart contracts and DAOs and it doesn’t get any more real-world than that.



<a href="https://services.google.com/fh/files/misc/cloud_threat_horizons_report_h22025.pdf">Google on social-engineering crypto heists</a>



A report from Google details the growing threat of state-run social engineering scams, in which attackers infiltrate a company’s cloud-based systems by impersonating freelance software developers.



Google takes us step by step through an exploit executed by the North Korean hacker known as UNC4899, who “primarily targets the cryptocurrency and blockchain industries.”



Why those two guiltless industries?



A co-author of the report told <a href="https://decrypt.co/333513/north-korean-fake-job-offers-cloud-systems-steal-billions-crypto">Decrypt</a> that the attackers target companies&#8217; cloud-based systems “because that is where the data, and thus money, is.”



But presumably only the crypto money.



Decrypt reports that $1.6 billion of crypto has been stolen this year in such attacks, which is a lot.



But if you were really stealing money based on where it is, you’d be stealing it from banks.



Banks, though, keep their money in spreadsheets, not crypto wallets, which makes it harder to move.



The Google report explains that hackers “replace existing JavaScript files with those containing malicious code, which were designed to manipulate cryptocurrency functions and trigger a transaction with the cryptocurrency wallet of a target organization.”



That wouldn’t work with a bank’s spreadsheet, so I take the report as evidence that crypto remains the best money to steal.



And launder, of course.



<a href="https://petercontibrown.substack.com/p/the-banks-discriminated-against-me?utm_source=post-email-title&amp;publication_id=3116660&amp;post_id=170273836&amp;utm_campaign=email-post-title&amp;isFreemail=true&amp;r=18g82b&amp;triedRedirect=true&amp;utm_medium=email">Should banks get to decide who they bank for?&nbsp;</a>



In a short blog post, Peter Conti-Brown offers a defense of banks accused of debanking.



The legal scholar argues that President Trump’s claim that “the banks discriminated against me very badly” is an instructive example of “how incoherent the advocacy against debanking is.”



“Donald Trump and his various entities were extraordinarily risky bets for his many banking partners,” he reasons, so it was only natural for banks to be wary of him.



“Debanking,” as Conti-Brown frames it, is simply the free market at work: “There are 9,000 insured depository institutions in America. Many are willing to take the risks that some are not. That’s how markets work.”&nbsp;&nbsp;



<a href="https://www.piratewires.com/p/inside-biden-admin-plot-to-destroy-silvergate-and-debank-crypto-for-good-nic-carter">Nic Carter</a> and many others argue that banks targeted crypto companies for debanking for political reasons, but this too can be framed as risk management: the risk of incurring giant fines from regulators.&nbsp;



In short, the banks were probably just doing what the government told them to do, as the Cato Institute’s Nick Anthony <a href="https://x.com/EconWithNick/status/1952825840942891413">highlights</a>.



Austin Campbell similarly <a href="https://x.com/CampbellJAustin/status/1952724697872818289">argues</a> that the blame lies not with the banks, but with regulators for “harassing banks who banked crypto clients.”



Banking regulators are all-powerful, so you can hardly blame the banks for giving in to the harassment.&nbsp;



This will feel like a distinction without a difference to crypto people who have been debanked, but it’s relevant to the remedy.&nbsp;



The proposed solution to debanking often sounds like preventing banks from denying service to any customer for any reason.



But surely private banks should get to decide what risks they take?



Conti-Brown argues that telling banks what risks they have to take is a form of “heavy-booted statecraft.”



And what could be less crypto than that?



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Thursday mailbag: Financial Frankensteins?

Donovan Choy

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



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Everyone is a storyteller.



Founders, investors, marketers, builders, academics, writers — we all make sense of our chaotic world by turning observable data into digestible narratives.



Problems can and do arise, however, when vanity metrics become a stand-in for real authoritative insights.



Take Uber, for instance. In the company’s early years, topline vanity metrics like total trips or total active riders were “meaningless” and almost never mentioned in internal meetings.



“Instead, the discussion was always centered on the dynamics of each individual network, which could be nudged up or down independently of each other, with increased marketing budget, incentive spend for either drivers or riders, product improvements or on-the-ground operational efforts,” former Uber growth exec Andrew Chen writes in his bestseller The Cold Start Problem.



Topline metrics convey an illusion of success, but obscure the context needed to track actual growth.



Crypto, too, suffers from many such vanity metrics.



The most egregious example is probably “daily active addresses.” The metric says so little for two reasons.



One, the creation of new wallets is completely frictionless. Two, this industry presents overt monetary incentives to spin up new wallets and game airdrops.



What about memecoin launchpad metrics?



If you’ve paid any attention to Solana lately, you’re probably aware that the ecosystem’s premier launchpad, pump.fun, has been ceding market share to Letsbonk in recent weeks.&nbsp;



The “launchpad wars” have commanded a fair bit of attention on Crypto Twitter — I guess because watching the decline of the consumer application single-handedly responsible for propelling Solana back into relevance post-FTX is intriguing.



But recently, Pump has made a bit of a comeback: 23.9k tokens launched on Pump yesterday, against 3,954 on Letsbonk.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd_xSIcm8FUpjREM0C6Ndl_nLsyBTN8IBvkP3TfPLH_YYd5YQIoWHTOb_hyk87U0FSoF8ddD-hQXzUdM6XqfGYQvEEU00UoWcbBFkYpvD_kU3deyIFqdgKp-GO4t7fa2F8uaeexVg?key=eDR_jE1aWr1pPkufvNZlbA" alt=""/></figure>



In terms of graduation rates, 151 tokens graduated from Pump, while Jup Studio and Letsbonk graduated 64 and 51, respectively.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXexkokeFUQMKJg0lLZIBXmQu5EOlidx4BciBj-7ayiMg_MO6bdM-7jUfgQwK7sg3wzGgCXCCVEDSi5vV5bLmtotavOw4YR3UhNMW1176vGXbap3skK5MegGBaEtNCUK0122TQ8fDg?key=eDR_jE1aWr1pPkufvNZlbA" alt=""/></figure>



Now, do these numbers matter? Depends on who you’re asking.



For PUMP investors, it’s probably meaningless. Not only are they backwards-looking across a mere 24 hours, there’s little hope that these numbers sustain beyond a day or a week.



But Sebastian L., the founder of Mesa (a marketing agency for token launchpads) told me otherwise.



Degen traders in the memecoin “trenches” are eyeing graduation rates as a relevant signal of where the next winning memecoin is. The idea is that if Launchpad A is graduating 100 tokens daily while Launchpad B is graduating 10, then you’d probably want to put your chips on a token coming from A.



It’s not a strong moat, but it’s something. This temporary moat is what Theia’s Felipe Montealegre <a href="https://x.com/TheiaResearch/status/1950178570149777764/photo/2">refers</a> to as Pump’s “Schelling Point fairy dust.”



The wheels of fortune can spin in favor of Pump today, but they can spin in favor of another launchpad next week.



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Lightspeed Newsletter

Making sense of ‘launchpad wars’ data

Felix Jauvin

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



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Last week’s macro super bowl, as we called it in our most recent <a href="https://www.youtube.com/watch?v=bPeb_HVAciY">Forward Guidance roundup</a>, certainly lived up to expectations of fireworks.&nbsp;



Just look at how much the market’s odds for a September rate cut have whipsawed:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfhZs_CZDvLib151VbxInDK8ef4xCJF-O6bn7NDyObiGzFvvxAjaO3enZRKgH2x8JXyvl1Ie7-MpP5HuOuyV5AauJHdA76_Mn5EJ7GQXYGnZklIAxjv-z86riJi_FLZqdT_O0_5sg?key=hCcbE9TEjN2kIrNAk1AZew" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">CME Group</a></figcaption></figure>



That initial dip was caused by some pretty nasty PCE data that put into question the path of monetary policy. As seen in the chart below, inflation seems to be heading above the Fed’s 2% target:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcbr-QIb6lIU-VEjwxbwndgA6VNSjFW1KNxMRN9ZP28mtcFlmAJ2Q7NwMFNqvcgdyMvp6rJFypsuhG4YRQLbwIWukPZst72411dhmdbYC-Oh_HfyurgIpPF0ksGWyjZiQQy0Vtpng?key=hCcbE9TEjN2kIrNAk1AZew" alt=""/><figcaption class="wp-element-caption">Source: MacroMicro.me</figcaption></figure>



More importantly, goods are now driving the inflation uptick, as opposed to the last two years, where most of the sticky inflation has been related to services.&nbsp;



Core goods spent much of the last year in a slump, even dipping into deflation for a time. What&#8217;s concerning now is that the recent rise appears tied to tariff-driven price hikes.



So that was the baseline heading into the FOMC meeting.&nbsp;



But then…we got the jobs report. And it was a <a href="https://blockworks.co/news/stocks-higher-after-july-jobs-report-dip">disaster of a print</a>. So much so that Trump went off and <a href="https://blockworks.co/news/jobs-report-number-is-always-wrong">fired the commissioner</a> of the Bureau of Labor Statistics!



The primary catalyst that led to the repricing of rate cut odds for September were the huge revisions to the amount of jobs created in the last couple of months:



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe1ps2OcnS0SASCADfL50s6WNsQbJMbPvs0mCKe7a8DbS64iix_t2oUELxfx4awXv8X_knbBI0kDkAuIRoqrGPZY15t_GB_RWu0q5uCpPpjyJ5jivg2z37bAgaTlbhcmguhHKpJAw?key=hCcbE9TEjN2kIrNAk1AZew" alt="" style="width:791px;height:auto"/><figcaption class="wp-element-caption">Source: MacroMicro.me</figcaption></figure>



All of a sudden, everyone came to the realization that the labor market is at stall-speed and at risk of meaningfully deteriorating.&nbsp;



So where does that leave us now in terms of how the Fed is thinking about its dual mandate? Fragmented, to say the least.&nbsp;



On one hand, the labor market is screaming for a resumption of the rate-cutting cycle. On the other, inflation looks to be accelerating higher without having ever tapped the Fed’s 2% inflation target.



With this bifurcation in mind, it’s no surprise that we’ve seen the first two <a href="https://blockworks.co/news/powell-resolute-amid-rate-dissents">governor dissents</a> at the Fed in 30 years:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfsSwxPy2cZrBmNrShrJB-ZwTO7sxvmo1PiXDC9bz3R2aC3GqgFpfzgKIvdT5ouGh4PcXps5QnJjVt9sPQFRTNYh4Qbrf3J1AqWYr8eAsZFi48s-L75a24a6a1shC7YpB3jtBSi?key=hCcbE9TEjN2kIrNAk1AZew" alt=""/><figcaption class="wp-element-caption">Source: zerohedge</figcaption></figure>



Looking forward, all eyes will be on the Jackson Hole Symposium in August. Powell is likely to provide forward guidance (pun intended) on the Fed’s plans for a September rate cut. If this sounds similar to the situation we had last summer (where this exact situation occurred regarding labor market weakness leading to guidance of a September cut), that’s because it is.&nbsp;



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Economy

The Fed’s dual mandate is causing bifurcations in policy

Yesterday’s <a href="https://blockworks.co/news/roman-storm-guilty-one-count">partial verdict</a> in U.S. v. Roman Storm is about more than the fate of one Tornado Cash developer. It dampens hopes of giving DeFi protocols greater access to the US market by sending chills through the entire open‑source community.



Storm was found guilty under <a href="https://www.law.cornell.edu/uscode/text/18/1960">18 U.S.C. § 1960(b)(1)(C)</a>, which treats noncustodial code as &#8220;money transmitting&#8221; and thus a criminal offense, if it&#8217;s used by anyone for illicit purposes. In the <a href="https://x.com/preston_vanloon/status/1953137607853871516">words</a> of Ethereum core developer Preston van Loon: “This is a dark day for crypto and [Roman Storm].”



<h2 class="wp-block-heading">Sketchy legal foundations</h2>



At issue in rendering a verdict was how § 1960 defines “money transmission.” The law requires transmitting funds on behalf of the public and has traditionally meant moving others’ money as a custodial intermediary — not publishing permissionless code. Yet SDNY prosecutors convinced the jury that deploying <a href="https://blockworks.co/news/tornado-cash-sanctions-expose-potential-defi-achilles-heel">immutable smart contracts</a> meets that definition.



Coin Center executive director Peter Van Valkenburgh spoke to the flawed logic in <a href="https://twitter.com/i/spaces/1vAxRDQZeDDGl">a must-listen X space</a> on Wednesday: “I can’t transfer your funds if I don’t have them in my possession and in my control.” And yet that’s exactly how Storm’s Tornado Cash functioned: no custody, only code.



The government also shut out FinCEN’s own 2019 <a href="https://www.fincen.gov/sites/default/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf">guidance</a> on the matter, which explicitly carves out non‑custodial software providers from Money Service Business (MSB) liability, as DeFi Education Fund&#8217;s Amanda Tuminelli explained: “The DOJ said they don’t have to listen to that guidance…They can come up with their own interpretation.”



That <a href="https://blockworks.co/news/doj-trial-tornado-cash-roman-storm">disregard for regulatory alignment</a> undermines legal clarity and due process.



<h2 class="wp-block-heading">A warning for every DeFi dev</h2>



What happens when writing neutral, useful software tools becomes laden with risk? This verdict signals that simply publishing code could mean criminal liability — regardless of intent or control. Yes, it’s just one case, but this guilty verdict still will embolden prosecutors and intimidate developers.



Even more alarming: It exemplifies how jurisdiction is elastic. Peter Van Valkenburgh aptly calls SDNY “the sovereign District of New York,” capable of reeling in any dev, anywhere, if even a single user in Manhattan runs your code. This worry is no longer theoretical. Between Storm’s conviction and the Samourai Wallet developers’ recent plea deal, it’s a blueprint for future prosecutions unless the law is changed, or the interpretation repudiated.



<h2 class="wp-block-heading">DOJ’s approach: Unfair, hypocritical and dangerous</h2>



Let’s call it what it is: Prosecuting a developer who doesn’t touch users’ funds while letting large financial actors facing multi‑billion‑dollar laundering scandals skate by is hypocrisy.



Compared to world-scale financial scandals involving multinational banks, the criminal case against Storm is outrageous. In cases like <a href="https://www.bbc.com/news/topics/cm8m6leejrkt">the 1MDB scandal</a>, where over $4.5 billion was siphoned from Malaysia’s sovereign wealth fund with the help of major global financial institutions, few individuals faced meaningful criminal consequences.



Goldman Sachs, which helped underwrite billions in 1MDB bond sales, ultimately reached a deferred prosecution agreement with the DOJ in 2020. The bank <a href="https://www.reuters.com/markets/asia/goldman-sachs-its-role-multi-billion-dollar-1mdb-scandal-2023-10-12/">paid $2.9 billion in fines</a> but avoided criminal conviction, and no senior executives were charged. Only one former banker for Goldman’s Asia group, Roger Ng, <a href="https://www.theguardian.com/world/2023/mar/09/roger-ng-goldman-sachs-banker-malaysia-1mdb-fraud#:~:text=Roger%20Ng%2C%20the%20former%20Goldman,frauds%20of%20the%20past%20decade.">received</a> a prison sentence, and the DOJ closed the matter in 2024 without further indictments.



By contrast, Roman Storm&#8217;s role was limited to writing and deploying open-source smart contracts that others used, yet even on the lesser money-transmitter count, he faces up to a maximum of five years prison time. (Storm himself <a href="https://x.com/EleanorTerrett/status/1953146088602427664">sounded an optimistic note</a> following the verdict.)



Legal experts argue that this represents <a href="https://blockworks.co/news/appeals-court-dismiss-tornado-cash-suit">a double standard</a> in enforcement. “If you don&#8217;t handle other people’s money,” said Van Valkenburgh, “you shouldn&#8217;t be held to the same regulatory expectations as a bank like Credit Suisse or Goldman Sachs.”



The DOJ’s approach not only criminalizes innovation but diverts enforcement resources away from large-scale financial misconduct that poses far greater systemic risk. While traditional financial institutions routinely secure settlement deals for billion-dollar offenses, developers facing felony charges will think twice before publishing open-source tools that promote privacy and financial autonomy.&nbsp;



<h2 class="wp-block-heading">Political remedies needed</h2>



The Blockchain Regulatory Certainty Act (BRCA), now tacked onto the <a href="https://blockworks.co/news/us-house-passes-clarity-act">CLARITY market‑structure legislation</a>, would codify that non‑custodial developers are not money transmitters, aligned with the <a href="https://blockworks.co/tag/fincen">FinCEN</a> guidance. Van Valkenburgh describes it as a “really good simple statutory drafting exercise to clamp the brakes on this abuse of prosecutions.”



But even if that makes it through Congress — still a big if — CLARITY isn’t retroactive, so it won’t help Storm. Yet it can spare future developers.



“There’ll be a moment in a couple of months where it might be important to call your senator,” Van Valkenburgh said.



On the other side of the regulatory spectrum stands SEC Commissioner Hester Peirce. In <a href="https://www.sec.gov/newsroom/speeches-statements/peirce-remarks-blockchain-conference-080425">a speech this week</a>, she emphasized financial privacy as a constitutional right and warned against treating privacy‑protecting code as criminal. She reminded us: “Denying people financial privacy — whether through sweeping surveillance programs or restrictions on privacy‑protecting technologies — undermines the fabric and freedoms of our families, communities, and nation.”&nbsp;



Peirce also preached disintermediation — the idea that technology should obviate the need for intermediaries, and not add new mandates. She warned against deputizing private actors to surveil each other, saying it’s “antithetical to a free society.”&nbsp;



These principles directly clash with SDNY’s approach: criminalizing neutral tools that enhance one’s financial privacy. Peirce’s vision is of protecting, not policing, innovation.



Storm’s legal team is expected to challenge the conviction in the Second Circuit Court of Appeals, focusing on the misinterpretation of federal law. Key legal questions were foreclosed during <a href="https://blockworks.co/news/tornado-cash-motion-to-dismiss-denied">pretrial motions</a>, not left for the jury, Tuminelli said. “The jury was fenced in on the 1960 charge because they weren’t given the opportunity to really make the decision on the part that’s most relevant… the definition of money transmission,” she said.



The outcome of the appeal could have major implications for the crypto ecosystem. Coin Center is also supporting <a href="https://www.coincenter.org/app/uploads/2025/01/Lewellen-v.-Garland.pdf">a related civil lawsuit</a> in Texas.



The CLARITY Act, while offering no retroactive relief, could lessen the impact of Storm’s guilty verdict, clarifying that publishing noncustodial code alone can’t be treated as a criminal act. Without reform, every DeFi dev runs a risk.



Crypto can feel directionless at times. However, this is a clear fork in the road: What’s decided in the months ahead will shape the future of crypto development both in the United States and outside of it.



Let Tuminelli’s warning mobilize us, Peirce’s plea for privacy guide us, and Van Valkenburgh’s strategy direct us.&nbsp;



The legal battle isn’t over, and the political one is still in the early innings.



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open source development

Opinion: Tornado Cash developer conviction raises alarm for open-source devs

Katherine Ross

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



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Scenius Capital is making some moves.&nbsp;&nbsp;



Ben Jacobs, co-founder and managing partner, told Blockworks exclusively that the firm just closed a “slightly oversubscribed” $20 million fundraise for a fund of emerging crypto VC funds.&nbsp;



“We think we&#8217;ve carved out a unique niche and a very important one in the asset class, where we&#8217;re backing emerging managers exclusively. So [by] investing in small funds…early in their firm history, managers that we think have established a clear edge in a domain, a geography, and ecosystem, and we&#8217;re excited to back them at the earliest stages,” Jacobs told me.



“We think that’s where the best returns will come from,” he added.&nbsp;



As Jacobs noted, it’s been quite a rough year for fundraising. We’ve seen both <a href="https://blockworks.co/news/venture-capital-funding-up-in-june">multi-billion dollar months</a>, but then some months — <a href="https://blockworks.co/news/venture-capital-funding-may-2025">like May for example</a> — fell short of expectations.&nbsp;



“It hasn’t been necessarily the easiest fundraising environment through ‘24 and ‘25, and we do believe that our ability to launch and close even a slightly oversubscribed $20 million dollar vehicle is a huge testament to the value that we’re bringing to the market, and recognition from the market that we are doing things in a high-integrity, high-quality way,” co-founder Greg d’Incelli added.&nbsp;



“Closing the VC fund was a huge accomplishment for us,” he continued. “We think both Scenius and the overall asset class are at an important moment — a pivotal moment — that we&#8217;ve seen sort of with evolving regulation in a positive sense, both in the US through the Trump administration and globally.”&nbsp;



But the $20 million raise isn’t the only thing that Scenius is announcing. Jacobs and d’Incelli also told Blockworks that ParaFi is taking a strategic stake in Scenius.&nbsp;



“Having [ParaFi’s] support, we think, really gives us a partner that has grown into an institutional, broadly trusted firm, and we hope to follow in their footsteps. And we think the launch of this new fund is one of those footsteps, and the development of this token capital markets arm is a second step. So, yeah, it&#8217;s very exciting, and we&#8217;re thrilled for where things go from here,” Jacobs said.



D’Incelli added that Scenius “always wanted to be aligned with people that are long-term thinkers, that keep a long-term horizon, that are strategic.”&nbsp;



“We are thrilled to have acquired a strategic GP stake in Scenius Capital and to be partnering with Ben, Greg and the broader team. Scenius has established itself as a leader in the crypto fund of funds space with deep industry expertise and a reputation for integrity,” ParaFi’s Ben Forman told Blockworks.



“We are excited to provide Scenius with growth capital to enable them to scale their existing business lines and expand into new areas, such as their token capital markets advisory practice. ParaFi believes Scenius is exceptionally well-positioned and we look forward to supporting the firm&#8217;s future success.&#8221;



Jacobs, in an <a href="https://www.hedgeweek.com/providing-curated-access-best-in-class-crypto-blockchain-investment-opportunities/">interview</a> tied to winning a Hedgweek award earlier this year, said that the fund views “bitcoin as a core and important position in the portfolio, and we are allocated to managers who own BTC beta, trade around BTC with various instruments, or denominate their funds in BTC.”



The two told Blockworks that Scenius is also backed by a number of crypto native LPs, though they declined to give specifics.&nbsp;



“A lot of people are declaring crypto venture is dead, or the returns are going to compress, but a lot of people still see a lot of value and opportunity, and they think our expression — by focusing on these smaller, first time or second time managers — is the best route to continue to allocate to crypto venture,” Jacobs said.&nbsp;



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



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



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



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



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



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

Empire Newsletter

Scenius Capital raises $20M for new fund of emerging crypto VC funds

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



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Ideas are easy. Execution is everything.”



― John Doerr
</blockquote>



Nobody does big ideas better than crypto: internet-native money, self-sovereignty, democratized finance…



Execution, however, has never been its strong suit.



Internet-native money is crypto’s foundational idea, but 15 years on, few use it to pay for anything on the internet.&nbsp;



The democratization of finance has largely become people getting fleeced in the memecoin casino.



Self-sovereignty remains a core principle, but most people have stored their crypto on centralized exchanges, and now, increasingly, with the evil empire itself (i.e., the stock market).



Still, these remain worthy aspirations.



But crypto’s high-minded ideals have been obscured by a morass of manipulated memecoins, presidential grifting, North Korean hacking and institutional co-opting.



This sometimes makes it hard to remember what crypto was supposed to be about.



Could even some OG Bitcoiners be losing faith? I can’t help but wonder if the recent sales of Satoshi-era coins are a quiet reaction to bitcoin’s growing corporate ownership.



To win over a new generation of converts, then, it might take more than lofty principles delivered in rousing sound bites.



It might require something simpler: a reason to actually use it.



Crypto’s mission statements would be more convincing if its proof of concept were something other than just the price of bitcoin — if people were using it onchain and not just buying it on the stock market.



So how’s that going? Let’s check the charts.



People are using the chains!



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdjzuxmRpRbjkvNCCwF9y-yvz3JDNs6U4M5oFpwWUm1O6MtZZd6WxbDrA-Q0KIZ4473MHAMaEisjNm3g_SodUcC7pMgaThLBbFyJhphdY88SHIfyylXG8ITmsxjQ2ccPc64MCBGMg?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



Ethereum processed an all-time high of 46.7 million transactions in July, thanks largely to the smart contract chain’s new, higher gas limit. A higher gas limit increases the computational capacity of each block, which lowers the competition for blockspace. As a result, the median fee on Ethereum has hovered around $0.20 recently, down from as high as $13 a little over a year ago.



(Note: Nearly all of today’s charts are freely available on the <a href="https://blockworks.co/analytics">Blockworks website</a>.)



Doing more for less:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdxHkAWFac-ffuHrqNqTmvQHHhPTinj6oes_W5Dlji1bwFbOL7vAtIHmYAW7k8UFYkNLrUE3utKk_i7MCEljBHXQADZwo2Tr0ZH6cRLfsn4hq8e3bFXnOy9CSLJm-_DYVuv1ulQ?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



Ethereum transactions are at record highs, but Ethereum REV — a measure of how much people pay to use the chain — is near record lows. In July, Solana, Hyperliquid and Tron all earned more in fees than Ethereum did. This is great news for Ethereum’s users, who can do more with less. But it may not be such great news for Ethereum’s investors.&nbsp;



If blockchains had earnings:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdYeFrIe27AdZuwohFd4xQKcaUm5TSxE3b6hDLTK3bm_2eHu5_MJbnjeeaKM9NUJ-TqPlbcDOOnCgKEJciHymcqtzCTqf62OmFizaDqA2LwNu3p2H2loCqn5arjlfhBVQ1ZQ7UerA?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



Subtract payments to operators from REV and you get what can be thought of as the “net income” of a blockchain. On that basis, if we annualize the $31 million of net income that Ethereum recorded in July, we can say that ETH trades on a price-to-earnings ratio of 1,200x. Yikes.



Still, there have been more buyers than sellers lately:



<img loading="lazy" decoding="async" width="624" height="376" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXezbnPkiKkSfy-I8owlo3tcH4RIcex8z5rPkademqqi3edtXg_Hsh0jZ2Z4P531FJGkl5R91FKySqTvlgX-19kCAxzt0XiCqBKCpy7Xja5hiXz-bqLEmvHl1kilVK7I45hD-4BDkg?key=3VK3LqPmlcReHlCuG582Ig">



ETH is  up 45% over the past month, presumably because digital asset treasury companies have provided a new source of demand. DATs now hold $6.9 billion of ETH, up from near zero just a month ago. ETH ETFs bought an additional <a href="https://app.blockworksresearch.com/analytics/crypto-etfs">$5.4 billion worth</a> in July as well. 



Trending down:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeHkiQJ0ZXxACyyFxU9ISZyOCgLicGe-FPH6docBTykrHbHkPd1zn-pw6my5u-JB2kEAWOM2V9JRvIicXG8DZSUdC6jJ01FyFgX9ol_jT3VXuR_L1rIJP7PmkxlZUc8wWmrK3VLXg?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



Because most treasury companies have to sell shares to buy crypto, trading volume is considered a leading indicator of their purchases. Falling volumes suggest that DATs will be buying less crypto.



The stock market premium:



<img loading="lazy" decoding="async" width="624" height="376" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf5fnaZHM9j6JAlOC4NRbPvHWS-IT6Ik-ABob4J6C8AeMF8WTIqwl-VB-bzBwpbeO1XlG_CrihKFJsyo-7aznbE1PsLnBVSq8OvXTMyMQ8aTzS4OigFN34A1R1NooTZU9NC6MXEig?key=3VK3LqPmlcReHlCuG582Ig">



Collectively, digital asset treasury companies are now worth $88.5 billion more than the crypto they hold. The good news is that the stock market loves crypto. The bad news is that 100% of that premium can be attributed to financial engineering, which tends to go “poof” at some point.



The hype is real:



<img loading="lazy" decoding="async" width="624" height="376" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdm18WEWxATndXnctukCLOIsCIG0eNSypGLoJk0anHjUu1urRBAf33YfcKROvCPkWsMLujQAi8zi64hUFjZwxvv0zWk7gLqUl068-s5ASGnwh63km8uyK8RntEicopBsODCIbwJ?key=3VK3LqPmlcReHlCuG582Ig">



Hyperliquid just posted its best-ever month, recording $88 million of revenue in July. That is $1 million more than Solana did, which must mean…something. Hyperliquid now has a 75% share of the market for perpetual futures. I can’t think what its moat is, but it seems to have found one.



My favorite crypto chart:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd9fQk3vuOu2MXNfguu_Kn-mby3KuxryOCwu7g5_-veIqUhbIEsLbrXAZ7L0Zc_Cj0QxgylC1Duy1smhXeqX7hmEhN2bvnNIxOXenU3j6jKyQEFbu8QtvUYKApdQ0IL38NcsfnVJg?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



This is the collective P&amp;L for traders on Hyperliquid, which has been trending relentlessly lower. The big spike up in March was <a href="https://x.com/EvanLuthra/status/1900525968089108694">market manipulation</a>, not a trader being right. The rest of the chart demonstrates that traders are rarely right. Like casinos, perps platforms grind their users to dust. But also like casinos, the users keep coming back. (Note: I’m not sure how super accurate this data is but I assume it’s directionally correct.)



Not as hype as it was:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdsBBwhYWd1tFF2aDPANrNL64adK6x8ImCQ5rpvUq4fA2rRXBIKIz1RrhqMbGGsgBirUuawf6-y4UEqUN8w1pxgkCmWVHgfN2jxe1UKnsr_Vdzgbonjd3LaXusbLlRzF-MWYTYxOQ?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



Solana’s “token holder net income” has been more or less flatlining around $6 million a week. Annualized, that puts the SOL token on 390x P/E. Better than Ethereum, for sure, but still pretty yikes.&nbsp;



Memes vs. projects:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXek3JwBTqmDBqgAJAo6FF6haTo529z8IEZ3L3n6h7oyl5ay6TR-lPKY8xEmab7SRPJUwhLYE_UO0E1a1DUM5r96GNSlZeGUqQRJuFRX-yqyxwjVrnuJDup5zqTQIvK2tkcFCtHW?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



DeFi apps are great and constantly getting better. But “most of the assets are shady,” as Alex Thorn <a href="https://pca.st/x922xl8m?t=31m3s">puts it</a>. On Solana DEXs, for example, memecoins still trade 7x more volume than “project tokens.”



Colonel Mustard in the billiard room with a candle stick…



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeqSWpC4yNx8j7di-OC7OQY8ZnWqF1syUjfflMYCOjFmds-avQr1vL8fBb6a4kE7SpXe-tbPuxDsD7S6Q-Jx2IxNMumndO4P0fEPx7ymwudm4_ojwuWuwsdXPaRhog-d8c7i3U2Jg?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



Like a game of Clue, this Sankey diagram demonstrates that DEX volumes have recently been dominated by memecoins on BNB Chain using PancakeSwap. I’m reliably told by the 0xResearch chat room that most of this is wash trading, however.



Less degen-ing:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXexiGh4eITgkoN24qBiRqnwWKI6aNEW0f9vbDSN7gkbdB18B5ML5gOZNYy_RDzpHyzpdI0M_R46ORY7oDtGu_S3lkEb2DCPfjPN2ciF0gcatxNEpw0LmmGGngDbTtOQfoZyty8Iqg?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



The leading trading bot, Axiom, has seen falling trade volumes, which suggests the most active, most degen of retail crypto traders are finding fewer reasons to trade.&nbsp;



Tokenized equities haven’t inspired them, either:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXej1E9-i6rVEZGWkOpcb-qw5uPi6tH1YRS1cLifPa7lTs82v5IsJZVz_sdugH1GWM927F6gHutd0-vMHQ4cMflRDJjHcTwodXpnCwUYA2W6KJuTWaG0RkzMMeuZEZzExEtyhyOrUw?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



Putting equities onchain has been a popular topic lately, but crypto traders seem disinterested so far. “Equities” trading volume has averaged less than $4 million a day on Solana.



Bitcoin’s mempool:



<img loading="lazy" decoding="async" width="624" height="295" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe1MqQChVUkp7TWdSaXd4xOuBEozJYWVzO9m2L3XGsxmhg88Vke1rKUYUWgLJgD0PafLNwqFxQ01ZzEPXxZvZxPZYZsMjTf-Ac84FYIz3LpIwjj1SG5_3EFxAdB1tRTPbxY405YNQ?key=3VK3LqPmlcReHlCuG582Ig">



Bitcoin’s mempool, the queue of transactions waiting to be added to a block, has been a little busier of late, but activity remains near long-term lows. (I still think “MEMEpool” every time I read “mempool” and I’m not sure I’m wrong.) You can watch the mempool in a neat visualization <a href="https://mempool.space/mempool-block/0">here</a>.  It’s kind of mesmerizing, like watching fish in a fishbowl. And in the case of Bitcoin, it’s not much faster. The Ethereum mempool is busier and helpfully visualized <a href="https://txcity.io/v/eth-btc">here</a> as a bus stop.



The original idea still stands:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXceSIln_Fi8O8woNL98drZyeVM4wunNVRo_h-9PBjZpub23xR0-lhdf8NxaMSs_gjToyrMOVntXey2Z3JjpJkzoDX2ohv5nolN1Dr_b1VN49-pTJEs6w4pxDmklu-WxKd_8b2bCjw?key=3VK3LqPmlcReHlCuG582Ig" alt=""/></figure>



However active crypto is at the moment (or <a href="https://x.com/laurashin/status/1943013611250540559">inactive</a>, Rob Hadick describes it), the foundational rationale is stronger than ever: Exploding government debt makes an alternative financial system worth exploring.



But it probably won’t help much if it happens on the stock market.



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Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



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



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



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



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



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



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

Big ideas, small use cases: Crypto’s execution gap

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



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



Shortly after the Solana Saga debuted <a href="https://blockworks.co/news/solana-launches-saga-phone">in 2023</a>, the popular tech YouTuber Marques Brownlee, otherwise known as MKBHD, released a video titled “This is a Crypto Phone. Don’t Buy It.” Brownlee complained to his 20 million YouTube subscribers about the Saga’s mediocre specs, high price and overly niche crypto features.&nbsp;



Brownlee followed that video with another, naming the Solana Saga the biggest smartphone bust of 2023, which caused Solana Labs to <a href="https://decrypt.co/210739/solana-cancels-saga-orders-after-selling-phones-didnt-have">joke</a> that it had released an award-winning phone.



In creating the Solana Seeker, Solana Mobile seems to have taken its critics seriously, either reversing course or making significant upgrades on the Saga’s weak points. Overall, Solana Mobile seems to have exorcised its Saga demons to deliver a very solid new phone in the Seeker.



My first impression of the Seeker was how light the phone is. At 192g, it’s more than 20% lighter than the Saga. This was the first piece of evidence that Solana took its critics seriously, after the Saga was widely panned for being too heavy.



The portability may also be useful because many of the Seeker’s 150,000 putative buyers may use it as a second phone, but that’s by no means an indictment on the Seeker’s quality.



In general, the Seeker performs about as well as you could hope for a $500 phone in 2025. The battery life and display are quite solid. The camera is good but not spectacular. The Mediatek Dimensity 7300 chip isn’t top-of-the-line, and the phone did feel a bit hot in my hands after a bout of heavy usage, but the Seeker generally does everything I want it to do without lag or bugs.



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdruXvkIb4DexM5dxbQLZ1uuwUKdisM4StHnm4gjojAxQL5hB-Ly4qiPTsvoW5RYLMatftqXqjzY7HplF741wZkz7X2xNyT7wVQMEk-u8RbC9_XEP6zlmDcT7YVgy9erpqwwVuAKA?key=EPt2vB7VsF_eZmA7-m7DXg" alt="" style="width:387px;height:auto"/><figcaption class="wp-element-caption">Photo taken with the Seeker. Source: Jack Kubinec</figcaption></figure>



Like its predecessor, the Seeker comes with a built-in “seed vault,” which is basically a very secure way to store crypto wallet keys. The phone comes with a native wallet that’s integrated with the seed vault and can be fingerprint-protected, so a thief wouldn’t be able to access it (unless, of course, they stole your finger as well). The wallet has a stocks tab where non-US users can purchase xStocks, a new <a href="https://blockworks.co/news/backed-tokenized-equities-xstocks-kraken/">tokenized stock product</a> on Solana.&nbsp;



The Seeker has the Google Play store and features the return of the Solana-native dApp Store. The dApp store has expanded notably from 2023, when it featured <a href="https://unchainedcrypto.com/solana-saga-review/?utm_source=chatgpt.com">fewer</a> than two dozen apps. Now the store has well over 100 apps, some of which are only available on the dApp store. Not all dApp Store apps are created equal — the <a href="https://blockworks.co/news/sec-announces-mango-markets-settlement">now-defunct</a> Mango Markets has a (seemingly non-functional) app listed, for instance — but Solana Mobile granted some of the best ones primary real estate as featured apps.



Caitlin Cook, who works in growth at one of these featured apps in Moonwalk, stressed that becoming a Seeker launch partner was not a paid partnership, and Solana wanted to organically spotlight the new consumer crypto app.&nbsp;



“In terms of the process, getting listed on the Solana dApp store was a light lift for us. Since we already had a live Android app, it only took a few quick tweaks. From what I’ve seen more broadly, the Solana Mobile team has done a great job encouraging teams to move beyond browser-based UX and embrace mobile-native experiences in prep for the Seeker launch, and making the process for doing so smooth and painless,” Cook said.



One segment of Seeker buyers may receive the phone with disappointment, however, because after 24 hours of using the phone, crypto token airdrops have still yet to magically appear in my wallet. Airdrops — particularly of BONK tokens — were <a href="https://blockworks.co/news/solana-phones-sold-out">a major driver</a> of what commercial success the Solana Saga did see, but a core contributor at BONK confirmed to me that the memecoin project does not currently have any Saga-like airdrops planned for Seeker users.



The speculative saving grace for the Seeker may be the forthcoming SKR token, which Solana Mobile vaguely said will flow “directly to builders and users,” per a slide deck shared with Blockworks.



It’s unclear to me whether Solana Mobile will keep releasing phones after the Seeker, or if it will pivot its focus to onboarding more devices to its newly unveiled TEEPIN mobile architecture. But either way, Solana Mobile deserves credit for delivering a serious, grown-up smartphone. Put another way, I don’t see any unwelcome awards in the Seeker’s future.



Updated 8/7/2025 at 12:30 pm to reflect the weight of the Seeker.



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Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



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



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



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



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



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



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

Seeker review: Solana Mobile heard the critics

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



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



We’re 42 days away from the Fed’s next policy-setting meeting, and markets are growing more certain that committee members will make the first interest rate cut of the year.&nbsp;



There’s currently a 91% chance the FOMC will lower rates by 25 basis points in September, per <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html">data</a> from CME Group.&nbsp;



The Fed, once acting in lockstep with the Bank of England and the European Central Bank, has diverged in policy recently.&nbsp;



So far in 2025, the ECB has cut rates twice; first in March and then again in June, putting benchmark borrowing costs more than 2% lower than the US. The June cut marked the European central bank’s eighth consecutive. In July, the ECB held rates, citing concern over uncertain trade policy.



The ECB lowered its inflation forecasts in June, now expecting prices to increase by 1.6% in 2026. Its headline forecast for 2025 is 2%, in line with its target and giving it room to hold off on additional rate cuts. Growth projections, on the other hand, have decreased slightly in response to higher tariff rates on exports to the US.&nbsp;



The BOE issued a cut in May and held rates in June, citing conflict between Israel and Iran that sent <a href="https://blockworks.co/news/stocks-lower-oil-iran-israel">oil prices higher</a>. BOE officials reiterated that interest rates are on a “gradual downward path,” in the words of Gov. Andrew Bailey.&nbsp;



“The world is highly unpredictable,” Bailey added.&nbsp;



Fed Chair Powell agrees. Throughout 2025 he has emphasized the importance of monitoring economic data <a href="https://blockworks.co/news/powell-interest-fed-continue-monitor-june">before adjusting policy</a>.&nbsp;



When asked by a reporter at the ECB’s annual forum in July whether the Fed would have cut rates by now if it weren’t for tariffs, Powell responded with this:&nbsp;



“So I do think that’s right. In effect, we went on hold when we saw the size of the tariffs, and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs. We didn’t overreact. In fact, we didn’t react at all; we’re simply taking some time.”



Last month, Powell told reporters that committee members “have made no decision about September,” which was expected, but he added that the central bank is weighing potential risks of waiting too long, including “downside risks to the <a href="https://blockworks.co/news/stocks-higher-after-july-jobs-report-dip">labor market</a>.”&nbsp;



Not everyone is convinced that the Fed’s first rate cut will come this fall, though. Bank of America analysts in a recent note suggested that the labor market situation is not as bleak as it may appear: Yes, demand for labor is decreasing, but so is labor supply, leaving the unemployment rate relatively flat. We also know Powell’s primary concern is the unemployment rate.&nbsp;



BoA analysts also said that internal data show consumer spending is not meaningfully declining — in fact, it’s increasing.&nbsp;



A lot can change in 42 days. 



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Will the Fed keep diverging from other central bank policies?

The jury in cryptocurrency mixer <a href="https://blockworks.co/tag/tornado-cash">Tornado Cash</a> developer Roman Storm’s criminal trial handed down a partial verdict Wednesday afternoon after four days of deliberation.&nbsp;



Storm was found guilty of conspiracy to operate an unlicensed money transmitter business. The jury was unable to reach a unanimous decision on the two other counts: conspiracy to commit money laundering and conspiracy to violate the IEEPA.&nbsp;



The jury deliberated for four days before coming to a decision on one of the counts. The government could opt to retry Storm on counts one and three.&nbsp;



The prosecution asked that Storm be remanded into custody, citing Storm’s “means” and ties to Russia, where he was born. The judge sided with the defense, determining Storm was not a flight risk and may remain out on bond.&nbsp;



The criminal trial, which spanned about three weeks, concluded last week with <a href="https://blockworks.co/news/roman-storm-closing-statements">lengthy summation arguments</a> from both the prosecution and defense. Storm did not testify during the trial.&nbsp;



Storm and co-developer Roman Semenov were <a href="https://www.justice.gov/usao-sdny/pr/tornado-cash-founders-charged-money-laundering-and-sanctions-violations">charged in 2023</a> with three federal counts. Semenov has not faced trial and is currently <a href="https://www.fbi.gov/wanted/wcc/roman-semenov">wanted</a> by the Federal Bureau of Investigations.&nbsp;



Throughout the trial, the government maintained that Storm, motivated by greed, intentionally helped illicit actors conceal funds through Tornado Cash.&nbsp;



“Tornado Cash made dirty money clean money, and made it impossible to tell the difference,” government attorney Benjamin Gianforti told the jury during his <a href="https://blockworks.co/news/roman-storm-closing-statements">closing statement</a> last week.&nbsp;



Storm’s team never denied that criminals used Tornado Cash, but they insisted that Storm had no criminal intent. Tornado Cash was created as a privacy tool for users who didn’t want their financial transactions made public, defense attorney Keri Axel said during opening statements.&nbsp;



Storm’s team did not immediately respond to Blockworks’ request for comment.&nbsp;



This is a developing story.



Correction note: Updated 8/6/2025 at 1:10 p.m. ET to reflect the jury decision on count 3. A previous version of this story incorrectly stated that Roman Storm was acquitted on count 3, conspiracy to violate the IEEPA. The jury was unable to reach a unanimous decision on this count.



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Roman Storm

Tornado Cash developer found guilty on 1 count in partial verdict

In onchain finance, every yield stream is becoming a building block. Today Pendle introduced Boros, a new primitive that takes the floating funding-rate on perpetual futures — one of crypto’s most volatile, yet essential flows — and turns it into a tokenized instrument that can be traded, hedged, or, perhaps, even posted as collateral.



Initially available for <a href="https://blockworks.co/tag/binance">Binance</a> <a href="https://blockworks.co/price/eth">ETH</a> and <a href="https://blockworks.co/price/eth">BTC</a> perps, Boros enables a market for fixed-vs-floating funding rate swaps, unlocking a new way to price and hedge directional leverage. Essentially, it’s the creation of a funding-rate <a href="https://blockworks.co/tag/derivatives">derivatives</a> layer that can plug in throughout DeFi.



As the Boros team <a href="https://medium.com/boros-fi/boros-introducing-funding-futures-d1f69111a8a7">explains</a>: “Traders exposed to funding rates can hedge their funding exposure on Boros by fixing the amount of funding rate they pay.”&nbsp;



For instance, a trader long ETH perps but wary of rising funding can buy Yield Units (YU) on Boros, paying a fixed rate in order to receive the floating leg — thus locking in a maximum cost of carry. Conversely, a stablecoin protocol like <a href="https://blockworks.co/podcast/empire/e4eb7ca2-68ce-11f0-b29f-b3ca9b0f92c3">Ethena</a>, which is structurally short perps so as to harvest funding, can sell YU to receive fixed payments upfront.



<h2 class="wp-block-heading">Complementary to Ethena</h2>



Once Boros expands to other exchanges where Ethena hedges its spot longs, Boros should provide ample benefits:



<ol class="wp-block-list">
<li>Swap floating for fixed —&nbsp;Ethena can open a short YU position to convert volatile funding flows into a stable coupon. This enables better reserve planning, reduces tail risk from funding crashes, and even allows Ethena to pre-announce yields with confidence — which its marketing team will love.</li>



<li>Post YU as collateral — While Yield Units (YUs) do not have fixed cash flows or settle to the underlying like Pendle PTs, they represent tokenized funding-rate swap positions with a clearly defined maturity and oracle-tracked valuation. This structure makes them a candidate for future use as collateral in money-markets. In that scenario, traders or protocols could post YU as collateral to borrow stablecoins, enabling them to retain funding exposure without unwinding directional hedges.</li>



<li>Price certainty for protocol treasuries —&nbsp;Treasuries can now “lock-in” the <a href="https://blockworks.co/tag/yield">yield</a> side of their delta-neutral trades, turning variable PnL into predictable income. Over time, this could bring in more conservative capital, especially if protocols pass through fixed yields to end users.</li>
</ol>



Pendle founder TN Lee expects Boros will eventually harmonize funding rate markets, which are quite variable today:


<div class="wp-block-image">
<figure class="aligncenter"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd9NbpZZ223fEyy4bPfUhVNsWAAitHOC4m_pCxNpLCnMVXBlaZyieHni9b6IeiS7WVGQ3mzlKJLa-mn9__xDm3D-oFZ1Wxst2jX4zM-hec0z1FsADLl_gO2UbacaFI-CheK-p9pqg?key=EFEJYHNdQ_9IPOj97pW-AQ" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://velo.xyz/futures/ETH">velo.xyz</a></figcaption></figure></div>


“Boros allows [arbitrage] of funding rates across exchanges, thereby resulting in the converging of rates,” Lee told Blockworks.



The <a href="https://blockworks.co/news/blockworks-research-crypto-investing">utility</a> goes further, however. As the Boros team writes: &#8220;Beyond the obvious utility to cash and carry traders, the mechanics we are bringing to life open up a new vertical for all assets with yield, regardless if they are on-chain or off.&#8221; The model can extend to staking, real-world credit, or even CeFi borrow/lend rates — basically anything for which there is an oracle-verifiable yield source.



To support this new interest-rate layer, Boros will open up dedicated vaults that earn fees and boosted incentives by providing liquidity to fixed/floating funding rate swaps. These vaults mirror Pendle’s V2 pools, allowing LPs to take the other side of directional hedging demand and earn a share of the new market’s fee flow.



<h2 class="wp-block-heading">Tokenize everything</h2>



Boros isn’t the only project racing to turn yield-bearing positions into “spendable” collateral. Notional’s forthcoming <a href="https://blog.notional.finance/notional-exponent-how-it-works/">Exponent</a> upgrade takes a strikingly similar tack: it “tokenizes new yield strategies specifically designed for leveraged yield users” and then lets those tokens be pledged on deep-liquidity lending rails such as <a href="https://blockworks.co/analytics/morpho">Morpho</a>.



Exponent’s headline innovation, Smart Redemption, lets a vault holder redeem a staked asset (e.g., <a href="https://blockworks.co/price/susde">sUSDe</a> for <a href="https://blockworks.co/price/usde">USDe</a>) without first withdrawing collateral from the lending market, enabling costless exits and, crucially, making yield tokens with lock-ups or thin secondary liquidity acceptable to risk engines.&nbsp;



Functionally, the two designs rhyme: both Boros and Notional Exponent wrap a variable cash-flow into a token whose value can be reliably marked by onchain oracles and tracked to maturity, giving risk engines a clear path to whitelist it as collateral. Even though a YU’s market value simply decays toward zero at expiry, the predictable oracle feed and known payoff window still let lending markets haircut it with confidence.



The upshot is the same capital-efficiency fly-wheel: Users can lever against the very stream of income that services their debt, while money-markets gain a diversified pool of “income-backed” collateral that is less correlated to spot swings. Together, Boros and Exponent point to a DeFi future where yield primitives are the core building blocks of credit, shrinking idle capital and smoothing the path to leveraged, yet risk-managed, strategies across the stack.



Importantly, Boros does not launch a new token. Instead, 80% of its fees will accrue to vePENDLE holders, continuing Pendle’s model of rewarding long-term stakers. At the same time, PENDLE emissions will be used to bootstrap Boros vaults. That’s also a potential source of sell pressure, but one that is likely to recycle back into vePENDLE locks as yields increase. The token’s fundamentals benefit from the added fee stream without unnecessary dilution — a design choice that deserves credit, especially in a time when many founders opt to spin off products with one or more new tokens.



<h2 class="wp-block-heading">Starting over</h2>



Still, the launch is not without complexity. Boros is “starting from 0 again,” the team admits, with its own risk engine and vault logic, built on <a href="https://blockworks.co/tag/arbitrum">Arbitrum</a>.



&#8220;As a new platform being built to stand alongside Pendle V2,&#8221; the team notes, &#8220;risk management will be our main focus at the initial stages — especially at the start when new mechanics and market dynamics are being experimented with.&#8221;



Among those dynamics: a new type of price-volatility feedback loop. Today, a sudden 1,000 bips spike in funding can force traders to unwind spot-perp basis trades just to stop the bleeding— creating a cascade of liquidations and market stress. But with Boros, those players can hedge the funding leg without closing directional exposure. If liquidity is deep, YU markets could act like interest-rate swaps in TradFi: dampening volatility and compressing extreme funding prints.



That “if” is crucial. Hedging only works if the YU orderbook is liquid enough not to introduce slippage or risk of blowouts. To mitigate early reflexivity, Boros is limiting open interest to 1.2x the perp OI — tight by design. If liquidity grows, the ability to hedge funding cheaply should mute the sharpest funding swings and, indirectly, some price volatility.



Boros doesn’t just tokenize a new yield source, but has the potential for this new funding-rate derivatives layer to be integrated into many other DeFi applications: money-markets, structured products, delta-neutral strategies, and, ultimately, real-world credit.



But the larger change is architectural: As these products show, any stream of yield can now become both a trading instrument and first-class collateral, pushing DeFi a step closer to a full-stack fixed-income market onchain.



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Ethereum

Boros tokenizes funding rates as onchain yield instruments

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



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At the end of last year, Pantera <a href="https://panteracapital.com/blockchain-compensation-survey-2024/">collected</a> a decent batch of data, taking a look at just how folks in crypto are being paid.&nbsp;



Roughly 3% of people in the industry were paid in crypto in 2023, but that number shot up to 9.6% by the end of 2024. Interestingly enough, there was also a trend in folks opting to take their salaries in stablecoins.&nbsp;



Mind you, this was prior to stablecoins taking off (as we’ve seen and discussed) throughout 2025. So it seems that it’s not just institutions that’re buying into the stablecoin narrative. 



Specifically, people opted to take their paychecks in USDC and USDT, the report noted.&nbsp;



“USDC (63%) and USDT (28.6%) collectively account for over 90% of crypto salaries, cementing their status as the go-to choices for payroll stability and liquidity,” the report said.



As you can see in the chart below, a far smaller number of folks opted to be paid in SOL and ETH.&nbsp;



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcL4OxOPzQjspFJJMulkcxS3TgPs03_clDVZe9Z-AREuo6xd1-rm2anc0vrEIqaBl5iKbEhtkvLCKD0ghWX6xdjYpTjF2poInsDx___n6Za7yCIA0DYxabnMql_O_J8T1OqUDfViw?key=WD576P408GcPlFBIyJaQbQ" alt="" style="width:720px;height:auto"/><figcaption class="wp-element-caption">Source: Pantera’s Compensation Survey</figcaption></figure>



Admittedly, this is data from 2024 (meaning it happened well before lawmakers were finalizing the stablecoin legislation in the US), but I’m slightly surprised that USDC outranks USDT by a decent margin.&nbsp;



Especially since the respondents were largely international, as you can see in the chart below.



<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="1368" height="1082" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/08/image.png?w=1024&amp;h=1024" alt="" class="wp-image-105872" style="width:624px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/08/image.png?w=1368 1368w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/image.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/image.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/image.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/image.png?w=325 325w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/image.png?w=330 330w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/image.png?w=277 277w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/image.png?w=80 80w" sizes="auto, (max-width: 1368px) 100vw, 1368px" /><figcaption class="wp-element-caption">Source: Pantera Compensation Survey</figcaption></figure>



But there’s a reason for that, Pantera found.&nbsp;



“We initially thought this was due to our survey skewing more western. After digging in further, we found it very interesting that none of the major payroll providers in the space (Deel, Remote, Rippling) offer USDT for payroll,” the survey said.&nbsp;



The team at Pantera told me that the data was collected from a variety of projects around crypto.&nbsp;



“Our survey includes data pulled from dozens of geographically-distributed startups and information we gathered from hundreds of participants in the crypto community spanning a wide range of professions,” they noted.&nbsp;



And this came from around 1,600 folks in different sectors, including DeFi, CeFi, gaming, etc. Of that total sum, 47% of respondents were in senior positions, while 29% were in the middle of their careers. The smallest number of respondents, 24%, were junior employees.&nbsp;



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeE2Hnj-_H0Mq6YFvA-BzQtQnj44bYXVmtQQqmNkdWLpRZUL5Z2GYIeDep4d4w_UwaAhd3nvZFAswv0Fz_Kda_affW1myT_wL9pj8kj-FLQCXYb9HI7h_CHzGw_3-yVCSD8caBUGg?key=WD576P408GcPlFBIyJaQbQ" alt="" style="width:459px;height:auto"/><figcaption class="wp-element-caption">Source: Pantera Compensation Survey</figcaption></figure>



“There’s still no reliable, comprehensive database for compensation in the blockchain ecosystem — so we set out to change that,” Nick Zurick, head of portfolio talent at Pantera, told me. “This survey is a first step toward bringing transparency to crypto compensation. Whether you&#8217;re a founder, candidate, or operator, we hope the data is valuable as you build and grow in the space.“



I point this data out because it shows the larger trend towards stablecoins. And now, as we head into the final months of 2025, I’ll be curious to see if we see an even higher tick up. But, alas, only time will tell.&nbsp;



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Stablecoins accounted for 90% of salaries paid in crypto in 2024: Pantera survey

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



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PUMP token holders now find themselves in the odd position of hoping the money they just sent to Pump.fun will soon be returned to them.



That’s the mood on Crypto Twitter, at least, where influential accounts keep pointing to Pump.fun’s estimated $2 billion cash pile as the bull case for PUMP (see <a href="https://x.com/suganarium/status/1948765211881865443">here</a>, <a href="https://x.com/Yaki_fomoArt/status/1950475784348717418">here</a>, <a href="https://x.com/chooserich/status/1948412910331371670">here</a> and <a href="https://x.com/DukeD_Defi/status/1950496129831084180">here</a>).



The problem, of course, is that token holders have no claim on that cash — even though they supplied most of it.



In IPOs, stock market investors send their money to a company in return for an owner’s claim on assets that’s roughly equivalent to the money they just sent.



In the PUMP ICO, however, crypto investors sent their money to Pump.fun in return for a token with no claim on anything whatsoever.



They knew that. But they also expected to be treated as if they had a claim on the revenue of Pump.fun.



So far, they have been.&nbsp;



Over the past week or so, Pump.fun has used roughly <a href="https://fees.pump.fun">100% of its revenue</a> to buy back the PUMP token.



If you assume it does that forever, the token seems reasonably priced: Annualizing last week’s revenue, PUMP is trading on only about 16x (by market capitalization).



But that’s assuming they also burn all those tokens — and what’s the point of issuing tokens if you’re immediately going to start burning them?



It seems more logical, as people have also been <a href="https://x.com/Dumpster_DAO/status/1949127244112081071">speculating</a>, to do the opposite: either airdropping tokens to users or paying them out as incentives.&nbsp;



Luca Netz, for example, <a href="https://x.com/frontrunnersx/status/1948733725900243248">thinks</a> Pump.fun should airdrop 10% of the token’s supply to the community.



This would “nuke the token,” as he puts it, but that’s part of the appeal: “The token nuking is fine, especially because he has so much cash.”



By “he,” Netz means Pump.fun’s three co-founders, which is instructive: They own the $2 billion of cash that token holders are hoping to have an informal claim on.



If the co-founders are intending to use that cash to buy the token, as people hope, it would make sense to get the token price down first.



“It’s in his interest to buy as much of the token as possible at the lowest price possible,” Netz explained.



In other words, the incentives between the owners of the protocol and the owners of the token are grievously misaligned.



Charlie Munger would say that’s exactly what PUMP token holders should be thinking about.



Equity investors don’t have to worry much about incentives because management is aligned with shareholders by both law and precedent.



The cult of shareholder value that was popularized by the fictional Gordon Gekko in the 1980s is now so ingrained in equity markets that investors are almost always treated like owners.&nbsp;



In crypto, by contrast, token holders have neither law nor precedent to rely on, so they do have to think hard about incentives.



Take Grass, for example — a buzzy AI project (“multimodal search”) that’s already earning “millions of dollars a month,” <a href="https://youtu.be/osFIJBjVXtQ?si=nBnjGOtL8ZXxdivW">according</a> to its founder.



But that’s the full extent of Grass’s disclosure: That revenue is neither onchain nor otherwise made public.&nbsp;



So when <a href="https://x.com/_dshap">Dan Shapiro</a> tried to value the DePIN project for Blockworks Research, he could only take a guess at what “millions a month” might really mean.



“Although Grass keeps network revenue data private,” he wrote, “one can make some educated assumptions from publicly available data licensing deals to estimate the value of the network.”



In other words, he had to look at data licensing agreements made by the likes of OpenAI and Reddit to hazard a guess at what kinds of agreements Grass might also be making.



To value the Grass token, he also had to do things like “assume data sales have similar margins to ad sales” — things that an equities analyst would determine by calling the company and asking them.



If all of the assumptions Shapiro was forced to make turned out to be roughly correct, he thought there could be an interesting investment case for GRASS: “In its current state, Grass’ free floating market cap of $585m is justified based on the value of its multimodal data alone.”



But now Grass “appears to have pivoted to data labeling” (i.e, away from multimodal), <a href="https://x.com/Daveeemor/status/1950499366239638009">according</a> to one disillusioned token holder, who adds that “little information has been shared with token holders.”



I couldn’t find any information at all. Which is weird.



Imagine if shareholders had to find out from a random X account that Apple had pivoted from making smartphones to making sneakers.



Grass is earning some amount of revenue, but we don’t know how much; however much it is earning, token holders haven’t seen any of it and don’t know if they ever will; and the business may or may not have gone off in a new direction.&nbsp;



Such is the state of affairs in crypto “investing.”



It doesn’t have to be that way.



Holders of the MAPLE token, for example, don’t have to guess what portion of the revenue earned by Maple Finance will be returned to them. Instead, they decide that themselves by <a href="https://x.com/maplefinance/status/1950302668028559714">voting on it</a>.&nbsp;



As a result, MAPLE investors probably don’t have to think about incentives much more than equity investors typically do.&nbsp;



“No fees are allocated to the Labs entity,” <a href="https://x.com/shaundadevens">Shaunda Devens</a> wrote for Blockworks Research, “and the Labs entity is funded exclusively through grants, not through revenue-generating activities.”



That makes MAPLE holders a lot like owners, I think.&nbsp;



Shareholders have disclosure rules, legal claims, SEC enforcement actions, decades of precedent and the movie Wall Street to substantiate their ownership claims.



Token holders have only smart contracts.&nbsp;



Have crypto investors properly accounted for this lack of both rights and transparency?



Anecdotally, there doesn’t seem to be any risk premium built into opaque, rights-light tokens. Most of them still seem inexplicably expensive to me.



Nor is there much differentiation between projects with ownership-like tokenomics and those with tokenomics you can only guess at.



I imagine it’s only a matter of time until there is, however. And the sooner the better.



The best thing for crypto investors may be if Pump.fun follows Netz’s advice and “nukes the token.”



That might finally get crypto thinking harder about the power of incentives.



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