ZambesiGold

David Canellis

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



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When Johannes Gutenberg built the first movable-type printing press in the mid-15th century, he could hardly have imagined the impact it would have on humankind.



Civilization-style achievements fell like dominos over the next 300 years. People who weren&#8217;t priests learned to read within decades, and within a lifetime, the Protestant Reformation brought <a href="https://www.libertymagazine.org/article/the-protestant-reformation-and-freedom-of-conscience">freedom of conscience</a>, trailed by an explosion in scientific progress half a century later.&nbsp;



When the 1800s came around — 332 years after Gutenberg’s death — the Enlightenment and the scientific revolution had reshaped the world, powered by the printed works of Galileo, Newton, Descartes and others.&nbsp;



Then came public education, decolonization and the subsequent rise of nation-states, some of which are now opening their coffers to bitcoin, including the US.



When Satoshi toppled the first of his own set of dominos, could they have anticipated that only 16 years later, multiple US states would compete for bitcoin bragging rights?



Arizona is now the first state to ensure that any unclaimed bitcoin or cryptocurrency is never sold for cash.&nbsp;



The law includes the establishment of a state-controlled bitcoin reserve fund, which would also custody any other cryptocurrencies handed over to the Arizona revenue department.&nbsp;



Arizona officials are permitted to stake crypto held by the fund and even collect airdrops. But by law, they can’t sell any coins.



“Digital assets aren’t the future — they’re the present,” said House Committee Chair Jeff Weninger in a <a href="https://www.azleg.gov/press/house/57LEG/1R/250507WENINGERHB2749.pdf">release</a>. “This law ensures Arizona doesn’t leave value sitting on the table and puts us in a position to lead the country in how we secure, manage and ultimately benefit from abandoned digital currency.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">ARIZONA SIGNS STRATEGIC BITCOIN RESERVE INTO LAW! 🇺🇸 <a href="https://t.co/xQXsm2fEXQ">pic.twitter.com/xQXsm2fEXQ</a>&mdash; Dennis Porter (@Dennis_Porter_) <a href="https://twitter.com/Dennis_Porter_/status/1920270813506290100?ref_src=twsrc%5Etfw">May 8, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Is this cool? For sure. Could it be cooler? Also yes.



The law relates only to property for which the state cannot find or contact the original owner for three years. Think lost property, forgotten bank accounts and now, perhaps, crypto exchange accounts belonging to the deceased.



Arizona’s fund is different from the US government’s strategic bitcoin reserve <a href="https://www.whitehouse.gov/presidential-actions/2025/03/establishment-of-the-strategic-bitcoin-reserve-and-united-states-digital-asset-stockpile/">established</a> by Trump earlier this year, which for now exclusively holds coins seized by criminal forfeiture (although we still don’t know exactly how many).&nbsp;



The Arizona law is more about adding bitcoin and crypto to standard civil asset procedures, with Governor Katie Hobbs <a href="https://blockworks.co/podcast/thebreakdown/ccdd2238-2a1b-11f0-80b0-0fe8e51e0e48">vetoing</a> a separate bill earlier this week that would’ve permitted the state to invest 10% of its public funds into bitcoin.&nbsp;



Weninger explained in an X post that there are other avenues through which Arizona’s fund can acquire bitcoin without taxpayer money.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Hi &#8211; it’s staking any crypto asset that is being held for the consumer as unclaimed property that has emissions. Then that revenue is sent to the treasurer where the bitcoin reserve would be. At that point most revenue would be converted into Bitcoin most likely and held. Actual…&mdash; Jeff Weninger (@JeffWeninger) <a href="https://twitter.com/JeffWeninger/status/1920299302674718980?ref_src=twsrc%5Etfw">May 8, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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It’s all necessary progress that was long overdue. However, both Arizona and Trump’s reserves would be radically improved if they could actually buy bitcoin at will, which at least in the latter’s case, is technically on the table pending budget-neutral strategies.



New Hampshire has already laid claim over those bragging rights, with Governor Kelly Ayotte on Tuesday <a href="https://blockworks.co/news/new-hampshire-crypto-reserve-bitcoin-state-governments">signing into law</a> provisions for the state to invest 5% of all public funds into bitcoin.



The real question is then: Where does this put Bitcoin on its grand unified timeline, if the white paper was the first domino?&nbsp;



Almost two decades in, it’s clear we’re still early. Just look at the printing press.



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<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/daily">Blockworks Daily</a>: Unpacking crypto and the markets.</li>



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



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



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



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



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



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

Bitcoin

Domino effect: Arizona forms 2nd state bitcoin reserve in one week

Ben Strack

Coinbase’s <a href="https://blockworks.co/news/coinbase-to-acquire-deribit-in-2-9b-deal">agreement to acquire</a> crypto options giant Deribit affirms the trend of industry players flocking to a fast-growing derivatives market.&nbsp;&nbsp;



Industry observers expect more deals to come in this sub-sector, as the changing regulatory landscape empowers crypto giants to capitalize on heightened institutional demand.



The crypto exchange is set to pay roughly $2.9 billion for the Panama City-based company — $700 million in cash and 11 million shares of COIN stock.



Coinbase said in a blog post that Deribit’s options platform complements its US futures and international perpetual futures businesses — “completing our derivatives offering.”



The company added: “This is an important step toward our goal of providing traders access to spot, futures, perpetual futures, and options trading — all in one seamless, capital-efficient platform.”



This deal — subject to regulatory approvals — “would give the company an immediate and dominant foothold in the high-growth derivatives space ahead of an anticipated increase in institutional adoption of digital assets,” Benchmark analyst Mark Palmer wrote in a Thursday research note.



After all, he noted, Deribit is the world’s largest platform for bitcoin and ether options. Its nearly $1.2 trillion in trading volume in 2024 was almost double that of the prior year.&nbsp;



“The firm’s sophisticated trading tools, which cater to institutional and high-frequency traders, could strengthen Coinbase’s Prime platform and institutional appeal,” Palmer explained.&nbsp;



This pending deal follows Coinbase’s 2022 acquisition of FairX, which was later rebranded to Coinbase Derivatives Exchange. That gave the company a CFTC-regulated platform for offering crypto derivatives in the US.&nbsp;



Coinbase is now going a step further by expanding its international footprint, Morningstar analyst Michael Miller said.&nbsp;&nbsp;



“This is also a sign that the new regulatory environment is giving them more confidence to be aggressive in their growth efforts,” Miller told me.



The crypto industry saw <a href="https://blockworks.co/news/crypto-ma-mergers-feeding-frenzy-kraken">a record number of M&amp;A deals</a> during the first three months of 2025. There were 62 such crypto transactions in Q1, according to advisory firm Architect Partners — up from 59 deals in the final quarter of 2024.&nbsp;



This deal would surpass — in size — two others revealed earlier this year. Kraken shared in March that it was set to purchase NinjaTrader for $1.5 billion. A few weeks later, <a href="https://blockworks.co/news/crypto-tradfi-intersections-ripple-blackrock">Ripple said it agreed to buy Hidden Road</a> — a prime broker clearing $3 trillion annually — for $1.25 billion.&nbsp;



Before those, digital asset prime broker FalconX bought trading firm Arbelos Markets in January as part of a push to become one of the largest crypto derivatives dealers.



“It follows our thesis that derivatives M&amp;A will continue to be active,” Architect Partners’ Michael Klena told me. “But the difference in this deal is scale, as Coinbase acquired one of the largest in a headline deal.”



Because derivatives are a higher-margin product than spot trading, firms will look to expand those types of offerings as trading fees are compressed, he added.



Regulatory changes and optimism around upcoming crypto-friendly frameworks has also spurred institutional demand — further fueling these kinds of moves. Coinbase’s institutional trading volume in 2024 amounted to $941 billion, which was up 139% year over year.



“Since Coinbase is taking captive one of the largest derivatives firms, their competitors will be looking to enhance product via acquisitions,” Klena said. “So overall it&#8217;s a deal that makes sense in the market, and we expect more to come around derivatives trading and infrastructure.”



Coinbase’s stock price was roughly $205 at 11 a.m. ET, marking a 4.3% increase on the day.&nbsp;



The company is hosting a Q1 earnings call at 5:30 p.m. ET. Following the deal announcement, Palmer noted: “Our estimates for the company are under review.”



<a href="https://blockworks.co/newsletter/forwardguidance">Subscribe</a> to the Forward Guidance newsletter for more on Coinbase’s Q1 results.  



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<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/daily">Blockworks Daily</a>: Unpacking crypto and the markets.</li>



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



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



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



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



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



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

Coinbase

Coinbase-Deribit deal affirms industry’s growing focus on derivatives

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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If spending $1.1 billion wasn’t enough of a sign that Stripe is serious about stablecoins and gaining market share there, its newest announcement shows that it is serious.



Stripe unveiled Stablecoin Financial Accounts, which — much like the name suggests — is a money-management feature. Businesses in over 100 countries can now use these “stablecoin-powered” accounts.&nbsp;



Basically, a business can not only hold their balance in stablecoins, but they can also receive funds on both crypto and fiat rails.&nbsp;



Oh, whoop, big deal.&nbsp;



Let me explain: Empire subscribers like yourself are very in the weeds when it comes to crypto. Many of you are crypto-native and likely interact with crypto daily.&nbsp;



We’re all aware that stablecoins have been the big winner for crypto, and the extent of their usefulness hasn’t even been realized yet by non-crypto folks. Announcements like this are the exact sort of moves you want to see when introducing stablecoins to businesses, entrepreneurs and executives who’ve probably heard about stablecoins through headlines, but don’t understand the usefulness.&nbsp;



“Because stablecoins make it dramatically faster and cheaper to move money internationally, many of the world’s largest companies are turning to Stripe to help assemble their stablecoin strategies. But a challenge remains: making it possible to spend stablecoins at businesses that only accept fiat currencies,” Stripe said in a <a href="https://stripe.com/en-hk/newsroom/news/sessions-2025">press release</a>.



Announcements like Stripe’s have a chance to open the eyes of non-crypto folks to show them how stablecoin payments can make a difference when it comes to speed and cost.&nbsp;



If we pair this with the one they made last week (<a href="https://stripe.com/en-hk/newsroom/news/bridge-partners-with-visa">partnering</a> with Visa on a card-issuing product that allows folks to spend stablecoin balances as fiat), we really are cooking.&nbsp;



Normalizing stablecoins — and showing off how effective they are — is the first step to mass adoption, if we’re simplifying it.&nbsp;



Patrick Collison, CEO, noted that stablecoins are a “gale-force” tailwind alongside AI, and are “dramatically reshaping the economic landscape around us.”



“Our job is to pull these technologies forward so businesses on Stripe can benefit from them right away,” he added.



Last year, businesses using Stripe processed roughly $1.4 trillion in total payment volume. Yes, with a T.&nbsp;



Right now, these accounts will support USDC and USDB (Bridge’s stablecoin), but it plans to add more in the future.&nbsp;



This is how crypto wins.



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<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/daily">Blockworks Daily</a>: Unpacking crypto and the markets.</li>



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



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



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



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



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



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

Empire Newsletter

What Stripe’s new Stablecoin Financial Accounts mean for adoption

Coinbase has agreed to snap up Deribit in a $2.9 billion deal, executives from both companies told The Wall Street Journal.&nbsp;



The deal is the single largest acquisition in crypto’s history, easily beating Kraken’s $1.5 billion deal for NinjaTrader earlier this year. Stripe said it planned to acquire Bridge in a $1.1 billion deal, and Ripple announced it would acquire Hidden Road for $1.25 billion.&nbsp;



The makeup of the deal is $700 million in cash and 11 million shares of its Class A common stock.&nbsp;



In a blog post, Coinbase said that it expects the deal to close by the end of this year.



By acquiring Deribit, which had been shopping itself around for a few months, Coinbase will now expand into crypto derivatives. Deribit has seen an <a href="https://insights.deribit.com/exchange-updates/deribit-reports-q4-and-2024-year-end-volumes-provides-operational-update/">uptick</a> in overall trading volume activity thanks to a softening regulatory environment and expanding interest from institutional investors looking to capitalize on crypto.&nbsp;



“With Deribit’s strong presence and professional client base, Coinbase is making its most substantial move yet to accelerate our international growth strategy,” Coinbase said. It plans to create the most “comprehensive institutional derivatives platform.”



“We’re excited to join forces with Coinbase to power a new era in global crypto derivatives,” Deribit CEO Luuk Strijers said in a statement emailed to Blockworks.



“As the leading crypto options platform, we’ve built a strong, profitable business, and this acquisition will accelerate the foundation we laid while providing traders with even more opportunities across spot, futures, perpetuals, and options – all under one trusted brand. Together with Coinbase, we’re set to shape the future of the global crypto derivatives market.&#8221;



Prior to striking the deal with Coinbase, Kraken also expressed <a href="https://www.coindesk.com/business/2025/02/20/crypto-exchange-deribit-still-in-talks-to-be-acquired-by-kraken-source">interest</a> in the options exchange.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcEpvO2GFVKQmVXCxIrDu4X8iCBJdZdpf-Qi8e-ocH8XGrnU_sQYBNqGb0LPJXmeeKt2LXgOyuBm9MUO3wtC1G_YXf663Ow-mbs6271AVnSBQ70xOgA1_RXGO76uhVl0pFpeh3BHQ?key=mnhKqsV8m8wnndNQJnLvBg" alt=""/></figure>



Overall crypto M&amp;A has seen an uptick last quarter, per data from Blockworks Research. Crypto firms specializing in finance have seen the largest amount of M&amp;A activity.&nbsp;







Updated May 8, 2025 at 9:30 am ET: Added additional context throughout.



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<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/daily">Blockworks Daily</a>: Unpacking crypto and the markets.</li>



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



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



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



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



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



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

Coinbase to acquire Deribit in $2.9B deal

Byron Gilliam

This is a segment from the Blockworks Daily newsletter. To read full editions, <a href="https://blockworks.co/newsletter/daily">subscribe</a>.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“The social object of skilled investment should be to defeat the dark forces of time and ignorance which envelop our future.”



— John Maynard Keynes
</blockquote>



Despite all the numbers involved, investing is widely acknowledged to be more art than science.



&#8220;Common stock selection is a difficult art,” Benjamin Graham cautioned.



Graham’s life-long student, Warren Buffett, specified that “investing is the art&#8230;of laying out cash now to get a whole lot more cash later on.”&nbsp;



Pretty much all investing boils down to predicting those cash flows.



But investors “who&#8217;ve been trained to rigidly quantify everything have a big disadvantage,&#8221; Peter Lynch warned.



That does not, however, mean that “valuation is a meme,” as financial nihilists like to claim.



Instead, it means that applying and interpreting quantifiable valuation metrics is a creative endeavor.



What valuation metric to use for which investments is a subjective decision — and knowing how to interpret the results is even more so.



A low valuation, for example, doesn’t mean a stock is cheap and a high one doesn’t mean a stock is expensive (it’s just as often the opposite).



A stock can look appealingly cheap on one metric and appallingly expensive on another.



And none of these things are obviously correlated to returns.&nbsp;



This is often cause for despair — if cheap stocks don’t go up and expensive ones don’t go down, why bother trying to figure it all out?



It’s worth figuring out, I think, because that’s what makes investing fun and interesting — and, if so, the fun of crypto investing is only just getting started.



Until recently, crypto investors didn’t have many numbers to work with beyond token price and market capitalization.&nbsp;



That made everything in crypto a “story” — which is fine!



Investing is about telling stories.



But the best investing stories are told with numbers and crypto increasingly has them because more protocols are earning revenue and more of that revenue is being passed on to token holders.



Also, these numbers are becoming more accessible thanks to the likes of <a href="https://app.blockworksresearch.com">Blockworks Research</a>, whose analysts package them up in digestible charts and report them for us.



This is helping crypto advance to a higher stage of storytelling: storytelling with numbers.



Let’s check some current ones.



<h2 class="wp-block-heading">Ethereum vs. Solana</h2>



Judging by Crypto Twitter and podcasting, it seems obvious that sentiment on Ethereum has sunk to new lows, especially relative to Solana.



But an uninitiated TradFi refugee going straight to the numbers would likely guess otherwise.



Solana recorded $36 million of “token holder net income” in April, according to Blockworks Research data, which puts the SOL token on 178x annualized earnings — a rich, but possibly fair multiple if you think current activity levels are low.



Ethereum, by contrast, did $21 million in token holder net income for April, putting the ETH token on 841x earnings.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdiIdt5yNc7TbGaCg29EnOItfhmPeu85fyxeadUGplWJpbc130wy6BDzqeDTce3BeZLf1NC1Gg0fAzrig0jhbTlO_-5aTlP52g4kMzGOOEhjDM2AyF592I_Ty8mhrxdi9jnDSw1Sw?key=b6NzDIc5luKsYjQm8mwuVQ" alt=""/></figure>



A TradFi refugee seeing ETH trading at 5x the multiple of SOL wouldn’t immediately think, “wow, why is everyone so bearish on Ethereum?”



But they wouldn’t immediately think people are 5x less positive on Solana, either.



Instead, they might conclude Solana’s revenue gets a low multiple because it mostly comes from “low-quality” memecoin activity — while Ethereum’s revenue commands a higher multiple, at least in part, because it includes higher-quality activity like real-world assets.



Now we have something to work with: If you think memecoin activity isn’t so low-quality, SOL is probably undervalued, and if you think RWAs are the future, ETH might not be so overvalued.



You could also dig a little deeper.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdz3YXAvpqD6K_wg-Emh4xjeeyYC_MTRf4tAmC3qoaCbdjivGBlLtMejijW3Soax8batKbWuH71sxhUtyYisVtEGJJHkqUuqqCJUQJHGIaHmLlnTHZAYky186RsjdDkd56qoL8y-g?key=b6NzDIc5luKsYjQm8mwuVQ" alt=""/></figure>



Blockworks Research data shows that the revenue collected by all Solana apps is only about 1.8x greater than the revenue collected by Solana.



As platform businesses go, that is a very high take rate — much higher than the maximum 30% take rate at Apple, which the US government thinks is monopolistic.



This might mean that Solana is overearning and that its token should therefore trade at a low multiple of earnings — or that Solana has a business moat and its token should therefore trade at a high multiple of earnings.



Either way, it’s a story.



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



Hyperliquid, a semi-decentralized crypto exchange, is the strange story of a protocol that earns quite a lot in revenue ($43 million in April) and pays virtually all of it out to token holders.



This has unsurprisingly helped the token outperform recently: “The assistance fund uses trading fees for token buybacks every 10 minutes,” the single-named <a href="https://x.com/salveboccaccio">Boccaccio</a> noted in a recent report for Blockworks Research, “creating consistent buy pressure.”&nbsp;



Every 10 minutes!



It’s hard to know what to make of that because there is no such thing in TradFi as a company that returns 100% of its revenue to shareholders — let alone every 10 minutes.



Judging by its valuation, crypto seems a little uncertain too.



The HYPE token trades on about 17x annualized revenue (based on market capitalization), which would normally be considered expensive.



But, in this case, revenue and earnings appear to be the same thing, so it seems pretty reasonable — if you believe the story that HYPE will continue to win business from centralized exchanges.&nbsp;&nbsp;



Boccaccio cautions that HYPE is trading at a significantly higher multiple than its decentralized peers, but also that these might not be the right peers to compare it.



“The Hyperliquid L1 would have to take a very small percentage of overall Binance daily volume to meaningfully increase its volumes…Taking just 10-15% of only the BTC/USDT pairs volume [from Binance], would lead to a 50% increase in the HyperCore volume.”



“A growth multiple is warranted,” Boccaccio concludes.&nbsp;



How much of one depends on how much you believe the story, of course.



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



Jupiter, a Solana DEX aggregator, returns a comparatively modest 50% of revenue to token holders (also via buybacks) — but similarly has quite a lot of it.



<a href="https://x.com/marcarjoon">Marc Arjoon</a> estimates that Jupiter may earn $280 million of revenue over the next 12 months, which would put the JUP token on a yield of about 11.5% yield, based on market cap.



In equities, an 11.5% yield would imply that the underlying business is distressed, but that does not seem to be the case here.



Jupiter is “the default router” on Solana, Arjoon writes, “currently has no equal in aggregation,” and is “the fourth-highest revenue-generating application among all crypto dapps.”



Better yet, it’s run like a business: “Jupiter’s strategic maneuvers throughout 2024-2025 reflect an organization aggressively entering a hyper-growth phase, ambitiously positioning itself as Solana’s premier crypto super-app.”



That hardly sounds like a business that should yield anything close to 11.5%.



There are plenty of risks, of course, which Arjoon details in his most recent note.&nbsp;



But his takeaway is that “Jupiter currently trades at compellingly low multiples relative to its peers, suggesting considerable upside potential even without multiple expansion.”



He even quantifies this in a sum-of-the-parts scenario analysis, which warms my TradFi heart:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf5jZdFKHhav5udssAeDF5sYBQ3Ols2JEqYW2r74SQtS1QmfUBNpgW2JSpgqWs0c2Y7DOgOwR4plhldVhGfMM5xCVSGmOrqIhuGqUiL1TNKXl94r4vUan2rvCvvuF5BjzM9_0uzhw?key=b6NzDIc5luKsYjQm8mwuVQ" alt=""/></figure>



Looks like a good story.



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



Helium, a decentralized telecom provider, has been a crypto story for a long time now — it was founded way back in 2013.



But now it’s a story with numbers: “Revenue as measured by data credit burn is accelerating, growing at 43% QoQ,” Blockworks Research&#8217;s <a href="https://x.com/0xMetaLight">Nick Carpinito</a> wrote in a recent note.



“Importantly, Helium’s mix of revenue is shifting from Helium Mobile to Mobile Offload, with the latter now accounting for roughly 3x more DC burn, and growing at nearly 180% QoQ, an astounding rate for a DePIN protocol selling into enterprise budgets.”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcxW0Jfw6F0fpD2pKkB3RB32IX57drA63Bjt08Q5ErFkECKJ0v4oycIaVx287_6jYq7PEnv79HVU3EfWMU0s7HhGB7wo8mhrrmDczn4N717ntr2L05h33YaPghqqpUh4ggTTIRRpw?key=b6NzDIc5luKsYjQm8mwuVQ" alt=""/></figure>



“Mobile Offload” is the blue line above and its quarterly growth rate of 180% is an astounding number for anyone, really.



Helium’s HNT token might seem to be priced for it, trading on about 120x annualized sales.



But Carpinito told the <a href="https://youtu.be/F6BsNclvbsM?si=QKQkyLaC187ttITq&amp;t=1545">0xResearch podcast</a> that he expects revenue to accelerate thanks to a “surge in data credit use through AT&amp;T allowing its subscribers in the US to connect to Helium.”



As a result, “there’s a high likelihood that we see some HNT price appreciation over the next 12 months that is unprecedented and also much more stable than any Helium price appreciation we’ve seen in the past, which was largely based on speculation.”



It’s unusual in crypto to hear anyone make that kind of price prediction based on anything other than speculation.



And refreshing.



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



Finally, Pendle is a “yield trading” protocol whose new offering, dubbed “Boros,” will allow users to speculate on any off-chain or onchain yield, beginning with funding rates.&nbsp;



“The implementation will look similar to a classical interest rate swap market, where traders can pay a floating rate to receive a fixed rate, or pay a fixed rate to receive a floating rate, on margin,” Blockworks Research’s <a href="https://x.com/0xMether">Luke Leasure</a> explained.



That doesn’t mean too much to an equities guy like myself, but it’s apparently a big market: “With perpetual futures markets settling nearly $60 trillion annually with hundreds of billions in open interest, Boros will enter an entirely new, enormous and untapped market,” according to Leasure, who expects that Boros could double Pendle’s revenue rate.



That’s not something you hear much in TradFi.



In a bull case, Leasure estimates that the “vote-escrowed” version of Pendle’s token might be trading on just 1.6x earnings:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf2aq6w286aRRLTlakCa-F1zzPsmOxPLmt4Q-3P1R_lY96Hc-1p5M1R0kMK78oB0a8_XRyyyhUPB3onOOsZ1eHVMYo2q-1K8QS0a2dji7PJADx3-1cQ9KX_Em-qCbpJUcosY9H1?key=b6NzDIc5luKsYjQm8mwuVQ" alt=""/></figure>



1.6x!



Nothing in equities ever trades on 1.6x earnings unless its business is about to fall off a cliff, which doesn’t seem to be the case here.



Still, that’s not investment advice (from me, at least) because Pendle is a complicated story — as most of them are in crypto.



But at least they’re now stories that can be told in numbers.



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Blockworks Research

How crypto investing is becoming a better story

Jeff Albus

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



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Earlier this week, we wrote that Solayer was about to begin its token unlocks.



We <a href="https://blockworks.co/news/solana-bug-patch-zero-knowledge-proofs">noted</a> that this would mark the first real loosening of grip over Solayer’s tightly controlled float, and observed that while the token had surged 87% in a month, traders appeared to be bracing for volatility.



Well, SURPRISE! That volatility came early.



In the 48 hours that followed, $LAYER <a href="https://app.blockworksresearch.com/assets/layer">collapsed more than 55%</a> from its all-time high, wiping out over $350 million in market cap. The selloff was sharp, disorderly and possibly — in the eyes of some — deliberate.



Back in March, onchain researcher Andrew 10 GWEI <a href="https://x.com/Andrey_10gwei/status/1919829616115540303">flagged</a> a series of Solayer team-linked wallets that <a href="https://x.com/Andrey_10gwei/status/1904213428148826407">received</a> large airdrop allocations, <a href="https://x.com/Andrey_10gwei/status/1904213436877140478">deposited</a> funds to Binance and appeared to sell into the market well ahead of this week’s unlock.&nbsp;



His analysis <a href="https://x.com/Andrey_10gwei/status/1904213441339924484">suggested</a> that only 3.6% of the total token supply — rather than the 12% promised — was actually distributed through the Genesis Drop. He claimed at the time that over $28 million in tokens were routed through wallets tied to the team.



Though Blockworks was unable to directly verify these claims, they have contributed to <a href="https://x.com/onchainquant/status/1919641933796016535">speculation</a> that the <a href="https://x.com/langeriuseth/status/1919855807404863796">downturn</a> was more of a <a href="https://x.com/Colasama/status/1919823238575649249">coordinated</a> exit. But whether orchestrated or not, the crash fed on itself. Thin order books, high leverage and looming dilution made for a classic cascade. The market structure Solayer relied on — thin float, heavy lockups and delayed investor cliffs — is the same playbook that powered dozens of outsized runs this cycle. But this can also be deeply unstable.



When a token trades with a high FDV and low float, <a href="https://www.binance.com/en/square/post/20199723509546">price discovery</a> becomes a function of narrative momentum, not actual demand depth. Early buyers are betting they can rotate out before gravity hits, and any deviation — a perceived exit, a mispriced unlock, a sharp funding flip — sparks the kindling.



Once that kind of volatility begins, there’s usually little structural support to stop it.



Zooming out, while Solayer unraveled, the Solana ecosystem <a href="https://app.blockworksresearch.com/flashnotes/solana-april-2025-update">posted</a> one of its strongest months in a year. DEX volumes and REV bounced back. SOL outperformed both ETH and BTC in April.



Block space rose to 50 million CUs with 60 million on the way. SolFi and ZeroFi, two closed-source “prop AMMs,” now make up 20% of DEX volume. Stablecoin supply hit an all-time high of $12.6 billion. Solana’s price at the time of publication is $146.57.



The chain’s fundamentals continue to accelerate. So why, then, does one of its most high-performing new tokens seem to have imploded?



Maybe because Solayer wasn’t priced on fundamentals — it was priced on narrative. On mechanical scarcity. On the hope that a thin float, institutional heat and Solana tailwinds could suspend gravity. The future of Solana itself may be bright, but its token economy is still wild, still early, and still very much a game of timing.



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investors

Volatility arrives early for Solayer

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



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New Hampshire has won the <a href="https://blockworks.co/news/us-states-btc-reserve-proposals">race</a> among US states mulling laws to allow digital assets investments and/or create reserves.



How quickly should we expect a wave of others to follow suit?



Headed to Arizona Gov. Katie Hobbs’ desk, as of yesterday, was a law to establish a state treasurer-run “digital assets strategic reserve fund.”&nbsp;



But Hobbs could veto this, given that she rejected a separate bill last week to allow a state public fund to invest up to 10% in “virtual currency holdings.” She <a href="https://www.azleg.gov/govlettr/57leg/1r/sb1025.pdf">called</a> those “untested investments.”&nbsp;



So if Arizona is not next, who will be? Perhaps North Carolina or Texas, filings compiled <a href="https://bitcoinlaws.io/reserve-race">here</a> indicate.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdG7sUR5W-dDhK0Tl6sGReRcz4ng46eXGsVH4dmgZpuyCTv2-w0AmFXQTEV-73IW7tSq7JCFa_pPmFR_-uA-vPYyDU2oKdVsW9brspe51lPRLlRpmDHA5CBv0G1bDu8Ibu5h-zpqg?key=pQwIpy1cyCnnxyZ6QtSKr6nl" alt=""/></figure>



North Carolina’s Digital Assets Investments Act would authorize the state treasurer to invest up to 5% of any designated funds in “qualifying digital assets.” That passed a second reading in the House (71-44) on April 30 and moved on to the Senate.&nbsp;



That bill would also “examine the feasibility” of allowing state retirement income plan members to make such investments (via crypto ETPs) and study a state reserve to hold seized or forfeited crypto.



Looking at Texas, the state’s <a href="https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&amp;Bill=SB21">proposed</a> Strategic Bitcoin Reserve and Investment Act would establish a special fund to invest in crypto assets with a market cap of $500 billion or more (currently only BTC).&nbsp;



Ishmael Green, a partner at law firm Diaz Reus, said he expects half a dozen or so states to follow New Hampshire in the near-to-medium term — “because states are looking to hedge against inflation, in addition to protecting their balance sheets.”



Indeed, the Texas bill text states the following:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfgo-iSyTKee3EEbRELZLoOh9Tnkgr0tFqp-uHpzOGI32WRd6--zwM4taciCIYmZaifGdBpsQ6P26taYo2_9xOTkCRtPmfxFvJxVLM09eXLdKieCD06cHrY_qyAW6eCt9Fzh0UdJA?key=pQwIpy1cyCnnxyZ6QtSKr6nl" alt=""/></figure>



“Long term, these sorts of laws will lead to an upward price pressure and supply shortage, as states and other institutional entities scramble to accumulate more bitcoin,” Green told me.



As for how the North Carolina and Texas governors feel about crypto, if these bills reach their desks? NC Gov. Josh Stein hasn’t said much on the topic, but has <a href="https://www.wfae.org/2025-03-03/nc-invest-cryptocurrency-destin-hall-bill-bitcoin">indicated</a> support for the legislation.



In a November X <a href="https://x.com/GregAbbott_TX/status/1855015903496147225">post</a>, Texas Gov. Greg Abbott wrote: “Texas is already the home of crypto mining. This session Texas should become the crypto capital.”



FalconX research head David Lawant said he too expects at least a few more states to enact these types of laws in the next six to 12 months.&nbsp;



But he’s watching out for a Bitcoin Policy Institute framework (set for release in June) that aims to help states craft effective BTC reserve laws.



“A common issue with many of the current proposals is that they’re not as clearly written or thoughtfully structured as they could be,” Lawant told me.



Suffice it to say, there’s plenty more where this came from.



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After New Hampshire’s crypto reserve race win, which states are next?

Casey Wagner

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



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The Federal Open Market Committee (FOMC) today, as expected, kept interest rates unchanged.&nbsp;



Committee members cited a “stabilized” unemployment rate, “solid” labor market and continued elevated inflation. However, they noted there’s now an increased risk that unemployment and inflation will rise in the coming months.&nbsp;



Stocks were mostly flat on the news. The S&amp;P 500 was up 0.2% on the day, as of 2:30 pm ET. The Nasdaq Composite was trading 0.3% lower.&nbsp;



“If the tariffs that have been announced are sustained, they’re likely to generate a rise in inflation, a slowdown in economic growth and increase in unemployment reflecting a one-time shift in the price level,” Fed Chair Jerome Powell said shortly before publication. 



The Fed’s focus on the unemployment rate in today’s statement suggests that a so-called “Fed put” (the central bank stepping in to lower rates and prevent a sharp market decline) will not come until — or unless — the labor market starts to deteriorate.&nbsp;



In other words, should tariffs spur significant layoffs, we could be looking at an interest rate cut sooner rather than later.&nbsp;



Committee members did not release projection materials this month, so it’s hard to know how they’re thinking about the impact of new and pending tariffs. In March, FOMC members indicated they still expect two cuts in 2025.&nbsp;



It’s been a tumultuous six weeks for markets since the Fed’s last meeting in March. Stocks whipsawed along with President Trump’s tariff policies at the beginning of April — rising and falling as optimism over trade deals fluctuated.&nbsp;



In the past couple of weeks, though, major indexes have erased their “Liberation Day” losses. As of Tuesday’s close, the S&amp;P 500 was up 0.5% from April 2. The Nasdaq Composite gained 2.8% in that period, no doubt benefiting from tech giants’ <a href="https://blockworks.co/news/meta-microsoft-earnings-q1-stocks-higher">positive Q1 earnings</a>.



Investors are, apparently, confident that the <a href="https://blockworks.co/news/us-economy-shrank-q2-fears-tariff-impact">looming trade war</a> won’t be so bad after all. Pushing the start date for most tariffs on foreign imports and granting exemptions for the select tech and <a href="https://blockworks.co/news/gm-stock-earnings-release-auto-tariffs">auto levies</a> helped markets rally.&nbsp;



While fears around tariff impact may be easing, analysts warn that many of the trade policies — and their impact on prices, consumer spending and the labor market — remain to be seen.&nbsp;



In a constantly changing situation, traders must be cautious to give credence to any single statement. Case in point: Trump just after 2 pm ET said he wasn’t open to lowering the 145% tariff rate on China. This comes hours after China said it agreed to meet with the White House.&nbsp;&nbsp;



The decision comes after weeks of President Trump <a href="https://blockworks.co/news/trump-criticizes-fed-chair-powell">urging Powell</a> to cut rates. Trump quelled fears that he’d attempt to remove Powell, but tension between the two remains. 



Since November, Powell has been <a href="https://blockworks.co/news/equities-trade-war-powell-rate-cut">consistent</a> in his stance that he will be waiting and watching the data before making any decisions. So don’t expect committee members to cut rates on headlines.



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Federal Reserve

Fed holds rates, cites increased risk of setbacks in the labor market, inflation

Macauley Peterson

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



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Ethereum’s most ambitious upgrade since <a href="https://blockworks.co/tag/ethereum-merge">the Merge</a> is now live.



The Pectra hard fork, which <a href="https://x.com/yeluacaM/status/1920058186997936608">activated smoothly</a> shortly after 6 am ET, delivers a powerful set of upgrades to Ethereum’s execution and consensus layers, affecting everything from validator operations to transaction UX and data availability.



<h2 class="wp-block-heading">What’s changed?</h2>



The upgrade introduces several important features, grouped roughly into three categories:



<h3 class="wp-block-heading">Smart accounts (EIP-7702)</h3>



This upgrade <a href="https://blockworks.co/news/ethereum-upgrade-account-abstraction-proposal">lets EOAs</a> temporarily behave like smart contracts, opening the door to batched transactions, stablecoin and sponsored gas payments — a massive UX unlock, according to Hart Lambur, co-founder of Risk Labs (which built Across and UMA).



For example, “users will be able to sign a single intent that seamlessly triggers actions across chains — no need for native gas, no extra wallet setup and no extra developer work,” Lambur told Blockworks. “It gets us closer to a world where bridging is invisible and cross-chain coordination just happens under the hood.”



<h3 class="wp-block-heading">Data availability scaling (EIP-7691)</h3>



By doubling <a href="https://blockworks.co/news/ethereum-blobs-balancing-act">blobspace</a> capacity from six to 12 blobs per block, Ethereum increases throughput for <a href="https://blockworks.co/tag/rollups">rollups</a> and reduces L2 fees. But as Ansgar Dietrichs <a href="https://x.com/adietrichs/status/1920082921873870859">pointed out</a>, saturation of this new capacity would be good for Ethereum, provided it can continue scaling bandwidth to avoid too much fee pressure as demand grows.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcO_eL5-nOFyGE8bOf11k4-Rkabi35gY7gEchuAOpxf6tC1UHm5-N8FNmzhXR7yPsexGK_euqXpg947WIZDrynrFisoDp_YQVaxnBisClAyjfpYPRW02gXyU7i6PrwxfVkxAGlHRQ?key=50kD8TET5WXoo_sD0HAAfw" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://x.com/hildobby_/status/1920067472960762207">@hildobby</a></figcaption></figure>



<h3 class="wp-block-heading">Validator UX and efficiency</h3>



Pectra raises the maximum effective validator balance from 32 ETH to 2,048 ETH, which <a href="https://blockworks.co/podcast/bellcurve/9fd1a758-a922-11ee-85f0-2bb0374896a4">Alluvial</a> co-founder Matt Leisinger calls “a meaningful unlock for institutions.”



“Institutions can now autocompound rewards natively — no more skimming and aggregating 32 ETH to stay efficient,” Leisinger told Blockworks.



Bohdan Opryshko at Everstake thinks it may be the “most institution-friendly update yet.” He notes EIP-7002 also allows validators to exit using execution-layer controls, reducing trust assumptions for stakers and protocols alike — altogether making “staking at scale with operational clarity” possible for more conservative capital.



<h2 class="wp-block-heading">What happens next?</h2>



Pectra sets the stage for <a href="https://blockworks.co/news/ethereum-consensus-evm-upgrade-fusaka-devs">Fusaka</a>, Ethereum’s next major upgrade — now tentatively pushed to 2026. That fork is expected to introduce PeerDAS, a more efficient data availability sampling scheme for rollups, and continue laying the groundwork for future upgrades like <a href="https://blockworks.co/news/ethereum-developers-consider-evm-upgrade">Verkle trees</a> and full account abstraction.



But in the coming months, attention will shift to ecosystem adoption as teams try to showcase the real-world capabilities of the upgrade.&nbsp;



How will wallets, L2s and dapps move to support <a href="https://blockworks.co/news/vitalik-buterin-eip-account-abstraction">EIP-7702</a>? We can expect features like batched transactions, gas sponsorship and stablecoin fee payments.



According to OP Labs&#8217; Sam McIngvale, “apps drive this adoption curve.”



“Wallets will follow once there&#8217;s clear demand,” McIngvale told Blockworks. “If widely adopted, 7702 could finally make one-click onboarding and abstracted UX the norm.”



Now that rollups can post more data to Ethereum cheaply, how long will it take to saturate that bandwidth? This could have consequences for rollups’ adoption of alternative DA layers such as <a href="https://blockworks.co/news/eigenlayer-restaking-mantle-zksync">EigenDA</a>, <a href="https://blockworks.co/tag/celestia">Celestia</a> and <a href="https://blockworks.co/tag/avail">Avail</a>. If L2 activity fails to match blob supply, scaling momentum could stall. Conversely, if demand rises too quickly, Ethereum may need to accelerate PeerDAS or further blob increases to prevent bottlenecks.



Large operators can collapse thousands of validators into a few, but testnets couldn’t simulate how much that will improve efficiency, so it will be interesting to observe the concrete effects.



Solo stakers may benefit indirectly, according to Preston van Loon, a core developer with <a href="https://blockworks.co/tag/offchain-labs">Offchain Labs</a>. Fewer attestations from consolidated validators means lower network bandwidth requirements. “It really does help everybody,” van Loon told Blockworks. “It&#8217;s hard to say which group has the outsized benefit.”



Dashboards tracking validator set composition, message propagation and slashing rates will become key indicators.



The “unpredictability of network behavior” may be a risk in the future, MIT professor and <a href="https://blockworks.co/news/optimum-ram-web3-protocol-memory-decentralized">Optimum</a> co-founder Muriel Médard warned. “As blob sizes and message throughput increase, Ethereum’s ability to propagate data efficiently and predictably will define how far it can scale,” Médard told Blockworks.



Considering the fork involved more EIPs than any prior upgrade, Pectra’s <a href="https://x.com/elbuenmayini/status/1920082396625375387?s=46&amp;t=yjAdM2ddX0KgGQimu7jcDQ">quiet launch</a> may signal just how much <a href="https://blockworks.co/tag/ethereum">Ethereum</a> has matured as a decentralized protocol. Still, the protocol has a long way to go and faces more competition than ever.



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0xResearch Newsletter

Ethereum quietly flips the switch on Pectra

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



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Bitcoin miners are earning more than $1.2 billion per month to secure the chain.



What are they securing, exactly?



At its core, the collective hash power of honest miners ensures that bad actors can’t suddenly build up and release a second, dubious chain that might usurp the current one’s claim as the longest.



Together with full node operators, miners also protect the chain from non-standard transactions. But miners can only ever select transactions that full nodes (which they generally operate themselves) have already deemed to be valid.



So, how do those nodes decide which transactions are valid? That’s the role of Bitcoin Core’s relay code, which enforces standardness rules that determine whether a transaction ever makes it to a miner’s mempool at all.



Those standardness rules (also referred to as policy rules) secure Bitcoin in a very different way. They effectively define what Bitcoin is and isn’t, and they’re <a href="https://blog.bitmex.com/dapps-or-only-bitcoin-transactions-the-2014-debate/">routinely</a> up for debate.



<h2 class="wp-block-heading">On This Day: Ordinals take Bitcoin</h2>



This time around, discussion has centered on the lifting of a policy rule that capped OP_RETURN outputs at 80 bytes, limiting the amount of arbitrary information that can be posted to the network through individual transactions.



Two years ago to the day, however, Bitcoin was reckoning with the sudden popularity of digital collectibles protocol Ordinals, which utilizes three other opcodes introduced under the Taproot umbrella in 2021.



At the time, 425,000 transactions were sitting in the Bitcoin mempool, as <a href="https://mempool.jhoenicke.de/#BTC,all,count">represented</a> by Jochen Hoenicke’s full node, breaking the previous record of almost 262,000 from peak bull market in December 2017.&nbsp;



Average bitcoin transaction fees spiked to more than $31, up from $2 days earlier.



Through Ordinals, <a href="https://www.coindesk.com/tech/2024/12/09/bitcoin-four-meggers-ordinals-bot-inscribes-largest-ever-file-on-the-og-blockchain">files</a> of close to 4MB (enough to <a href="https://blockworks.co/news/inside-bitcoin-biggest-block">fill an entire block</a>) have been written to Bitcoin including images, videos, audio and video games without relying on OP_RETURN, thereby avoiding its 80-byte limit altogether.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcwOED68Iy271t0R-xzZ5tPnW4-xwvyt9MTSzdM5YVtxaA6qVQX2akNqRPXqCbbXArg3Ney_cg_Ed1SPxNuZZfs7AIls0dsUVpc71AZmrjbo2oPpuOlFqMC4EgXKLlsHGxNRrMU?key=hn2Rv85GBuJrZ8j20Y4AeQ" alt=""/><figcaption class="wp-element-caption">The purple arrow points to May 7, 2023, when Ordinals hype really set in.</figcaption></figure>



All this has made Bitcoin a content storage network, to some degree. Each Ordinal is, essentially, tokenized non-financial data that can be traded peer-to-peer — the type of <s>nonsense</s> utility that had been typically reserved for virtual machine chains like Ethereum and Solana.



These days, Ordinals activity has cooled, but has its moments. Bitcoin Core developers, in lifting the 80-byte policy rule on OP_RETURN data, are hoping to reduce the incentives for further workarounds that might damage the network in unknown ways.



“The change re-affirms that Bitcoin is governed by transparent, minimal rules rather than editorial preference,” Blockstream engineer Gregory Sanders <a href="https://gist.github.com/instagibbs/c436110890ab25aa9997b13c2270d5ce">wrote</a>. “By retiring a deterrent that no longer deters, Bitcoin Core keeps the policy surface lean and lets the fee market arbitrate competing demands.”



Times like these remind us that Bitcoin is not sentient, but it does evolve. For living things, it’s the biological code inside DNA that informs how they grow.&nbsp;



On the other hand, Bitcoin’s “blind watchmaker” is the collective resolve of its active developers, even if they don’t have unanimous support for their proposed changes, as expressed through the willingness of miners, node operators and users to adopt them.



Or, as Sanders put it: “Dissenting parties remain free to modify software, run stricter policy, or propose new resource limits if empirical harm emerges.”



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Bitcoin Core devs want Bitcoin governed by ‘transparent, minimal rules’

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



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



Unlike memecoins — which Blockworks Research thinks are here to stay — an altcoin szn may not come back…at least not in the way we’re used to, according to K33.



The 2020/2021 cycle may have been the peak, K33’s David Zimmerman wrote in a note.



“Without fresh retail inflows, the math gets tougher for speculative tokens with no revenue, no product, and no roadmap beyond vibes,” he said.



One of the big changes, outside of the overall maturity cycle we see, is that memecoins have really solidified themselves within crypto.&nbsp;



To put it another way: Why play a narrative-driven token when you can make a memecoin play instead?&nbsp;



As I wrote in the Milk Road last week, memecoins represented roughly 25% of the overall volumes in crypto at the peak of Q1.&nbsp;



This means the path forward for altcoins is more likely to be selective. As Zimmerman noted, the overall “altcoin market faces $4.3 billion in token unlocks in May, $2.8 billion in June, and $3.2 billion in July. These unlocks are headwinds that demand a surge in new liquidity to be absorbed.”



“In the absence of any significant surge of demand or new retail inflows, the math is simple: more supply facing static or shrinking demand equals downward pressure.”



Outside of the obvious need for liquidity, times have simply changed. Back in the day, altcoins could get a boost just by being in proximity to a hot narrative. Now, there’s more of a need for fundamentals (I swear <a href="https://blockworks.co/news/crypto-valuations-fundamentals">I’m not trying to keep bringing this up</a>, it’s just what’s happening).



Zimmerman said that bitcoin will remain dominant, but there will be chances to allocate smaller positions to altcoins. While some may outperform, the “windows are limited and increasingly fleeting.”



Tokens may not continue to be the big winners as crypto matures. Take, for example, stablecoins.&nbsp;



“The most bullish crypto asset outside of Bitcoin right now is almost certainly stablecoins. They are making their way into payment infrastructure, relentlessly growing in market cap, and positioning themselves at the center of both retail and institutional use cases,” Zimmerman said.&nbsp;



In a sea of choices, now investors will have to pay attention to metrics before aping into a token (unless you stick with memecoins). For K33, this means understanding the product-market fit, user growth, or revenue of said token.&nbsp;



RIP, face-ripping altcoin rallies. You were fun. But hello to a more — dare I say — serious era of crypto.



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altcoins

Why altcoin seasons may not be coming back

This is a segment from the Blockworks Daily newsletter. To read full editions, <a href="https://blockworks.co/newsletter/daily">subscribe</a>.



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



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Consciousness may end up being found in very strange places.” — Christof Koch
</blockquote>



The canonical question in the philosophy of consciousness was posed by Thomas Nagel in 1974: “What is it like to be a bat?”



Nagel’s idea was that consciousness is defined simply by what it feels like to be something — the inner, subjective experience of being alive and aware.



“An organism has conscious mental states if and only if there is something that it is like to be that organism,” he explained.



Many have found this subjective answer unsatisfyingly circular: What is this something???



David Chalmers later declared this question “the hard problem of consciousness” because it exposed a gap between subjective experience and objective science.



In 2004, however, Giulio Tononi confronted Chalmer’s hard problem with a paper proposing a mathematical model for consciousness: Integrated Information Theory (IIT).



Consciousness, he argued, is a mathematical property of physical systems — something that can be quantified and measured.



But can a system be conscious?



After interviewing the computational neuroscientist Christof Koch, the co-hosts of the <a href="https://youtu.be/qme8fOs7N8g?si=xZUjUtbDmmNVpKuI&amp;t=665">New Scientist podcast</a> concluded that computers, being systems, could theoretically achieve consciousness if they were able to “integrate” the information they process.



And nearly anything could be a system: Even a rock might register a trace of consciousness if its atoms form the right kind of structure (as proven in the science documentary <a href="https://youtu.be/2X1sOTg-ivg?si=iVUg_SNnwbLK3Yrq">Everything Everywhere All at Once</a>).



Which got me thinking: Ethereum is a world computer, right?



And critics accuse Bitcoin of being a pet rock.



So…if computers and rocks can be conscious, surely blockchains can be, too?



Blockchains do, in fact, tick a lot of IIT’s boxes.



IIT posits, for example, that a system can only be conscious if its current state reflects everything it’s been through — just as your memories shape who you are and each moment builds on the last.



Blockchains like Ethereum work in a similar way: A blockchain’s current “state” is a function of its history and each new block depends entirely on the ones before it.



That history-dependence gives it a kind of memory — and because thousands of nodes agree on a single shared version of reality, it also creates a unified “now” (or “state”) that IIT says is a characteristic of consciousness.



Unfortunately, IIT also says that for a system to be conscious, it has to have “causal autonomy” — which is to say, its parts have to influence each other internally and not just in response to inputs it passively receives from external actors.



Blockchains don’t work like that, of course.&nbsp;



Instead, they rely on external inputs (like users sending transactions and validators adding blocks) to act on and advance — and the nodes that run the network don’t influence each other internally, they just blindly follow the same set of rules.



There’s no spontaneous activity, no internal causation — not even the aimless vibration of molecules you’d get in an inanimate chunk of granite.



So I’m sorry to report that, on the IIT spectrum of consciousness, blockchains rank below even rocks — and that the “pet rock” jab might therefore be a compliment to Bitcoin (or an insult to rocks).



But maybe not for long!



In 2021, the computer scientists (and married couple) Lenore and Manuel Blum co-authored a <a href="https://www.scirp.org/reference/referencespapers?referenceid=3699575">paper</a> describing how to engineer consciousness into machines.



Their framework treats consciousness as a computable property — achievable with AI algorithms designed to produce systems with the “causal autonomy” required for conscious experience.



The AI wouldn’t be conscious itself, in this case, but a system that deploys it could be.



Now imagine an AI-enabled blockchain that doesn’t just run code, but thinks about running code.&nbsp;



Instead of inert ledgers passively waiting for inputs, blockchains could be self-contained, “causally integrated” machines — more like synthetic brains than distributed databases, with the kind of internal autonomy that IIT researchers consider essential for consciousness.



This could be useful!



A system like that might be able to reason about its own security, detect anomalies in real time, and decide when to fork itself (perhaps after a period of soul-searching introspection).



In short, it would do things not because it was told to, but because it understood what was happening — both inside itself and in the outside world.



It’s not impossible.&nbsp;



Today’s blockchains are more like nervous systems without a brain — wiring without will.&nbsp;



But tomorrow? Who knows.&nbsp;



If IIT is right, philosophers might soon be asking, “What’s it like to be a blockchain?” (And also, is it better than being a rock?)



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The Breakdown Newsletter

Will AI make blockchains conscious?

Jack Kubinec

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



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



As Solana continues to cement itself as the most performant layer-1 blockchain by speed and cost, some crypto developers have gained an interest in using the technology underpinning Solana to launch new blockchains of their own.



To wit, there are around two dozen of these Solana Virtual Machine chains — counting layer-1s, layer-2s built on various other blockchains, and application-specific chains. But for simplicity’s sake, here are the layer-1s trying to out-Solana Solana:



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



Fogo is a <a href="https://blockworks.co/news/solana-chain-running-pure-firedancer">forthcoming layer-1</a> that says it wants to push the SVM’s performance to its limits by only running the Firedancer validator client on a permissioned validator set with multi-local consensus.



If that sounds like word salad, just know that Fogo’s bet is that with a fork of Jump’s open-source Firedancer code and a couple tradeoffs around decentralization, Solana’s software can be even more performant.



The layer-1 raised $8 million at a $100 million valuation via the crypto crowdfunding platform Echo.



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



The popular Solana oracle Pyth runs an SVM app chain where Pyth operators who provide price data run validators, and the protocol aggregates prices.&nbsp;



Pythnet is the oldest on the list: Remarkably, Pyth shipped its SVM chain in August of 2022.



Since it’s a blockchain for data, this chain is less consumer-facing than others, but it’s an interesting decentralized way to stream price data — and the product has been live for nearly three years.&nbsp;



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



Solayer initially fundraised and launched as a Solana restaking protocol, but after Jito entered the <a href="https://blockworks.co/news/jito-releases-code-for-solana-restaking-network">restaking race</a> — and as restaking became less buzzy, to put it bluntly — Solayer pivoted to launching its own layer-1 powered by its InfiniSVM.



Solayer’s documentation and leadership have claimed that it can achieve one million transactions per second at points, although some Solana developers <a href="https://x.com/trentdotsol/status/1917328407878328470">dispute</a> Solayer’s performance figures.



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



The Solana DeFi giant Jupiter began teasing JupNet in January as an “omnichain network that aims to aggregate all of crypto in one single decentralized ledger.”



Little is yet known about JupNet, but Jupiter co-founder meow said in a blog <a href="https://meow.bio/jupnet.html">post</a> that its so-called Jupiter SVM has validators come to agreement on both internal Solana transactions and external transactions from other blockchains.



Jupiter has greatly expanded its business via acquisitions in recent months, but JupNet may be its most ambitious venture yet.



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



Cube Exchange is building an SVM L1, co-founder Bartosz Lipinski confirmed to me in a Telegram message.



Lipinski and co. <a href="https://www.youtube.com/watch?v=vo3nhdIra6M">forked the SVM</a> as part of a product they’ve <a href="https://blockworks.co/news/cube-exchange-crypto-mpc">described as</a> a hybrid centralized-decentralized exchange.



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



This one barely counts since Thru will be built on a new virtual machine called the ThruVM, but a <a href="https://blockworks.co/news/unto-vc-raise-thru-blockchain-l1">lot of the intrigue</a> around this brand new project comes from the fact that its co-founder, Liam Heeger, was previously a core engineer working on Solana’s Firedancer client.



So with the Firedancer credentials, Thru ekes out a spot on the list.



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Solana’s software underpins these layer-1s

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



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A US litecoin ETF — and other altcoin products — will have to wait at least a little longer.&nbsp;



But the chance such products see the light of day still appears quite good — and issuers continue plotting more crypto ETFs.



The SEC decided on Monday to <a href="https://www.sec.gov/files/rules/sro/nasdaq/2025/34-102988.pdf">delay</a> its ruling on Canary Capital’s proposed spot LTC offering. It requested the following:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf8gYwBqo8LMe2Sj8ys9eqWodvuqV0_-TCHXOZBaQhF8PwaMhMnhCWM7sVT_SqFMbXgsbHj67Y_clBzkIBW0H4Maa3g3FzbZru95Kn8gsDo1IrTALIi5gRPim4o0T-1fGdbvIOp?key=RFcg87cpckgMv3djFkBtin71" alt=""/></figure>



We might not get a ruling until the agency’s final deadline in October.&nbsp;



Prior to the Monday delay filing, Bloomberg Intelligence’s James Seyffart held out hope that we could see a different result, writing on <a href="https://x.com/JSeyff/status/1919159854691713334">X</a> that the “SEC went early &amp; delayed a bunch of filings but not this. If any asset has a chance of early approval it&#8217;s Litecoin IMO.”



You might recall that in February, he and colleague Eric Balchunas <a href="https://blockworks.co/news/litecoin-etf-approval-odds-2025">put the odds</a> of a US spot litecoin ETF launching by the end of 2025 at 90%.&nbsp;



The thinking went that LTC was one of the few assets the SEC had not previously labeled as a security. Also, like bitcoin, litecoin uses the proof-of-work consensus mechanism.&nbsp;



Those 90% odds remain intact, Balchunas noted last week.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Would love to hear directly from Atkins, but all good chance of happening. Here’s our latest odds of approval for all the dif spot ETFs via <a href="https://twitter.com/JSeyff?ref_src=twsrc%5Etfw">@JSeyff</a> <a href="https://t.co/nLhYJJmO9U">https://t.co/nLhYJJmO9U</a> <a href="https://t.co/4AcJVwhics">pic.twitter.com/4AcJVwhics</a>&mdash; Eric Balchunas (@EricBalchunas) <a href="https://twitter.com/EricBalchunas/status/1917444433282490606?ref_src=twsrc%5Etfw">April 30, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The Bloomberg pros also give spot solana products a 90% chance of approval by the year’s end. XRP products are next highest, at 85%.&nbsp;



CME Group introduced SOL futures contracts in March. The derivatives marketplace is set to unveil XRP futures on May 19.&nbsp;



There are also products currently holding both BTC and ETH that want to add more assets. Hashdex CIO Samir Kerbage called indexing “the next frontier” in the crypto investing space, <a href="https://blockworks.co/news/trump-media-etf-cryptodotcom">telling me in March</a> that his firm wants to ultimately create “the Nasdaq 100 for crypto.”&nbsp;&nbsp;



With optimism comes more filings.&nbsp;



Canary last week applied for a product that would hold SEI — a token with a market cap of roughly $1 billion (ranking 90th on CoinGecko). It would seek to earn more SEI “through the validation of transactions in the SEI Network’s proof-of-stake process,” the April 30 <a href="https://www.sec.gov/Archives/edgar/data/2066353/000199937125005157/sei-s1_042925.htm">filing</a> notes.&nbsp;



Then on May 2, VanEck <a href="https://www.sec.gov/Archives/edgar/data/2066824/000206682425000002/vaneckbnbetfs-1.htm">proposed</a> an ETF offering exposure to BNB — the native token of the Binance-created BNB Chain. BNB’s market cap of ~$87 billion is fifth-highest among crypto assets — sitting between XRP (~$123 billion) and SOL (~$74 billion).



Kyle DaCruz, VanEck’s director of digital assets product, previously told me the SEC could wait for legislation — noting that following a framework would be easier than evaluating each crypto asset one by one.



Just when you thought you got away from Washington politics.



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Bloomberg Intelligence

Optimism fuels more crypto ETF filings despite LTC fund delay

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



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Just months after taking a euphoric victory lap around Washington to celebrate the new administration, it would appear the crypto industry has a Trump problem.&nbsp;



2025 was supposed to be a <a href="https://blockworks.co/news/trump-das-crypto-address">historic year</a> for crypto legislation. With a favorable White House and established <a href="https://blockworks.co/news/crypto-bipartisan-usa-polarization">bipartisan</a> <a href="https://blockworks.co/news/senators-oppose-sec-accounting-standards">support</a> for policy, lawmakers and industry members expected to have new laws passed before midterm elections.&nbsp;



But, as Ben <a href="https://blockworks.co/news/legislative-speed-bumps-genius-act-sec">wrote about yesterday</a>, nine Democrats pulled support for the current version of the stablecoin-focused GENIUS Act. They cited wanting stronger provisions around anti-money laundering and national security, for example.&nbsp;



Then there are concerns over the president’s family’s crypto business endeavors. Thanks to Trump’s <a href="https://blockworks.co/news/trump-more-than-a-memecoin">memecoin launch</a> in mid-January, tensions have been building since before Inauguration Day. In the months since, World Liberty Financial (the <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-family-defi-venture">Trump family’s</a> crypto venture) has floated stablecoin plans and recruited investors.



Many Democrats, like Financial Services Ranking Member Maxine Waters, insist this is a clear conflict of interest, and lawmakers should not be advancing policy that would directly benefit Trump’s <a href="https://blockworks.co/news/crypto-prices-dinner-donald-trump">business initiatives</a>.



“I am deeply concerned that Republicans aren’t just ignoring Trump’s corruption, they are legitimizing Trump and his family’s efforts to enrich themselves on the backs of average Americans,” Waters wrote in a Tuesday statement after she objected to a planned joint House hearing on crypto.&nbsp;



“Through his crypto businesses, Trump has turned the office of the presidency into a personal money-making machine,” she added.&nbsp;



The comments come after members of the House Financial Services and Agriculture committees gathered this morning for a joint hearing on the newly released crypto market structure bill <a href="https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=409719">discussion draft</a>.&nbsp;



The hearing didn’t get very far, though, as Waters objected to the gathering. Because unanimous approval is needed for joint hearings, she was successful in stopping the official proceedings.&nbsp;



Digital Assets Subcommittee Chair Bryan Steil pivoted, and called for a roundtable discussion — a loophole allowing the witnesses to provide testimony and answer lawmakers’ questions. Waters then left the room, asking colleagues to join her for a separate meeting to discuss Trump’s crypto dealings.&nbsp;



Financial Services Committee Chairman French Hill countered Waters, noting the market structure draft and the stablecoin-focused STABLE Act are intended to bring crypto out of regulatory purgatory. The bills, he said, seek to fill <a href="https://blockworks.co/news/washington-dc-blockchain-summit-takeaways">gaps in oversight</a> that even President Biden admitted existed. Up until recently, they had significant bipartisan support.&nbsp;



Crypto lobbying groups and Hill insiders have known for weeks that these legislative efforts would face roadblocks from Democrats.&nbsp;



Groups have even proposed combining the market structure and stablecoin bills into a single piece of legislation. The theory was that it’s extremely unlikely lawmakers will pass two crypto bills, but the problem with one super bill is it gives everyone a lot more to fight over.&nbsp;



The new market structure discussion draft in the House is similar to bills from the last session of Congress: <a href="https://blockworks.co/news/house-passes-act-fit21-with-bipartisan-support">FIT21</a> in the House and <a href="https://blockworks.co/news/bitcoin-ether-to-be-regulated-as-commodities-by-cftc-per-new-senate-bill">DCCPA</a> in the Senate.&nbsp;



Generally speaking, the legislation seeks to clarify the roles of the SEC and CFTC. It also outlines the process for listing tokens, consumer protections and disclosure requirements. A big difference between this draft and FIT21 is that the new version does not include the term “decentralized system.” A <a href="https://blockworks.co/news/fit21-isnt-crypto-win">key criticism</a> of FIT21 was that the focus on “decentralization” was too great, potentially making it more challenging for certain token issuers to be compliant.&nbsp;



The key term here though is really “discussion draft.” The industry can now submit comments on the bill, so we’re still several steps away from a floor vote.



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congress

Rep. Waters blocks joint House crypto hearing, cites Trump conflict of interest

Kate Irwin

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Coinbase is now sponsoring Riot Games for the studio’s League of Legends and Valorant Esports global gaming events.



The deal officially starts next month with two esports events in Canada. The first is the Valorant Masters event in Toronto June 7. Coinbase will also be part of the MSI 2025 esports tournament in Vancouver that runs June 27 until July 12.



David Mulhall, Riot Games’ global head of esports partnerships and business development, called Coinbase a “perfect addition” to its list of brand partners and said the crypto firm can bring “engagement touchpoints and features that our global esports community appreciates.”



Crypto, however, remains a polarizing and controversial topic among gamers, including <a href="https://www.reddit.com/r/leagueoflegends/comments/1h1u11u/lol_community_opinion_on_blockchain_in_esports/">League of Legends fans</a>. Some gamers like it and some are open to it, while others absolutely despise it, as we’ve seen time and time again when non-crypto video games toy with the idea of crypto integrations or add NFTs to their titles.



Coinbase is planning event activations, promotions, awards and other perks in the Riot deal, but the financial terms have not been disclosed.&nbsp;



We do know that both parties are heavy hitters in their respective industries: Coinbase made $6.6 billion in revenue last year, while Riot made over $376 million in 2024.



Coinbase has sponsored the NBA since 2021. The US exchange also <a href="https://teamliquid.com/race-to-world-first">sponsored</a> esports organization Team Liquid (which itself struck a deal with Sui).



Other crypto firms have sponsored sports or esports, like Kraken with Williams Racing. Bybit struck a deal with the Brazilian esports organization Made in Brazil (MIBR) in 2022, and Crypto.com signed a five-year partnership with Fnatic in a <a href="https://www.sportspro.com/news/crypto-fnatic-esports-gaming-cryptocurrency-nft-partnership/">$15 million deal</a> in 2021, to name a few. 



But some deals have seen much bigger numbers. FTX struck a $210 million deal with the esports org TSM, but that fell apart in 2022 when the exchange collapsed.



The esports industry more broadly has <a href="https://decrypt.co/205565/inside-esports-industry-war-survival-investigation">struggled</a> in recent years, spurring an increasing reliance on brand sponsorships and corporate investment to generate revenue.



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